Shell is a global company in the energy sector that deals with petrochemicals in over 70 countries spread across all the continents (Media). Being in such a complex industry, Shell has managed to be a market leader through upholding high ethical standards. Shell's central operation hub is in Nigeria which has faced ethical challenges since it set up its operation back in 1936 (Reuters). Over the decades, Shell has faced accusations of environmental pollution in the form of oil spills and gas flaring (Action). These practices have led to degraded farmlands, limited aquatic life, respiratory diseases, carcinogenic water sources, global warming effects, and other societal challenges (News).
Shell in Nigeria
Reports by U.N and Amnesty International indicate that it would take Shell almost 30 years and $1 billion to clean up the Niger Delta oil spill. After being taken to court, Shell paid up to $55 million to help in the cleanup exercise (Reuters). The compensation has enabled the community to overcome the pollution partially, and their lives are back on track (Westby). Shell stopped their operations in Ogoniland in 1993 after realizing the damage it had caused (Reuters). Shell has since gone back to the area to decommission its gas plants, pipelines, flow stations, and other infrastructure. United Nations Environment Programme (UNEP) is working with Shell to ensure that the environmental situation is restored.
Shell's Ethical Decisions
The compensation plan is not the only ethical measure that Shell embraced after environmental challenges in Nigeria. Shell has since collaborated with community partners such as Mercy Corps, United Nations Development Programme (UNDP) and RESOLVE among others (Media). Shell has also collaborated with environmental institutions such as Earthwatch, Wetlands International, and The Nature Conservancy. Shell has also been working with International Union for the Conservation of Nature (IUCN) since 1999 to ensure the conservation of biodiversity (Media). These policies among others are still being implemented, and this can be seen with Shell's decision to suspend indefinitely drilling projects at the Arctic waters (Tomorrow).
Effects on Stakeholders
The decision by Shell to embrace environmental and societal ethical issues has resulted in actions against various stakeholders. The Nigerian government is the hardest hit with former presidents and oil ministers accused of indulging in corrupt activities. The fraudulent activities have also caught up with Shell and an Italian company known as Eni (Chapman). Nigeria has been suspended from the Commonwealth since 1995 due to its involvement in the execution of environmentalists campaigning against Shell (Reuters). Executives and contractors from both companies and officials from the Nigerian government are still waiting on different trials up-to-date.
Has Shell Acted Ethically?
Shell is a renowned market leader in the energy industry, but it has failed in meeting its ethical standards. Court cases relating to ethical issues are proof that Shell is deeply entangled in unethical practices in some areas of operations. Corruption and environmental pollution are some of the critical ethical issues that Shell has failed to address, and the cases are slowly catching up with the company. From my point of view, despite embracing environmental and community partners, Shell's operations go against all ethical standards that are expected of it. Reports by the U.N and Amnesty International indicate that Shell is responsible for cases of pollution and corruption, especially in Nigeria (Westby). Shell needs to overhaul its executive since they have gone against the company's code of ethics. The accountability ethic has been violated in many ways and profitability has been prioritized over the set ethical standards.
Loyal customers are the reason why Shell can perform at high levels despite being in a very competitive company. Ethical standards at Shell are like a double-sided sword; on one end, it portrays proper customer service ethics but on the other hand, ethical issues of corruption and pollution still, exist. The ongoing court cases are an indicator that Shell has violated ethical standards in many ways. Presidents, governments, executives and citizens are all caught up in the ethical cases, and all eyes are on Shell as it tries to restore its high ethical standards.
Action, Essential. "Boycott Shell/Free Nigeria: The Main Issues." Essentialaction.Org, 2011, https://www.essentialaction.org/shell/issues.html. Accessed 8 Feb 2019.
Chapman, Ben. "Shell Faces One Of The Biggest Corporate Corruption Cases In History." The Independent, 2018, https://www.independent.co.uk/news/business/analysis-and-features/shell-and-eni-face-one-of-the-biggest-corruption-cases-in-corporate-history-over-13bn-nigerian-oil-a8537506.html. Accessed 8 Feb 2019.
Media, Shell. "Environmental And Social Partners." Shell.Com, 2019, https://www.shell.com/sustainability/our-approach/environmental-and-community-partners.html#iframe=L3dlYmFwcHMvRWFydGh3YXRjaC92Ml8wLw==. Accessed 8 Feb 2019.
News, BBC. "Shell Accused Of Abuses In Nigeria." BBC News, 2017, https://www.bbc.com/news/world-africa-42151722. Accessed 8 Feb 2019.
Reuters, Discover. "Timeline: Shell's Operations In Nigeria." U.S., 2018, https://www.reuters.com/article/us-Nigeria-shell-timeline/timeline-shells-operations-in-Nigeria-idUSKCN1M306D. Accessed 8 Feb 2019.
Tomorrow, Blue. "Shell Forced To Answer Tough Questions On Environment, Ethics, And Governance At AGM." Blue And Green Tomorrow, 2014, https://blueandgreentomorrow.com/invest/shell-forced-to-answer-tough-questions-on-environment-ethics-and-governance-at-AGM/. Accessed 8 Feb 2019.
Westby, Joe. "The Difference PS55 Million Compensation From Shell Makes". Amnesty.Org, 2017, https://www.amnesty.org/en/latest/campaigns/2015/04/nigeria-shell-oil-compensation/. Accessed 8 Feb 2019.
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