Shell-shocked Dutch rue new Brexit blow

For more than a century Shell has been an iconic presence in the Netherlands, making the energy giant’s decision to move to Britain a painful one for the Dutch.

Even more galling for the Netherlands is that its biggest company wants to follow consumer titan Unilever to London, despite a hoped-for economic boost from Brexit.

Here are some key questions and answers about Shell’s announcement on Monday:

– How old is Shell? –

Koninklijke Nederlandsche Petroleum Maatschappij, or Royal Dutch Petroleum, was founded in 1890 to explore for oil in what was then the Dutch East Indies and now Indonesia.

On April 23, 1907 it merged with the British firm Shell Transport and Trading to take on their main competitor, Standard Oil of the United States.

The “Shell” name and logo came from seashells imported in the 19th century by the father of Marcus and Samuel Samuel, the brothers who founded the British firm.

Due partly to national sensitivities, the company was dual-listed, much like Unilever, which was formed by a similar arrangement across the North Sea.

Since 2005 the company has been incorporated in the UK with Dutch tax residence.

– How big is its impact on the Dutch economy? –

Shell is by far the biggest Dutch company, with turnover of $180.5 billion (158 billion euros) in 2020.

The hit to the Dutch treasury if Shell moves its taxation base to London will be in the “billions” annually, Dutch media reported without giving a precise figure.

It is also a top-25 employer with around 8,500 staff in the Netherlands, one tenth of its 87,000 employees worldwide. Shell says these numbers will remain about the same.

Beyond the numbers, Shell is also something of a symbol for the Dutch of their self-image as an outward-looking nation of traders and explorers.

Shell buildings can be seen in various cities and its logos emblazon huge tankers on the skyline of Rotterdam, Europe’s largest port.

– What was the tax issue? –

The Dutch have however in recent years appeared to cool on their giant multinationals, with concerns over issues like tax avoidance and the environment.

Prime Minister Mark Rutte expended much political capital trying to ram through an unpopular policy scrapping a tax on dividends for companies, with firms like Shell and Unilever in mind.

Meanwhile the multinationals were finding the financial and regulatory burdens of their dual status increasingly difficult.

– Wasn’t Brexit meant to boost the Netherlands? –

Britain’s departure from the European Union was meant to boost the Netherlands, but while Amsterdam has gained on London’s financial hub, it hasn’t all favoured the Dutch.

In 2018, Marmite-maker Unilever had to abandon a plan to locate its headquarters in the Netherlands after a shareholder revolt. In 2020 it went the opposite way, becoming a wholly British company.

Politically stung by the failure to keep Unilever, Rutte abandoned his unpopular tax breaks plan.

That however caused trouble with Shell, whose chairman Andrew Mackenzie said the dividends tax row meant Shell was “driven to go to the UK”.

– Will it affect climate court case? –

Shell’s Dutch woes have also been compounded by a Dutch court verdict in April this year that the company must slash greenhouse gases.

But both the firm and the environmentalists behind the court case say the ruling will stand even if Shell moves.

“It will have no effect on the case against Shell. This case will remain under the control of the Dutch court,” Peer de Rijk of Friends of the Earth Netherlands told AFP.

Shell said the plans “will have no impact on legal proceedings relating to the climate ruling… This applies regardless of our tax residence location.”

dk/jhe/tgb/dl