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The Ogoni Crisis and Shell

Shell Nigeria is one of the largest oil producers in the Royal Dutch/Shell Group. 80% of the oil extraction in Nigeria is the the Niger Delta, the southeast region of the country. The Delta is home to many small minority ethnic groups, including the Ogoni, all of which suffer egregious exploitation by multinational oil companies, like Shell. Shell provides over 50% of the income keeping the Nigerian dictatorship in power. Accumulated neglect of corporate social responsibility by Shell , over a significant period of time in the oil and gas rich Niger Delta region

The Nigerias Niger Delta

Natural Gas Flaring Oil Spills Pipelines and construction Health impacts The neglect took the life of Ken Saro-Wiwa, the Ogoni activist and eight others in 1995 among many others and caused unprecedented environmental devastation in the region.

The Nigerias Niger Delta

80% of Nigerian government revenues come directly from oil, over half of which is from Shell. Shell continued funding of the military in the Delta region under the auspices of "protecting" Shell from peaceful demonstrators in the village of Umeuchem Accumulated neglect of corporate social responsibility Shell, over a significant period of time in the oil and gas rich Niger Delta region caused the eruption of militancy, kidnapping and 4 other vices in the area.

The Nigerias Niger Delta
The government of Nigeria lost revenue in excess of US$30b in 7 years due to the instability; and it took the introduction of amnesty by the Federal Government of Nigeria in 2009 for some calm to return. A law was also enacted by the National Assembly of Nigeria to make mandatory Social Responsibility contribution of operating companies into the cleaning up and development of the region . Ogoni Bill of Rights clean up of oil spills reduction of gas flaring fair compensation for lost land, income, resources, life a fair share of profits gained from oil drilled at their expense self-determination

Challenges @Nigeria
Shells huge stake in Nigerias national oil reserves means that its activities face wide scale challenges on a regular basis. 1. Poor track record Shell has a poor track record in Nigeria for its earlier perceived lack of responsibility and accountability with operations and activities. It could take considerable time for Shell to change its tainted public perceptions and be considered a responsible, ethical, accountable and transparent organisation in Nigeria. 2. New challenges Operating in a developing country with huge disparities of wealth and high levels of corruption, Shell is regularly facing difficult and complex challenges, which require Shell to adapt and evolve their policies on anti-corruption. 3. Corporate citizenship Shells high profile and powerful position in Nigeria, means they assume the role of a corporate citizen. It can be said, that the reason for this, is because the Nigerian Government somewhat struggle to adequately meet the needs and fulfill the basic rights (human, labour and basic) of a large proportion of the Nigerian population. Shell, on the other hand, is in the position where they are able to impact on a high the majority of the population. As a result, Shell is constantly under pressure from a wide range of stakeholders (including activists, environmentalists, NGOs, the general public etc).

SPDC has contributed about $31 billion to the government over the past five years (20062010). The Shell Nigeria Exploration and Production Company (SNEPCo) which manage offshore business in deep water has paid about $3.8 billion in taxes and royalties over the same period Shell run operations contributed over $161 million to the Niger Delta Development Commission while an additional $71 million was directly invested by SPDC and SNEPCo towards addressing social and economic development challenges in the region As part of the economic empowerment initiative, shell launched the micro-credit programme in 1998. So far, it has directly assisted more than 30,000 people to establish or expand their businesses. The Shell LiveWIRE Nigeria programme which began in 2003 provides a platform for youth development. The objective of LiveWIRE is to facilitate the emergence, survival and expansion of youth owned businesses. The programme has trained more than 3,000 young people since 2003. In 2010, Shell awarded 2,730 secondary and 750 university scholarships. It also instituted the Cradle-to-Career Scholarship Scheme through which 60 brilliant students were awarded full scholarships . Health care is one of the biggest challenges in Africa. SPDC currently supports 27 health facilities in the Niger Delta. In addition, served 118,000 people through mobile health outreach programmes The Project, NiDAR Plus encapsulates not only HIV/AIDS activities but includes scaling up health systems performance through an integrated multifaceted approach to health care delivery

Issues at Hand
Worsening reputation: Shells reputation with regards to Sustainability / CSR is not good. After being seen as leaders some years ago they are now being perceived as just putting a lot of money in their communication . Lack of Sustainability / CSR innovation: Over the last few years Shell have not really convinced on the content and implementation side through innovation at all. This might be the consequence of not being leaders anymore combined with a lack of aspiration for bringing their reporting and best practice onto the next level. Perceived indifferent corporate culture: the corporate context and culture itself at Shell does not fully go hand in hand with their Sustainability / CSR messaging .

Taking action
Core values Shell identifies its core values as integrity, honesty and respect for people. These values are the foundation of Shells General Business Principles and code of conduct, and are in line with the business principles set out by the United Nations Global Compact (UNGC) and the OECD guidelines for multinational enterprises. Communication Shell communicates its General Business Principles, standards, anti-corruption principles, values and initiatives, through regular training programs, induction programs, employment contracts and various communication tools. Shell assures the application of the Shell General Business Principles through making staff aware of its operations and activities through clear guidelines. Additionally, to support the policies and guidelines, Shell devised a document for management to identify ethical dilemmas and understanding of what dealing with corruption entails, which used problem solving exercises and case studies. Policies and initiatives Shell co-operates closely with NGOs, industrial organisations and international bodies to tackle collectively the problem of corruption. It has signed up to international agreements such as the UNGC 10th Principle and Transparency Internationals Business Principles on Countering Bribery. It has become part of a major international initiative, the Extractive Industries Transparency Initiative (EITI).

Shell has made strategic changes to its business model, supply chain and operations, in order to incorporate strong principles of transparency, anti-corruption and business responsibility.