Royal Dutch Shell Case Study

Introduction
The political instability inherent in emerging economies make for very challenging business environments. In late October 1995, Royal Dutch Shell founds itself in just such a tenuous environment in Niger. As Paine and Moldoveanu (2009) outlined,Shell came under scrutiny in the 1990’s for the environmental impact that they were having on the Niger Delta. Shell was accused of creating an “ecological disaster” on the region, caused by oil spills, emissions from flaring of natural gas, and drainage of contaminated water into the waterways (Paine & Moldoveanu, 2009). Adding to the operating complexity, the Nigerian government and its leader faced escalating international condemnation for the actions of a special military tribunal

Shell’s decision to pump for oil, although legal and in development for decades, had major negative repercussions on the local environment. Some, such as Norma Bowie, argue that because they were operating legally, Shell’s obligation to protect the environment isn’t very strong. Others, such as Arnold and Bustos, assert consumers/ stakeholders cannot be held responsible for policing the operating companies if the government doesn’t give them that sort of power, and therefore Shell had an obligation to protect the stakeholders (Arnold et al, 2012). The arguments must be weighed by any company that has the potential to augment the environment in which they will be operating. In another industry, chemical companies are regulated well in the U.S. to keep them from contaminating the local water supply, but in countries without these regulations is it ethically responsible of the company not to damage the ecosystems surrounding them, although they are not legally bound to do so. Another major learning point is what the involvement of major companies in politics can do to an economy and its people. Had Shell utilized their power in the region to perhaps mediate between the activists and Nigerian government perhaps the outcome of the trial could have been different. Given the unstable situation, politically and socially in Nigeria, Shell’s decision to work quietly with international leaders “behind the scenes” and offer on their local manager, Brian Anderson, to issue a public statement on the necessity for a “fair trial, medical treatment, and lawyers of their own choosing” (Paine and Moldoveanu, 2009), may have been the best option available at that time and can serve as a point of learning for other companies operating in such volatile, unstable, and complex international situations. This is also a tough concept to argue