Press launch: 11.30am Jubilee Room, House of Commons interviewees and footage available - contact press office 020 7566 1649

The oil giant Shell, already under scrutiny for overstating its oil reserves, stands accused of polluting communities, damaging wildlife habitats and failing to live up to its promise of environmental and social responsibility in a new report launched by Friends of the Earth today (Wednesday 23 June), ahead of the company's annual general meeting (AGM) ^[1].

Behind the Shine - the other Shell Report 2003 unveils a catalogue of misery from communities living next door to Shell's operations around the world ^[2]. These people have known for many years what shareholders were shocked to discover this year - Shell's promises and commitments are not all they seem ^[3]. Representatives from these communities are in London to raise these concerns at the company's AGM.

In the Niger Delta, where Shell sources 10 per cent of its oil, the company's failure to invest in technology results in 700 millionscf/d of gas being burnt off into the environment, an increase on last year, despite a commitment to end flaring by 2008 ^[4]. Gas flaring wastes energy, contributes to global warming and pollutes the environment ^[5]. But gas flaring has become an every-day feature for the communities in the Delta. Oil spills are also common - with 9,900 barrels of oil spilt in 2003 ^[6]. Oil spills are frequently left rather than cleaned up, contaminating farmland, water courses and fish supplies.

In Texas, Shell is facing legal action from the community living next door to its operations in Port Arthur who are literally sick of the pollution in their backyard. Some 1,200 residents are alleging air, soil and other contamination due to the release of "noxious fumes, vapours, odours and hazardous substances" from the Motiva refinery, which processes 235,000 barrels of oil a day.

Legal wrangles also face Shell in the Philippino capital Manila where the company's oil depot is sited in the centre of a residential community; and in Sao Paulo, Brazil, where the company stands accused of contaminating drinking water and causing serious health problems including cancers, infertility and respiratory diseases.

On the Caribbean island of Curaçao, Shell walked away from these problems, selling its refinery to the Government in 1985 after operating for more than 70 years. Pollution from the refinery has contaminated the small island which is surrounded by 20 km of coral reef, and severely damaged the health of the community with complaints of premature deaths, cancers, birth defects, bronchitis, skin diseases and asthma. Local residents are now campaigning to hold Shell liable.

And in Louisiana, where community campaigner Margie Richard was this year awarded the Goldman Prize for her campaign for environmental justice from Shell, the community is still fighting for the right to health care after years of exposure to pollution from Shell's refinery in Norco. Shell responded by commissioning a study of community perceptions and not health.

Oronto Douglas, who is travelling to Shell's AGM from Friends of the Earth Nigeria said:

"Shell's business practices in the Niger Delta have destroyed our environment, our farmland and our fisheries. Oil spills are not cleaned up and gas flares dominate the sky line. The people in Nigeria are not benefiting from Shell's presence in our country - we are paying the price. Shell must work with local communities to clean up the Niger Delta and make sure communities receive the benefits of their operations there."

Hilton Kelley, who is attending Shell's AGM from Port Arthur in Texas, said:

"I really expected Shell's practices to change after I spoke with Sir Philip Watts at the AGM in London last year. But the only thing that has changed is that Watts has been forced to resign. We had no choice but to file a lawsuit. Now we will let the courts decide who is dumping what on our community."

Friends of the Earth believes UK companies should not be able to inflict damage on communities around the world and yet remain unaccountable to both their shareholders and local stakeholders for the impacts caused. That is why the organisation is calling on the British Government to introduce corporate accountability legislation here in the UK, to ensure that British companies take account of the negative impacts of their operations and can be held accountable by the communities they work alongside ^[7].

Friends of the Earth Executive Director Tony Juniper said:

"Shell is currently under investigation for overstating its oil reserves, but this report shows the company has for many years also been overstating its social and environmental performance. Unlike shareholders, the communities living next door to Shell have little or no rights of redress. Many suffer ill health, pollution and environmental damage as a result of Shell's pursuit of profits. It is time the British Government legislated and gave communities the right to protection from such corporate abuse. And they must be compensated when abuse occurs."

• Mandatory reporting - requiring all UK companies to report annually on the impact of their operations, policies, products and procurement practices on people and the environment both in the UK and abroad
• New legal duties on directors - to take reasonable steps to reduce any significant negative social or environmental impacts
• Foreign direct liability - to enable affected communities abroad to seek redress in the UK for human rights and environmental abuses resulting directly from the operations, policies, products and procurement practices of UK companies or their overseas subsidiaries. See www.corporate-responsibility.org