04_Royal Dutch Shell

New Political Economy

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Royal Dutch/Shell J. George Frynas To cite this article: J. George Frynas (2003) Royal Dutch/Shell, New Political Economy, 8:2, 275-285, DOI: 10.1080/13563460307169 To link to this article: http://dx.doi.org/10.1080/13563460307169

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New Political Economy, Vol. 8, No. 2, July 2003

GLOBAL MONITOR Royal Dutch/Shell J. GEORGE FRYNAS With the onset of globalisation and deregulation, the influence of national governments is diminishing and transnational corporations (TNCs) are becoming increasingly open to public scrutiny. Hardly any other large corporation has been more scrutinised than Royal Dutch/Shell, the transnational oil company, which came under intense public pressure in the mid 1990s. Two events galvanised public opinion in 1995: the company’s controversial decision to dump the Brent Spar platform in the North Sea and the execution of Ken Saro-Wiwa, a leader of the Ogoni people who campaigned against the company’s Nigerian operations. These events highlighted the fact that Royal Dutch/Shell is a major player in the international political economy and, as such, a worthy object of in-depth study with reference to global governance. This report aims to shed some light as to how a major transnational corporation operates in the new world of globalisation and deregulation. An overview of Shell’s operations

With revenues of almost US$135 billion in 2001, Shell was amongst the largest companies in the world and the third largest oil company behind ExxonMobil and BP (see Table 1). 1 It has over 90,000 emplo yees in over 140 countries, though it may employ several times as many people indirectly as contractors (e.g. for carrying out oil exploration surveys). Its sales outstrip the gross domestic product of many countries. The Shell structure is more complicated than that of most transnational corporations. As Edith Penrose once stated, Royal Dutch/Shell ‘is not, strictly speaking, a Company at all, but represents literally a “group” with two parent Companies’.2 Similar to Unilever (the food and home/personal care products business), the Shell group of companies is Anglo-Dutch in the sense that it has a Dutch and a British parent company. The two parent companies are the British-registered Shell Transport and Trading Company plc and the Dutchregistered Royal Dutch Petroleum Company. These two parent companies do not carry out any oil operations themselves. They act as the financial and strategic J. George Frynas, Birmingham Business School, University of Birmingham, Birmingham B15 2TT, UK. ISSN 1356-3467 print; ISSN 1469-9923 online/03/020275-11 DOI: 10.1080/1356346032000092583

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2003 Taylor & Francis Ltd

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J. George Frynas TABLE 1. Largest oil companies, ranked by revenues in 2001 Nationality ExxonMobil BP Royal Dutch/Shell ChevronTexaco TotalFinaElf PDVSA ENI SINOPEC REPSOLYPF MarathonOil

USA UK UK/Netherlands USA France Venezuela Italy China Spain USA

Revenues (US$million) 191,581 174,218 135,211 99,699 94,312 46,250 44,637 40,388 39,091 35,041

Profits (US$million) 15,320 8010 10,852 3288 6858 3657 6941 298 918 157

Source: Fortune, 22 July 2002.

centres of the company: they hold the publicly owned shares in Shell Group’s two holding companies and they receive the income from the Group on a 60:40 basis in Royal Dutch’s favour. This peculiar company structure emerged out of protracted negotiations leading to an alliance between Shell Transport and Trading and Royal Dutch in 1907, which until then had been commercial rivals. 3 The two holding companies, Shell Petroleum N.V. and Shell Petroleum Company Limited, between them hold, either directly or indirectly, all Group interests in the other Shell Group companies. Day-to-day oil operations are carried out by operating companies, which are assisted by service companies based in the UK and the Netherlands providing services such as research and development. However, this report sometimes uses the word ‘Shell’ for convenience when it refers to the Shell Group or an individual Shell company. Although Royal Dutch has a 60 per cent stake in the Shell Group, Dutch shareholders owned only 28 per cent of shares at the end of 2001, while British shareholders owned 39 per cent and US shareholders 26 per cent (see Table 2). Shares in Royal Dutch have a wide geographical spread, while shares in Shell Transport and Trading are mostly owned by British shareholders. However, as with other large publicly owned corporations, shareholders have very little effective power in practice as long as the company generates dividends and the share price is at an acceptable level. With the exception of a few powerful institutional investors such as Barclays Global Investors International, the role of shareholders is mostly restricted to officially ratifying decisions which are made by the board of directors in advance of the annual general meeting. The real centre of power within the Shell Group lies with the top directors of Shell Transport and Trading and Royal Dutch, who jointly decide on policy. Following on from the Group’s internal reforms in 1959, the chief decisionmaking body has been the Committee of Managing Directors (CMD). The CMD consists of the five so-called Group Managing Directors (again weighted 60:40 in Royal Dutch’s favour).4 The top figures amongst them today are Philip Watts, the current CMD chairman (also Chairman and Managing Director of the Shell Transport and Trading Board of Directors), and Jeroen van der Veer, current 276

Royal Dutch/Shell TABLE 2. Estimated geographical distribution of shares in Royal Dutch and Shell Transport and Trading at the end of 2001 Royal Dutch (%) UK Netherlands USA Switzerland France Germany Others

1 47 40 7 3 2 *

Shell T & T (%) 96

Combined (%)

39 *

4

28 26

* * * *

4 2 1 *

* Less than 1% Source: The ‘Shell’ Transport and Trading Company plc, Annual Report and Accounts 2001 (‘Shell’ Transport and Trading, 2000).

CMD Vice-Chairman (also President and Managing Director of the Royal Dutch Board of Management). Shell’s management rejected a recommendation by the consultants McKinsey’s in 1958 which suggested that the Group as a whole should share one chairman and one chief executive officer. 5 So, unlike many large modern corporations such as British Petroleum (BP) where one person at the top can decisively change the direction of the organisation, Shell has developed a more collectivethe decision-making process wherefour the CMD is powerful, yet requires collaboration of the other CMD chairman members. Partly as a consequence of these arrangements, Shell has proven somewhat slower in initiating internal reforms than some of its rivals and in the past has sometimes been regarded as ‘a dinosaur’ in the industry. As previously said, Royal Dutch and Shell Transport and Trading do not directly engage in operating activities. Day-to-day business is carried out by hundreds of Shell companies. Like the other oil majors, such as ExxonMobil and BP, Shell is a vertically integrated oil company in the sense that it operates at all stages of the supply chain : it conducts oil exploration and production, it transports the oil, it refines the crude oil into fuel and other products and, finally, it sells petrol directly to end-consumers. Like the other oil majors, it is represented in all parts of the world, though certain countri es are more important than others. In terms of oil production, the main countries of operation are the USA, Oman, the UK and Nigeria, which accounted for almost 60 per cent of Shell’s worldwide oil production in 2001. 6 Most commentators use the term ‘oil company’ when referring to Shell, but Shell Group’s activities are much broader. In addition to oil, Shell is a major producer of natural gas, which is a by-product of oil production. In terms of 2001 revenues, Shell’s four main segments were as follows: •

oil products segment (sales, marketing, refining, supply, trading and shipping of various oil products)—69 per cent of 2001 revenues; 277

J. George Frynas • • •

gas and power (gas infrastructure and market development, marketing and trading of natural gas and electricity, power plant development)—12 per cent; exploration and production (search and production of oil and gas; building of infrastructure needed to deliver oil and gas)—9 per cent; and chemicals (production and sale of base chemicals and petrochemical building blocks)—10 per cent. 7

Oil and gas, therefore, account for 90 per cent of sales. If the number of employees is used as another indicator for the relative importance of areas of operation, oil and gas make up over 80 per cent of Shell’s operations. At the end of 2001 Shell’s oil and gas exploration and production, gas and power and oil products segments combined employed 75,000 out of the Group’s total of 91,000 employees.8 Judging by the above figures, some 80–90 per cent of Shell’s business focuses around oil and gas, but the importance of other areas should not be underestimated, especially the Group’s chemicals segment with its 10 per cent share of sales. Even though the chemicals segment has become somewhat less important for the Group as a whole over recent years, it still generated some US$10.6 billion in chemical sales proceeds in 2001, down from US$14.3 billion in 1997. 9 The Group is a major player in the international chemicals industry. In terms of sales, it was still ranked as the seventh largest chemicals company in the world in 2000. 10 Shell is also becoming an important international player in renewable energy (see below), in good part as a result of the two crises in 1995. Shell in crisis: Brent Spar and Nigeria

Shell is used to controversy. The company faced a reputational dent in the late 1930s over the pro-Hitler sympathies of the late Henri Deterding, Royal Dutch’s legendary Dutch head who was behind the 1907 alliance between Royal Dutch and Shell Transport and Trading. 11 In the 1970s and 1980s Shell was accused of breaking international oil sanctions against the illegal Rhodesian regime and it faced criticism over its investments in apartheid South Africa. 12 By the late 1980s Shell’s practices were questioned from Peru to the USA, but all of these episodes were eclipsed by Shell’s Brent Spar and its Nigerian troubles. On 30 April 1995 Shell managers were taken by surprise when Greenpeace activists boarded the Brent Spar, a floating oil storage facility in the North Sea. The Brent Spar was decommissioned and the Group’s subsidiary, Shell UK, planned to sink it in the Atlantic. Although the Brent Spar was jointly owned by Shell and Exxon, Shell became the target of major international protests as it was responsible for operating the facility. Exxon was able to disassociate itself. Greenpeace criticised the planned sinking of the Brent Spar as the storage facility contained some harmful substances and it advocated onshore disposal. For almost two months the Brent Spar issue dominated media reporting in the UK and many other countries. While Greenpeace occupied the Brent Spar in the North Sea, public protests took place elsewhere and they were strongest in Germany, where Shell faced a major decline in petrol sales. Finally, on 20 June 1995, Shell UK backed down by announcing a reversal of its decision to sink the 278

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Brent Spar, apparently after having been instructed by the Group’s CMD to do so. Shell engaged in public consultation over how to dispose of its floating problem in the North Sea. Greenpeace claimed victory and protests stopped. Finally, in January 1998, a plan was announced to re-use the bulk of the Brent Spar in a quay extension for a ferry terminal in Norway. 13 In contrast to the Brent Spar episode, Shell’s Nigerian troubles were neither unexpected, nor did they end so quickly. For a number of years prior to 1995, Shell had faced criticism over its operations in Nigeria. Ken Saro-Wiwa, a leader of the Ogonis (an ethnic minority of some 500,000 people), organised mass protests against Shell, which led to Shell’s eventual withdrawal from the Ogoni area in 1993. The Ogonis complained about major environmental damage caused by Shell and they demanded greater benefits from oil operations for the local people. They suffered from oil spills and other harmful side-effects of oil production, while little oil money flowed back to the local communities. Saro-Wiwa was able to mobilise international non-governmental organisations (NGOs) to publicise the plight of the Ogonis in the West. The Nigerian government staged a show trial against Saro-Wiwa and eight other Ogoni leaders on pre-fabricated charges and Saro-Wiwa was executed in November 1995. This galvanised NGOs into supporting the Ogoni cause and led to major exposure of Shell’s policies and practices in international media. After 1995 matters got worse for Shell when other ethnic minorities in Nigeria’s oil-producing areas began to imitate the Ogoni tactics and also disrupted oil activities. Indeed, some NGOs continue to criticise Shell over its Nigerian operations. 14 These two crises had a major impact upon Shell’s thinking and led to a strategic shift in the company’s relationship with the outside world. Shell, government relations and the new political economy

Both the Brent Spar and the Niger Delta crises highlighted Shell’s reliance until the mid 1990s on dealing with governments to solve problems. Before Greenpeace boarded the Brent Spar, no objections to the dumping plans were raised from any of the states bordering the North Sea, other European Union (EU) states or the EU itself. When Shell came under attack from Greenpeace, the UK government firmly supported Shell’s disposal plans even after the company announced a reversal of its plans in June 1995. 15 Similarly, Shell enjoyed the full support of successive Nigerian governments in dealing with anti-oil protests.16 In fact, when expanding abroad, Shell relied less on its home government (in this case two governments) than some of its other rivals and tried to find ways of collaborating with the host governments wherever it operated. 17 But it could always count on the support of the home governments—the UK and the Netherlands—if the need arose. During colonial rule Shell and BP received preferential treatment in some parts of the British Empire; for instance, Shell’s current dominant position in Nigeria can be attributed in good part to the monopoly granted to Shell and BP by the British government in the late 1930s. 18 When the EU tabled proposals to impose a complete oil embargo on Nigeria in November 1995, the British and Dutch governments vetoed the proposals, being worried about their impact on Shell. 19 279

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Indeed, compared with other oil companies, Shell was said to be particularly adept at dealing with governments. The Union Bank of Switzerland (UBS) published a report in 1995 entitled Royal Dutch/Shell: No Longer Sure of Shell , in which it stated: As a result of its long involvement in countries where oil and gas are very important to the economy, Shell has some very close relationships with governments. One of its strengths has been the ability to manage those relationships, such that it has avoided 20

some of the nationalisations that have happened to others. This reliance on government support perhaps helps to explain Shell’s initial inability to adjust to a new world in which governments are becoming less influential and international civil society gains in importance. Both the Brent Spar and the Niger Delta episodes caught Shell off-guard. Since then, Shell has reappraised its place in the international political economy and put much more emphasis on exchanges with civil society and local communities. As Mark Moody-Stuart, CMD Chairman at the time, wrote: ‘Shell is undergoing fundamental change…. We have learned the hard way that we must listen, engage and respond to our stakeholder groups’. 21 After 1995 Shell embarked on a series of internal reforms, which reflected its newly found interest in engaging with stakeholders and social responsibility issues. In 1996 the company initiated the ‘Society’s Changing Expectations’ project, a sophisticated audit of the views of the company’s stakeholders. Shell engaged in a process of dialogue with a number of stakeholders, including human rights organisations such as Amnesty International. 22 The Shell Group’s so-called Statement of General Business Principles was revised to include statements in support of fundamental human rights and sustainable development. The internal organisation also changed and the two parent companies—Shell Transport and Trading and Royal Dutch—set up the Social Responsibility Committee in 1997 to ‘review the policies and conduct’ of the Group ‘with respect to the Group’s Statement of General Business Principles as well as the Group’s Health, Safety and Environment Commitment and Policy’. 23 In the wider world too Shell’s relationship with society has also undergone some changes. In 1998 Shell pulled out of the membership in the Global Climate Coalition, a US corporate lobby group which spent tens of millions of dollars trying to undermine the United Nations (UN) climate negotiations. On the other hand, Shell has become a member of such initiatives as Kofi Annan’s Global Compact—a UN initiative that asks members to subscribe to nine core principles in the areas of human rights, labour rights and the environment. 24 These are symbolic steps for a company eager to promote itself as socially responsible, although the significance of some of them should not be exaggerated. To take one example, the Global Compact has been criticised by a broad coalition of international NGOs, agencies and development academics as ‘corporate greenwash’; the Compact is not a code of conduct and it does not set minimum standards, the nine principles are vague and there are no monitoring or enforcement procedures. Critics point out that essentially companies can continue to engage in human rights violations and environmental pollution while 280

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benefiting from their connection to the United Nations. 25 Shell has also become very active in the World Business Council for Sustainable Development (WBCSD), whose website presents the case of Shell’s community development projects in Nigeria as a positive case study of corporate social responsibility. This is despite the fact that many have pointed to abundant evidence of major deficiencies in Shell’s projects. 26 In short, in the eyes of many observers, while Shell is changing, it is yet to prove how sincere it is about doing so.

Shell and renewable energy

Shell managers recognised many years ago that oil might not always remain the company’s core activity. In 1984, Mr van der Toorn, Shell’s head of ‘non-traditional business’, explained Shell’s diversification philosophy: ‘One thing Shell still knows for sure, is that we will one day run out of oil. At that moment Shell wants to substantially participate in new and profitable industries with growth potential.’27 Like some other oil companies in the 1970s and 1980s, Shell diversified its business portfolio and the company became involved, amongst others, in the non-ferrous metal sector. This strategy has since been reversed and Shell has sold many non-oil-related businesses, something that was visibly 28 symbolised by Shell’s decision to sell its mining company Billiton in 1993. Given the company’s withdrawal from other sectors such as metals and coal, Shell’s more recent expansion in renewable energy is the more significant, but it is consistent with the previous realisation that oil and gas are non-renewable resources. Jeroen van der Veer, the current CMD Vice-Chairman, stated in 1997: ‘we work with a finite hydrocarbon resource and want to make sustainable development a reality. The foundation for that is world-class performance of whatever we do.’ 29 Accordingly, in November 1997, Shell International Renewables (SIR) was created as a new core business alongside such established businesses as Oil Products and Chemicals. Shell committed itself to invest more than US$500 million over 5 years in renewable energy; this was not necessarily a huge sum for Shell, but it catapulted Shell to become one of the leading renewables companies in the world. The decision to go ‘green’ was not simply a reaction to the rise in NGO protests, for it had a very clear commercial rationale. Shell came to recognise the enormous profit potential of the new technologies. The creation of SIR was based on Shell’s optimistic expectation that renewable energy will supply 5–10 per cent of the world’s energy needs by 2020, which could perhaps rise to more than 50 per cent by mid-century. 30 This market is expected to be worth billions in the decades to come and Shell wants to have a big slice of the cake. Shell’s main renewable businesses today are solar energy, wind power and hydrogen, although it was also engaged in other areas such as biomass and geothermal energy. In April 2001 Shell Solar and Siemens Solar formed a joint venture to conduct business in the solar photovoltaic market. 31 A year later the Shell Group acquired its partners’ 67 per cent share in the venture and Shell Solar is now amongst the world’s largest solar energy companies alongside the other oil giant BP.32 Shell WindEnergy is also quickly expanding its wind energy business. By mid 2002 Shell developed or evaluated more than 3000 MW of 281

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wind-energy projects in the USA and Europe. 33 Finally, Shell Hydrogen was involved in various partnerships and invested in other companies engaged in hydrogen and fuel cell technology development. In the 2001 Annual Report Shell again promised to invest a further US$0.5–1 billion over the next five years in ‘new energy solutions’. 34 Shell’s expansion in renewables is viewed by environmentalists with both keen interest and mistrust. Shell’s (and, for that matter, BP’s) renewable energy initiatives can count on the environmentalists’ support, while the critical focus of environmental NGOs has undoubtedly shifted towards the US oil majors such as ExxonMobil, which—in stark contrast to Shell and BP—continue to undermine global climate negotiations.35 All of Shell’s initiatives also fitted nicely with the plans of the Dutch and the British governments to increase the percentage of renewable sources in energy generation. In more than just symbolic terms, then, the contrast between the policies of Shell/BP and ExxonMobil illustrates the current divide between the EU and the USA on energy issues. Conclusion

This report has revealed the shifting role of the Royal Dutch/Shell Group with regards to global governance. After the crises of the mid 1990s Shell embarked on a serious attempt to incorporate Corporate Social Responsibility (CSR) into the company’s decision making. The company reconsidered its relationship with the outside world and began to focus considerably more on external stakeholders, including NGOs and local communities. In terms of CSR and stakeholder involvement Shell has become much more progressive than its US rival ExxonMobil, which until most recently denied the existence of global warming, and smaller oil companies, such as Premier Oil (British) or PetroChina’s subsidiary CNPC (Chinese), which continue to invest in repressive regimes such as Burma and Sudan. At the same time Shell expanded into renewable energy. While oil and gas will most likely continue to provide the main source of revenue for several decades and Shell is currently investing in expanding its oil and gas production, it is not inconceivable that the company’s overwhelming dependence on oil and gas could end in the very long term. Nonetheless, Shell’s role in global governance remains ambiguous. While Shell’s CSR programme received praise from NGOs in some areas and countries—e.g. Shell’s ‘Better Britain Campaign’ (which supports community-based environmental and social initiatives)—Shell underperformed elsewhere. 36 Above all, Shell continues to be vulnerable to criticism over its practices in Nigeria where, despite tens of millions of dollars spent on community development, the company’s involvement in local communities has been questionable. While there is substantial evidence of Shell’s contributing role in human rights abuses (such as requesting the Nigerian state security forces to deal with non-violent protesters) and serious environmental pollution (Shell still reported 340 oil spills in Nigeria in 2000 alone), Shell’s Nigerian subsidiary, Shell Petroleum Development Company (SPDC) of Nigeria, by and large, denied the firm’s responsibility.37 This precluded any meaningful reconciliation with the Ogoni and other 282

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peoples of Nigeria and Shell is still not back in the Ogoni area, which it was forced to leave in 1993. Meanwhile, Shell’s new CSR initiatives have also been questioned. According to a leaked 2001 independent audit commissioned by Shell, less than one third of Shell’s development projects in Nigeria were fully successful. According to The Economist , the report found that Shell is still essentially trying to buy off the local people with gifts rather than trying to offer them genuine development. 38 Why does Shell still underperform in some areas? There are at least two obvious explanations. First, despite reforms initiated by the CMD, it can take a long time to change a corporate culture wherein Shell operating companies have operated for decades without paying much attention to social and environmental issues. Second, many social initiatives in the past were undertaken primarily for public relations reasons and not out of genuine social concern, which ultimately constrained their effectiveness. This yields one lesson for CSR initiatives, namely, that the quality of internal management and stakeholder engagement is much more important than the quantity of funds spent on social and environmental initiatives. Other oil companies such as Perenco (formerly Kelt) in Colombia or the Statoil–BP alliance in Nigeria have illustrated how successful and innovative host community involvement can be implemented with relatively little money.39 Even if Shell turns out to be consistently successful in its CSR initiatives, the most fundamental question is whether corporations should engage in CSR in the first instance. Some neoliberal scholars echo Milton Friedman’s famous statement that there is ‘only one social responsibility of business: to use its resources and energy in activities designed to increase its profits’. 40 According to this view, by pursuing social and environmental business objectives, firms might ultimately hurt shareholders by generating lower profits. Furthermore, firms do not have the expertise to engage in solving social problems. At the other end of the political spectrum, critical scholars are suspicious of voluntary CSR initiatives, as they consider the provision of social justice the domain of state regulation. Critics point out that CSR initiatives such as corporate codes of conduct lack precision, uniformity across firms and industries and proper monitoring, and note that there are few, if any, sanctions for non-compliance. But both views encounter the practical problem that state regulation has so far failed to tackle effectively some of the world’s pressing problems such as pollution and labour rights abuses. National governments and international organisations focus on voluntary agreements, self-monitoring by firms and social audits performed by external consultants. Even where international agreements for the protection of the environment or workers’ rights exist, they are ‘vaguely worded, slow to negotiate and difficult 41

to enforce’. NGOs and corporati ons fill a void created by states in a globalising world. In this sense Shell is an interesting test case as to how corporations can or cannot contribute towards equitable governance of our planet. Notes 1. Shell was displaced as the secon d largest oil compa ny betwe en 2000 and 2001 to the great pleas ure of many BP staff.

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J. George Frynas 2. Edith T. Penro se, The Large International Firm in Developing Countries: The International Petroleum Industry (George Allen & Unwin, 1968), pp. 101–2. 3. A very meticulous four-v olume history of Royal Dutch until the First World War was provided in F.C. Gerretson, History of the Royal Dutch (E.J.Brill, 1957). The more recent history of the Shell Group did not receive such a thorough analysis, but a Shell-inclined account written to celebrate the 100th anniversary of Shell Transport and Trading can be found in Stephen Howarth, A Century in Oil: The “Shell” Transport and Trading Company 1897–1997 (Weidenfeld & Nicolson, 1997). 4. At the beginning the CMD had seven members (four Dutch and three Britis h). 5. Howarth, A Century in Oil , p. 260. 6. Royal Dutch/Shell Group of Companies, Financial and Operational Informatio n 1997–2001 (‘Shell’ Transport and Trading, 2002). 7. Corporate Information website at http://home.sprintmail.com/ debflanagan/over09.html. 8. Royal Dutch/Shell Group of Companies, Financial and Operational Information 1997–2001 . 9. The ‘Shell’ Transport and Trading Com pany plc, Annual Report and Accounts 2001 (‘Shell’ Transport and Trading, 2002). 10. Kerri Walsh, ‘Billion-dollar club: the heavies retain their titles’, Chemical Week (New York), 5 December 2001. 11. Daniel Yergin, The Prize: The Epic Quest for Oil, Money and Power (Touchstone, 1991), pp. 369–70. 12. The Rhodesian issue was discussed in Howarth , A Century in Oil , pp. 327–31. On Shell and the apartheid, see ‘Shell—100 years is enough!’ on the Corporate Watch website at http://www.corporatewatch.org.uk/ publications/shell.html. 13. On the Brent Spar episo de, see Tony Rice & Paula Owen, Decommissioning the Brent Spar (E & FN Spon, 1999); and Stelios C. Zyglidopoulos, ‘The Social and Environmental Responsibilities of Multinationals: Evidence from the Brent Spar Case’, Journal of Business Ethics , Vol. 36, Nos. 1/2 (2002), pp. 141–51. A Greenpeace account can be found in Chris Rose, The Turning of the ‘Spar’ (Greenpeace, 1998). 14. On the relationshi p between oil companies and the local people in Nigeria, see Jedrzej George Frynas , Oil in Nigeria: Conflict and Litigation between Oil Companies and Village Communities (LIT, 2000). A very good account was also provided in Human Rights Watch, The Price of Oil—Corporate Responsibility and Human Rights Violations in Nigeria’s Oil Producing Communities(Human Rights Watch, 1999). On Shell and the Ogoni people specifically, see Richard Boele, Heike Fabig & David Wheeler, ‘Shell, Nigeria and the Ogoni: A Study in Unsustainable Development I’, Sustainable Development, Vol. 9, No. 2 (2001), pp. 74–86. 15. Rice & Owen, Decommissioning the Brent Spar , pp. 98 and 101. 16. Jedrzej George Frynas, ‘Corpora te and State Responses to Anti-Oil Protests in the Niger Delta’, African Affairs, Vol. 100 (2001), pp. 27–54. 17. One example was the Suez crisis of 1956–7. After the French and British forces bombed Egypt ian airfields in response to the nationalisation of the Suez Canal, Egypt broke off relations with the UK and seized Shell’s Egyptian properties. These events overshadowed Anglo-Egyptian relations for years to come and a re-establishment of diplomatic relations was only announced in December 1959. Shell had already re-started Egyptian operations over a year earlier; it struck a financial settlement with the Egyptian government and indeed was granted new oil concessions. See Howarth, A Century in Oil , pp. 251–2. 18. Jedrzej George Frynas, Matthias P. Beck & Kamel Mellahi, ‘Maintaining Corporate Dominance after Decolonization: The First Mover Advantage of Shell–BP in Nigeria’, Review of African Political Economy, No. 85 (2000), pp. 213–30. 19. ‘British, Dutch veto Nigerian oil ban, European leaders agree to extend arms embarg o’, The Guardian, 21 November 1995. 20. Jeremy Elden, Royal Dutch/Shell: No Longer Sure of Shell (Union Bank of Switzerland, 1995). 21. Richard Boele & Heike Fabig, ‘Case study: Shell, Nigeria and the Ogoni’, the 3rd Annual Nestle´ Canada MBA Case Competition in Business and Sustainability, Schulich School of Business, Toronto, York University, 28–29 January 2000. 22. Ibid. 23. The ‘Shell’ Trans port and Trading Company plc, Annual Report and Accounts 2001 . 24. Nicole Winfield, ‘UN launches partnership with business, environment and rights groups’, Associated Press Newswires, 26 July 2000. 25. Katherine Butler, ‘UN offers firms “logo for human rights” ’, The Independent , 26 July 2000; and ‘The U.N. sells out’, The Progressive, 1 September 2000. 

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Royal Dutch/Shell 26. Frynas, ‘Corporate and State Responses to Anti-Oil Protests in the Niger Delta’; and Human Rights Watch, The Price of Oil . 27. Quoted in Bob de Wit & Ron Meyer, Strategy—Process, Content, Context, 2nd edn (Thomson, 1998), p. 1056. 28. Ibid., pp. 1054–73. 29. Quoted in Jedrzej George Frynas, ‘Royal Dutch/Sh ell’, presentation at the Crude Operators conference, London, 11 May 1997. 30. David Knott, ‘Improvi ng Viability of Renewable Energy Beckons Petroleum Firms Investmen t’, Oil & Gas Journal , 13 December 1999, pp. 127–9. 31. ‘Shell, Siemens agree to form JV business’, The Independent, 2 March 2001. Shell only had a 33 per cent share in the venture, while Siemens and E.ON Energie AG had a 34 per cent and a 33 per cent stake respectively. 32. ‘Shell to acquire partners’ stake s in solar energy joint ventu re’, PR Newswire, 23 January 2002; and ‘For the record—Shell Solar’, Platt’s Oilgram News , 25 January 2002. 33. ‘Wind Power (Quick Takes)’ , Oil and Gas Journal , 3 December 2001; and ‘Shell WindEnergy enters California with 41 MW acquisition’, PR Newswire, 17 May 2002. 34. The ‘Shell’ Trans port and Trading Company plc, Annual Report and Accounts 2001 . 35. For a contrast of the two positions, see I. H. Rowlands , ‘Beauty and the Beast? BP’s and Exxon’ s Positions on Global Climate Change’, Environment and Planning C , Vol. 18 (2000), pp. 339–54. 36. See the ‘Better Britain Campaign’ website at http://www.sbbc.co.uk/. 37. Jedrzej George Frynas, ‘The oil industry in Nigeria: conflic t between oil companies and the local people’, in: J. G. Frynas & Scott Pegg (eds), Transnational Corporations and Human Rights (Palgrave, 2003); Frynas, Oil in Nigeria ; Human Rights Watch, The Price of Oil ; and Shell Petroleum Development Company of Nigeria Limited, 2000 People and the Environment Annual Report (Shell Petroleum Development Company of Nigeria Limited, 2001). Shell’s Deputy Managing Director in Nigeria, Egbert Imomoh, reportedly said at a hearing of a human rights panel in February 2001 that ‘we completely reject all accusations of the abuse of human rights’. ‘Shell denies rights abuses’, Phone News International , 2 February 2001. 38. ‘Nigeria and Shell—helping, but not developing’ , The Economist, 12 May 2001. 39. This insight is based on many interviews with senior oil company staff and activists of non-governmental organisations. 40. Milton Friedman, Capitalism and Freedom (University of Chicago Press, 1963), p. 133. Shell was specifically mentioned as an example in David Henderson, Misguided Virtue: False Notions of Corporate Social Responsibility (Institute of Economic Affairs, 2001). 41. Peter Newell, ‘Globalisation and the new politics of sustainable development’, in: Jem Bendell (ed.), Terms for Endearment—Business, NGOs and Sustainable Development (Greenleaf, 2000), p. 33.

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