The Brent Spar Syndrome
Shell and the pressure groups scare
Shell is not going to forget lightly its misadventures with the Brent Spar. The Oil Major was taken by complete surprise when the Greenpeace campaign against sinking that former drill platform achieved its goals. What happened to Shell can in fact happen to any corporation. Loosing control of the situation as result of the activities of a pressure group has become a nightmare scenario for the modern multinational enterprise.
Shell did too little too late
The Oil Major's first reactive measures have meanwhile become the perfect example of how not to do it.
But Shell has learned a lot as well. A comprehensive review of what has become known as the PR disaster of the century indicates that Shell had it all wrong about its own influence on the media. There was a new factor in the game, which had been completely missed out: the role of the Internet. That would not be allowed to happen a second time. From July 1996 Shell International sports an Internet manager. His name is Simon May, he is 29, and responsible for Shell International's various presences on the Internet, and for monitoring and reacting to what is being written and said about Shell in cyberspace. He also helps formulating Shell group's strategy for how the Internet should be used.
May's carreer began in journalism, and more recently he did a four-year stint in the Sultanate of Oman in charge of the English- language communications for the state-owned oil-company. With him Shell's got a premium catch: May is young and eager, smart and fast, open-minded and nice, everything the image of the Company ought to be.
And he understands like no other the Internet's potential - also what it could mean for a company like Shell. Simon May openly admits that Shell was beaten in the new-media war. The Brent Spar affair was one, but the Nigeria situation also has prompted a 'massive on-line bombardment' of criticism. To quote May:
'There has been a shift in the balance of power, activists are no longer entirely dependent of the existing media. Shell learned it the hard way with the Brent Spar, when a lot of information was disseminated outside the regular channels.'
The Brent Spar affair has brought quite some change of attitude to Shell. Ten years ago the Multinational could afford to blatantly ignore campaigns against the South African Apartheid regime. Concern was brewing inhouse, however, but Shell could maintain to the outside world that the campaigns against Apartheid were not significantly damaging the Company. And for the rest Shell kept haughtilly mum. Come the Brent Spar and car owners taking en masse to boycotting Shell's petrol pumps, and such an attitude no longer pays of. Shell came to feel the might of the mass market, and bowed down. An alternative would be worked out for the platform's fate.
But developments did not stop there. A few month later opposition leaders were executed in Nigeria as result of their attacks on the environmental disaster Shell was causing in Ogoni- land, and this caused a renewed storm of protest against Shell. The intimate links between Shell and the military regime came for severe criticism. The Oil Major then went for a new tactic and opened a PR offensive. CEO Cor Herströter took the initiative in a debate on politically correct entrepreneurship. At the shareholders meeting in 1996 the new chart of busines principles at Shell was unveiled, a comprehensive code of conduct with due allowance for human rights.
Does this all point out to a major shift in policies? Or are we witnessing a smart public relation exercise intent on taking some steam from the pressure groups' momentum?
In the beginning of June 1998, Brussels saw a conference devoted to pressure groups' growing influence, organised by the PR agency Entente International Communication. Entente did research about the way corporations were interacting with pressure groups ground vice versa. The outcomes, presented in a report titled Putting the Pressure on are harsh:
'Modern day pressure groups have become a major political force in their own right, and are here to stay. They manifest themselves in the use of powerfull communication techniques, and they succeed in attracting wide attention and sympathy, projecting their case with great skill via the mass media - they understand the power of PR and of the media 'sound-bite'.
And now increasingly they do so over the global telecommunication networks.
Their power and influence is bound to grow inexorably over the next years. Pressure groups are small, loosely structured and operate without overhead or other bureaucratic limitations, they move lightly and creativly. They pursue their aims with single- minded and remorseless dedication. To be on the receiving end of a modern pressure group can be a very uncomfortable experience indeed, sometimes even a very damaging one.
Multinational companies are ill prepared to face this challenge, their responses are often slow and clumsy. There is a 'bunker' mentality, and a reluctance to call in experienced help from outside which is surprising - and potentially dangerous. This failure could cost such companies dearly in the future.'
At the conference in the SAS Radison Hotel in Brussels, attended by some 70 participants from the corporate world and the PR industry, fear for the unknown prevails. The unpredictable power of pressure groups, consumers, or even normal citizens can take the shape of boycott campaigns, but also of commuters on the (newly privatised) British Railways to move out from a train that has been cancelled on short notice. The biggest question remains unanswered: whose turn will be next? The Brent Spar affair has left its mark here.
By way of illustration the story of Felix Rudolph, an Austrian national who worked himself up from farm hand on his father's estate to manager of a factory producing genetically modified grain.
Pioneer Saaten ('Pioneer Grain', the company's name) was not aware of doing anything wrong. The company produces for a small market niche in Central Europe and strives for optimal quality, so as to enable farmers to obtain beter yields. All products have been tested extensinvely, and all test results have been duly registered. So nothing to worry about, that is till the company became the focus of a protest campaign, triggered by an impending referendum in Austria on genetically manipulated foodstuffs.
We suddenly had to engage in debate with the public, something we never had done before. Who's interested in grains anyway?
Felix Rudolph
Felix Rudolph, as he holds his presentation at the Brussels conference, still looks dumbfounded about what overcame him.
Your products are unhealthy and dangerous asserted the pressure groups, and we had no clue what we had to say in return. As soon as you try to explain the extent of a risk, you admit that such a risk exists. In that referendum, 90% of the people turned out to be against gene technology, the majority of whom did not know what they were talking about.
Felix Rudolph
It is only later that Herr Rudolph understood that his company merely served as an example for the pressure groups.
By engaging in a dialogue, we provided them with a platform to put forward their case. The discussion itself went nowhere.
Felix Rudolph
This realisation came too late, however. The campaign so much impressed the government that it enacted laws regulating genetically manipulated foodstuffs. An embittered Herr Rudolph:
'Now the farmers may foot the bill, and the pressure groups have vanished into thin air!'.
Pioneer Saaten had to temporarilly suspend the production of modified grain.
'We will tray to explain things better next time we apply for a license.'
According to Peter Verhille from the Entente PR agency, the greatest threat to the corporate world's reputation comes from the Internet, the pressure groups newest weapon.
A growing number of multinational companies - such as McDonald's and Microsoft - have been viciously attacked on the Internet by unidentifiable opponents which leave their victims in desperate search for adequate counter measures.
Peter Verhille
The danger emanating from the new telecommunication media cannot be over-emphasized, says Mr Verhille.
One of the major strength of pressure groups - in fact the levelling factor in their confrontation with powerful companies - is their ability to exploit the instruments of the telecommunication revolution. Their agile use of global tools such as the Internet reduces the advantage that corporate budgets once provided.
Peter Verhille
His conclusions made a hard impact on the participants of the conference. In fact most companies appear slow to incorporate such tools into their own communication strategy. When asked what steps they planned to take to match pressure groups mastery of these channels, most respondents simply repeated their intention to expand into this area or admitted that their preparations were still in a...preparatory stage.
Pressure on the Internet, Threat or Opportunity
As came to light in Brussels, there is one exception to this picture however: Shell international. Internet manager Simon May gave a smashing presentation, which showed very well what Shell had come to learn about the new media. Simon May was also very open in an interview we hold with him (as befits, by e-mail), even though he could understandably not answer all our questions.
Pressure on the Internet, Threat or Opportunity was the core issue at his presentation. Internet may be a threat to companies, it also offers big opportunities. Simon May states that the fact that anyone can be a publisher cheaply, can be seen, or at least searched and looked at worldwide, and can present his/her viewpoints on homepages or in discussion groups is not merely a menace, but also an unique challenge.
'Why are pressure groups so active on the Internet? Because they can!'
Companies should do the same, he argues, but must do it professionaly.
On-line activities must be an integral part an overall communication strategy, and should not be simply left to the care of the computer department.
Simon May
Basic tenet of the Shell Internet site (launched early 1996) was a new strategy based on openness and honesty. Dialogue was the core concept, and sensitive issues were not sidestepped. May is quite satisfied with the results of this approach and illustrates this with some facts and statistics.
Shell receives over 1100 e-mails a month, a full time staffer answers all these mails personnally and within 48 hours, there is no such thing as a standard reply. There are links to the sites of Shell's competitors and detractors, and also to progressive social organisations (nothing there more radical than Friends of the Earth or Greenpeace, but this aside). Shell also allows opponents to air their views in forums - those are uncensored. Not without pride, Simon May states that Shell is still the only multinational to do this. There is no pre-determined Internet strategy at Shell's, flexibility is the name of the game.
'It's all about being able to to react, listen and learn'.
His advice to the Brussels conference-goers:
Be careful, technology changes fast, and your audience changes and develops even faster. And think before acting: anything you're putting up on an Internet site you make globally available.
Simon May
Taking care of Shell's presence on the web is only one of the Internet manager's tasks. He must also monitor and react to what is being written and said about Shell. 'The on-line community should not be ignored' was one of his advices in Brussels.
Pressure groups were aware of the potential of the Internet far earlier than the corporate world. There are pressure groups that exist only on the Internet, they're difficult to monitor and to control, you can't easilly enroll as member of these closed groups.
Simon May
Listening to the Internet community can be an effective barometer of public opinion about your company. The Shell Headquarters in London are making a thorough job of it. Specialised, external consultants have been hired who scout the web daily, inventarising all possible ways Shell is being mentioned on the Net, and in which context. Things are not made easier by the fact that search engines will assign 48 different wellknown uses of the word 'shell'...
Simon May gladly explains how the work is done.
'We use a service which operates from the US, E:Watch, who scan the Web worldwide for references to certain key words and phrases we supply to them. In the UK we use a company called Infonic, who does the same thing from a European perspective. The results they come up with can be completely different, although they have been given the same search criteria, and the search has been done at the same period of time. This can be for a number of reasons, including the methods which they use to search, and the times of day they enter a site to index it.'
Shell also uses so-called intelligent agents. These are search programs that can be trained to improve their performance over time. Simon May:
'This is particularly useful for us since our company name has so many different meanings. We can tell the 'agent' which results are useful and which ones aren't, the next time the agent wil go out and come back with only those documents which are relevant.'
This monitoring can not be for 100% truly effective, but has to be carried out nonetheless, according to Simon May.
'You need to keep track of your audience all the time, since you may learn a lot from it.'
Visiting the Shell web-site, the first surprise is the measure of openness about issues previously wrapped in taboo. There are carefully written features on human rights, the environment, and even the devastation and exploitation of Ogoni-land in Nigeria. The somewhat defensive character of some stories gives an indication to which issues are still sensitive. Speaking for instance of the massive oil spills in Ogoni-land, for which Shell is held responsible ('totally exaggerated and unproven accusations'), there is always the mention that 80% of those have been caused by sabotage by radical resistence groups (this percentage is contested by the groups concerned).
At the site's discussion forums arranged by subject everybody is allowed a say about Shell's practices. It is then ironic to see Shell collaborators from Malaysia and Nigeria reacting with dismay about what they read in those forums about their employer.
The question is of course whether this form of openness really yields results. The forums are not intended for people to use to question Shell - the e-mail facility is provided for that. 'The forums are intended for people to debate issues relevant to Shell among themselves, so to speak,' says Simon May. The e-mail service is actually being used quite intensively to put questions to Shell - these are the 1100 e-mails coming in every month. What the nature is of these questions, and the answer to these, remains between Shell and the e-mailers.
All in all, one might conclude that this amounts to a fake openness, for show purposes only. True discussions in public are being eschewed, after all. But Simon May would deny that the forums are mere window-dressing:
'We do believe quite firmly that people have the right to debate these issues and we provide a place where they can do that in an environment which might just lead to their view being heard in an organisation that can make a difference.'
Of course these forums function as barometer for what certain people think, May admits, although this is not their primary aim.
At Earth Alarm (the foreign affair project of the Dutch environmental organisation Milieudefensie) these rather embellished representations of reality do not cut much ice.
They've changed a lot in their communication, they're far more carefull about how they present themselves to the outside world. But that is mostly addressed to their customers here, in the Western world.
Irene Bloemink, Earth Alarm spokesperson
'Profits and principles, the first issue of the totally overhauled Shell International Yearly Report has been only distributed in The Netherlands, Great Britain and the United States. That's where the people are Shell sees as a potential threat.'
The situation in Ogoni-land has not improved in the two-and-half years since Ken Saro-Wiwa was hanged; on the contrary, things have only gone worse, at least till the death of the military dictator General Sami Abacha.
'Scores of people have been arrested in the beginning of this year by a special military unit, founded specially to 'ensure Shell comes back to Ogoni-land'. This would at least suggest some kind of involvement. Yet Shell has done nothing to stop the latest wave of arrests.'
Adopting a code of conduct regarding human rights and the environment is simply not enough. What counts is implementation and enforcement.
Shell has not in any way made clear how they intend to translate their good intentions into concrete practice. There is no independent body to monitor the implementation of the code of conduct.
Shell is self-congratulating about their first environmental Year Report, which they claim, has been thoroughly reviewed by KPMG Management Consultants. Shell considers this a fully independent review. But then, KPMG's environment CEO George Molenkamp goes in de Volkskrant (Dutch daily) to say that 'accountants don't vouch as such for Shell's policies. Anything that comes in the report is as Shell has decided.' Some contradictory viewpoints, I may say.
Irene Bloemink.
It is doubtful whether Shell has really learned anything from its mistakes in Nigeria. There is a new Shell venture in the Westafrican country Tshad that looks as big as the Nigeria operation, and with the same possible consequences. And everything seems to go wrong again. Shell joined in a partnership with Esso and Elf (stakes are 40-40-20 respectively) and intends to start drilling new oil fields in the unstable South of that country. A report on the environment assesment came as an afterthought, according to Earth Watch: the agreements were signed and test drillings had already begun. The local population was appraised of what was in store for them as the invading oilmen were underway, and the operators came to the villages to bring the news accompanied by a heavyly armed military escort. In March of this year, over a hundred civilians were killed by the army as it tries to wrest control back of the area from the FARF separatist movement, which in its turn highlights its existence by attacking this oil project. The FARF claims that the earnings of the oil production will exclusively benefit the presidential coterie in the North.
Up to now, Shell has been hiding itself behind Esso as the local executive partner responsible for external relations, and has declined to engage in public debates on the subject. Even Simon May doesn't want to burn his fingers on the Tshad issue. Not yet, that is.
Translated from Dutch by Patrice Riemens