The old Latin adage pecunia non olet (money does not smell) has been used throughout the ages to justify all sorts of financial dealings. But, as the IUCN is experiencing right now, if you are committed to protecting the environment, you have to carefully watch where the money comes from.

In October 2007, IUCN signed an agreement with oil giant Royal Dutch Shell with the aim of enhancing the company's biodiversity conservation performance and, at the same time, strengthening the green coalition's own capacity to influence large corporations into a greater environmental commitment.

The issue is a sensitive one. Not by chance the relationship between IUCN and transnational corporations was the very first question posted to the three presidential candidates' first debate on Thursday.

The Shell agreement, whose core funding is worth at least 1.2 million U.S. dollars, is now being severely questioned. A number of IUCN's international member organisations are demanding that the contract be cancelled, and have presented a motion to that effect.

Motion 107, introduced by member groups such as Friends of the Earth International, Pro Natura, the Argentine-based Latin American Centre for Human Rights and Environment (CEDHA), and the Netherlands Society for Nature and Environment call the network's director general to "terminate the agreement ... with Shell."

"Shell's past, present and future operations have huge negative social and environmental impacts," the motion says. The Dutch oil company "has a highly controversial reputation in dealing with ... communities (affected by oil exploitations)."

Indeed, despite recent efforts of green-washing its corporate identity, Shell continues to enjoy of a less-than-great environmental reputation. For instance, Shell continues flaring gas in Nigeria, especially in the Niger delta, despite several promises to phase out the process.

In addition, detractors recalled that the oil giant rejected European Union plans to reduce carbon dioxide emissions by European companies, and is increasingly investing in highly-polluting oil sands in Canada and is also planning oil explorations in the Arctic.

In response to the allegations, the IUCN secretariat has emphasised the likely high costs of terminating the contract, rather than defending its hypothetical influence upon Shell's behaviour. "The core funding (of some 1.2 million U.S. dollars) would be lost," an internal IUCN paper says, and should Shell take legal action, "the financial consequences (for IUCN) are unforeseeable."

Dennis Hosack, IUCN programme officer for business and biodiversity, admitted that Shell "has a large environmental footprint, and is operating in places very hard to manage, such as the Niger delta. We do not defend Shell," Hosack said. "But IUCN believes that we can help it to reduce its environmental footprint, and so raise the environmental standards for the whole oil industry."

Carbon footprints are inevitable, Shell CEO Jeroen van der Veer told IPS TerraViva earlier this week, but Shell is committed to work together with civil society to "do things right" and have NGOs as "witnesses." He also accused media of nurturing prejudices against his company.

Other than Shell, IUCN maintains a similar controversial partnership with Holcim - the leading global supplier of cement. Other partners are Total, the French oil giant and, in the pipeline, Rio Tinto, the world's largest coal extractor.

A member of the IUCN National Committee of the Netherlands, directly involved in the debate, told IPS TerraViva: "We at the Dutch national committee have indeed discussed the motion to terminate the contract with Shell, but we do not have a position as a group."

A Latin American delegate to the IUCN congress said: "if you don't quote me, I would tell you that the trade off is extremely dangerous for all environmental activists."

Christiane Ehringhaus, a German researcher at the Latin American desk of the Centre for International Forestry Research, considered it "very naïve to believe that environmental groups can really influence the corporate behaviour of enterprises as powerful as Shell."  

But Anna Kalinowska, member of the Polish National Foundation for Environmental Protection, says: "if you black-label all major companies, you are not going to have any chances to inducing changes in their ecological behaviour."