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Shell Case

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Shell´s Environmental Responsibility in Vila Carioca, Sao Paulo, Brazil [1]

by
Jose Antonio Puppim de Oliveira
Associate Professor
Brazilian School of Public and Business Administration - EBAPE
Getulio Vargas Foundation - FGV
Praia de Botafogo 190, room 507
CEP: 22250-900, Rio de Janeiro - RJ, Brazil phone: (55-21) 2559-5737 fax: (55-21) 2559-5710 e-mail: puppim@fgv.br

Introduction:

Shell defines its aim as “to meet the energy needs of society, in ways that are economically, socially and environmentally viable, now and in the future.”[2] Shell was one of the pioneers in the movement for Corporate Social Responsibility. The company says it is committed to sustainable development and human rights: “Our core values of honesty, integrity and respect for people define how we work. These values have been embodied for more than 25 years in our Business Principles, which since 1997 have included a commitment to support human rights and to contribute to sustainable development.”[3] The case in Vila Carioca (São Paulo City) below illustrates a tough decision the company must make in order to keep its commitments, especially when the company’s past actions occurred in a different institutional and regulatory environment.

Vila Carioca is a neighborhood in the southern part of São Paulo, the largest city in South America.[4] Greenpeace and the Union of Workers in the Mining and Petroleum Sector (Sinpetrol) alleged in the 1990s that the region had its soil, air and water contaminated by several pollutants from industrial activities that took place in the area. The pollution may have contaminated approximately 30,000 people residing in the area.[5] Shell is accused of being one of the main sources responsible for the pollution among companies operating in the region. One national newspaper (Folha de São Paulo) considers that Vila Carioca may

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