ANSWERING QUESTIONS of THE END OF THE CASE STUDY (There are 3 QUESTIONS below)

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CASE STUDY: SHELL IN NIGERIA: ISSUES MANAGEMENT, ACTIVISM, AND REPUTATIONAL DAMAGE Shell is one of the first truly international corporations and has been one of the ten largest companies in the world for nearly a century. In the late 1980s, senior executives within Shell were particularly concerned about environmental issues and wished that the corporation would be seen by the general public as more progressive and as making headway on these issues, rather than a business as usual approach. They decided to use scenarios as one of the ways to communicate this aspiration to the rest of the company, which became known as the sustainable world scenario. These executives were initially successful in influencing the internal culture of the corporation in some way, forcing every middle and top manager to think through how their investment proposals and projects would survive in an environmentally conscious world. However, the overall culture of the corporation was not significantly affected as became clear in 1995 when Shell found itself in heated debates with a whole range of critics (including The Movement for the Survival of the Ogoni People, Greenpeace, the Sierra Club, Amnesty International, and the media) over the companys environmental impact on the Niger Delta in Nigeria. In that year, Shell failed to take a high-profile public stance against the Nigerian government, Shells local business partner in Nigeria, when it executed nine environmentalists including Ken Saro-Wiwa, an internationally acclaimed journalist and writer who had spearheaded protest against Shells environmentally destructive operations in the Niger delta.

Nigeria and the Ogoni

Shell had been operating in the Niger Delta since the 1930s and is by far the largest operator in the area with an output of more than 1m barrels a day. But the companys 90 oil and gas fields have suffered spills and sabotage, damaging the livelihood of farmers and fishermen and threatening the half-million Ogoni people who live in the Niger Delta in which the bulk of Shells production is located. The ethnic minority communities such as the Ogoni people have also seen almost no return of Shells revenues. Moreover, because of weak environmental regulation, these indigenous peoples who live traditionally by fishing and farming have suffered severe ecological and health impacts from oil spills. In Nigeria, much of the gas by-products from oil drilling were flared (i.e., burned off in the open air) which caused some of the worst local environmental pollutions. Flaring is held responsible for acid rain in the Niger Delta which corrodes roofs, pollutes lakes and damages vegetation. Together oil spills and gas flaring have threatened the Niger Delta, which is one of the largest and most ecologically sensitive wetlands in the world. In 1993, a non-violent protest organized by the Movement for the Survival of the Ogoni People (MOSOP) against Shell and other oil companies led Shell to withdraw its staff and close operations in that part of the Niger Delta where the Ogoni lived. The Nigerian government, as Shells business partner, blamed the MOSOP leadership for local resistance. The government tried Saro-Wiwa and others by a kangaroo court of the military tribunal. Nine Ogonis, including Saro-Wiwa, were executed on 10 November 1995. From the early 1990s, Ogoni environmental activists and Delta tribal chiefs had documented the environmental degradation stemming from oil company activity. Their accounts were taken up in the African media and in media around the world. Saro-Wiwas high public profile within the worldwide environmental movement forced a communication response from Shell. Shell expressed shock and sadness over Saro-Wiwas death. However, in the first instance, Shell also tried to minimize and displace blame for both the political and ecological problems in Nigeria. Shell Nigeria released a briefing statement that was mainly argumentative and defensive in nature. Overall, Shell characterized itself as a victim, arguing that the company had been unfairly used to raise the international profile of the MOSOP campaign against the Nigerian government. While the company acknowledged that there had been environmental problems, it downplayed the issue. Shell admitted that its facilities needed upgrading, but blamed sabotage rather than the corrosion of ageing pipes for the oil spills. It said that Ogoni claims of environmental devastation were grossly exaggerated, citing conclusions of journalists who said that Shells limited presence in the Delta area meant that the damage was only a tiny fraction of that routinely claimed by campaigners. Shell also cited a 1995 World Bank study that characterized the problem of oil pollution ... only of moderate priority in comparison to other poverty-related factors that contributed to environmental deterioration (i.e., population growth, deforestation, erosion and over-farming). It further relied on the World Bank study and a report by the World Health Organization to dispute the connection between gas flaring and health. Thus, it claimed a lack of evidence that such problems as asthma and skin rashes were due to its activities. Shell Nigeria also claimed that it had some influence with the government but that force was impossible: What force could we apply leaving aside the question of whether it would be right for us to do so? This mirrored the position of Shell Group Chairman at the time, Cor Herkstrter, who defined Shells role as strictly economic and commercial and said that the company lacked licence to interfere in politics or the sovereign mandate of government.

Oil spills and environmental degradation

Since the initial issue emerged in 1995, Shell has continued to remain under fire over its environmental record in Nigeria. In January 2007, advertisements calling on Shell to clean up its mess appeared in the Guardian and the Dutch newspaper De Volkskrant. The adverts were signed and financially supported by more than 7,000 people worldwide in an effort to encourage Shell to live up to the aims of its corporate social responsibility (CSR) policies. Nnimmo Bassey, from Environmental Rights Action in Nigeria, said: Despite Shells public commitment to CSR and specific promise it has made to communities, life on the fence line can too often be likened to hell. From Nigeria to Ireland, the Philippines to South Africa, Shell still too often fails to respect the environment or the needs of local communities. Shells poor environmental record in Nigeria is given prominence in the adverts, which demand the company pay $10bn to clean up oil spills and compensate communities in the Niger Delta. Environmental Rights Action, Friends of the Earth, and others estimate that as much as 13m barrels of oil have been spilled into the Niger Delta ecosystem over the past 50 years by Shell and its partners, an amount they say is 50 times more than that associated with the infamous Exxon Valdez tanker grounding off Alaska. The spills pollute the land and water of the communities. Drinking water is affected, people get sick, fish populations die and farmers lose their income because the soil of the land is destroyed. Shell has since responded to the adverts and has stated that the adverts neither reflect the realities of the situation and the very real progress made, nor represent the views of the wider communities around these locations. Shell is committed to being a good neighbor and maintains productive relationships with many local communities and their representatives. In recent years, the issue has not gone away and has in fact worsened. Although the news may not reach Western households the frequent oil spills in the region have been described as the worst oil disaster in human history. In August and December 2008, two further major oil spills affected the livelihood of the 69,000 or so people living in Bodo, a town in Ogoniland in the Niger Delta. Shell Nigeria, the subsidiary of Shell, has so far not sufficiently cleaned up the effects of these oil spills. In June 2013, a fire also broke out near one ageing pipe. In all of these instances, Shell has blamed sabotage and the illegal tapping of oil from the pipes, rather than what the community and activist groups claim is the result of the corrosion of the pipes and a lack of maintenance. A key difficulty here is that the company itself carries out investigations into the leaks, but there is no oversight by the industry or by the Nigerian government. With sabotage, Shell is also legally not entitled to pay compensation and has no direct obligation to clean up the environmental damage. Amnesty International has campaigned against Shells constant tactic to externalize the responsibility to the local community and has described it as a PR gimmick. Amnesty also believes that the company should be more transparent towards the local community in disclosing information on investigations into the leaks. In 2011, a United Nations report on the oil pollution in the Niger Delta concluded that a clean-up exercise would take 25 to 30 years, ranging from the disastrous impact on mangrove vegetation to the contamination of wells with potentially cancer-causing chemicals in a region that is home to some 1 million people. The report also called directly on Shell to take responsibility and shoulder the financial cost of the clean-up exercise. Whilst the company may dispute the causes of the oil spills, there is a significant risk that continued inaction on restoring the area may in the long run damage its reputation with stakeholders around the world. What is more, court cases involving the environmental degradation in Nigeria and Shell's alleged complicity in the killing of the nine Ogoni activists are ongoing, and these cases will continue to ensure that the larger issue remains alive in the public's mind.

Question 1. Describe the way in which this issue evolved into a crisis for Shell using the issue life-cycle models (2 models below)

Question 2. Discuss the way in which Shell has responded to the broader issue, using the concepts of buffering, bridging, and advocacy. Should the company have opted for a different response?

*Theories:

- Buffering strategy: an attempt to stonewall the issue and delay its development

- Bridging strategy: involves organizations being open to change and recognizing the issue and its inevitability

- Advocacy strategy: an attempt to try to change stakeholder expectations and public opinions on an issue through issue campaigns and lobbying

Question 3. SUMMARIZE THIS CASE

PRESSURE LATENT ACTIVE INTENSE CRISIS TIME The 'life-cycle' of an issue Enforcement Emergence Codification Debate PRESSURE LATENT ACTIVE INTENSE CRISIS TIME The 'life-cycle' of an issue Enforcement Emergence Codification Debate