New Political Economy

ISSN: 1356-3467 (Print) 1469-9923 (Online) Journal homepage: http://www.tandfonline.com/loi/cnpe20

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

Published online: 18 Aug 2010.

Submit your article to this journal

Article views: 1648

View related articles

Citing articles: 8 View citing articles

Full Terms & Conditions of access and use can be found at

http://www.tandfonline.com/action/journalInformation?journalCode=cnpe20

Download by: [Universitara M Emineescu Iasi] Date: 13 October 2016, At: 02:49
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 companys 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 companys Nigerian opera-
tions. 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 Shells 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 employees 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 Dutch-
registered 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 2003 Taylor & Francis Ltd 275
DOI: 10.1080/1356346032000092583
 J. George Frynas

TABLE 1. Largest oil companies, ranked by revenues in 2001

Nationality Revenues (US$million) Profits (US$million)

ExxonMobil USA 191,581 15,320

BP UK 174,218 8010
Royal Dutch/Shell UK/Netherlands 135,211 10,852
Chevron Texaco USA 99,699 3288
TotalFinaElf France 94,312 6858
PDVSA Venezuela 46,250 3657
ENI Italy 44,637 6941
SINOPEC China 40,388 298
REPSOL YPF Spain 39,091 918
Marathon Oil USA 35,041 157

Source: Fortune, 22 July 2002.

centres of the company: they hold the publicly owned shares in Shell Groups
two holding companies and they receive the income from the Group on a 60:40
basis in Royal Dutchs 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 Com-
pany 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 conve-
nience 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 Groups internal reforms in 1959, the chief decision-
making 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 Dutchs 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 Shell T & T Combined

(%) (%) (%)

UK 1 96 39
Netherlands 47 * 28
USA 40 4 26
Switzerland 7 * 4
France 3 * 2
Germany 2 * 1
Others * * *

* 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). Shells management rejected a recommendation by the
consultants McKinseys 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 collective decision-making process where the CMD chairman
is powerful, yet requires the collaboration of the other four CMD 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 countries 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
Shells worldwide oil production in 2001.6
Most commentators use the term oil company when referring to Shell, but
Shell Groups 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, Shells 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 Shells operations. At the end
of 2001 Shells oil and gas exploration and production, gas and power and oil
products segments combined employed 75,000 out of the Groups total of 91,000
employees.8
Judging by the above figures, some 8090 per cent of Shells business focuses
around oil and gas, but the importance of other areas should not be underesti-
mated, especially the Groups 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 Dutchs
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 Shells practices were questioned from Peru to the USA, but all of these
episodes were eclipsed by Shells 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 Groups 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
 Royal Dutch/Shell

Brent Spar, apparently after having been instructed by the Groups 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, Shells 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 Shells 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
Shells policies and practices in international media. After 1995 matters got
worse for Shell when other ethnic minorities in Nigerias 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 Shells thinking and led to a
strategic shift in the companys relationship with the outside world.

Shell, government relations and the new political economy

Both the Brent Spar and the Niger Delta crises highlighted Shells reliance until
the mid 1990s on dealing with governments to solve problems. Before Green-
peace 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 Shells 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 governmentsthe UK and the
Netherlandsif the need arose. During colonial rule Shell and BP received
preferential treatment in some parts of the British Empire; for instance, Shells
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
 J. George Frynas

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
some of the nationalisations that have happened to others.20
This reliance on government support perhaps helps to explain Shells 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 funda-
mental 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 Societys Changing Expectations
project, a sophisticated audit of the views of the companys stakeholders. Shell
engaged in a process of dialogue with a number of stakeholders, including
human rights organisations such as Amnesty International.22 The Shell Groups
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 companiesShell
Transport and Trading and Royal Dutchset up the Social Responsibility
Committee in 1997 to review the policies and conduct of the Group with
respect to the Groups Statement of General Business Principles as well as the
Groups Health, Safety and Environment Commitment and Policy.23
In the wider world too Shells 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 Annans Global
Compacta 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 exagger-
ated. To take one example, the Global Compact has been criticised by a broad
coalition of international NGOs, agencies and development academics as corpo-
rate 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
 Royal Dutch/Shell

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 Shells 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 Shells 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
companys core activity. In 1984, Mr van der Toorn, Shells head of non-tra-
ditional business, explained Shells 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
symbolised by Shells decision to sell its mining company Billiton in 1993.28
Given the companys withdrawal from other sectors such as metals and coal,
Shells 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 Renew-
ables (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 Shells optimistic expectation that renewable energy will supply 510
per cent of the worlds 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.
Shells 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 worlds 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
 J. George Frynas

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$0.51 billion over the next five years
in new energy solutions.34
Shells expansion in renewables is viewed by environmentalists with both
keen interest and mistrust. Shells (and, for that matter, BPs) 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, whichin stark contrast to Shell and BPcontinue to under-
mine global climate negotiations.35 All of Shells 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 Exxon-
Mobil 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 companys decision making. The company reconsidered its relationship with
the outside world and began to focus considerably more on external stakehold-
ers, including NGOs and local communities. In terms of CSR and stakeholder
involvement Shell has become much more progressive than its US rival Exxon-
Mobil, which until most recently denied the existence of global warming, and
smaller oil companies, such as Premier Oil (British) or PetroChinas 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 companys overwhelming dependence
on oil and gas could end in the very long term.
Nonetheless, Shells role in global governance remains ambiguous. While
Shells CSR programme received praise from NGOs in some areas and coun-
triese.g. Shells 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
companys involvement in local communities has been questionable. While there
is substantial evidence of Shells 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), Shells Nigerian subsidiary, Shell Petroleum Develop-
ment Company (SPDC) of Nigeria, by and large, denied the firms responsi-
bility.37 This precluded any meaningful reconciliation with the Ogoni and other
282
 Royal Dutch/Shell

peoples of Nigeria and Shell is still not back in the Ogoni area, which it was
forced to leave in 1993. Meanwhile, Shells new CSR initiatives have also been
questioned. According to a leaked 2001 independent audit commissioned by
Shell, less than one third of Shells 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 environmen-
tal initiatives. Other oil companies such as Perenco (formerly Kelt) in Colombia
or the StatoilBP 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 Friedmans famous state-
ment 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 worlds pressing problems such as pollution and labour rights abuses.
National governments and international organisations focus on voluntary agree-
ments, self-monitoring by firms and social audits performed by external consul-
tants. Even where international agreements for the protection of the environment
or workers rights exist, they are vaguely worded, slow to negotiate and difficult
to enforce.41 NGOs and corporations 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 second largest oil company between 2000 and 2001 to the great pleasure of
many BP staff.

283
 J. George Frynas

2. Edith T. Penrose, The Large International Firm in Developing Countries: The International Petroleum
Industry (George Allen & Unwin, 1968), pp. 1012.
3. A very meticulous four-volume 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 18971997 (Weidenfeld & Nicolson, 1997).
4. At the beginning the CMD had seven members (four Dutch and three British).
5. Howarth, A Century in Oil, p. 260.
6. Royal Dutch/Shell Group of Companies, Financial and Operational Information 19972001 (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 19972001.
9. The Shell Transport and Trading Company 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. 36970.
12. The Rhodesian issue was discussed in Howarth, A Century in Oil, pp. 32731. On Shell and the apartheid,
see Shell100 years is enough! on the Corporate Watch website at http://www.corporatewatch.org.uk/
publications/shell.html.
13. On the Brent Spar episode, 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. 14151.
A Greenpeace account can be found in Chris Rose, The Turning of the Spar (Greenpeace, 1998).
14. On the relationship 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 OilCorporate Responsibility and
Human Rights Violations in Nigerias 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.
7486.
15. Rice & Owen, Decommissioning the Brent Spar, pp. 98 and 101.
16. Jedrzej George Frynas, Corporate and State Responses to Anti-Oil Protests in the Niger Delta, African
Affairs, Vol. 100 (2001), pp. 2754.
17. One example was the Suez crisis of 19567. After the French and British forces bombed Egyptian airfields
in response to the nationalisation of the Suez Canal, Egypt broke off relations with the UK and seized
Shells 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. 2512.
18. Jedrzej George Frynas, Matthias P. Beck & Kamel Mellahi, Maintaining Corporate Dominance after
Decolonization: The First Mover Advantage of ShellBP in Nigeria, Review of African Political
Economy, No. 85 (2000), pp. 21330.
19. British, Dutch veto Nigerian oil ban, European leaders agree to extend arms embargo, 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, 2829 January 2000.
22. Ibid.
23. The Shell Transport 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.

284
 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, StrategyProcess, Content, Context, 2nd edn (Thomson, 1998), p.
1056.
28. Ibid., pp. 105473.
29. Quoted in Jedrzej George Frynas, Royal Dutch/Shell, presentation at the Crude Operators conference,
London, 11 May 1997.
30. David Knott, Improving Viability of Renewable Energy Beckons Petroleum Firms Investment, Oil &
Gas Journal, 13 December 1999, pp. 1279.
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 stakes in solar energy joint venture, PR Newswire, 23 January 2002; and For
the recordShell Solar, Platts 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 Transport 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? BPs and Exxons Positions
on Global Climate Change, Environment and Planning C, Vol. 18 (2000), pp. 33954.
36. See the Better Britain Campaign website at http://www.sbbc.co.uk/.
37. Jedrzej George Frynas, The oil industry in Nigeria: conflict 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). Shells 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 Shellhelping, 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 EndearmentBusiness, NGOs and Sustainable Development (Greenleaf, 2000), p. 33.

285