Paper Due Date
Introduction/Background
Shell is a Global Energy Company which operates in 70 different countries. The company employs ninety two thousand (92,000) employees world-wide with its corporate headquarters is in The Hague, Netherlands. Shell operates thirty refineries and produces three point two (3.2) million barrels per day. Shell’s mission statement is: “Shell is a global group of energy and petrochemical companies. Our aim is to meet the energy needs of society, in ways that are economically, socially and environmentally viable, now and in the future” (Shell 2014).
Shell operates in sixteen (16) key segments:
- Credit Card Services
- Motor Sports
- Aviation
- Fuels
- Motorist Apps
- Shell Station Locator
- Shell Bitumen
- Shell Chemicals
- Shell Commercial Fuels
- Liquefied Petroleum Gas
- Lubricants for Businesses
- Shell for Suppliers
- Marine Products
- Sulphur Solutions
- Shell Trading and Shipping
- Shell Global Solutions
Contrast Shell’s business divisions with that of Norway’s Statoil (shown below) and it is clear that Statoil takes Corporate Social Responsibility (CSR) much more seriously than Shell seems to. This is evident through Statoil’s dedication to two of the six operations being exclusively devoted to the mandates and accountability of Corporate Social Responsibility. The New Energy segment searches for clean, green energy sources, while the Exploration & Production unit works to stave the effects of Global climate change in developing countries (Statoil 2014).
Statoil’s Business Divisions and key segments:
- Natural Gas
- New Energy
- Production Facilities (Oil and Gas)
- Procurement
- Trading
- Exploration & Production
Statoil is not nearly as large as Shell, in fact Shell is the world’s seventh largest Gas and Oil company (2014.). However, size should not be an excuse for ignoring a vitally important mandate of Corporate Social Responsibility. In fact, by being in the Top 10, Shell should arguably be a role model of Corporate Social Responsibility, yet based on what happened in Nigeria, they seem to be a role model for what not to do with the citizens of a country (Hellman, n.d.) when they want to get oil from that region.
As the map of the Niger delta shows (Eaglespeak 2008), this region is full of oil fields and refineries. Shell began oil production in Nigeria in 1958, and with very close cooperation from the Nigerian government, they worked together to quash any opposition to the cost of environmental devastation in the Niger delta (center for constitutional rights 2008). The situation escalated during the period 1990-1995 when Shell financed the use of Nigeria’s military to use deadly force to finally silence the voice of the Ogoni leaders who had long opposed and had been quite vocal about the devastation to the region. As a result of the use of deadly force, nine Ogoni leaders were executed (Shell accused 2011). The leaders had risen to the ranks of Human Rights and Environmental activists and as a result, the Nigerian government created a special tribunal counsel that falsely accused them of murder, and had them killed.
These heinous crimes were precipitated by several factors that contributed to the opposition by the Ogoni leaders. The Niger delta is known to be one of the most important ecosystems in the world. The Ogoni people and other neighboring Niger delta residents have relied on this ecosystem for their livelihood as fisherman and farmers. As a result of the transformation of this region from a thriving marine ecosystem to a barren oil producing, devastated waste land, the locals could no longer make a living for themselves or for their families (A mixed verdict 2013).
Shell continues to use gas flaring despite its outlaw by the Nigerian government. Gas flaring is s process that burns off the natural gas that is produced as a result of drilling for oil (Spence 2013). Unlike natural gas that is used for cooking and heating, this gas is toxic and contains Benzene, a deadly chemical already proven to be carcinogenic and to alter chromosomal structures, and, cause birth defects. To this day, Shell continues to make excuses about their gas flaring practice and pay a fine. Although the practice is now strictly illegal, Shell would rather continue to pay a fine and, harm the environment and its inhabitants.
Shell has being paying hefty fines for a long time and sending checks instead of doing the right thing for the citizens of the Niger delta. On the eve of the trial for the execution of the Ogoni leaders, Shell settled the lawsuit and paid many billions of dollars in order quiet all the human rights and environmental activists that viewed Shell in a negative way. The total bill for Shell has been forty two (42) billion US Dollars to the Nigerian government between 2008 and 2012. Another five point two (5.2) billion was paid in taxes and royalties in 2012 (Visser 2013).
Research Questions
Shell Nigeria’s actions have made for a legendary case study for deplorable Corporate Social Responsibility. Therefore, the research to be undertaken must seek to understand why this has been allowed for so half a century and what Shell is doing about this now. Because Shell Nigeria is also so intimately tied to the Nigerian government, the subject of this relationship must also be explored. Why, for example, didn’t the Nigerian government do more to protect its people and to ensure that money paid by Shell found its way back to the pockets of the farmers and fisherman that could no longer make a living in the region.
Hence, there are two broad areas to explore regarding the research, one being the past and present oil production operations of Shell in Nigeria. The other significant area to explore is the role that the Nigerian government has played in enabling Shell’s deplorable lack of Corporate Social Responsibility (Go 2014).
Aims and Objectives
With two broad areas to explore, the specific and measurable goals for conducting our research will be:
Below is a chart (Asian Institute 2014) outlining what Corporations should be doing in order to uphold their Corporate Social Responsibility duties:
Methods
Studying and analyzing Corporate Social Responsibility is difficult because it is highly subjective. There are many articles written about the need to develop methods to analyze Corporations’ Corporate Social Responsibility efforts, but to date, there has been no specific method that has risen to the top as the model method for analyses.
A study was conducted to determine if CEOs’ behaviors and actions could be directly linked to a company’s Corporate Social Responsibility efforts (Fook 2013). The study interviewed a number of CEOs to determine if their survey answers could be correlated to a company’s Corporate Social Responsibility initiatives. The study found that there was no direct correlation between what the CEOs said and the companies were doing to do their part regarding Corporate Social Responsibility.
In another study, researchers were trying to determine if there was a relationship between a company’s profitability and their Corporate Social Responsibility initiatives (Aupperle 1985). Here again, there was no specific correlation between a company’s profitability and how much effort /how many resources they use toward their Corporate Social Responsibility effort.
Therefore, what is needed in order to accurately measure CSR efforts is a combination of both quantitative and qualitative analyses. The quantitative analysis will define the key performance indices and provide empirical data about how it is tracking against established goals and milestones. The qualitative analysis will frame the data and provide insight about the quantitative research.
For our research, we would therefore establish a timeline for each question that we set out to analyze and additionally devise a survey to use to access the progress of each item.
A company-level measurement approach for CSR was discussed in an article (Weber 2008) published by the European Management Journal. According to Weber, in order to measure CSR, there must be Key Performance Indices (KPI) established and measured in order to understand the progress that a company is making in meeting its CSR goals. Weber recommends that the KPIs of interest are:
- Brand Value
- Customer attraction and retention
- Reputation
- Employer attractiveness
- Employee motivation and retention
In this complex study, once again, the conclusion was that researching CSR was a difficult undertaking and that it would require cooperation from many employees at many levels from a corporation. . This study did confirm that a combination of quantitative data gathering and a specific definition of the KPIs might make the study less subjective. Additionally, coupling the data gathered by undertaking qualitative analysis would provide insight about the data that is otherwise not possible.
For our efforts, we will need a task force, that shall be supported by the Executives at Shell and the work will proceed according to the Gantt chart below.
Risks
Our research will require that we appoint a task force and that this task force will have to travel to Shell’s corporate headquarters in the Netherlands first. There is a key assumption made here which is that Shell is interested in improving their reputation, their brand and their attractiveness to current and future employees. After all, these are the KPIs that we set out to test with our research. The risk here is that Shell will say that they are keenly interested in these KPIs and in making a commitment to this CSR research plan, when in actual fact they might just go along so that they don’t inflame the situation or make it worse than it already is. Therefore, the risk of assumed consent must be tested and only then, can we be sure that our research will be completed successfully. To ensure that Shell is committed to the task force effort, employees from Shell should partially staff the task force. In this way, Shell will be using their own resources to complete this research. This type of human capital commitment means that Shell is genuinely interested in the findings and recommendations that the task force will be making.
The next risk will be the health and safety of the task force staff. The images from Shell’s Nigerian plants are horrifying and dangerous.
The environment in Nigeria is toxic (Lubbers, 2010) and where there is no smoke (Nigeria’s environmental, 2014) and gas flare fires (To avoid responsibility 2014), there seem to be armed militia and protests (Ikari 2013). The task force mission will be a dangerous one. Hence, another risk is the safety of the task force members. This risk could be mitigated through an agreement from Shell in The Hague that they will cooperate with the government and in turn it’s military to ensure that the task force members are safe and get the full cooperation required from Shell employees in Nigeria (Rowell 2010) as well as the Nigerian government.
The next risk entails a meeting with the Nigerian government. For this meeting, the interview questions should be pared down to a minimum and should deal mainly with the reputation of Nigeria and the transparency of the Nigerian government. As noted earlier, Shell has given the Nigerian government billions of US Dollars, and even though this information is published on a website and is publicly available, somehow, none of this money given to the Nigerian government has ever made it to the pockets of the people of Nigeria (Shell’s grip 2010) who have lost their livelihoods and have suffered human rights and environmental hazards (Dole to drop 2012).
The final and probably most significant risk is that the results of the task force and its recommendations will be ignored and not implemented by Shell when the findings are presented to the Hague Executives. As a precaution, we did ask that Shell designate some of its own employees to staff the task force with the hope that this would ensure a commitment on Shell’s part. In the end, there can be no guarantee whether Shell will act on the task force recommendations or not. An extra safeguard to use might be to publish the findings with Global newspapers such as Financial Times, the Wall Street Journal and select African newspapers. By doing so, media awareness will be created that may deter Shell from ignoring the recommended actions.
This ongoing situation in Nigeria is appalling. There is no way to change the Nigerian government due to its corruption and what many have labeled “Shell’s puppet” (Researchomatic 2013). There is hope that interest in and awareness of CSR significance will cause Shell (Dutch court 2010) to redirect some of their environmental efforts and truly start to behave in a green, sustainable way -- the way that other Oil and Gas companies such as Statoil are already doing. Shell has been and continues to be more profit driven than environmentally conscious (Shell invests 2012).
References
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