shell case - final

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SHELL IN NIGERIALoes Altena

Martin Belej

Katarina Jablonická

Fanny Latarche23-09-2011



Agenda

Situation ² Shell in Nigeria

Critical success factors

Current problems Ethical principles

Ethical principles & Shell

Alternatives



Situation ² Shell in Nigeria (1)

Start of operations in 1937

Joint venture between BP, Nigerian government and

Shell in 1973

Shell·s share: SPDC

Nigerian government: NNPC

Division of profits Per barrel Share

Costs $ 4.50 -

Shell $ 0.70 30%

Elf/Agip $ 0.30 15%

Goverment $ 9.50 55%

$15.00



Situation ² Shell in Nigeria (2)

Mid 1990s

60% of oil reserves

5000 employees 930.000 barrels of oil a day

Net income of $235.000

Usage of Niger Delta land of 0.3%



Critical Success Factors

Industry

Exclusive rights toprospect for oilJoint-venture

Strategy¶Cash calls· ² system

Organizational culture

EnvironmentalGovernment

dependency on oilindustry

Rockart & Bullen (1981)



Current Problems (1)

Politics

Governmental instability & corruption

Military in politics

Socio economic conditions of Nigeria

Social pressure groups

Ethnic tensions & conflicts




The exploitation of oil by Shell in the Niger Delta is

contested by the Ogoni people (tribe in Niger

Delta)

Environmental issues caused by exploitation

¶Fair share· of operation




The Trial

MOSOP & the Bill of Rights

´The right to t he control and use of a fair proportion of

Ogoni economic resources for Ogoni development.µ

´The right to protect t he Ogoni environment and ecology

from furt her degradation.µ

Saro-Wiwa´They are going to arrest us all and execute us.

All for Shell.µ



Ethical Principles

"It pays to be ethical!"

The principle of equality

Just institutions Rights and duties

Principle of integrity

Responsibility



Ethical Principles and SHELL

Equality principle

Unfair treatment ofdefendants

Rigged trial

Principle of integrityNone superior sets ofstandards over the requiredminimum

Rights and dutiesDeprived rights ofShell·s lders

j Responsibility

Any precautions held toprevent the radicalactions stakehothatfollowed Just institutions

Acts based on the laws of

the local institutions

Promotion of ¶The Good·supressed

jRights and duties

Deprived rights ofShell·s stakeholders



Alternatives (1)

Do Nothing

Accordance with Shell·s business principles

Avoiding conflicts with Nigerian government

Severe criticism

Tension between Shell and the Ogoni tribe



Alternatives (2)

Extensive Lobbying

Complies with moral obligations

Apolitical impression

Criticism

Tension between Shell and the Ogoni tribe

Unlikely to succeed



Alternatives (3)

Pressuring the Nigerian Government

Future relationship with the Ogoni tribe

Possible conflicts with the Nigerian government

Inconsistency with Shell·s business principles

No real leverage

Unethical



Alternatives (4)

Releasing an Official Public Statement

Positive public image

Future relationship with the Ogoni tribe Publicizing the trial

Contempt of court

Inconsistency with Shell·s business principles



References

Rockart, J. and Bullen, C., 1981. A primer on critical success factors. Center for Information Systems

Research Working Paper No 69. Sloan School of Management, MIT, Cambridge, Massachusetts.

Andreas W. Falkenberg: ´When in Rome« Moral maturity and Ethics for International Economic

Organizationsµ Journal of Business Ethics, Sept. 2004

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