Communications in Petroleum Industry

? Case Study 3 ? A Two-Part Analysis of Shell in the Mid-1990s?. Case Study 3 explores Shell Oil Company?s experiences producing oil in Nigeria. Therefore, for your communications project, you are to use Case Study 3, as a seed paper for you to write a 10-15 page paper that examines social and political problems, associated with oil production in Nigeria. Information from Case Study 3 may account for no more than one-third of your paper. You are to use MLS or APA writing guidelines.
this is the link to the case study
i will also copy and paste the exact case study so there is no confusion
Case Study #3: Shell?s Human Rights Violations in Nigeria
?We have woken up to find our lands devastated by agents of death called oil companies. Our atmosphere has been totally polluted, our lands degraded, our waters contaminated, our trees poisoned, so much so that our flora and fauna have virtually disappeared. We are asking for the restoration of our environment.? ?Garrick Leton, a leader in the Movement for the Survival of the Ogoni People (MOSOP) on the reasons behind their peaceful protests against Shell Oil52 Shell?s presence in Nigeria in the mid-1990s provides the perfect example of an oil company doing as it pleases in a country lacking Friedman?s ?rules of the game.?
Nigeria is the 10th largest oil producer, pumping out nearly 3 million barrels each day. Needless to say, Nigeria?s economy is, to a large extent, oil dependent. At least 65% of its GDP comes from oil.53 Nigeria is also the most densely inhabited country in Africa. 50 Id. 51 Occidental Petroleum Corporation, Corporate Website, Feb. 10, 2009, available at 52 Al Gedicks, Resource Rebels 47 (2001). 53 Bomann-Larsen, Responsibility in World Business, Supra note 14, at 139. 17 It consists of over 130 million people, 55 percent of which comprise a rural demographic.54 The Ogoni tribe is one such faction of that rural demographic. Residing in a just over 400 square miles of coastal plains in the Niger Delta, the 500,000 Ogoni people make their living, subsisting largely upon agriculture and fishing.55 Shell?s effect on Ogoni land has been devastating, and Shell has shown only a desultory amount of concern for not only the people, but the environment in which it operates. While pursuing oil operations, Shell has legally occupied Ogoni villages and has installed oil pipelines on their farms and in their backyards?all thanks to the Land Use Act, passed in 1978 under the Olusegun Obasanjo military regime, which allows land for oil operations to be appropriated for use by multinational corporations.56 According to a report by the World Bank cited in Responsibility in World Business, Shell?s ?oil activities have undoubtedly caused significant and extensive environmental degradation in the Niger Delta region.?57 Flaring, the cheapest way to dispose of unwanted natural gas in oil extraction, is the most significant problem from Shell?s operations in Nigeria.58 The rate of flaring in Nigeria is markedly higher than that of any other country exporting oil. For example, flaring constitutes 76% of all excess natural gas disposal in Nigeria, as opposed to 20% in Saudi Arabia, 5% in Mexico, 1.5% in the former Soviet Union, and 0.6% in the United States.59 Flaring is detrimental to the environment in a number of ways, but most significantly it adds vast quantities of carbon dioxide and 54 Id. 55 Gedicks, Resource Rebels, supra note 52, at 44. 56 Id. 57 Bomann-Larsen, Responsibility in World Business, Supra note 14, at 142. 58 Id. 59 Id. 18 methane into the atmosphere, thus directly contributing to global warming. Furthermore, flaring is a known cause of acid rain.60 These gas flares, which burn 24 hours a day, are a constant problem for the Ogoni people. According to Al Gedicks, sociology professor at the University of Wisconsin, ?the intense heat and gases that are released from these flares affect nearby homes, destroy food crops, and render surrounding farmlands barren and wasted . . . the gaseous hydrocarbons are known hazards to life.?61 As previously mentioned, the process of flaring produces acid rain. This, in turn, ultimately denies the Ogoni people drinkable rainwater and severely stunts crop growth. Because of the Ogoni?s direct dependence on the land, these harmful effects are all the more destructive. Other more environmentally friendly options for disposing of natural gas exist. Flaring, however, is by far the cheapest method. Laws exist in industrialized nations which limit the amount of flaring an oil company can implement. Nigeria, however, does not have these laws. A U.S. delegation to the Niger Delta met with a Shell public relations official who denied that the Ogoni were even harmed by the constant flaring. This Shell official, who was not named, even went so far to claim the Ogoni used the flares to dry various foodstuffs and therefore benefited from the flares.62 Flaring aside, the next critical problem the Ogoni people face comes from oil spills, which are another major cause of the environmental destruction of Ogoni land. Shell has failed to adequately maintain their oil pipelines. For example, a 1992 pipeline breach completely destroyed a river, spilling oil for one week. That river, in the Ogoni 60 Id. 61 Gedicks, Resource Rebels, supra note 52, at 44 62 Id. 19 village of Botem, provided the only source of drinking water for the village. Life in the stream has all but ceased to exist, and the many farmlands that were fed by the river have since been labeled biological dead zones.63 Shell has reason to avoid quickly cleaning up oil spills?the Nigerian government does not require it. Despite the known corrosion and poor maintenance of the pipeline, Shell officials claim the pipelines are being sabotaged. Thus, they are able to take their time in reacting to spills. Forty percent of Shell oil spills happen in the Niger Delta region. To put that in perspective, oil spills in the Niger Delta constitute three times more spillage than in any other of Shell?s operations outside Nigeria.64 The Ogoni people have considered Shell?s presence a direct assault on not only their way of life, but their very right to life. In the early 1990s, Ogoni communities began to stage peaceful protests. Shell, which has been accused of entering into collusion with the Nigerian government, requested the assistance of the notorious Nigerian ?Mobile Police? to take care of this problem. Shell further provided the military with weapons, vehicles, and boats, in what one Shell scientist called ?the militarization of commerce.?65 A slaughter ensued. Over 100 people were killed, and houses were pillaged and subsequently burned to the ground. According to Human Rights Watch, virtually every Ogoni community has been targeted by Nigerian forces for their involvement in protests against Shell.66 Ogoni leaders, however, have not backed down. After Shell began oil extraction on Ogoni land, the Movement for the Survival of the Ogoni People (MOSOP) was 63 Id. at 45. 64 Id. 65 Id. at 49. 66 Id. at 46. 20 formed as an answer to the environmental degradation. Ken Saro-Wiwa, an Ogoni leader and human rights activist, started MOSOP by forming an ?Ogoni Bill of Rights? which was presented to the Nigerian government. The main thrust of the bill focused on ?political control of Ogoni affairs by Ogoni people; the right to the control and use of a fair proportion of Ogoni economic resources for Ogoni development; adequate representation in all Nigerian national institutions, and the right to protect the Ogoni environment and ecology from further degradation?67 MOSOP went on to charge Shell with genocide of the Ogoni people. So significant was the Ogoni/Shell dispute that the Ogoni people?s condition was presented to the 1992 United Nations Commission on Human Rights. As a result, the United Nations issued a statement condemning the actions taken by both Nigeria and Shell against the Ogoni people.68 The Nigerian government responded to MOSOP with even more alarming actions after the United Nations story broke. An Ogoni task force was specifically created by the Nigerian government to deal with the protestors. The Rivers State Internal Security Force, as it was called, employed military rule over the Ogoni region. This military presence has produced grave consequences, ?resulting in the deaths of over 2,000 unarmed civilians and the destruction of 37 villages? and leading to the internal displacement of some 30,000 Ogoni people.69 The clash between the military and the Ogoni people was so intense that Shell was forced to cease oil production in the Ogoni region. Ken Saro-Wiwa was considered a threat by the Nigerian government, which subsequently fabricated false charges against him and eight of his MOSOP associates. 67 Id. 68 Id. 69 Id. 21 Saro-Wiwa and his associates were charged with, and convicted of, conspiracy to commit murder. Every independent witness of the military trial considered it illegal and grossly unfair.70 Evidence has since come forth confirming that the only two witnesses who gave testimony against Saro-Wiwa and his associates were, in fact, bribed to do so. Despite worldwide outrage over the trial, including an appeal from Nelson Mandela, the Nigerian military regime hanged Saro-Wiwa and his eight associates in November 1995.71 According to Peter Schwartz, chairman of Global Business Network and former Shell scenario planner, protests against the oil company ?broke out around the world? and ?human rights activists accused the company of supporting the well-documented abusive practices of the Nigerian security forces and failing to use its leverage with the government to overturn the death sentences [of the MOSOP leaders].? 72 Shell?s devastating presence in Nigeria and cooperation with its corrupt military regime ignited a firestorm of worldwide contempt. Shell?s Response to Nigeria?Outsourcing CSR The key catalyst for change appeared when Shell suffered the economic losses resulting from the poor publicity of their Nigeria operations. Further driving the need for change, public opinion polls conducted by Shell?s own officials found the company to be worse than average in many areas including environmental and human rights. The polls also showed that it was not only the general public who believed Shell had major 70 Schwartz, When Good Companies Do Bad Things, supra note 7, at 27. 71 Id. 72 Id. 22 shortcomings. Experts, too, noted Shell?s severe deficiencies in the environmental and social spheres.73 Desperate to revive its reputation, Shell took measures to assuage shareholder fears. For example, Shell has offered to clean up the oil spills on Ogoni land and phase out the use of regular flaring at all Nigerian sites.74 Beginning in 1996, Shell ?undertook a major review of its values and business principles.?75 Such a review was necessary and considered by many to be long overdue. Although brand value concerns were a primary motivator, the oil company was also leery of having liabilities in environmental and social sectors?issues Shell had generally overlooked. Arguably its biggest change, Shell hired the consultancy group SustainAbility to engage in a ?massive public relations campaign to advertise its new ?open? approach to listening to stakeholders?76 In effect, Shell was able to outsource CSR. The first CSR movement instilled by SustainAbility was to focus on transparency. Shell would now report health, safety, and environment performance information. This information was then analyzed to determine if it met Shell?s self-imposed targets for reducing Shell?s environmental impact.77 The second CSR movement employed by Shell and SustainAbility focused on the stakeholders. Primarily an advertising campaign, the stakeholder efforts were directed at society in general. Its purpose was to inform the public of Shell?s new environmental and societal standards. Furthermore, the campaign used the transparency of externally 73 Christine Parker, The Open Corporation 161 (2002). 74 Id. at 162. 75 Lynn Pain, Value Shift 20 (2003). 76 Parker, The Open Corporation, supra note 73, at 162. 77 Id. 23 reporting performance in relation to self-imposed standards as an attempt to avert criticism.78 Environmental marketing, or green marketing as it is sometimes called, played an integral role in SustainAbility?s efforts to clean up Shell?s image. One set of advertisements appeared in The Economist as well as the London Financial Times. The advertisements are ?clearly aimed at leaders in opinion-making and those deciding whether to invest in Shell shares.?79 The advertisements are analyzed in detail: [t]hese advertisements are a series of full-color double-page images of lush rainforest, a tiny tree frog, an obviously diverse blend of people of different ages and races, and so on, and they ask questions such as ?Exploit or explore?,? ?Cloud the issue or clear the air?,? and ?Protect endangered species or become one?? The text of each advertisement refers to one of the environmental or social responsibility issues that Shell is seeking to address. Each also contains a careful disclaimer that the advertisement is a Shell group initiative and does not necessarily reflect the views of any Shell operation . . . The disclaimer clearly illustrates the difficulties of centralizing control on compliance management issues across a huge corporate group (emphasis added).80 Another Shell advertisement entitled ?Listening and Responding: Dialogue with our stakeholders? is analyzed: the Shell group uses cute graphics and the following text to say that it is ?no longer solely accountable to our shareholders? but to ?our customers and our people, to other companies with whom we work, to government and nongovernmental groups, and to all those affected by our operations and products.? It states that Shell must not only comply with law but also ?understand the currents of social opinion and strive to meet societal expectations that are not reflected in legislation.? The pamphlet goes on to describe their focus group and survey methodology and commits Shell to continue to engage employees, the public and peer companies in dialogue about ?the three legs of sustainable development: economic progress, environmental care, and social responsibility.? They invite people to visit their interactive website and to receive and comment on Shell?s social responsibility reports.81 78 Id. 79 Id. at 163. 80 Id. 81 Id. 24 In the course of the last decade, SustainAbility?s CSR campaign has certainly changed the public?s perceived view of Shell. By and large, the company is considered significantly more transparent than it ever was in the past. Shell has also been praised for its openness with stakeholders. In spite of that openness, however, Shell has also been criticized for implementing nothing more than an elaborate public relations operation with little to actually show for its efforts.82