essay

REL/MGT  228   Case  Study  #1  

Shell Oil in Nigeria

In the case of Shell Oil in Nigeria, Shell had multiple responsibilities to the country of

Nigeria that were to be both beneficial for the Oganiland communities as well as its government.

Of course this may have appeared to be true for Shell back in 1956, but five decades later

Nigeria has developed into what is believed to be the most corrupt country in the world as well

as one of the poorest. According to a statement by Shell, “Nigeria depends on the oil industry

for 95% of its export earnings and 80% of government revenues, and the Shell Petroleum

Development Company of Nigeria (SPDC) is the largest operator” (Shell). If this were true then

it is safe to say that the majority of Nigeria’s economy is driven by Shell’s oil drilling, whose

moral obligation is clearly simple for their egoistic opportunity.

Throughout the case study article and several other sources across the web, it would

appear that Shell markets their image as a company who influences and supports human rights

and the development of communities. It is this idea that looks as though Shell wants to provide

for the common good while also maintaining consistent profit, which is basically what any other

big corporation would do for itself. It can be thought that providing for the common good in the

business world is sort of the new profit wagon these days in which larger corporations are

beginning to take a ride on because it allows them to play a part in society while receiving

reputable benefits such as brand marketing and free advertising. However in this particular case,

Shell did not show responsibility for the common good of Nigeria because its executives did not

intervene in the tribunal trials of Ken Saro-Wiwa and six others whom were being charged for

murdering several Ogoni chiefs which were suspected of collaborating with the Nigerian

military. This is not to say that the men should not have been punished, but that Shell could have

played a role in the investigation.

Shell also did not provide for the common good because it brought unsustainable

conditions to the Ogoniland environment. The village of Ogoniland was polluted and

overcrowded. Oil spills, flaring and atmospheric discharge from Shell did not help the situation.

Shell believed that their actions and their presence in Nigeria were in the common good of the

Nigerian people even though they were not. Shell should have ensured that the living conditions

of the people in that region were much more sustainable than they were. On the other side, Shell

at the time did do its part by contributing millions of dollars to Nigeria for schools, hospitals, and

other services, but the federal government limited the return to the communities of Ogoniland to

no more than 3 percent, with the remaining to be used by government and military disposal. This

was a huge mistake made by the Nigerian government because they did not provide enough to

stimulate economic growth within Ogoniland. Again if Shell was acting in the common good of

the Nigerian people, they would have ensured that Ogoniland would have seen a larger portion of

their profits by better overseeing how and where their sizable donations to Nigeria were being

disbursed.  

Shell commonly argued that they felt the Nigerian people would suffer if they were to

leave the area. But in reality the Nigerian military and the Nigerian government are the only two

entities that would incur damages if Shell were to leave. Therefore it was vitally important that

both entities sought protection for Shell’s oil production, which is where all the corruption had

stemmed from.

There were many options on the table in order for Shell to resolve the issue for the

Nigerian people. One of them was that they had the opportunity to take action against the

Nigerian government and it’s military by questioning their economic support over the Ogoniland

region. Agreements could have been established between Shell and the Nigerian government

that could have ordered the protection of innocent civilians within the region. Although the

environmental conditions were already greatly affected by oil drilling, an agreement still could

have been met with certain preconditions that the government must abide by. For example, a

condition could have been made for economical development in the Ogoniland area that shows

consistent and well above standard development within its schools, hospitals, and community

services. Of course this option would appear as an ultimatum to the Nigerian government, but if

Shell’s moral goal was to provide for the common good, then this could have been a reasonable

choice.

On the other hand if an agreement or some type of ultimatum was proposed to Nigeria’s

government, this could have created a risk that could have easily barred them from ever drilling

in Nigeria. Considering the Nigerian government had a 55% stake in the revenue generated from

oil drilling and that it was also their land, they indeed had the upper hand compared to Shell. So

the agreement option may have not been the financially wisest decision to consider since it could

have severely threatened their take in profit.

Another choice Shell could have considered was to employ dedicated members from its

own staff that’s primary purpose could have been to serve and protect the communities of

Ogoniland. These members could have brought direct support in creating better schools and

hospitals, as well as jobs and businesses, thus providing for the common good. However, this

could have been a costly decision that would have taken away from the company’s profits so it is

highly unlikely that such a decision like this would have ever been considered, therefore, making

Shell a company whose only values are what is in the self-interest of the company, money. That

is why my analysis was that they took an egoistic approach to the tribunal trials that would

protect them from any conflict that could damage their relation with the Nigerian government.

Works Cited

Boatright, John. "Shell Oil in Nigeria." 291-293.

  http://www.shell.com/home/content/responsible_energy/society/using_influence_responsibly/political ly_sensitive_regions/nigeria_case_study/