2

Royal Dutch/Shell: Human Rights in Nigeria

Synopsis
The African nation of Nigeria won independence from Britain. At that time, many believed that
Nigeria had the potential to become one of the engines of economic growth in Africa. The country
was blessed with plentiful natural resources, particularly oil and gas. By the mid-199s, it was clear
that much of that potential was still to be reali!ed. Thirty-five years after winning independence,
Nigeria was still heavily dependent on the oil sector. But conse"uently it failed to #eep pace with
the growing population. They were a large food e$porter but because of the rapid growth of
population they had to import food. %oreover the &ovt. was hardly handling the arising situation.
They were not getting any financial help from other nations. 'o, internal conflict arose between
different ethnic groups and ultimately civil war started in 19(. Then to stable the situation a
military system forcefully too# the power by falsify the democratic election. )oyal *utch+'hell is
the main foreign oil producer operating in Nigeria. )oyal *utch+'hell has been involved in oil
e$ploration and development in Nigeria since the 19,s. 'hell was operating in a coastal plain of
Nigeria.
The -goni are primarily farmers and fishermen, who have been see#ing greater self-determination.
.n 19,/, )oyal *utch+'hell struc# oil on -goni lands. By some estimates, the company has
e$tracted some 01 billion worth of oil from the region since then. A small percentage of -goni
region was wor#ing at 'hell. 'o, because of the minority they were being overloo#ed in terms of
allocating 2obs either &ovt. or private sector. They would li#e to receive a greater share of the
revenues generated from the oil. They are also concerned about the environmental costs 'hell3s
activities have ta#en on their land. Their environment was drastically damaged due to the
production of oil. -goni activists claim that 'hell4s poor environmental safeguards have resulted in
numerous oil spills and widespread contamination of the soil and groundwater. Then a protest
leader named 5en 'aro-6iwa argued the people would never deliberately spill oil on their land
because they #now the so called compensation is worthless and the land is never restored. The
government, however, has been unsympathetic to the -goni, generally ignored their re"uests, and
e$ecuted -goni leaders. 'aro argued that a spill from the 19(s had not been cleaned up and in
response 'hell stated the spill occurred during civil war and cleanup wor# was completed in 199.
7nfortunately drowned spill reappeared on the surface and Shell continuously
gather oil from it by posing threats against employees. In 1993, for their safety
3
Shell banned the entry to this region. .n April 1991, the -goni organi!ed their first protests
against 'hell and the government. -goni farmers were protesting against 'hell3s activity. Although
'hell stated that the land had been ac"uired by legal means and that full compensation had been
paid to the farmers and the local community. Though many of the farmers argued 'hell was
continuously e$ploiting their land. After observing that this protest was a complete threat for
continuing the operation 'hell notified Nigerian &ovt. 'o to handle the situation a unit of military
came and shot the protestors. There was loss of 1 lives and military arrested 'aro-6iwa and eight
associates in the movement for survival of -goni people. 'aro-6iwa4s arrest achieved the goal that
the protests and bloodshed had not. .t focused international attention on the plight of the -goni
people, the heavy-handed policies of the Nigerian government, and 'hell4s activities in Nigeria.
'everal human rights organi!ations immediately pressured 'hell to use its influence to gain the
release of 'aro-6iwa. But 'hell was not in a mood in mutual understanding and realising of 'aro-
6iwa. After a trial by a military tribunal that was derided as nothing more than a #angaroo court,
'aro-6iwa and his associates were sentenced to death by hanging. Thus there is pressure on 'hell
to improve the environmental situation and put pressure on the government to improve the social
conditions of the -goni. .n spite of the international pressure, 'hell has gone ahead with plans for
further investment in Nigeria. 'hell3s position is that it is better for the people that it is in the
country operating and investing.
4
Question #1:
Does shell bear some responsibility for the problems in the Ogoni region of Nigeria?
. believe 'hell bears much responsibility for the problems in the -goni region. -ne reason is the
fact that 'hell has received nearly 01 billion worth of oil from the -goni land but has not helped
the -goni people by providing them with 2obs or money to develop their lands. .f 'hell had
provided money to the -goni people they could have built schools and provided health care that
would help them get their feet on the ground and potentially give them some power. Because they
were powerless minority so they were overloo#ed in every sector in getting advantage and benefits.
The revenue from the oil production was not invested for the -goni people the health, education
sector was highly affected.
Another reason 'hell is responsible is because they destroyed much of the land in this region. This
occurred through numerous oil spills that contaminated the soil and groundwater in the region. -il
spills also contaminates the groundwater which can cause serious health problems for the
inhabitants and destroy vegetation. 'hell had not followed any environment safeguard and which
affected the -goni tribe a lot. 8arge area of farmlands and fisheries had been occupied to e$plore
oil. Numerous oil spills and lea#age degrade of the soil. 6ithout fertile soil, -goni people lose their
mode of survival and are faced with the crisis of food shortages. *estruction of wildlife and damage
to a"uatic ecosystems due to destructive oil mining. 'hell focused on e$ploiting the resources, while
ignoring the local people4s health and education conditions. 9ven a spo#esman at 'hell admitted to
them being at fault for this. :owever, the same spo#esman also blamed many of the more recent
lea#s in the -goni region were done deliberately by 'hell. :e also stated that 'hell offered
compensation for doing the harm. All these are due to 'hell4s poor social responsibility in Nigeria.
9nvironmental regulations which are common practice in developed nations are often not followed
in less developed countries. The system of oil production in Nigeria clearly is heavily s#ewed in
favor of the 'hell company and government elites rather than native populations. :ence, the
indigenous inhabitants are actually further impoverished.
Another reason 'hell is responsible for the problems in this area is because they were the causing
the conflict between the -goni people and the government. 'hell was deliberately tried to create
conflict between -goni people and the Nigerian &ovt. ; hopefully they were successful at their
motive. 'o, by the influence of 'hell Nigerian &ovt. had to ta#e some decision against them. The
-goni people were fed up with 'hell destroying their land that, they believe, the government was
responsible for stopping. Because of this the -goni people protested against the government plus
5
'hell. 'hell is responsible for the problem is because 'hell would complain to the goernment
about the -goni people3s protests and how it was halting their operations. *uring the protest govt.
of Nigeria send some of the military and they shot some of the protestor instantly and for -goni
faced heavy loss of lives. These events caused hundreds of protestors to die.
*uring the protest, a protestor named, 'aro-6iwa was arrested and this news was all around the
world that time. .nternationally the incidents by 'hell got noticed and international organi!ation
started putting pressure on 'hell. 'everal human rights organi!ations immediately pressured 'hell
to use its influence to gain the release of 'aro-6iwa. They also urged 'hell to put on hold plans to
start wor# on a 01., billion li"uefied natural gas pro2ect in Nigeria. The pro2ect was structured as a
2oint venture with the Nigerian government. 'hell was trying to ma#e mutual understanding by
discreet diplomacy with Nigerian &ovt. But Nigerian military was not in a mood of understanding
with 'hell or any other organi!ations. After a trial by a military tribunal that was derided as nothing
more than a #angaroo court, 'aro-6iwa and his associates were sentenced to death by hanging. The
sentence was carried out shortly after sunrise on November 1, 199,. Though 'aro-6iwa was
supporting the -goni but he had to pay price for his good deed ; again 'hell was responsible for
the death of 'aro-6iwa.
.n conclusion, it is fair to say that 'hell was very much responsible for all of the problems caused in
the -goni region. This includes, to an e$tent, the e$ecution of 'aro-6iwa and his associates. This
is because 'hell only used discreet diplomacy to influence the Nigerian government to stop the
e$ecution. This was obviously not enough of an effort on their part.
!
Question No: 04
Was the response of western goernments to the e!e"ution of #en Saro$Wiwa about right% too
e!"essie or too mil&? What shoul& hae been the appropriate response?
The response of western governments to the e$ecution of #en 'aro-6iwa about right was too mild.
6estern governments could have done more to Nigeria.
-ne can argue all sides of this, and one3s political views will li#ely affect one3s position.
9mbargoes and prohibitions on investment stand little chance of wor#ing even when there is
widespread international support. And even if a few countries decide to ignore the embargo - which
they might for cheap oil - it will li#ely fail. .t seems that embargoes are not particularly effective in
pressuring governmental change and are merely symbolic. 6hile it is true that many people believe
more should be done, it is unclear that there is much that can be done that will be effective.
.n a surprising and welcome move, the 7nited Nations accused Nigeria and 'hell of abusing human
rights and failing to protect the environment in oil producing regions, and called for an investigation
into 'hell. The report condemned 'hell for a well armed security force which is intermittently
employed against protesters. The report was unusual both because of its fran#ness and its focus on
'hell, instead of only on member countries. The <ommonwealth is a group of ,= developed and
developing nations around the world. Almost all members have had a past association with another
<ommonwealth country. The <ommonwealth believes in the promotion of international
understanding and co-operation, through partnership. Nigeria4s membership of the <ommonwealth
was suspended by <ommonwealth :eads of &overnment. *espite repeated pleas from Nigerian
human rights activists, the <ommonwealth has failed to follow through on threats of e$pulsion. .n
word, the 7nited 'tates is a strong critic of the Nigerian government, both past and present. .t has
condemned the e$istence of the military regime, of election cancellations, and of the situation in
-goni. .t has threatened to ta#e action. >et it never does. As the largest consumer of Nigerian oil,
the 7' could be the strongest advocate for human rights and 2ustice, yet it refuses to ta#e on that
role. The 7' government has even protected Nigeria from economic sanctions by states and cities
within the 7'.
"
The 6estern governments did ma#e it clear that it was wrong what Nigeria did by cutting military
sales and aid to them but arguably it was not enough. By these western governments still purchasing
the oil, they were, in a way, 2ustifying Nigeria4s actions in the first place. They did this to not halt
the production and sales of oil. By the western governments still purchasing the oil, they are
indirectly supporting the Nigerian government4s decision. .t is important, no matter how much
money may be lost, that we do the moral thing. By halting purchases of the oil, we would really be
ma#ing it clear to the Nigerian government that what they did was immoral and wrong. -n the other
hand, by halting the operations many people would lose their 2obs in Nigeria and elsewhere, which
would result in a tremendous amount of hardship for many people. This is a tough "uestion to
answer because no matter what someone is getting hurt. But, overall the western government did
the most good for the most people by not halting oil production.
N'(): *he Sweatshop Debate
#
Synopsis:
Ni#e is one of the leading mar#eters of athletic shoes and apparels on the planet. Ni#e story began
in 19,? with a handsha#e of @hil 5night met his 7niversity trac# coach Bill Bowerman. .n 19(=
they formed Blue )ibbon 'ports to imports athletic items from Aapan. Blue )ibbon 'ports had a big
e$perience in subcontract on its shoe in 19?1. -n %ay 1, 19?1 Blue )ibbon 'ports officially
became Ni#e.inc. The company ta#es this name from the &ree# &oddess of victory. Now Ni#e
provides wide variety of athletic shoes, apparel, e"uipment and accessories in global mar#et.
.n addition, Ni#e controls several stores and N.59T-6N shoe, factory outlets, women shops and
online shopping. Ni#e sponsors many high-profile athletes and sports teams around the world, with
the highly recogni!ed trademar#s of BAust *o .tB and the C'wooshD logo. Almost all these products
are manufactured by third party.
Ni#e manufactures shoes in places li#e <hina, .ndonesia, Eietnam and other developing countries.
Ni#e manufactures these shoes in these countries on contract basis. Although Ni#e does not own
any manufacturing facilities in those countries, but it is accused of producing its goods where the
wor#ers are e$ploited. As a result of these problems faced by Ni#e, it has assured to improve the
wor#ing conditions in those facilities. Ni#e has been in the news by number of agencies and
organi!ations who complain about the low wages, long hour shifts and enforcing child labor in
those countries. .n contrast, Ni#e contracts many sport stars, who are reaping in multimillion dollars
to promote Ni#e goods. Ni#e has admitted of manufacturing its goods in countries which are in
developing phase, have cheap labor and lac# human rights and union movement. Because of these
practices, Ni#e had made huge margins by the wor#ers who are paid mere = cents an hour. Ni#e4s
success is not only based on its campaigns and advertisements but also of the tears of tortured
wor#ers and child labor.
Against this different problem Ni#e developed different strategic approaches for wor#ing condition
and pay. After all, Ni#e responded, in 199( hired one-time 7.' Ambassador to the 7N. After
finishing two wee# investigation tour, they released a report and that report positive for Ni#e. .n late
199( Ni#e designed a tas# force to find the rout of blac#balling
'weatshops. Finally, -n %ay 1=, 199/, @hil 5night ta#e first step designed to improve the wor#ing
condition for employees who are wor#ing for Ni#e.
9
-n %ay 1=, 199/, in a speech given at the National @ress <lub, Ni#e founder @hil 5night spelled
out a series of initiatives designed to improve the wor#ing conditions for the ,, people that
ma#e products for Ni#e through subcontractors.
Although these moves were applauded in the business press, they were critici!ed by its long term
adversaries in the debate over the use of foreign labour.
The original challenge for Ni#e is to enforce their codes of conduct and use their power to ensure
that their wor#ers receive basic human and labour rights. Although these sweatshops are beyond the
reach of 7.'. law, they are not beyond the giant American companies with factories across the
national border or abroad.
Question No+1:
1$
Shoul& Ni#e be hel& responsible for wor#ing "on&ition in foreign fa"tories that it &oes not
own% but where sub"ontra"tors ma#e pro&u"ts for Ni#e?
.n my opinion, Ni#e should be held responsible and also accounts for the wor#ing conditions that
prevail in the factories that it sub-contracts. Ni#e should not only ta#e the positive aspects of cheap
labor in the foreign countries but also ta#e responsibility of the employees wor#ing in those
countries. Ni#e as global organi!ation should reali!e its goals to the consumers worldwide. Ni#e
should ta#e the e$ample of <oca <ola industries in .ndia. )ecently <oca <ola was in the news for
using pesticides as preservatives in the cold drin#s. <oca cola after the inspecting their
manufacturing facilities, it ensured that all of their manufacturing facilities should follow the same
standard of water purification done across the world. At the same time <oca <ola also ensures that
its employees are getting minimum wages and the better wor#ing conditions in the factories. This
ma#es <oca <ola socially responsible for its employees in the respective countries.
9ven though Ni#e is technically away from those responsibilities, it is clear that it should ta#e
control of its sub-contractors who e$ploit the wor#ers in the foreign countries. .f Ni#e could have
made any changes to the wor#ing conditions or the wages as part of the arrangement, it would have
benefited and passed to those wor#ers. Ni#e as a corporate giant concentrates on improving the
value of its shareholders. The wor#ers in these under developed countries were happy, eager to
wor# and accept the conditions that were provided by the sub-contractors of Ni#e. The main reason
behind this is that the wages that they get are far more superior or e"ual to the wages got from other
companies. This denotes that the conditions that are considered illegal in developed countries are
perfectly legal in some developing countries where the production is done. .f the company "uits
because of the protests held by many organi!ations, the ultimate losers will the wor#ers.
There needs to be combination of the standards that prevail in 7.'. and the other developing
countries where Ni#e has its manufacturing facilities. .f Ni#e is forced to follow the standards that
prevail in 7nited 'tates, it might not benefit from the low cost labor and environmental advantages
of manufacturing of shoes. -n the other hand, if Ni#e adopts the standards prevailing in foreign
country where it manufactures it shoes then it may not be able to agree with some of the :uman
)ights related issues that a global player should follow. Therefore, it is very important in the Ni#e4s
perspective to combine the standards of 7nited 'tates and Foreign countries to ensure that all the
wor#ers get at least the minimum wages in the respective country. .t should also ensure better
wor#ing conditions for the wor#ers and the minimum age limit of the wor#ers should be followed
strictly. Ni#e, in doing so may benefit from the public relations rather than wasting money creating
some defensive @) strategies.
11
*irectly Ni#e has to change their policy, because their policies are very older and poor. For policy
ad2ustment one strategy will be to involve international agencies. Ni#e has some obligation to the
shareholders and improvement in competitive mar#etplace. .f the new policies are that finally get its
business down then it4s not good for wor#ers. <learly, remain change occur in its wor#ers is
redoubtable.
.n the world sweatshops are a big problem in different firms. The firms are searching for low cost
subcontractors in every corner of the world. 'o the sweatshops are a world problem. The possible
solutions are change or modify, with minimum pay and age. The firms can get low cost labor and
low cost of manufacturing in certain countries. :owever, low cost labors are promoting the free
trade and improve the "uality of life.
6hile Ni#e has faced severe criticism due to its manufacturing decisions, it as a brand and product
has fought and sustained its success. 9thics e$perts will continue to "uestion Ni#e in unfavourable
ways, however when we apply the ethical theories that have relevance in the business world, we
observe that Ni#e does its best to meet the re"uirements. This is especially evident when Ni#e made
decisions to conduct independent audits and engage in human rights activities. -n the other hand
Ni#e faces ethical dilemmas due to its operations and these dilemmas will continue to e$ist in the
world economy. Ni#e has gone with the route of foreign contracting in its earlier phase and has
received tremendous criticism through it. Faced with its plenty of ethical dilemmas, Ni#e has
managed to sustain the product, develop new products and continue to be a force to rec#on with as a
consumer brand.
Question No+,
12
-n in"ome of ./+/0 a &ay% the base play of Ni#e fa"tory wor#ers in 'n&onesia% is &ouble the
&aily in"ome of about half the wor#ing population+ 1alf of all a&ults in 'n&onesia are farmers%
who re"eie less than .1 a &ay+ 2ien this% is it "orre"t to "riti"i3e Ni#e for the low pay rates of
its sub"ontra"tors in 'n&onesia?
.n my opinion, Ni#e was not entirely responsible for .ndonesian subcontractors. .n other words,
Ni#e should not responsible for low pay rates. Because they always deal with the 'ubcontractors.
8i#e cost of goods ; wages. 'ubcontractors then set up the pay rates for the wor#ers. But who
ma#ing them shoes are the employees of Ni#e. 'o Ni#e need to responsible for their employees.
Though half of the population of .ndonesian daily income is less than 01 a day but this is not
enough.
The daily wage rate varies in different countries and is fi$ed by labor laws in that country. 6hen
Ni#e began its operations in .ndonesia in 199(, Ni#e was not even paying the minimum wage to its
wor#ers. The other facts related to Ni#e is that it would file a petition to the .ndonesian government
year after year for reduction in the daily wages as it would be hard to pay the sub2ected wages to the
wor#ers. A wage of 0=.=/ a day was fi$ed by .ndonesian government itself, covering ?G of the
basic needs of a person. The daily wage rate also varies by the city the wor#er lives in, s#ill set of
each wor#er, e$perience of the wor#ers and the essential commodity prices in that city.
Another problem that the .ndonesian wor#ers face is that the several factories pay a apprentice
wage for the new wor#ers, which is below the minimum wage fi$ed by the government. These
problems mainly occur with the female wor#ers, 2ustifying that women need several months to get
trained in manufacturing the shoes. But almost all the time, they are trained for few hours to few
days and are put directly on the production facility. This apprentice wage is simple ways of cheating
the wor#ers.
.n 1999, the .ndonesian government announced the increasing of minimum wage to 0=(+month. For
the first time in this year, Ni#e has initiated to increase its minimum wage of the factories wor#ers
in .ndonesia higher than the government allocated wage. The new wage structure was 01+month
and a bonus of up to 01?.,+month. This is certainly a step forward in the wage structure but far
below the wages re"uired to maintain a average family. %a2ority of wor#er in .ndonesia are
teenagers and unmarried young women from ages 1? to 1. The average target for the wor#ers is
H.1 pairs of shoes a day and only gets 0=., as a daily wage in .ndonesia. The wage re"uired for a
single person to cover the basic needs is around 01/+month as released by &lobal 9$change and the
living wage a family re"uires is double the single person wage which is 0?(+month. >et Ni#e pays
13
the minimum wage to the wor#ers who produce shoes that sell for 01. This ma#es the daily
wages of wor#ers in factories manufacturing Ni#e shoes are paid more than the farmers in the same
region. Ni#e should be critici!ed, if Ni#e4s sub-contractors are not obeying by the rules and
following the minimum wages for the type of s#ill and wor#ing conditions the wor#ers wor# in. -n
the other hand, Ni#e should not be critici!ed if they pay the minimum wages set by a group of
wor#ers depending on their s#ill and wor#ing condition. And it is not correct to compare the wages
for another group of wor#ers li#e farmers. This is because farmers as a whole may be under some
other rules and sub2ect to other loan allowances from the government. Thus it is not fare to compare
the wages of different set of wor#ers. 'till now .ndonesian wor#ers are wor# in danger. They are
in2ured by chemical re-actions. >et no response from the Ni#e.
But mainly, subcontractors are responsible for this. They set up a low pay rates from Ni#e. And
Ni#e also #eeps a silent act. They are not as#ing or argue about the low pay rates. But basic rights
cannot be maintained by 0=.=/. Though farmers3 income is lower than what they paid but this was
not enough that Ni#e also do the same 2ob. 'o it is not entirely but corrects to critici!e Ni#e for the
low pay rates. Because Ni#e consciously done that 2ob with their subcontractors for low pay rates.
4)5)4)N6):
14
<harles 6.8.:ill, =1=-111, .nternational Business, %c&raw-:ill .rwin, 7niversity of
6ashington
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