The True Colors of Royal Dutch Shell

A corporation is like a person. Who they are is defined by the decisions they make and the actions they take. The same goes for the reverse. Not acting says just as much about a person or corporation’s character. The true colors of that character are best shown when things get ‘messy.’ Keeping that logic in mind, Shell qualifies as a corporation who is in it deep. It is the perfect time to ask, who is Shell? The blog “Shell: Guilty or Not Guilty?” proves that defining a person(s) character depends a lot on who you ask. Shell continually resists charges of complicity inhuman rights abuses.  When asked directly to address their lack of public involvement in these rights abuses, Shell is quick to throw up their hands and hide behind their business policy that they are not to involve themselves in political affairs. They regret the abuse of locals of the oil producing communities experience at the hands of the mobile police. They regret the failures of the Nigerian government in spreading the oil wealth to those communities. Yet they “represent these problems as essentially nothing to do with the commercial companies that produce the oil” (Human Rights Watch 189). That is the true color of Shell.

There is an obvious ethical dilemma here. How can a corporation like Shell play such a vital role in the lives of thousands of people throughout the Niger Delta without owning to any social responsibility? According to ethicists like Hartman and Donaldson, they cannot. In order to act more ethically, and in doing so prove their character, Shell must perform the four correlative duties presented by Hartman and Donaldson. In doing this they must level with the idea that not to act is to act immorally. They have a responsibility to their shareholders; this includes the local communities. In doing this they must also learn to leverage their power against the Nigerian government rather than fueling the violence between activists and law enforcement. Complying with these ethical objectives should make it impossible for Shell to argue that business and politics do not overlap. Business and politics overlap in all sectors of the world, but in a location like the Niger Delta that overlap is more important than ever.

Oil companies like Shell are operating joint ventures with the Nigerian government whose economy is very sensitive to the existing oil relationships.  In a report conducted by the Human Rights Watch in 2009 they said “they (oil companies) have constant opportunities to influence government policy, including security for the oil facilities and other issues in the oil producing regions” (HRW 3). This statement makes it clear that Shell is capable of influencing the government because of their business position. Now the question is ‘why should they?’ Why should Shell involve itself in the country’s politics? The Human Rights Watch and Amnesty International have issued reports of human rights abuses listed page after page. They have letters, faxes, interviews, and eye witness accounts.  So many of these human rights abuse instances stem from the presence of the oil companies. For example, a young man was assaulted by the mobile police at one of Shell’s gas projects. Following the assault, he was approached by authorities of the Nigerian government and told to withdraw his legal complaint and he replied he would do no such thing. Armed men from the State Security Service went to his house later and told him “to learn the lessons from the Saro-Wiwa trial.” The young man fled to Togo shortly after (HRW 14). On several occasions such as this, Shell requested Mobile Police escorts for gas projects. Involvement of the Mobile Police on a typical day results in unarmed civilians being assaulted, killed, or forced to flee. The Mobile Police are known to be especially violent, and Shell is the one who is employing them to act so. It would be unfair to say the Shell is hiring them because they want them to kill these people, but they took no steps to ensure the protection detail was done in a non-abusive or non-violent way (HRW 14). Shell could have given that young man the protection he needed to resist the threats of the Mobile Police and the State Security Service. To answer the question posed earlier, Shell should involve itself in the country’s politics because they are the facilitator of many of these abuses. The oil business is feeding political corruption when it should be doing the reverse. “Insofar as ethics involves politics, the ethical manager’s intentions must extend beyond politics internal to the organization, owing the corporation’s legal and social relationship to the community and its legal institutions” (Hartman 172). Shell is a big player in the decision making of the Nigerian government and they must leverage this to achieve more ethical practices by Nigerian authorities.

According to Hartman’s work Donaldson on Rights & Corporate Obligations, Shell has four correlative duties based on the affordability fairness condition. A duty can be defined as a justified entitlement to something from someone. Shell’s four correlative duties are; the duty to avoid depriving people of their rights, the duty to help protect people from such deprivation, the duty to aid those who are deprived, and avoiding helping to deprive. These duties are subject to the affordability condition. This condition states that if an individual/corporation cannot fulfill duties (for affordability reasons or other such constraints) than they do not have the obligation to do what they cannot. This is not the case for Shell. They have the resources to perform their duties, it is absolutely affordable. “The corporation has the resources to respond to stakeholder’s rights and, in view of what normal activities are, may fairly be expected to do so”(Hartman 164).  The first duty does not permit Shell to violate human rights. Management cannot say “that is none of our business” if rights are being violated. Court documents in the form of confidential memos, faxes, eyewitness statements, and letters reveal that in the 1990s Shell paid Nigeria’s military and mobile police to suppress resistance, often from activists in Ogoni land and other parts of the delta region (Vidal, World News). In a letter sent in 1994 from Shell to the Nigerian Government, payments made from Shell to the government were described “as a show of gratitude and motivation for a sustained favorable disposition in future assignments” (Vidal, World News). Shell regularly paid the Nigerian military to stop peaceful protest movements. They even helped plan raids of villages strongly opposing Shell. Several thousand people were killed in the 90s and many others fled from the violence (Vidal, World News). Because of Shell’s connection to this conduct, validated by the court documents, they are in clear violation of every single one of Donaldson and Hartman’s duties

In light of this situation, particular attention can be drawn to the fourth duty added to Donaldson’s list by Hartman. “To fulfill this duty the company need not contribute to protecting anybody from privation: it need only make sure that nothing it does helps the depriver get the job done” (Hartman 165). In this situation, the depriver is the Nigerian government. Shell paying the government to conduct raids on villages can easily be defined as helping the depriver. This is what the blog Shell: Guilty or Not Guilty really emphasizes. Shell has the duty to protect the local communities, but at the very least they have the duty not to help the government violate their rights! The Sullivan Principle is another concept Hartman mentions. The principle upholds the employee rights identified by Donaldson but does not obligate corporations to take a hand in South African politics. There is a great amount of criticism surrounding this principle. Subsidiaries in South Africa adhere to the Sullivan Principle and protect the rights of their employees and other nearby stakeholders, but they “deprive black South Africans of their rights by contributing to the support of the oppressive government” (Hartman 166). This is the case with Shell’s participation in the Niger delta. They defend themselves by arguing that they have security teams to protect employees on oil projects from hostage taking, sabotage, and intimidation of staff. But at the same time they pay the Mobile Police to ‘protect’ them from activists. An investigation by the Human Rights Watch reported “people are brutalized for attempting to raise grievances with the companies; in some cases security forces threatened, beat, and jailed members of community delegations even before they presented their cases” (HRW 1-2). This happened adjacent to Shell’s company property. Shell shares a responsibility to oppose human rights violations by government forces like the Mobile Police in areas they operate.

Once Shell accepts responsibility and begins to perform these duties, they should realize that there is no such thing as moral neutrality. Every decision Shell makes has some type of moral consequence that is associated with it. These moral consequences affect many different groups of Shell’s stakeholder’s. Edward Freeman in Stakeholder Theory of the Modern Corporation makes the point that managers have fiduciary relationships to stakeholders, not just stockholders. Things like the local community are included in this definition. Freeman’s Stakeholder Theory aligns well with the views of Hartman and Donaldson. Both speak to a corporation’s social responsibility to more people than those who are financial owners. “Managers cannot escape moral decisions, and cannot remain neutral on moral issues where not to decide is to decide by default” (Donaldson 164). During the trial of Saro-Wiwa, Shell managers strayed away from the public spotlight stating that they were not to involve themselves. They attempted to remain neutral. But as Donaldson says, remaining neutral is impossible. The decision not to speak out against the government in these executions has huge moral consequences. The Human Rights Watch commented themselves that “it is not possible to obsolve the oil companies from a share of responsibility for the human rights abuses taking place in the Niger Delta: whether by action or omission they play a role” (HRW 3).

Companies like Shell argue that their presence enhances respect for the rights of people living and working there. But this is clearly not the case in the Niger Delta. Amnesty International commented “oil companies working in the delta, of which Shell is the largest, have overseen a human rights tragedy.” The presence of the oil companies has only acted as a catalyst to these tragedies. If it is Shell’s wish to defend those individuals in the Niger Delta who have been constant victims of human rights abuse, they must leverage their power with the Nigerian Government so as to better align their performance with the four correlative duties presented by Hartman and Donaldson. They must accept that their decision not to act is to act immorally, and because of this they can no longer cower from the public spotlight.

Work Cited

Donaldson, Thomas J. “Rights in the Global Market.” Multinational Corporate Responsibility.

Web. 23 Sept. 2011.

Freeman, R. Edward. “Stakeholder Theory of the Modern Corporation.” Web. 23 Sept. 2011.

Friedman, Milton. “The Social Responsibility of Business is to Increase its’ Profits.” Web 18 Oct 2011.

Hartman, Edwin M. “Donaldson on Rights & Corporate Obligations.” Web 18 Oct 2011.

Human Rights Watch “The Price of Oil: Corporate Responsibility and Human Rights Violations in Nigeria’s

Oil Producing Communities.” 2 January 1999. Retrieved 18 Oct 2011.

Vidal, John. “Shell Oil paid Nigerian Military to put down protests, Court Documents Show” The

Guardian. 2 Oct, 2011.  Retrieved 3 Oct. 2011.

This entry was posted in Business, Cases (Real World), Equality, Ethics, Government and tagged , , . Bookmark the permalink.

One Response to The True Colors of Royal Dutch Shell

  1. Jordi says:

    But, what did you learn about the Saro-Wiwa trial? Did Shell push government to arrest him?

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