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Royal Dutch/Shell: Human Rights in Nigeria

This case examines Royal Dutch/Shell's operations in Nigeria and the human rights issues that have arisen. Shell has been involved in oil exploration in Nigeria since the 1960s, during which time the country has been ruled by a repressive military regime. Some of Shell's operations are in the Nigerian region of Ogoniland, home to the Ogoni tribe, who have faced environmental degradation and have received little benefit from the oil revenues. The case allows students to consider the role of multinational firms in countries with poor human rights records and how they can influence host governments. Strategic issues for discussion include Shell's responsibilities for problems in Ogoniland, steps it could have taken to reduce protests, whether it

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53 views2 pages

Royal Dutch/Shell: Human Rights in Nigeria

This case examines Royal Dutch/Shell's operations in Nigeria and the human rights issues that have arisen. Shell has been involved in oil exploration in Nigeria since the 1960s, during which time the country has been ruled by a repressive military regime. Some of Shell's operations are in the Nigerian region of Ogoniland, home to the Ogoni tribe, who have faced environmental degradation and have received little benefit from the oil revenues. The case allows students to consider the role of multinational firms in countries with poor human rights records and how they can influence host governments. Strategic issues for discussion include Shell's responsibilities for problems in Ogoniland, steps it could have taken to reduce protests, whether it

Uploaded by

A Chowdhury
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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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+
D

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