SPE 86577
One Step Beyond: Managing Areas of High Biodiversity Value
Stephen Macklin* (Shell International EP B.V.), Sachin Kapila (Shell International Ltd) and Jan Hartog (Shell International EP B.V.)
(*now with Salym Petroleum Development B.V.)
Copyright 2004, Society of Petroleum Engineers Inc.
This paper was prepared for presentation at The Seventh SPE International Conference on
Health, Safety, and Environment in Oil and Gas Exploration and Production held in Calgary,
Alberta, Canada, 29–31 March 2004.
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Abstract
The scientific consensus is that biodiversity is under
increasing threat from habitat loss, climate change and
pollution. The challenge to protect areas of high biodiversity
value is gaining profile and the issue is not going to go away.
Increasingly, society is expecting the oil/gas industry to make
a broader contribution to solving the issue and increasingly
industry wants to make that contribution. Hydrocarbon
resources required to meet future demand for affordable
energy are often located in protected or sensitive areas, which
can give rise to tensions around competing land use.
At the heart of the issue is the call to establish a universal
system of protected areas. Protected areas was a key theme at
the World Parks Congress in September 2003 and will also
feature in the 7th Conference of the Parties to the UN
Convention on Biological Diversity (CBD) in February 2004.
Government signatories to the CBD are required to establish
areas to protect biodiversity as part of their obligations under
international law. There are a number of global systems for
designating protected areas. World Heritage Sites are designed
to protect areas of outstanding universal value and are also
part of government’s international obligations. Oil and gas
activities are not considered compatible with the objectives of
such sites. The UN List of National Parks and Protected Areas
is classified into six categories by the World Conservation
Union (IUCN). The Category System was not designed to
define where industry should and should not operate, but is
increasingly being used to determine land use options,
although this system lacks the clear rules and procedures that
characterise the World Heritage Convention. Then there are
other protected areas systems such as Ramsar (for wetlands) or
man and biosphere reserves. Governments may also put in
place regional or national regulatory frameworks such as the
European Union Habitats and Birds Directives (Natura 200
sites). Less formal are areas or regions that have been
prioritised by various conservation organisations – these differ
according to the criteria used by the organisation.
There is a lack of trust between the conservation community
and business. Some NGOs are willing to engage, but are
coming under pressure to deliver benefits to conservation.
Others are more adversarial. Financial institutions are also
enquiring about company policy with respect to operating in
protected areas.
All these factors will affect us. We therefore need to position
ourselves to manage this issue in the long term. The paper will
outline the case for action, the recent developments within and
key challenges faced by the Shell Group – particularly Shell
EP, and the key features of its approach.
Proposal
The challenge to society in the coming years will be to ensure
continued economic and social development given the
increasing global population, while at the same time
maintaining the health and integrity of the world's ecosystems.
Part of this challenge is the need for increasing energy
supply1. If global energy demand is to be met, and much of it
through traditional forms of energy, then this inevitably means
access to new acreage and resources, some of which will
undoubtedly be sourced from beneath areas having high
biodiversity value. This presents a very real issue to industry,
governments, conservation organisations and civil society in
general - whether energy development and conservation can
1
Energy is essential for economic development and raising living
standards. Shell's long-terms energy scenarios cite that global primary
energy demand could ultimately saturate at either around 100 or 200
GJ per capita, depending on how much investment is made in energy
efficiency. At 100 GJ per capita energy consumption by 2050 would
be just over twice what it is now, and at 200 GJ per capita, three times
as much. There is a real concern that in order to meet this future
energy demand there will be a scarcity of energy resources. Just how
quickly the traditional forms of energy (coal, oil and gas) will become
scarce (if at all) depends on a number of factors such as the advent of
new technology, customer preference, and government choices. What
is clear though is that a large proportion of the energy needed to meet
future demand will come from these traditional energy sources with
renewable forms of energy (solar, wind, biomass, geothermal etc)
contributing around 30% of the energy portfolio by 2050. That leaves
70% coming from coal, oil and gas.
2 SPE 86577
co-exist? Can the extraction of coal, oil and gas resources be
carried out in such a way as to not compromise the integrity of
that area's biodiversity values, whether it falls under protection
or not?
The case for action has both business and reputation
perspectives. Business objectives are to safeguard activities in
existing sites of high biodiversity value by articulating the
view that we can operate in such areas without long term
impact, bringing a net positive benefit to conservation. At the
same time we wish to ensure that any new system for
designating protected areas has clear rules and procedures,
with a level playing field. Reputation objectives are to
maintain a proactive approach to secure and maintain an
industry seat at the table in future discussions, and to minimise
reputation risk.
What we have done so far
Shell's response to this challenge is to do three key things:
- play a role in the public policy debate around protected
areas;
- work to minimize our operational footprint, and
- make a positive contribution to biodiversity conservation.
The Public Policy Debate
At Shell, protected areas are explicitly highlighted in our
Group Biodiversity Standard (Figure 1), published in July
2001, and the first to emerge from an energy company. We
recognize however, that biodiversity is important everywhere
and not only in protected areas and that the statement that ‘we
respect the basic concept of protected areas’ did not go far
enough for some NGO's.
The World Conservation Union (IUCN) passed a
Recommendation at its 2000 Conservation Congress in
Amman, Jordan. It called upon governments "to prohibit
mining (including oil and gas operations) from certain
categories of protected areas- the IUCN Category I-IV
protected areas". Since 1994, IUCN has been advocating a
global system of classifying protected areas by their
objectives. Shell respects the need for a global system and
sees the six IUCN Categories as the best available framework.
What has happened more recently is that these categories are
being used by certain organisations to determine land-use
options and to push companies to adopt the Amman
Recommendation by making blanket prohibitions about where
they will and will not operate. This was never the original
intention of the IUCN Categories – they were designed to
provide a common language around the myriad of different
protected area systems of the world. If the system is to be
taken-up by Governments and provide a level playing field,
then it will need to be improved. We believe there are a
number of key areas where there are gaps at present.
The Categories could be strengthened by introducing a
consistent open, transparent and inclusive process (involving
key stakeholders such as local communities, government
agencies and industry) for designating protected areas. Just as
NGOs are legitimate stakeholders when deciding about energy
projects, we believe we, the industry, should be seen as a
legitimate stakeholder in the designation of protected areas.
If category designation required such a process, they would
become a tool for encouraging more strategic land-use
planning decisions, which, in the end, may better reconcile
land use options for a particular region. This is critical to
avoid the almost inevitable tensions that arise when one
ministry looks to develop its country's protected area system
without consulting other ministries including those responsible
for licensing oil and gas concessions. The end game here for
Shell is not to, de facto gain entry to these protected areas but
to consider what land-use options might be available which
best suit all stakeholders.
Shell acknowledges that the basis for the IUCN Categories are
the management objectives of the protected areas, but sees the
need for a system of assessing protected areas on a periodic
basis to determine if they are effectively managed – and if not,
to highlight or recommend changes to management. If, over
time, the management effectiveness and management
objectives of the PA consistently do not match, there should
be an agreed process to re-assigning the category, through
some sort of 'grievance procedure'. In conclusion, Shell
supports protected areas as an important component of the
conservation agenda, delivering in situ conservation objectives
set out in international conventions such as the Convention on
Biological Diversity. Shell recognises the importance of
protected areas and the years of hard work invested by the
conservation community in their establishment and
maintenance. Shell is furthermore committed to work with the
IUCN World Commission on Protected Areas (WCPA) to
help strengthen the IUCN Categories system for it to better
serve its objective of promoting the conservation of
sensitive areas.
We have spent the last two years defining what a blanket
prohibition to operate in the various categories of protected
areas means for us. Recently we have announced a number of
commitments with regard to protected areas:
1. Shell will not explore for, or develop, oil and gas resources
from within natural World Heritage Sites. This is the first
time an energy company has publicly declared where it will
not operate. Some may regard this commitment as one not
really worth making – we take a different view. First, it is a
public statement saying that we recognise the outstanding
universal value that these sites represent for society. Second,
the commitment builds trust between us and the conservation
movement – it is a signal that we are serious about
biodiversity. Third, it sends out a very strong signal that we
support the systems that allow natural WHSs to become
designated – hence our ability to make a blanket prohibition
on existing and future sites – and that is why we are NOT
willing to make an equivalent statement yet regarding other
designations of protected areas (the systems supporting those
are just not in place), and fourth, it begins to give us a
legitimate seat at the policy table – we feel we are a legitimate
stakeholder in the protected areas debate just as the ENGOs
are a legitimate stakeholder in the activities we carry out.
SPE 86577
2. We will further upgrade our operational practices wherever
we operate in IUCN category I-IV protected areas or where an
environmental, social, health impact assessment (ESHIA)
indicates high biodiversity values. We will become involved
in spatial/regional planning exercises, assess our secondary
impacts, implement Biodiversity Action Plans, and conduct
appropriate baseline and monitoring studies in such areas.
3. We will publicly report on our activities in IUCN
Categories I-IV.
4. We will work with IUCN and others to develop and pilot
ways of strengthening the management effectiveness of
protected areas through the provision of key skills, creation of
sustainable livelihoods and by exploring options for
sustainable financing.
While defining what we meant by our reference to protected
areas in our Standard, we have been given the opportunity to
also contribute to the wider policy debate. Shell is a member
of the Steering Committee for the "Speaking a Common
Language" project. The objectives of this project are:
• establish the impact and effectiveness of the 1994
IUCN guidance;
• examine what needs to be done to develop and
promote the objectives-based system of protected
area categories itself, and consider how it should be
linked to other initiatives in protected area planning
and management;
• guide the programme of work on protected areas of
the CBD, and
• provide technical advice on the Category System to a
proposed programme of work on protected areas for
IUCN.
The project outputs will provide a review of progress of the
implementation of the IUCN protected area management
categories system, leading to the recommendations for the
system's refinement and development (see
http://www.cf.ac.uk/cplan/sacl/ for more details).
Shell has been working to strengthen its relationship with the
IUCN, both with the Secretariat and its regional offices. Shell
benefited from a two-year IUCN secondment that helped us to
work on the protected area issue and on specific projects on
the ground. Shell will be providing a return secondment to
IUCN in 2004 for a period of 2-3 years. IUCN's unique
membership of government, government agencies and NGOs
has provided Shell with access to a wide range of stakeholders
and views. One example is the role we played at the recent
World Parks Congress, the first time industry was allowed to
contribute to the Congress proceedings.
Shell has also been keeping a close eye on what is going on
with the CBD process through consultations with key
stakeholders and through the industry trade associations,
IPIECA (International Petroleum Industry Environmental
3
Conservation Association) and OGP (International
Association of Oil and Gas Producers).
Reducing our Footprint
We are currently working hard to embed our Biodiversity
Standard into business operations and systems. Spatial
information of protected areas and other sensitive regions
(World Heritage sites, IUCN Categories I-VI protected areas,
Ramsar wetlands, WWF Global 200 Ecoregions and
Conservation International's Biodiversity Hotspots) has been
loaded onto an internal Geographical Information System
(GIS). This 'Early Warning System' helps staff developing
new business opportunities to identify risks related to
protected areas and other areas of biodiversity value/
sensitivity. Early engagement with key stakeholders such as
WWF is now institutionalised.
Biodiversity has also been integrated into our internal ESHIA
guidelines as well as into our internal assurance process, by
which each Operating Company has to assure our Committee
of Managing Directors that they are complying with HSE
policies and underlying standards. We are working on
developing guidance to have in place Biodiversity Action
Plans at sites in or near areas with high biodiversity value. We
are also producing a number of tools to internally
communicate the biodiversity message – a note to Shell
managers, internal website, guidance notes, posters, CD's,
magazine articles, guidance on how to implement the
Standard etc.
Making a Positive Contribution
We recognise that to be taken seriously, we must demonstrate
our commitments by taking action on the ground. Shell has
over a hundred biodiversity related projects worldwide
ranging from conservation, science, environmental education
to capacity-building and communication type projects (see
figure 2 for list of key projects). Following are a few
examples of projects where we are putting our policy into
action and making a positive contribution.
Gabon: In September 2002, President Omar Bongo of Gabon,
declared 10% of his country under protection and created 13
new national parks. Two of these parks surround Shell
Gabon’s oilfield operations, where we have been present for
over 20 years. Through a grant of US$ 2.8 million, the Shell
Foundation (together with Shell Gabon) has facilitated a
unique partnership between science and industry. Scientists
from the Smithsonian Institution’s Monitoring and
Assessment of Biodiversity Program (SI/MAB) have been
independently assessing the impact of Shell Gabon's
operations on biodiversity and comparing this to that of the
adjacent national parks. Early results have indicated that the
biodiversity within Shell Gabon's operations remains intact
with healthy ecosystems and for certain taxa the biodiversity is
even higher than the surrounding areas including the national
parks. The scientific information collected will be used to help
drive improvements in operational performance and will be
used to contribute towards the longer-term conservation of the
general region. Shell Gabon is working with SI/MAB and
others to determine whether our area of operation could fall
4 SPE 86577

under some sort of protection to form an important biological Brunei: Brunei Shell Petroleum’s Panaga Sub-Aqua Club
corridor between the two adjacent national parks. received approval to conduct a two-year biodiversity study at
the end of 2002 on the platforms in the Ampa and Fairley
fields off shore Brunei. The area experiences a complex
Sakhalin: Sakhalin Energy Investment Company Ltd (SEIC) is
interaction of oceanic and brackish water from the Belait
fully aware of both the importance of biodiversity within the
River and the Baram River, a major river about 25 km South
marine, freshwater and terrestrial habitats of Sakhalin Island,
West of the area, which encourages an enormous diversity of
and the current and potential threats to its conservation.
life. The study will provide an understanding of the
Through detailed environmental impact assessments SEIC has
biodiversity around these platforms. There are two main
provided considerable resources to the maintenance of
objectives for this study: to promote an awareness of the
biodiversity, delivered in the form of a number of initiatives
potential positive impact of the oil and gas industry on the
aimed at protecting rare and endangered species. Amongst the
marine ecosystems, and by understanding local controls on
most substantial of these initiatives are those aimed at the
species distribution, provide information to assist in the
protection of the Western Gray Whale. Since 1997, the
optimum placement of future artificial reefs.
Company has provided funding support to the Sakhalin Island
Western Gray Whale Monitoring Programme, which is
Conclusion
undertaken by independent marine mammal researchers on an
Shell sees biodiversity as a real business issue: if not
annual basis. In 2003, Sakhalin Energy pledged US$ 5 million
addressed properly it increases our risks and potentially
towards this project, which will initially last until 2007 and
jeopardizes our ‘licence-to-operate’. On the other hand
have geographical coverage across five nations, namely
biodiversity presents great opportunities for us to work in
Russian Federation, Japan, Republic of Korea, People’s
partnership, empower staff, make a positive contribution, and
Democratic Republic of China and Taiwan. The outputs of
to play an active role in the public policy debate.
this Programme have guided the development of a Western
Gray Whale Protection Programme, which has been in place
Shell supports protected areas as an important component of
since 2001. It provides detail on the mandatory mitigation
the conservation agenda, delivering conservation objectives
measures in place to protect the whale during construction and
set out in international conventions such as the CBD. Shell
operational activities in the marine environment. One
recognises the years of hard work invested by the conservation
important mitigation measure includes the zonation of project
community in their efforts to establish and maintain
marine activities, which restricts marine operations within
protected areas.
areas that are in relative proximity to known whale feeding
areas. Additional commitments to biodiversity conservation
Shell sees the need for pragmatic and yet innovative
include the Steller’s Sea Eagle Monitoring Programme, to
approaches when it comes to addressing the needs for energy
which Sakhalin Energy has pledged US$ 300,000 over three
and biodiversity conservation. Shell does believe that there
years. The Programme will be carried out by independent
are some areas too sensitive to operate in, namely natural
Russian researchers in collaboration with Japanese specialists.
World Heritage Sites. But also feels that it is possible through
a transparent process, working in partnership and with
The Netherlands: The Nederlandse Aardolie Maatschappij b.v. stringent operating practices, that it is possible to operate
(NAM) is an oil and gas exploration and production company, responsibly in some areas under protection and other areas of
which is operated by Shell and situated in The Netherlands. high biodiversity value.
NAM has been researching bird species since 1992 to assess
and mitigate the possible impact of our operations. The North
Sea is an important migration route for a large number of bird Figure 1. Shell Group Biodiversity Standard
species including songbirds, waders, birds of prey and other
In the Shell Group, we recognise the importance of
bird species. More than 50 million birds may cross the North
biodiversity. We are committed to:
Sea twice each year, with peaks in spring and autumn. The • work with others to maintain ecosystems
investigations were initiated following observations that large • respect the basic concept of protected areas
flocks of migratory birds occasionally entered the flare during • seek partnerships to enable the Group to make a
well testing. Over the past ten years the research has been positive contribution towards the conservation of global
extended in order to investigate the impact of noise and light biodiversity
in a much wider context and develop mitigation measures.
Shell companies will:
Canada: A further way Shell supports conservation efforts has • conduct environmental assessments, which will include
been through its partnership with the Nature Conservancy of the potential impacts on biodiversity, prior to all new
Canada (NCC). Shell pledged US$ 160,000 for the three-year activities and significant modifications of existing ones,
project to secure properties and conservation easements on and
ecologically important lands in the Alberta Rocky Mountain • bring focused attention to the management of activities in
region. Shell is looking at other opportunities for enhancing internationally-recognised 'hotspots', including the
identification of, and early consultation with, key
or creating new areas under protection in the US, Latin stakeholders.
America and Africa.
SPE 86577 5

Figure 2. Overview of biodiversity projects

Australia: Shell Coastal Volunteers
Bangladesh: Sea Turtle Conservation
Brazil: The Biological Dynamics of Forest Fragments
Project
Brunei: Rig to Reef and Platform Environmental
Programmes
Canada: Integrating biodiversity into exploration and
production
Caspian: Protection for fragile ecosystems
China: Shell's Biodiversity Initiatives
Gabon: Biodiversity partnership Smithonian
Mali: Save the Elephants
Netherlands: Protecting bird migration routes
Nigeria: Caring for barrier island wetlands
Oman: Arabian Oryx Sanctuary
Pakistan: Mangrove and Forest Conservation
Philippines: Award-winning project protects Philippine's
biodiversity
Russia: Restoration underway for rare rodent
Sakhalin Island: Protection for endangered whales
South Africa: Sustainable development for the world's most
botanically-rich habitat
Thailand: Protecting the Marine environment
United Kingdom: Shell UK's Stanlow Manufacturing
Complex - wild at heart
United States of America: Supporting the biodiversity of
different habitats across America
Venezuela: Uncovering biodiversity in South America's
largest lake

Energy and Biodiversity Initiative: Energy industry

collaborates with conservation groups
IUCN (The World Conservation Union): Shell secondment
strengthens ties
Project Better World: Partnerships with Earthwatch and
Voluntary Service Overseas
Speaking a Common Language: Research supports
protected areas