Corporate Communication - 4 Questions

Case # 3

Shell & the Brent Spar

Spring 2005

In 1907, two major oil companies were in direct competition with one
another, Royal Dutch Petroleum and Shell Transport and Trading. These
two companies ultimately formed Royal Dutch/Shell Group, better known as
“Shell.” Since 1907, this group has provided much of the world’s
petroleum, natural gas, and electricity to all publics (government,
employee, employer, special interest, and general). Since their
inception, Shell has expanded into a publicly traded billion-dollar
company. The two companies still operate separately yet they both
support the Royal Dutch/Shell Group.

Shell is the third largest oil and gas group in the world with 14.4
billion barrels in reserve (Shell, 2004). Operations in 145 countries
with 119,000 workers who are economically, socially, and environmentally
proactive have contributed to the companies’ growth (Shell). With such
a large workforce, Shell has a broad “Diversity and Inclusiveness
Standard” (D&I) that supports diversity, respect, trial and error, and
employees’ needs. To carry out this commitment the Shell Company
assures it:

Approaches D&I management by systematically addressing each of the
elements of the Group Diversity and Inclusiveness Framework.

Supports attraction, development, retention, and promotion of diverse
talent.

Promotes a workplace free from harassment and discrimination.

Establishes annual diversity and inclusiveness plans, goals and targets
for improvement; measures, appraises and reports business performance.

Includes diversity and inclusiveness performance in the appraisal and
development plans of leaders and employees.

Provides safe and effective ways for employees to report observed
behavioral inconsistencies with this standard.

The Brent Spar off-shore oil platform was designed in the mid 1970’s
for the dual purpose of storing oil and offloading it onto passing
tanker ships. The 14,500 ton steel structure was anchored to the seabed
with six anchors (The Annual Achievement, 1998). In 1991 the Brent Spar
oil platform was decommissioned. The initial plan for the platform was
to dismantle it on shore but the dangers involved prompted Shell to
consider other options. Shell initiated studies over the next four
years to assess their decommissioning options for the Brent Spar (The
Shell/Brent Spar Debacle, 2003).

1995

Feb

UK approves Shell’s choice for disposal. The first public
announcement of plans to sink the Brent Spar came from the UK
government (The Annual Achievement, 1998).

April

Greenpeace launches denouncement of Brent Spar disposal, asserting the
decision was made “in secret” and exaggerating environmental
concerns. Greenpeace activists begin occupation of Brent Spar (The
Annual Achievement, 1998).

May

Shell publicly announces safety concerns of occupying the Brent Spar.
Shell also issues an eviction notice and threatening legal documents
to Greenpeace activists occupying the platform (Shell Attempts to
Evict, 1995).

June

Greenpeace activists attempt to paint the sides of the Brent Spar. A
nearby Shell ship sprayed the dangling occupants with fire hoses.
Shell employees claim they were testing equipment (Shell Attempts to
Evict, 1995).

Under pressure from citizens, the German government publicly announces
dissatisfaction with deep sea disposal of the Brent Spar. German
rumors of a mass- boycott of Shell oil surface (The Annual Achievement,
1998).

Activists were removed from the Brent spar with huge media attention
(The Annual Achievement, 1998).

Two hundred German shell stations are damaged or vandalized. Two
stations were firebombed and one raked with bullets (The Annual
Achievement, 1998).

The British Prime Minister publicly defends Shell’s decision to
dispose the Brent Spar at sea; the same day Shell UK announces plans
to halt the deep sea disposal (The Annual Achievement, 1998).

Shell announces that the Brent Spar is to be towed to Norway and
harbored until a final decision is reached (The Annual Achievement,
1998).

Greenpeace’s Perspective

Greenpeace strives to maintain the environmental integrity of the
natural world. These efforts were proven true again in the case of the
Brent Spar oilrig. It was on February 16, 1995 that Greenpeace received
word that the UK government had granted permission to Shell to dump
their huge and heavily contaminated oil installation, the Brent Spar in
the North Atlantic. This was of specific concern to Greenpeace
considering the fact that this installation still contained toxic
radioactive sludge. The planned site for Brent Spar’s disposal would
have been just west of Ireland and Scotland (Greenpeace Brent Spar).

When Greenpeace heard of these plans they immediately gathered about two
dozen people and began to occupy the top platform of the Brent Spar to
prevent Shell from sinking the platform. Greenpeace’s idea was to
draw enough attention to the situation that Shell and the uninformed
public would have to hear their side of the situation. Greenpeace’s
main concern was the impact the remaining toxins and sludge would have
on the marine life and overall habitat of the sea floor. They also had
a viable concern that this dumping would set a dangerous precedent for
the other 50-60 rigs that were set to be decommissioned. If one oilrig
of this size were dumped in the ocean, would the UK Government then have
to maintain similar habits for future circumstances? This would only
create an exponentially growing problem.

Greenpeace admitted they did not have specific knowledge of the measure
of pollutants within the Brent Spar. The information they had was based
on empirical measurements made by Shell, many of which were mere
estimates. In regards to the deep ocean environment, it is poorly
understood and, therefore, Greenpeace could only speculate as to the
long-term impact that an oilrig could have on this type of environment
(Brent Spar). None of this minimizes the main point that Greenpeace was
trying to make; the need for Shell to be environmentally responsible.
Greenpeace simply wanted Shell to take responsibility for what they
created. They wanted Shell to protect the environment by minimizing the
accumulation of waste and harmful materials through recycling, treating,
and containing. Greenpeace released the following statement:

[We] should no longer needlessly dump wastes into the environment
(which ever part) and that we must act responsibly to reduce waste and
recycle, treat or contain harmful materials. Opinions on the Brent
Spar depend not only on the specific knowledge available but also how
deeply we value our environment and what damage and precedents we find
unacceptable. Public concern about dumping may conflict with the
values of some scientists, but it does not conflict with the available
scientific knowledge (Brent Spar).

The main concern of Greenpeace was to avoid setting a precedent for
future deep-sea disposals. The Brent Spar was one of the first oilrigs
that would eventually need to be decommissioned.

Shell’s Perspective

Executives of Shell Oil believed that they were being very diplomatic
when they began the process of determining how best to decommission the
Brent Spar. Nearly 200 different options for disposal were studied and
13 were actively analyzed (Rudall Blanchard, 1994). Shell’s goals
were to minimize the amount of money spent on the decommissioning and to
limit the technical difficulty and risk for injury. After taking these
factors into consideration, the final decision came down to two options:
deep-sea disposal or on-shore dismantling. The deep-sea option was
favorable in terms of cost and hazard to workers. As Shell made their
decision, they failed to take into consideration all of the various
publics that would be impacted. A press release dated February 16, 1995
announced Shell’s plans for decommissioning the Brent Spar facility:

Disposal of the Brent Spar offshore storage and tanker loading facility
has been the subject of extensive discussions between Shell UK
Exploration and Production and the Department of Trade and Industry for
many months…Shell Expro has now received from the DTI approval for
abandonment of the Spar, which will involve removing it from its
moorings, following a clean- up operation, and towing it to a designated
deep water site in the North East Atlantic for disposal…Preparations
are in hand to enable the plan to be put into effect in the summer of
1995.

One possible option, which was investigated closely, was onshore
scrapping. However, it was concluded that this approach, involving
reversing the installation process, would be technically complex,
involving a higher number of offshore operations, would provide no
environmental benefit compared with deep-water disposal, and would
involve a significantly higher cost than the approved option.

Relevant parties, including environmental and fishing interests, were
fully consulted.

The detailed environmental impact analysis for the deep sea disposal
option identifies the effect of regulated substances on board and shows
the effect to be negligible. Any environmental impact of deep sea
disposal would be negligible and would be contained within the buoy’s
immediate vicinity.

This method of disposal has been supported by independent evaluation.
Balancing safety, environment and cost factors, deep sea disposal is
the most practical method of disposal (1995 Press Releases).

Although this announcement appears to be the definitive end to a
well-informed decision, this plan was never fulfilled.

Several publics had an interest in this case and Shell executives
considered those they thought were most important. The government was
consulted several times throughout the decision process; full approval
was granted by Norwegian and UK governments for the deep sea disposal.
The financial public, which includes stockholders, was also considered,
as the decision was greatly based on the amount of money required.
Employee publics were also considered, as Shell’s proposed deep sea
disposal constituted the least risk to employees.

Because Greenpeace boarded the Brent Spar in protest, the media’s
coverage was primarily from an environmental perspective. Shell was
portrayed as environmentally irresponsible and experienced harsh
criticisms from all publics. Shell gas stations were boycotted and
fire-bombed and their public image suffered greatly as well. As a
result, false information released by Greenpeace was taken to be true in
light of the negative image Shell had acquired.

Follow-up

Greenpeace’s efforts were successful; in June 1995, the Oslo and Paris
Commission voted 11-2 to ban the dumping of oil installations In the
Northeast Atlantic, including the North Sea (Brent Spar Meeting). The
Brent Spar was decommissioned on shore in 1998. The pieces were
recycled and used to build a new ferry terminal in Norway. Although
this situation led to conflict, much has been learned for future similar
situations.

(Blankenship, Buck, Gonnion, Hauslauden, Sabey, 2004)





CASE QUESTIONS

1. Analyze the “Organization” & “Constituents” boxes of
Argenti’s Strategic communication Model for Shell when they were first
preparing to release information regarding the sinking of the Brent
Spar.

2. Analyze the “Message” & “Feedback” boxes of Argenti’s
Strategic Communication Model for Shell when they were first preparing
to release information regarding the sinking of the Brent Spar.

3. What departments/divisions of Shell are responsible for communicating
with the publics following the release of the plans to sink the Brent
Spar?

4. Develop a series of change messages that Shell should send to
create/maintain positive
relations with various publics surrounding the on-shore decommissioning
of the Brent Spar.