Introduction
The Brent Spar was a storage buoy, commissioned on 1976 for oil storage and subsequent transfer to tankers. It was located in British territorial waters. This buoy belonged to Shell U.K. and Exxon; Shell was in charge of the operations. By 1989, Shell U.K. and Exxon finally had an operational pipe line so the Brent Spar was no longer useful. Both decided to decommission the Brent Spar on 1992 and Shell U.K. was going to be in charge, being the one who handled operations. Shell U.K. ordered no fewer than 30 separate studies which considered the technical, safety, and environmental implications. The studies concluded on two options; sinking the Brent Spar on the North Sea (which had 1% risk of pollutant discharges from the ships crossing North Sea every year) or decommission on land (which had less contamination risks but employees would be at risk).
The option of sinking the buoy was going to cost 20 million Euros while decommissioning on land was going to be around 40 million Euros. Shell decided on sinking the buoy as the best practical environmental option (BPEO) and the U.K. government approved. As a standard practice, United Kingdom informed on the procedure to the different countries surrounding the North Sea with 60 days for opposition which nobody claimed. And there was when Greenpeace (one of the biggest NGO’s) got involved. Greenpeace made a huge campaign, using every communication’s vehicles. They concentrated in Germany asking the people to stop using Shell products and the result translated into losses for Shell Germany.
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Other resources were filming on the occupation of the Brent Spar and further released on TV main channel companies worldwide. With all this pressure from Greenpeace, European countries and people everywhere, Shell U.K. decided not to sink the Brent Spar but to decommission on land. Shell U.K. ordered more scientific studies to investigate further on Greenpeace claims and the results relied on Shell’s BPEO; Greenpeace accepted they made a mistake on the numbers they presented but still were against the sinking. In the end Shell U.K. lost credibility (not to mention millions of Euros) and it is considered the worst PR disaster of last century. General public saw Greenpeace as their hero and felt their voices were heard.
Lessons Learned
After studying the history on this unfortunate incident called “the victory of a David over a Goliath” (Julian Oliver, Learning the lessons of Brent Spar saga, 1995) I think there were big mistakes made by Shell U.K. and if done correctly, they could have avoided the embarrassment. Those mistakes should serve as lessons not only to Shell but to all multinational corporations (MNC) in every single market. The lessons we should take from this case are: 1.Global Thinking. If you are an MNC, considering every aspect and every repercussion on decision making on a global perspective is mandatory. Shell didn’t consider the corporate environmental and social responsibilities (CESR’s).
Ethicalcorp.com very well summarizes: Heinz Rothermund, managing director of Shell exploration and production, said at the time of the Spar debate: “Spar is not, as so many believe, an environmental problem. Rather it will go down in history as a symbol of industry’s inability to engage with the outside world.” 2.Communication. Following the line on the previous lesson, communication is the key to keep CESR on situations with impact to others. Maintain open communication with the countries implied on the situation, NGO’s and public. Shell U.K. kept information and decision making by them and never asked for a meeting with Greenpeace. As a result, people saw Shell as a greedy corporation only thinking on the cheapest option. On the other side Greenpeace, supported by media, was seen as a symbol of “victory for democracy” (Ragnar E. Lofstedt and Ortwin Renn, The Brent Spar Controversy : An example of risk communication gone wrong, 1997)
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3.Research. Seek for expert and unbiased opinions. Search for similar actions that made an impact on other industries, NGO’s and public then analyze consequences beforehand. Shell only searched when the problem was already on and was obliged to cede and try to regain trust. 4.Focus Groups. Prepare focus groups in different countries searching differences in public awareness among affected nations. Ragnar E. Lofstedt and Ortwin Renn, The Brent Spar Controversy : An example of risk communication gone wrong, 1997 explains: As has been described in this paper, the Germans, for instance, had very different views of Brent Spar than the U .K. public.
Related to this, there is a need to improve consultation and communication with political agencies in other countries. Of particular importance is to test their agreement or approval if new methods are introduced or public outcry is likely to occur. The elimination of the so-called “surprise” factor is a necessity in order to reduce conflicts similar to Brent Spar. 5.MNC’s and NGO’s alliances. Public identify NGO’s as their representation on important matters such as environment and social justice. Corporations must consider alliances with NGO’s when working with issues that can impact worldwide, environmentally and socially. Together evaluate the pros and cons on different perspectives.
