master case body mgt 372 shh

8/12/2019 Master Case BODY MGT 372 SHH

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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 19s. '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 0 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 continuouslygather oil from it by posing threats against employees. In 1993, for their safety


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Shell banned the entry to this region. n April 199, 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.


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Question #1:

Does shell bear some responsibility for the problems in the Ogoni region ofNigeria?

believe 'hell bears much responsibility for the problems in the goni region. ne reason is the

fact that 'hell has received nearly 0 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. ven 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.

nvironmental 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 infavor 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


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'hell. 'hell is responsible for the problem is because 'hell would complain to thegoernment

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 0. 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.


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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.

mbargoes 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


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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


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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 apan. Blue )ibbon 'ports had a big

e$perience in subcontract on its shoe in 19?1. n %ay , 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 N5T6N 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 ust *o t and the C'wooshD logo. Almost all these products

are manufactured by third party.

Ni#e manufactures shoes in places li#e


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n %ay 1=, 199/, in a speech given at the National @ress


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Shoul& Nie be hel& responsible for woring "on&ition in foreign fa"tories that it &oes not

own% but where sub"ontra"tors mae pro&u"ts for Nie?

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


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*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.


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-n in"ome of ./+/ a &ay% the base play of Nie fa"tory worers in 'n&onesia% is &ouble the

&aily in"ome of about half the woring population+ alf 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 Nie 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 0+month

and a bonus of up to 0?.+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 . The average target for the wor#ers is

H. 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 0/+month as released by &lobal $change and the

living wage a family re"uires is double the single person wage which is 0?(+month. >et Ni#e pays


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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.

)5))N6):


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. n www.u#essays.co.u#,retrieved 11K, anuary 1, =1H, from httpK++www.u#essays.co.u#+essays+business+ni#e.php

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