I. the Story of Shell, Nigeria and the Ogoni People – Environment, Economy, Relationships: Conflict and Prospects for Resolution

Sustainable Development Sust. Dev. 9, 74–86 (2001) DOI: 10.1002/sd.161 SHELL, NIGERIA AND THE OGONI. A STUDY IN UNSUSTAINABLE DEVELOPMENT1: I. THE STORY OF SHELL, NIGERIA AND THE OGONI PEOPLE – ENVIRONMENT, ECONOMY, RELATIONSHIPS: CONFLICT AND PROSPECTS FOR RESOLUTION

Richard Boele1,*, Heike Fabig2 and David Wheeler3

1 Kingston University, UK 2 Sussex University, UK 3 York University, Canada

The Shell Petroleum Development international campaign against the Company (SPDC) and its joint-venture Nigerian government and Shell. Despite partners – particularly the Nigerian the avowed non-violent nature of the National Petroleum Corporation – have campaign, military repression resulted in earned billions of dollars from the oil thousands of Ogoni killed, raped, beaten, extracted from the land of the Ogoni in detained and exiled and the main the Niger Delta. The Ogoni however leaders executed. Under pressure from complain that they have not seen the Ogoni, Shell was forced to pull out adequate benefits; rather the oil has cost from Ogoniland in 1993. Since then, them dearly in terms of a deteriorating Shell International has re-invented its environment and underdevelopment and corporate strategy in line with principles mobilized a successful national and of sustainable development and it has

* Correspondence to: Richard Boele, Centre for Stakeholding committed itself to a level of stakeholder and Sustainable Enterprise, Kingston Business School, Kingston engagement on its environmental and Hill, Kingston Upon Thames, Surrey KT2 7LB, UK. 1 Based on a trilogy of papers presented at the Academy of social performance which would have Management, Toronto, August 2000. been unthinkable in 1995. So for Shell, a return to Ogoni would be a powerful Copyright © 2001 John Wiley & Sons, Ltd and ERP Environment. symbol that their corporate commitment SHELL, NIGERIA AND THE OGONI I to being a socially responsible company In the third paper we assess the effective- is being translated into action on the ness of integrating sustainability into business ground. However, there is still little trust strategy and postulate that Shell’s strategic between the company and the Ogoni management approach has the potential to people and their representative deliver profound change and full integration organization, the Movement for the of sustainability in Nigeria and elsewhere. Survival of the Ogoni People (MOSOP). Many of the issues raised by the Ogoni (such as the need for locally sustainable SHELL IN NIGERIA development, distribution of oil wealth, community projects and environmental Shell’s exploration began in Nigeria – which issues) have yet to be addressed. This was then a British colony – in 1937 (SPDC, paper is the first of a trilogy examining 1998b). The Company discovered its first the issues, relationships, management commercial oil field in the Delta in 1956 and and strategic implications of the case. by 1958 the first cargo of oil left Nigeria Copyright © 2001 John Wiley & Sons, (SPDC, 1998a,b). Ltd and ERP Environment. Today, Shell’s operations in Nigeria account for 14% of their world-wide crude oil production, yet account for only about 7% of their Received 14 November 2000 profits. Shell produces half of Nigeria’s total Revised 23 January 2001 daily production of 2 million barrels, some of Accepted 13 February 2001 the best crude oil in the world (Howarth, 1997, p 384). Shell considers their Nigeria operations to be ‘arguably Shell’s largest and INTRODUCTION most complex exploration and production venture’ outside North America (Shell Inter- any of the issues raised by the Ogoni national, 1995b). in their struggle for social and envi- Since the industry’s nationalization in the Mronmental justice against the Nige- 1970s, the Nigerian government has operated rian government and the oil companies – joint ventures with foreign oil companies. In such as the need for locally sustainable devel- the case of Shell’s operations, the government opment, distribution of oil wealth, community owns 55% while Shell Petroleum Develop- projects and environmental issues – have yet ment Corporation (SPDC) – Shell’s Nigerian to be addressed. subsidiary – owns 30% and Elf and Agip hold This paper is the first of a trilogy examining the rest. Shell is the operating partner mak- the issues, relationships, management and ing all day-to-day operational decisions strategic implications of the case. In this pa- (Howarth, 1997). per, we will summarize the chronological Shell has faced many significant challenges story of the conflict between the Ogoni and in Nigeria. Rampant corruption, military dic- Shell, providing a context for the trilogy’s tatorships and the government’s inability to other articles. provide basic development are just a few. The second paper places the confrontation Despite these circumstances the company be- in the context of globalization and the chal- lieves its ‘most effective contribution to Nige- lenge from the anti-globalization social move- ria is through the taxes and royalties we pay ment to contemporary business and business [to the federal government]’ (Shell Interna- practices. The case also provides a number of tional, 1995a). unique insights for proponents of stakeholder Many demands have been made of the theory with respect to what more equitable company from the communities and local and sustainable economic development might government. The company says that they ‘do look like. not hold the solution to community demands

Copyright © 2001 John Wiley & Sons, Ltd and ERP Environment. Sust. Dev. 9,74–86 (2001) 75 R. BOELE ET AL. for more amenities, more development, more Federal State the power to seize any land employment and more control over oil rev- needed for oil exploitation (Detheridge, 1999; enues. That is primarily a government respon- Frynas, 2000). In the late 1970s, the govern- sibility’ (Shell International, 1995d). ment further increased its control over the petroleum industry via two indigenization decrees, which virtually nationalized the oil industry and paved the way for establishing the THE OGONI AND OIL: current joint ventures. ENVIRONMENTAL, SOCIAL AND The disenchantment of the Ogoni people ECONOMIC ISSUES with the oil multinationals had been building from the early days. As early as 1968 Ken The Ogoni people live in Rivers State in the Saro-Wiwa wrote in his pamphlet The Ogoni Niger Delta, in south-eastern Nigeria, in an Nationality Today and Tomorrow area that is about 100 square kilometres in size. They number around 500000 people who We refuse to accept that the only responsi- live in six kingdoms. Linguistic studies sug- bility which Shell-BP owes our nation is gest they settled in the area currently known the spoliation of our lands [...] We shall as Ogoni over 2000 years ago (Kpone-Tonwe, appeal to the Federal military govern- 1987). The Ogoni were – and still are today – ment, or whatever government succeeds it a largely agricultural and fishing society. The to continue to show concern for small Ogoni claim their land was until the 1960s nationalities such as ours – especially in known as the ‘breadbasket’ of the region constitution making, that it TAKE (Boele, 1995). STRONG COGNIZANCE OF OUR DE- The discovery of oil initiated a process that SIRES WITH REGARD TO THE COMPA- dramatically affected the Ogoni, the peoples NIES PROSPECTING OR OPERATING of the Niger Delta and Nigeria as a whole. ON OUR SOIL (original emphasis, repro- The Niger Delta is one of the world’s largest duced in Saro-Wiwa, 1995a). wetlands, covering over 20000 square kilometres. The fragile eco-systems contained within Shell estimates that ‘[f]rom the start of pro- the area include mangroves, freshwater duction until 1993 when the company sus- swamp forests, lowland rainforests and pended operations in Ogoni land a total of coastal barrier islands. It also contains enor- 634 million barrels of oil, valued at US $5.2 mous bio-diversity including unique and rare billion, were produced from the area of which species. Most of the six million people living 79%, went to the Nigerian government in within the Delta depend on an agricultural taxes, royalties and equity take’ (Detheridge and fishing economy for their survival (Row- and Noble, 1998). ell and Goodal, 1994; Project Underground, The distribution of this oil wealth is a major 1997). issue for the Ogoni and other minorities of the Oil, and most importantly the revenue it Niger Delta (Saro-Wiwa, 1995a; MOSOP generated, quickly dominated the Nigerian Canada, 1998c). Like the other oil producing economy and thus control over oil resources communities, the Ogoni have never directly was, and still is, a key concern for any Nige- controlled even part of the petroleum rev- rian government (Ikein, 1990; Khan, 1994). In enue. This has always gone to the federal order to assure this control, the Nigerian state government, which has the duty to re- gradually strengthened its control over the distribute it amongst the country’s states. The land. The British colonial administration had Nigerian constitution originally provided that vested the ownership of all minerals in the 50% of the money generated by the oil (pro- Crown. This policy was intensified by the ceeds of royalties and mining rent) would go post-colonial Nigerian government through a to the regions producing the oil. At the height Land Use Decree, which vested all land in the of the Ogoni–Shell conflict in the early 1990s State and later the Petroleum Act, giving the the distribution formula stood at 55% for the

Copyright © 2001 John Wiley & Sons, Ltd and ERP Environment. Sust. Dev. 9,74–86 (2001) 76 SHELL, NIGERIA AND THE OGONI I federal government, 32.5% to the state gov- changed and they imitated a mainstream cul- ernment, 10% to the local government, 1% to ture, which caused division separating them a fund for the amelioration of ecological prob- from their communities (Frynas, 2000). As the lems and finally 1.5% to the Oil and Minerals main farm workers, women reported being Producing Areas Development Commission especially hard hit by the environmental and (OMPADEC). This body was charged with social consequences of the oil exploration. channelling funds specifically to oil producing They saw their lands appropriated for oil communities. In 1992 the OMPADEC share extraction, and received neither adequate was increased to 3%. More recently the figure compensation nor secure jobs in return. was increased to 13%. Sadly, the funds for the With the oil also came major industrial de- oil-bearing communities largely evaporated in velopment. Ogoni contains two oil refineries, corruption before they could trickle down to one petrochemical plant, a fertilizer plant, a the communities (Boele, 1995; Robinson, 1996; cement factory and a power plant, but the Frynas, 1999, 2000). No real development was Ogoni people are frustrated that the factories delivered and what projects were realized do not employ Ogoni people – despite Fed- were often unsustainable. eral government regulations – at what they Thus the oil communities saw their allo- consider to be a meaningful level. cated and their actual share of the oil revenue The Ogoni accused Shell of ‘devastating’ decrease gradually while at the same time, their environment from the start of Shell’s others – non-oil-producing majority peoples, operations in 1958 (Saro-Wiwa, 1995a; the federal government and the oil companies MOSOP Canada, 1998c). Shell’s response to – grew wealthier. While the oil may have the environmental accusations of the Ogoni brought industrialization to the region and was robust: export revenues to the country, the Ogoni The company recognises there are envi- claim their quality of life has not improved, ronmental problems associated with its and they have not ‘developed’ along with the operations and it is committed to dealing rest of their country (Saro-Wiwa, 1995a; with them, but these problems do not add MOSOP Canada, 1998c; Hammer, 1996; up to anything like devastation (Shell In- Robinson, 1996; Naanen, 1995). ternational, 1995c). Oil impacted directly upon the lives of the Ogoni people with both environmental and In addition to the general accusation of social costs. The communities were con- ‘devastating’ the environment, the company fronted first with seismic surveys and build- stood accused of specific acts of environmen- ing works, and then with the effects of oil tal irresponsibility. These included opera- extraction such as leaks, oil spills and gas tional oil spills, gas flaring, acid rain, land use flaring. Apart from the environmental pollu- and waste management. The company action, the communities saw oil exploration as knowledges that there were environmental aggravating already heavy pressure on land impacts but sought to put these into a wider in one of Africa’s most densely populated context of over-population, over-farming, de- regions. However, Shell argues it only uses forestation and industrialization (Shell Inter- 0.3% of the Delta for its operations and does national, 1995c). not believe it has a significant impact on land The Ogoni pointed to out-dated equipment, pressure (Detheridge, 1999). which was poorly maintained over the years The advent of oil, oil workers and oil instal- and which led to numerous spills (Saro-Wiwa, lations brought important societal changes 1995a; MOSOP Canada, 1998c). Most of the such as oil workers migrating into an area, the Ogoni oil infrastructure was built in the 1960s increasing importance of the money economy and 1970s. Referring to the equipment Shell and rising food prices. Temporary employ- confirmed that ‘they were acceptable then and ment was particularly destructive. As young in line with standards of technology then men were relatively highly paid for short prevalent, but we would not build them that periods of time, their spending habits way now’ (Shell International, 1995a).

Oil spills are still a major source of conflict Ogoni by military decrees and the threat between the communities and the oil compa- of or actual use of physical violence so nies. According to Shell statistics the Ogoni that Shell can wage its ecological war were very active saboteurs with 69% of all without hindrance and so produce the oil spills in Ogoni between 1989 and 1994 and petrodollars as well as the interna- recorded as sabotage (in comparison to 28% tional and diplomatic support upon which for the rest of the Delta – Shell International, the military dictatorship depends (Saro- 1995c). The figure has been strongly disputed Wiwa, 1995b). by the Ogoni, who point to a lack of logic in farming people polluting their own land for Obviously, there is always a certain level of inadequate compensation as SPDC main- required co-operation between business and tained a policy of not paying compensation government. However, the Ogoni claim that where sabotage was believed to be involved. the partnership between SPDC and the Nige- There is still little independent scientific rian military government went well beyond a evidence concerning the impact of the oil in- normal business relationship. Shell stood ac- dustry on the Ogoni’s land that could be cused of seeking and assisting the interven- accepted by all parties. There were two major tion of the security forces when confronted studies into the Delta’s situation – one by the with demonstrations by the communities (Hu- World Bank and the other by the Shell- man Rights Watch/Africa, 1995; Vidal, 1995; initiated and funded Niger Delta Environ- Robinson, 1996; Human Rights Watch, 1999; mental Survey. However they do not focus Duodu, 1996). Human Rights Watch/Africa specifically on Ogoni and do not take social noted that: and cultural effects into consideration (see World Bank, 1995; Project Underground, 1997; Because the abuses set in motion by NDES, 1995). Shell’s reliance on military protection in The claims and counter-claims around the Ogoniland continue, Shell cannot absolve impact of oil spills are paralleled throughout itself of responsibility for the acts of the the oil companies’ relations with the oil-bear- military. [...]TheNigerian military’s de- ing communities. Another of these was the fence of Shell’s installations had become relationship between the oil companies and so intertwined with its repression of mi- the Nigerian military dictatorship. norities in the oil-producing areas that Shell cannot reasonably sever the two (Human Rights Watch/Africa, 1995).

THE ROLE OF THE NIGERIAN The Ogoni perceived the partnership as act- MILITARY STATE ing against their interests. The fact that Shell has invested considerable sums on its com- The co-operation between the oil companies munity relations has done little to change this and the military dictatorship was an issue that perception in Ogoni where communities feel the Ogoni felt strongly about. From their these projects are insufficient, do not address point of view, two malign forces were the real issues and are a source of division combining to pursue their own interests. Ken within the communities. Saro-Wiwa expressed this sentiment in a statement during his trial: THE EMERGENCE OF MOSOP AS A Since it [Nigerian military dictatorship] POLITICAL FORCE also depended for survival on the availability of oil money, its violence is Where there is discontent and frustration in a directed at oil-producing areas such as community, new social movements may Ogoni. [...] The military dictatorship emerge to bring about fundamental changes holds down oil-producing areas such as in the existing social order.

In Ogoni a powerful example of such a Ogoni people to the United Nations Work- movement emerged to agitate for Ogoni self- ing Group on Indigenous Populations. This determination in order to bring an end to began the linking of the Ogoni with interna- perceived ‘economic strangulation, environ- tional allies in the form of human rights or- mental degradation and political marginali- ganizations, minority rights organizations sation’ (Saro-Wiwa, 1995a). With the estab- and indigenous peoples’ support groups lished Nigerian political system having world-wide (for example, Amnesty Interna- largely failed the Ogoni, they believed they tional, 1994a,b,c,d; Rowell and Goodal, 1994; had little choice but to revert to direct social Human Rights Watch/Africa, 1995). In Janu- action. The Ogoni movement decided to ary 1993, MOSOP was admitted as a mem- engage in a non-violent struggle drawing ber to the Unrepresented Nations and on the language of minority/indigenous Peoples Organisation (UNPO). UNPO is an peoples’ rights and social and ecological jus- organization of nations and peoples not ade- tice. In October 1990 they launched the quately represented in international fora Ogoni Bill of Rights. In the Bill, the Ogoni such as the UN. With their UNPO admis- people, while underlining their loyalty to sion the Ogoni received their first major the Nigerian nation, asserted their right to global press exposure from outlets such as self-determination and articulated their de- CNN and Time Magazine. The international mands for environmental, social and eco- media were only too happy to carry nomic justice (for a full text of the Bill, see MOSOP’s accusations against Shell (see, for MOSOP Canada, 1998b). example, O’Sullivan, 1995; Hammer, 1996; The oil question was very prominent in Vidal, 1995). the Ogoni Bill of Rights. Seven of its 20 listed points dealt with the exploration of oil, the distribution of the revenue it gener- SHELL AND THE OGONI IN DIRECT ated and the relative poverty and neglect of CONFLICT Ogoni in contrast to the money oil resources generated for the Federation. Their frustra- In December 1992, MOSOP issued a ‘de- tion was illustrated by the following extract mand notice’ to Shell, the Nigerian National from the Bill, which notes: Petroleum Corporation and Chevron, which gave them 30 days to respond to a list of [I]n over 30 years of oil mining, the Ogoni demands that included payment of compen- nationality have provided the Nigerian sation for past damage and impacts of the nation with a total revenue estimated at oil activities (Saro-Wiwa, 1995a). Shell and over forty billion Naira, thirty billion dol- the others did not respond and as a result lars. That in return for the above contribu- they were declared ‘persona non grata’ by tion, the Ogoni people have received MOSOP on 4 January 1993, which was de- NOTHING (quoted in Saro-Wiwa, 1995a clared Ogoni Day. 300000 people peacefully – original emphasis). marked the United Nations Year of Indige- nous People. There was not a single re- Shortly after the proclamation of the ported incident of violence (Boele, 1995). Ogoni Bill of Rights, the signatories of the However, that day, chants of ‘Say no to Bill established the Movement for the Sur- Shell!’ were heard at rallies throughout vival of the Ogoni People (MOSOP), which Ogoni. soon became the main social movement or- Shell had found tensions rising in Ogoni ganization voicing the demands articulated rising even before this (Boele, 1995) and offi- in the Bill of Rights (MOSOP Canada, cially withdrew all their staff from Ogoni in 1998a,b). January 1993 after a worker was allegedly In July 1992 Ken Saro-Wiwa, as the beaten (Boele, 1995). The Ogoni denied that MOSOP spokesperson, presented the first in- staff were physically hurt but admit that ternational speech on the plight of the Shell facilities were closed down.

CONFLICT WITH THE MILITARY across communities and leadership cadres AUTHORITIES especially vocal individuals [...] (quoted in Boele, 1995). In subsequent clashes between the Ogoni community and Shell, Nigerian soldiers The memorandum also noted the need for opened fire on what MOSOP claimed were ‘pressure on oil companies for prompt regular villagers peacefully protesting against the de- inputs as discussed’ (quoted in Boele 1995), struction of the fields for the pipeline con- implying that Shell may be paying the mili- struction, and the first Ogoni people were tary authorities for the operations of Major killed (Ikwunze, 1993; Boele, 1995). Okuntimo’s unit (the Internal Security Task As the international profile of the Ogoni Force) in Ogoni – a unit well known for its cause grew, so the domestic pressure on brutality in Ogoni. Shell responded ‘We cate- MOSOP and the Ogoni people increased. Late gorically deny that we paid money to the 1993 saw a series of attacks on Ogoni commu- likes of Major Okuntimo’ (Vidal, 1995). nities in both Ogoni and Port Harcourt result- Even while tensions rose from 1993 there ing in hundreds of deaths (Niboro, 1993). had been numerous attempts to build bridges Newspapers reported the attacks as ‘ethnic between Shell and the Ogoni people. They were fundamentally flawed by Shell’s diffi- clashes’ with Ogoni neighbours, but the culty in recognizing the significance of Ogoni saw the attacks as punishment for their MOSOP: stand against the Nigerian military government and Shell. [T]he company’s ability to communicate The government then attempted to broker a with the Ogoni community is very poor. peace treaty that was supposed to stop the Since 1990 this failure stems from the com- ‘ethnic clashes’ between the Ogoni and their pany’s unwillingness to acknowledge the neighbours. Ken Saro-Wiwa and MOSOP, un- significance of MOSOP which now repre- like other Ogoni representatives, refused to sents the bulk of the Ogoni community. . . sign as they objected to a paragraph that Shell Nigeria has chosen to promote the called for the ‘immediate resumption of all existence of conservative Ogoni leaders, full economic and social activities’ (Boele, some of whom have benefited greatly 1995). They feared it could be interpreted as from the company’s operations, instead of justifying Shell’s resumption of operations. In- actively engaging MOSOP (Boele, 1995). deed, later an internal Shell memo emerged, dated November 1993, which stated that in- spection teams had moved to ‘inspect the facilities with a view to resuming operations THE CONFLICT DEEPENS: THE at the earliest feasible time.’ (quoted by Boele, EXECUTIONS AND INTERNATIONAL 1995). REACTION It was another memorandum, this time from the Nigerian Government, that implied The state violence against the Ogoni climaxed direct collusion between the oil companies when Ken Saro-Wiwa and eight other Ogoni and the military in 1994. The leaked docu- activists were arrested and eventually con- ment was reported on the front page of the victed of the murders of four conservative, UK newspaper The Guardian (Vidal, 1995). pro-government chiefs, and sentenced to The story quoted the secret government death. In the closing statement Ken Saro- memorandum, Wiwa made it clear whom he held responsible for the trial: Shell operations still impossible unless ruthless military operations are under- Shell is here on trial [...] TheCompany taken for smooth economic activities to has ducked this particular trial, but its day commence [...] wasting targets cutting will surely come and the lessons learnt

here may prove useful to it for there is no In the year following the executions, Shell doubt in my mind that the ecological war was forced to defend itself again and again – the Company has waged in the Delta will from the criticisms of members of conserva- be called to question sooner rather than tion groups, academics and learned societies later. . . (Saro-Wiwa, 1995b). who wished to sever links with the company through to local governments considering The trial, which was conducted by a mili- boycotts of Shell products. tary appointed tribunal and included a The Shell Annual General Meetings in May serving military officer, was universally 1996 and 1997 also saw significant and simul- condemned as a sham (Birnbaum, 1995; ICJ, taneous actions in The Netherlands and the 1996). United Kingdom. During the 1997 AGM a Next to the Nigerian dictatorship, Shell was shareholder resolution was tabled requesting the main target for international campaigners the company to be more transparent in its so Shell found itself under intense pressure to social and environmental responsibilities. In a intervene. Shell claims it did call for the gov- significant result the resolution was sup- ernment to respect the right to a fair trial and ported by over 10% of shareholders who humane treatment for persons in detention voted even though the directors recom- and, once the conviction was confirmed, the mended voting against the resolution. There Chairman of the Group wrote to the Nigeria were also actions outside the AGM including military dictator asking for clemency (SPDC, the handing out of an alternative ‘annual re- 1998i). Nevertheless, on 10 November 1995, port’ entitled Human Rights and Environmental Ken Saro-Wiwa and eight MOSOP leaders Operations Information on the Royal Dutch/Shell (now known as the Ogoni Nine) were hanged Group of Companies (Project Underground, by the Nigerian authorities. 1997). After the executions there was worldwide condemnation of Shell (Wheeler, 1995; O’Sul- livan, 1995; Hammer, 1996). Headlines ap- peared that painted Shell as callous and a RECENT CHANGES supporter of dictators. In the months after the executions of the Ogoni Nine, Shell found its The sudden and unexpected death of General role in Nigeria the focus of much analysis in Abacha, Nigeria’s military ruler, in 1998 the media. The role of transnational corpora- brought significant change to Nigeria. The tions in countries with dictatorships was de- country returned to civilian rule; the political bated in many and diverse publications and climate in the country has freed up signifi- fora. Some in the media suggested that the cantly, and a great number of political prison- furore had gone too far (McElvoy, 1996). In ers, including the remaining Ogoni activists response to the criticisms, Shell launched a arrested with Ken Saro-Wiwa but not yet tried communications campaign including a series (known as the Ogoni 20), were released. The of full-page advertisements in major newspa- militarization of Ogoni ended and MOSOP pers such as the New York Times. However, far leaders in exile began returning home. more typical was commentary that drew the In order to address the outstanding issues obvious conclusion that ethical responsibili- of development, the government initiated the ties could not be ignored. UK-based Marketing Niger Delta Development Commission Bill Week in their cover story on ‘Shell’s sticky (NDDC Bill). While full of good intentions, problem’ noted: MOSOP felt the current Bill was ‘vulnerable to the same political manipulation that has . . . the Shell case has wider implications characterised earlier bodies’ and ‘has exposed for other multinationals who could also the continuing [...] lack of understanding of face worldwide pressure to accept ethical fundamental issues by policy-makers in Abuja and social responsibility for their actions [the Nigerian state capital]’ (MOSOP Interna- around the world (O’Sullivan, 1995). tional Secretariat, 1999b).

Shell International also underwent a pro- In 1998, Shell International published its cess of transformation. In 1996, the company first corporate statement of social and envi- initiated the ‘Society’s changing expectations’ ronmental performance entitled Profits and project, an elaborate audit of the views of the Principles – Does There Have to be a Choice? company’s stakeholders (Shell International, (Shell International, 1998). It ‘gives a detailed 1999a. The project found that: assessment [of the company’s] progress in living up to the values of [the] revised State- Shell’s economic contribution to society, ment of General Business Principles’ (Shell Inter- technology leadership, and product qual- national, 1999a). In the report, the company ity are recognised, but on human rights claims to have been ‘shaken by the tragic and environmental care Shell is rated execution of Ken Saro-Wiwa’ (Shell Interna- poorly by both the general public and tional, 1998). Furthermore, Shell acknowl- opinion leaders (Shell International, edged that, while convinced that it ‘acted 1999a). honourably’, it realized that ‘the conviction that you are doing the right things is not the Cor Herkstroter, Chairman of the Commit- same as getting them right’ and that was ‘a tee of Managing Directors admitted Shell was very salutary lesson’ (Shell International, responsible for ‘technological arrogance’ in 1998). The report states the Brent Spar and regard to discussion about environment and Ken Saro-Wiwa cases were turning points for human rights (Anonymous, 1996). In the year the company (Shell International, 1998). after the execution of Ken Saro-Wiwa and his The company also produced a practical eight colleagues, Shell engaged in a process of guide to human rights (also known as the dialogue with a number of stakeholders, Management Primer on Human Rights), de- which promised to be the beginning of a signed to help the Shell companies ‘to discuss their roles and responsibilities in understand- process of serious evolution and change for ing and supporting human rights [...]aspart the company. One part of this was Shell’s of an awareness programme designed to help regular dialogue with human rights organiza- staff deal with the issue in their work’ (Shell tions such as Amnesty International and Pax International, 1999b). The guide departs from Christi. Shell’s earlier narrow view of the role of busi- Subsequently, in 1997, Shell revised its 1976 ness in society and acknowledges that: Statement of General Business Principles. They ‘reaffirm the [...]principles that govern how Major human rights violations do not gen- each of the Shell companies which make up erally exist in a vacuum, but within a the Royal Dutch/Shell Group of Companies nexus of corruption, poverty, poor public conducts its affairs’ and ‘apply to all transac- services and infrastructure, governmental tions, large or small, and describe the be- instability and other factors which make it haviour expected of every employee in every difficult for business to operate (Shell In- Shell company in the conduct of its business’ ternational, 1999c). (Shell International, 1997). The revised Principles were unique at the As Shell International undertook the strate- time in their explicit reference to ‘express gic corporate changes outlined above, there support for fundamental human rights in line were significant implications for Shell in with the legitimate role of business’ (Shell Nigeria. International, 1997). They also re-affirmed the One of the Ogoni’s earliest complaints company’s responsibilities to society, and against Shell was the flaring of natural gas (a specifically state that Shell aims to ‘give by-product of oil production) in ground level proper regard to health, safety and the envi- pits, some of which are located close to vil- ronment consistent with their commitment to lages. Environmental activists and the Ogoni contribute to sustainable development’ (Shell have long argued the gas should be utilized. International, 1997). Indeed, using the gas can be commercially

Copyright © 2001 John Wiley & Sons, Ltd and ERP Environment. Sust. Dev. 9,74–86 (2001) 82 SHELL, NIGERIA AND THE OGONI I profitable, and harnessing of non-associated SPDC claims its ‘support for the communi- gas has been planned for more than 30 ties dates back to the 1950s and has become years (Frynas, 2000). Shell has now built an increasingly focused on long term goals in LNG plant (Shell International, 1999b) and partnership with the communities them- has a ‘commitment to end gas disposal by selves’ (SPDC, 1998f). SPDC says it spends continuous gas flaring by 2008.’ (Shell Inter- more than $20 million each year on commu- national, 1999b). nity development in the entire Niger Delta SPDC has also made a commitment to and even $36 million in 1996, and formed a bury all land flowlines by 2003 (SPDC, new Community Programme Development 1998a) and has been ‘continually renewing Unit in late 1997 (SPDC, 1998a,f). its production infrastructure. The annual Shell continues to attempt dialogue with cost of the upgrade and renewal programme the Ogoni. As the company states, ‘[m]eet- is around $100 million [...] Furthermore, ings and consultations continued during until the end of the century, at least one 1998 with a range of Ogoni groups and or- fifth of the company’s budget is committed ganizations. They were facilitated by, among to operations to conserve and improve the others, the Christian Association of Nigeria’ environment’ (SPDC, 1998d). In addition, (SPDC, 1998g). Shell maintains that ‘[p]ro- SPDC states that: gress towards reconciliation has been slow but steady. SPDC has, some time ago, re- Environmental Impact Assessments (EIAs) sumed community development activity in are now carried out before every major Ogoni land in the medical, educational and project is undertaken by SPDC. All exist- agricultural fields’ (Shell International, ing facilities are undergoing a similar ex- 1999b). amination through a programme of In a unilateral attempt to create a climate Environmental Evaluation Reports (EERs) of reconciliation, Shell proposed a Plan for which should be completed by the end of Action in Ogoniland in May 1996. The plan 1999. EIAs and EERs cover the whole of outlined a number of steps towards improv- the environment, from the physical to the ing the situation in Ogoni. These included socio-economic and health aspects of com- ‘cleaning up all oil spills – whether or not munities (SPDC, 1998d). due to sabotage – that have happened since the company withdrew staff in 1993, and With regard to rehabilitation of areas pol- make safe all facilities [...] rehabilitate its luted by oil spills in the past, SPDC asserts past community projects where necessary that ‘it is envisaged that ‘‘Past Impacted and take over their maintenance [...] [and] Areas’’ will be rehabilitated by the end of investigate further development projects in 2003’ (SPDC, 1998e). Shell Nigeria says it the area’ (Shell International, 1996). aims to discuss with the communities what Unfortunately, the company failed to in- their needs are on environmental issues form MOSOP of this plan before releasing it (Shell International, 1999b). to the press, and did not discuss it with Another of the Ogoni’s long-running com- them. For MOSOP, actions like these rein- plaints against Shell has been the under- forced the perceived dismissive attitude of employment of Ogoni people. Today SPDC the SPDC towards the Ogoni. Shell coun- claims that 95% of its full time staff are tered that it repeatedly stated that it has no Nigerian (SPDC, 1998a), 43 Ogoni companies intention of restarting production without are registered as Shell contractors and ‘85 the consent of the Ogoni people. Further- Ogoni are employed by SPDC out of a total more, with damage of over $50 million to workforce of about 5,000’ (SPDC, 1998c). their facilities, the chances of restarting sig- Shell in Nigeria recognizes that its rela- nificant production – even were consent to tions with the community, especially the be given – were considered slim in early Ogoni community, have been strained. 2000, at least in the short to medium term.

MOSOP AND SHELL IN NIGERIA – Activists particularly criticized Shell’s PROSPECTS FOR RESOLUTION US$16 million advertising campaign (almost the total annual SPDC budget for community As Cor Herkstroter, Chairman of the Commit- projects in the Delta), saying that it should tee of Managing Directors, said in the intro- ‘spend it’s money cleaning its mess in Nige- duction to the revised 1997 Statement of ria, not its image’ (Essential Action, 1999). The General Business Principles, ‘Upholding the Shell PR campaign, however, seems to have Shell reputation is paramount. We are judged been money well spent; a UK newspaper re- by how we act’ (Shell International, 1997). ported that a survey of 160 (western) global However, despite all the corporate activity opinion leaders found that Shell was thought in Shell International, Acting President of to be ‘strong on the environment’, ‘ethical’ MOSOP Ledum Mitee was still forced to con- and ‘committed to human rights’ (Vidal, clude in November 1998 that: 1999a). What all opinions do seem to have in com- Shell – the company that [...] promised mon, though, is the feeling that Shell needs to to balance principles with profit – has not enter in a serious dialogue with MOSOP made a single concession to help bring rather than impose projects, however well in- about the peace and reconciliation it says tended. MOSOP noted the ‘continuing failure of Shell and other multinationals to make it wants to see. I have a simple question substantive changes to their practices in the for the Directors of Shell: when will you Niger Delta’ as one of ‘the current areas of balance principles with practice in Ogoni prime political concern for MOSOP’ (MOSOP (MOSOP International Secretariat, 1998). International Secretariat, 1999b). Shell Nigeria says it ‘recognises the gap between its intentions and its current performance’ (SPDC, 1998h). Furthermore, specific CONCLUSION questions will still have to be addressed promptly in regard to commitments made by The story of Shell in Nigeria and the Ogoni SPDC. With Shell still persona non grata in provides many salutary lessons for businesses Ogoni, it was not clear how Shell would be seeking to operate successfully and ethically able to keep its promises to bury all flowlines, in developing countries. It is a story, except renew production infrastructure, rehabilitate for the courage and charisma of Ken Saro- oil spills and undertake its program of Envi- Wiwa, that might never have come to the ronmental Impact Assessments and Environ- attention of environmental and social activists mental Evaluation Reports (SPDC, 1998a,d,e). worldwide. To its credit Shell International Furthermore, the way in which community has attempted to internalize some learning development money was spent remained a from the events described here – to the extent cause of deep resentment (MOSOP Interna- that it has altered its business strategy in line tional Secretariat, 1998, 1999a,b,c). Villagers with principles of sustainable development accused the company of being parsimonious and its approach to stakeholder dialogue. at best, incompetent at development work, Shell has also recognized the need for cultural neglecting consultation and paternalistic (Vi- change and a more sophisticated attitude to dal, 1999b). The community development ‘political’ questions of human rights, environ- projects supported by Shell were dismissed mental responsibility and corporate social by Ledum Mitee, acting president of MOSOP, responsibility. The challenge that remains as ‘ineffective, unnecessary or just PR for the for Shell International is to translate the new company [...] They decide what is good for corporate strategy and attitudes into man- us. They are just wasting resources. We have agement action on the ground in Nigeria. yet to see the impact of all this spending’ The implications for management approach (quoted by Vidal, 1999b). and business strategy of these events are

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