International Business: Competing in the Global Marketplace Fourth Edition Cases
ROYAL DUTCH/SHELL: HUMAN RIGHTS IN NIGERIA
SYNOSIS
!o"al #utch$Shell has been in%ol%ed in oil e&ploration and de%elopment in Nigeria since the '()*s+
#uring most o, this time Nigeria has been ruled b" a militar" regime that repressed human rights and did
not ha%e a good record o, returning re%enues ,rom the oil to local areas+ -he case allo.s students to
consider the role multinational ,irms can and should pla" in helping the citi/enr" o, countries in .hich
the" operate+
Some o, Shell0s operations are in an area o, Nigeria .here the Ogoni tribe li%es+ -he Ogoni are primaril"
,armers and ,ishermen1 .ho ha%e been seeking greater sel,2determination+ -he" .ould like to recei%e a
greater share o, the re%enues generated ,rom the oil+ -he" are also concerned about the en%ironmental
costs Shell0s acti%ities ha%e taken on their land+ -he go%ernment1 ho.e%er1 has been uns"mpathetic to the
Ogoni1 generall" ignored their re3uests1 and e&ecuted Ogoni leaders+ -hus there is pressure on Shell to
impro%e the en%ironmental situation and put pressure on the go%ernment to impro%e the social conditions
o, the Ogoni+
In spite o, the international pressure1 Shell has gone ahead .ith plans ,or ,urther in%estment in Nigeria+
Shell0s position is that it is better ,or the people that it is in the countr" operating and in%esting+ It creates
4obs and in,rastructure ,or the people1 and generates ta& re%enues 2 part o, .hich end up helping people+
-E5C6ING OB7EC-I8ES
-he main teaching ob4ecti%es o, the case are:
'+ Illustrate the challenges multinational ,irms ,ace .hen dealing .ith national go%ernments that
ha%e social policies that di,,er ,rom those in their home countr"+
9+ #ebate the role a multinational ,irm has in in,luencing host go%ernments to enact %arious
policies that ma" bene,it the citi/ens+
:+ ;nderstand ho. international pressure can ,orce ,irms to undertake positions that ma" not be
popular .ith their host go%ernments+
-his case can .ork .ell a,ter art II to illustrate some o, the challenges ,aced b" a multinational ,irm+ It
can also be held ,or use a,ter Chapter <1 .hen students ha%e a better sense o, the political econom" o,
,oreign direct in%estment+
S-!5-EGIC ISS;ES 5N# #ISC;SSION =;ES-IONS
'+ #oes Shell bear some responsibilit" ,or the problems o, the Ogoni region in Nigeria>
Or put another .a"1 does a ,irm that operates legall" in a countr"1 totall" .ithin the la.1 ha%e a
responsibilit" ,or problems caused b" the host go%ernment> Clearl" Shell bears some responsibilit" ,or the
problems in the Ogoni region+ It certainl" could hire more Ogoni in its operations and could ha%e tried to
de%elop better relations .ith the Ogoni+ 5nd rather than assuming the national go%ernment .ould take
care o, matters locall"1 it could ha%e easil" ,unded schools and other public pro4ects+ I, it had done this1 it
ma" not ha%e had the problems it did .ith the Ogoni1 and the Ogoni .ould not ha%e been as militant in
their opposition to Shell and the national go%ernment+
9+ ?hat steps might Shell ha%e taken to nip some o, the protests against it in the bud1 or e%en
preempt them>
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International Business: Competing in the Global Marketplace Fourth Edition Cases
It certainl" could ha%e emplo"ed more Ogoni in its operations1 and could ha%e tried to de%elop better
relations .ith the Ogoni+ !ather than assuming the national go%ernment .ould take care o, matters
locall"1 it could ha%e easil" ,unded schools and other public pro4ects+ -hese all .ould ha%e helped it to
de%elop better relations .ith the Ogoni1 minimi/ed the likelihood o, protest1 and permitted Shell better
access to maintain its ,acilities1 pre%ent en%ironmental accidents1 and clean up e&isting en%ironmental
damage+
:+ Could the compan" ha%e done more to gain clemenc" ,or @en Saro2?i.a> Should it ha%e done
more>
It is hard to sa" i, the compan" should or could ha%e done more+ -his .as clearl" a political and tribal
matter1 and it is unclear .hether threats or ca4oling ,rom Shell .ould ha%e done much to detract the
go%ernment ,rom its political ob4ecti%es in 3uashing rebellion+
A+ ?as the response o, ?estern go%ernments to the e&ecution o, @en Saro2?i.a about right1 too
e&cessi%e1 or too mild> ?hat should ha%e been the appropriate response>
One can argue all sides o, this1 and one0s political %ie.s .ill likel" a,,ect one0s position+ Embargoes and
prohibitions on in%estment stand little chance o, .orking e%en .hen there is .idespread international
support+ 5nd e%en i, a ,e. countries decide to ignore the embargo 2 .hich the" might ,or cheap oil 2 it
.ill likel" ,ail+ Gi%en recent e&periences .ith embargoes against Bib"a1 Ira31 and Serbia1 and most
certainl" .ith Cuba1 it seems that embargoes are not particularl" e,,ecti%e in pressuring go%ernmental
change and are merel" s"mbolic+ ?hile it is true that man" people belie%e more should be done1 it is
unclear that there is much that can be done that .ill be e,,ecti%e+
)+ In the .ake o, Saro2?i.a0s e&ecution1 .as Shell correct to push ahead .ith the li3ue,ied natural
gas pro4ect in Nigeria>
-his is clearl" a matter o, opinion1 .ith the ke" points on each side detailed in the case+ Once again1 as
long as some ,irm .ould undertake the pro4ect1 it .ould accomplish little ,or Shell to back out+
C+ #o "ou think it is possible ,or a compan" such as Shell to re,orm itsel, ,rom .ithin1 or .ould it
ha%e been better ,or Shell to establish an e&ternal bod" to monitor its human rights and
en%ironmental policies>
-his is clearl" a matter o, opinion1 so either approach can be 4usti,ied+ It is not a topic that is discussed in
this te&t+ Students .ho ha%e take a course on Business1 Go%ernment1 and Societ" .ill likel" be in,luenced
in their ans.er b" the %ie.s presented in that course+
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