Critical Essay- Shell
Dann Sokol: 14679766
Word Count: 1665

Oil products are controlling aspects of how people and societies go about everyday activities and life. Thus, the ever-growing corporations such as Royal Dutch Shell and BP, who supply these products, are subject to immense public scrutiny to the quality of these products and more recently the ways in which they are manufactured. The focus of this argument involves the ethical aspect of Shell’s management with regards to the issue of human rights in the regions they operate in, as well as their engagement with their employees and other stakeholders.
According to their website the Niger-Delta region, which Royal Dutch Shell produces a quantity of their oil, the company provides funds to the government and commissions. Under law of the Niger Delta Development Commission and operations through the Shell Petroleum Development Company of Nigeria (SPDC), Shell contributed up to $82 million in 2008 ($56.8m and $25.2m, respectively). The contributions through the SPDC “promote and support small businesses, agriculture, skills training, education, healthcare, micro lending and capacity building.” They also have contributed through royalty payments amounting to “$36 billion in taxes and royalties from 2005-2008.”
Although the government will ultimately decide how to allocate the funds, Shell firmly believes that through their contributions “these funds can be used to promote development, reduce poverty and support economic growth.” If utilized in this manner and with reference to economic principles, with lower levels of poverty and sustained economic growth the funds can greatly improve general economic welfare among societies in the region. It is a positive and important aspect of the company by providing to their local stakeholders and attempting to provide them with contributions in return for the use of their region. However, seeing as though the majority of these contributions were required by law it is questionable the extent of which Shell actually regards these local stakeholders in a genuinely caring approach or legal approach.
Although Royal Dutch Shell provides positive information on their efforts towards their stakeholders within the human rights issue there is also negative information, which suggests that the oil firm may not be performing at the social level to the extent of their public affairs claims or the expectations of their stakeholders and the wider public. There are a number of organizations and websites that aim to expose these faults and even bring about legal issues regarding Shell’s operations in regions such as Niger- Delta. The Movement for the Survival of the Ogoni People (MOSOP), a human rights group, accused Shell and the Nigerian government of exploiting and repressing the Ogoni ethnic group of the Niger-Delta region and their resources. The website Wiwa vs. Shell claims that, “For the Ogoni and the people of Nigeria, oil and oil companies have brought poverty, environmental devastation and widespread, severe human rights abuses.” Where public relations with the community should have been formed to negotiate the acquisition of the regions plentiful resources, “Shell requested military support to build a pipeline through Ogoni.”
As a result, many issues came to surface involving the Nigerian troops and the Ogoni people in relation to the construction of the pipeline including harassment, assault, rape, and murder. All the plaintiffs shared a similar cause of protesting against the pipeline, which resulted in their abuse. Although carried out by the Nigerian officials, information came to surface connecting Shell to these incidents. According to the Wiwa vs. Shell website, “The oil company requested an increase in security and provided monetary and logistical support to the Nigerian police. Shell frequently called upon the Nigerian police for ‘security operations’ that often amounted to raids and terror campaigns against the Ogoni.”
The ethical treatment and wellbeing of these people, the stakeholders of Shell’s operations in the Niger-Delta region, should have been a top priority of Shell in regards to their public relations sector of business performance. Since the government in these resource-rich regions controls all mineral resources, Shell haven’t legally done wrong in obtaining their pipeline construction. However, there is an ethical issue in the manner of the construction of that pipeline. Their failure to appropriately attain the privileges to these resources, such as negotiating with local committees and councils to come to an agreement, resulted in the human rights abuse of those very stakeholders in the region; this hints at Shell’s lack of performance in society in that region.
As an employer in the African regions, according to Shell’s website, they are focused on improving employee equity through the Black Economic Empowerment Charter to achieve “sustainable presence, ownership or control by historically disadvantaged South Africans of a quarter of all facets of the liquid fuels industry, or plans to achieve this.” The employees of Shell form a dominating facet of its stakeholders interested in the company’s success. As a majority of the population in the African regions, the ethical and equal treatment of the black African people can greatly influence the public’s view of Shell’s social performance and worker moral. Through the charter the company also focuses on management diversity, where “25% of ownership and control of all facets f the industry” by historically disadvantaged South Africans. By improving the equality of the workplace, the aim is to increase “black participation at all levels of the population." The needs of these stakeholders can be met by providing them with incomes and equal opportunities to strive and develop in the workplace. Shell is addressing those issues through the Charter and effectively increasing employee loyalty in the region.
Shell’s empowerment and protection of its South African employees highlights a positive performance in the public sector. However, there are instances where the company has failed to protect its internal stakeholders. According to the SkyNews website, recently this year Shell experienced a “security breach that has seen the details of more than 170,000 employees and contractors leaked to the web.” The details were sent to environmental as well as human rights campaigners in a claim to “mount a peaceful corporate revolution” by those behind the breach. This is a failure to protect the company’s employees, because of an evident lack of security. It is true that security breaches can happen to any company at any time, however a breach of this magnitude to such a large company highlights a major fault in Shell’s performance in regards to its internal stakeholders. The leaked details on the web are a serious safety issue, as all the employees’ personal details become available, these people can become subject to potential crimes such as fraud and identity theft. Even greater risk arises if the home addresses of these people fall into the hands of criminals; potential burglaries or worse can be added to the list of safety risks to those employees.
Ethically, Royal Dutch Shell should see this breach as a major risk to its employees, however RoyalDutchShellPlc.com states “Shell is trying to prevent the security breach from being seen as a serious problem.” The company itself is quoted in an article from the TimesOnline playing down the risk by stating that the details leaked are “mainly business-related.” This statement is most likely contrary to those employees who’s private home numbers have been leaked. The actions to play down the severity of the breach and the statement by Shell can be seen as an ethical letdown by the company to its internal stakeholders. This, on a larger scale, can affect the company’s efficiency as stated on the RoyalDutchShellplc website, “Employees can’t function properly in an environment where they’re not certain that appropriate security measure are in place…workers are much less likely to remain loyal to a company which isn’t proactive about protecting its internal information.” This is not to say that actions haven’t been taken by Shell to protect their employees. A statement by Shell in the TimesOnline states that they “will investigate this matter and comply with all legal requirements in relation to this issue.” Shell has already demanded immediate deletion of the details by those non-government organizations that have received the data in a strict legal demand, referencing the UK Data Protection Act. In order to improve their relationship with these stakeholders and potentially improve performance internally, the company will need to be able to have such data kept secure to a high level of certainty. Such solutions to the problem will be costly but ultimately will benefit both Shell as a business and its employees.
Royal Dutch Shell is an extremely large multinational company subject to immense public scrutiny. The company has actively participated in public relations actions such as handing out contributions while also paying royalties to the governments and people of the regions they produce oil in. These actions can be seen as a positive performance in to the public and external stakeholders of Shell. However, cases such as those in the Niger-Delta region and claims of human rights abuses towards those stakeholder’s in the region gives light to a poor ethical performance by Shell towards their external stakeholders. Internally, with projects such as the Black Economic Empowerment Charter, Royal Dutch Shell is presenting its strong performance in the ethical and equal treatment of those employees. Recently, though, a poor performance with regards to their internal stakeholders has arisen through the major security breach of the personal details of the employees of Shell, and their apparent unethical downplay of the situation. In conclusion, Royal Dutch Shell’s performance in these areas is more equally presented, rather than primarily one-sided.

Reference List
The Case Against Shell. 2010. The Case Against Shell. http://wiwavshell.org/the-case-against-shell/ (accessed 9 April 2010).
Geology . Com. Mineral Rights: Basic information about mineral, surface, oil and gas rights. http://geology.com/articles/mineral-rights.shtml (accessed 10 April 2010).
Royal Dutch Shell Plc . Com. 2010. Security Breach at Shell Reveals Personal Employee Information. http://royaldutchshellplc.com/category/shell-employee-safety/ (accessed 12 April 2010).
Shell. 2010. Black Economic Empowerment. http://www.shell.com/home/content/zaf / aboutshell/who_we_are/our_values_and_principles/bee/ (Accessed 10 April 2010).
Shell. 2010. Social Performance. http://www.shell.com/home/content /environment_society/society/nigeria/social_performance/ (accessed 9 April 2010).
Times Online. 2010. Shell Investigates Posting of Personal Data. http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article7025711.ece (accessed 11 April 2010).