Shell Sets the Context

If you asked 100 executives on the street to list industries and companies with effective stakeholder engagement strategies, my bet is that the vast majority of people would overlook the oil and gas sector – let alone mega corporation Royal Dutch Shell. But thanks to social media forums like Justmeans, that’s all changing.

Last week three Shell executives – Bjorn Edlund, Executive Vice President of Communications, Nick Welch, Head of Policy and External Relations and Nick Wood, Vice President of Communications – joined the Justmeans community for a provocative conference call about the Wiwa v. Shell case and the company’s recent $15.5 million human rights settlement.

“We are trying to make ourselves available by using different avenues of social media to reach out to more people with a response,” says Shell’s Welch. “It’s our goal to respond as human beings, not as some big corporate machine. If this conversation stimulates people to want to learn more, then that will be all the better.”

The conference call was illuminating for those participating, and also timely. Just hours before the call took place, news broke of a terrorist attack on a major oil pipeline supplying Shell’s Bonny export terminal in Nigeria. In an e-mail sent to various news organizations, the militant group claiming responsibility, the Movement for the Emancipation of the Niger Delta (MEND), described their motive:  “The region where the wealth within the city has been built remains mired in poverty and lack. The people who own the resources have no stake in it, for which we have now waged a war to emancipate.”

Seemingly unruffled by the transpiring drama, Shell executives explained why this is only the latest in a string of similar attacks against the company’s Niger Delta facilities. “There is unrest because people see oil and gas operations generating billions of dollars in revenue, but people aren’t getting any of the benefits from that,” says Wood. “Communities are targeting companies such as Shell because they want a greater share.”

As with most oil rich Nations, Nigeria’s oil resources are controlled by the Federal Government, which then issues oil exploration and production rights to corporate partners in exchange for a share of profits. Oil presently accounts for 95 percent of Nigeria’s earnings and 80 percent of the government’s total revenues. But most of Nigeria’s 30 million citizens live below the poverty line, with no access to electricity, clean drinking water or other amenities enjoyed by Westerners. To add insult to injury, citizens living close to Shell refineries can plainly see the gas flares that contribute significantly to local air and water pollution, as well as global warming. These variables converge to create a terrible tension.

“What started as action by communities has over the years grown into a criminal movement,” says Wood. “[MEND] is heavily armed. They steal our crude oil, they attack our facilities and they pose a large threat to our staff working in the Niger Delta.”

According to Shell over the past three years 133 company employees and contractors working in the Niger Delta have been kidnapped, and five have been killed in assaults. Attacks from MEND are estimated to have forced oil companies including Shell to shut down at least 133,000 barrels per day of oil production in the last month, diminishing corporate profits and reducing Nigeria’s oil output by as much as 40 percent. That lost income creates a big incentive for military government intervention.

In mid-May the Nigerian military launched an offensive against MEND, bombarding rebel camps from the air and sea and sending in three battalions of ground troops to hunt them down. The offensive is said to have done little to quell the group’s resolve, however. Military attacks such as this one are known to sometimes displace villagers from their homes and also prevent people from accessing humanitarian aid. If anything, the Nigerian military’s notorious “kill and go” strategy potentially encourages some elements of the insurgency to become even more determined. Given MEND’s motives and the remote mangrove creeks of the Niger Delta, industry and security experts say that it is virtually impossible to guard against future attacks.

With no end to the violence in sight, Nigeria’s president, Umaru Yar’Adua, offered amnesty to militants in the Niger Delta this past Friday as part of his strategy for helping to protect national security and oil industry interests. For its part, Shell says that it is placing more emphasis on community outreach initiatives that create economic, social and environmental benefits for Nigerian citizens, but at the end of the day there is only so much the company can do.

“When it comes to [establishing] law and order, that’s not a Shell issue. This is not the sort of situation where we can get reasonable thinking people in a room and talk about it and sort things out,” says Wood. “The long-standing feuds between different groups of people, the huge economic interests on the legal and illegal side of things, makes this quite an intractable situation and a very difficult area to be in.”

Facing serious economic and ethical challenges, Shell is in a tight spot. Should the company decide to withdraw from Nigeria, then it would lose one of its most important markets, as it controls almost half of the 2.5 million barrels of oil that Nigeria exports daily. On the other hand, should Shell remain in Nigeria, then it will continue to come up against the nearly insurmountable struggles of staying ahead of security risks and also, reframing the past.

The Ogoni Legacy

Ogoniland, the 404-square-mile area off the coast of the Gulf of Guinea, is where Shell’s troubles in Nigeria all began. The Ogoni people, who represent less than two percent of Nigeria’s population, rose to international attention after a massive public protest campaign against Shell was led by the Movement for the Survival of the Ogoni People (MOSOP).

MOSOP’s campaign is ongoing, although it is not a terrorist group and is in no way affiliated with MEND. Founded in 1990, MOSOP’s mandate is to use non-violent protests in order to promote democratic awareness; protect the environment; seek social, economic and physical development for the region; protect cultural rights and practices; and seek appropriate rights of self-determination for the Ogoni people.

Activist and author Ken Saro-Wiwa served as founding member and president of MOSOP until 1995, the year he died. According to the website www.wiwavshell.org, in 1994 Saro-Wiwa and eight other Ogoni leaders were prevented by the Nigerian military from attending a protest gathering which left four Ogoni chiefs dead. The bodies of the four chiefs were never found. Despite the lack of evidence, the military government accused Saro-Wiwa and the eight other MOSOP members of causing the deaths, and arrested and detained all nine men. Eighteen months later, Saro-Wiwa and five others – John Kpuinen, Saturday Doobee, Daniel Gbokoo, Felix Nuate, and Dr. Barinem Kiobel – were executed. The military also conducted raids on 60 towns in Ogoniland and detained and beat several hundred men suspected of involvement with MOSOP.

Saro-Wiwa fought vigilantly for human rights and environmental justice for most of his career. He was nominated for a Nobel Prize and awarded the Right Livelihood Award and the Goldman Prize. Reportedly, his last words were: “Lord take my soul but the struggle continues.”

The lawsuit Wiwa v. Shell was filed in 1996 on behalf of 10 plaintiffs, who include family members of the deceased victims. According to the complaint, plaintiffs allege that Shell officials helped to supply Nigerian police with weapons during the 1990s, that they took part in security sweeps in parts of Ogoniland, and that they hired government troops that shot at villagers who protested against a pipeline. They also allege that Shell helped the government to capture and execute Saro-Wiwa and the other MOSOP members.

Shell firmly denies these charges and also says that it tried to get clemency for Saro-Wiwa and the eight other men. “What happened in Nigeria in 1995 was terrible. It was just the beginning of the problems we’ve had there,” says Edlund. “It has become a reputational burden for us.”

Shell hopes that its $15.5 million human rights settlement will help set a new tone for the future and provide the Ogoni people with some relief. An out-of-court settlement wasn’t necessarily the easy route, the company explains, but the most sensible one for all parties involved. “We were quite prepared to go to court and wanted to clear our name. We were confident that there was no evidence to show that we colluded with the government in any way, in any of the allegations that have been made as part of this case,” says Wood. “On the other hand, you look at the thirteen years that it has taken to get this far in the case. We were all looking forward to moving on, and this settlement seemed the best way to maximize the chance for reconciliation in Ogoniland.”

Lessons Learned

Regardless of what people believe about Shell’s history in Nigeria, one thing is absolutely certain. This is a company with a truly global perspective and a wealth of expertise that very few other companies have. These corporate assets could prove invaluable to the global community in years to come.

“There is something we can do so that something good comes out of this,” says Wood. “Even if you learn the painful way, you do learn, and you can pass that information along to others.”

At present Shell is engaged in a number of initiatives designed to ensure that its insights and experiences will not go to waste. Through the Voluntary Principles for Security and Human Rights, Shell shares its framework for maintaining safety and security of its operations, while also acknowledging the fundamental freedoms of its stakeholders. Similarly, through theExtractive Industry Transparency Initiative, Shell shares best practices with governments, companies and civil society, also holds itself accountable to certain ethical standards. “We publish what we pay,” says Wood. “We make it clear what the revenue stream is, and how the share of income is distributed throughout the countries where we operate.”

With the confluence of political, economic, social and environmental forces simultaneously working for and against Shell’s interests, the company says it has learned why it is essential to build a business that is a welcome partner to people. The more Shell is embraced by local citizens, the lower its risks and operating costs will be, and the higher overall value the company stands to generate. Striking such a balance is complex, particularly in countries like Nigeria. Still, Shell seems determined to establish the necessary foundation.

“We haven’t got all of the solutions for improving local conditions in the areas where we operate, and neither have governments or NGOs,” says Edlund. “The game plan is to have a clear set of principles, clear governance within the company, and to recognize that [we] don’t live in a bubble, that [we] have to collaborate with other people that you can make some progress with.”

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