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ETHICAL CONTROVERSIES IN BUSINESS MANAGEMENT (extract relating to Royal Dutch Shell)

BY DR ROSAMUND THOMAS, DIRECTOR, CENTRE FOR BUSINESS AND PUBLIC
SECTOR ETHICS, UK

Presented to IV Symposium on Corporate Social Responsibility in the Americas, Cancun, Mexico July 19-20 2006

EXTRACTS

My address in Cancun, Mexico, to representatives from the oil and gas industries of the Americas begins, first, with an Introduction to ‘Ethical Controversies in Business Management’ today. My Introduction defines key terms, such as ‘Business Ethics’, moral values, and ‘Corporate Social Responsibility’ (CSR), and also identifies some of the causes of ethical controversies.

2.5 Ethical Controversies involving Corporate Social Responsibility Generally: The Camisea Natural Gas Liquids (NGLs) Pipeline, Peru

Corporate Social Responsibility (CSR) was defined earlier as addressing social, environmental, and sustainability issues. There are numerous cases of ethical controversies involving CSR in the oil, gas and shipping industries, ranging from the 1984 catastrophic gas leak at the Union Carbide plant in Bhopal, India (61); the Exxon-Valdez oil spill in Alaska’s Prince William Sound in 1989 (62); the oil spill from the tanker, Prestige, off Spain’s Galician Coast in 2002 (63); Royal Dutch Shell’s oil spills, and other problems, in Ogoniland, Rivers State, Nigeria (64); the Shell-led Sakhalin II oil and gas project in East Russia, where pipeline crossings are reported to have endangered wild salmon rivers – and could also threaten the feeding grounds of whales (65); and BP Alaska’s leak in March 2006 of 270,000 gallons of crude oil from a corroded transit line into Prudhoe Bay. In addition, BP’s US operations experienced an explosion at their Texas City refinery, which killed fifteen people and injured an estimated five hundred persons. (66)

It is a challenge for ‘high risk’ oil and gas industries to avoid damage to the environment and dislocation of communities, causing social upheaval.   Therefore, the adoption of CSR principles, policies and management systems (as well as those for human rights and anti-corruption now attached to CSR) are critical for the oil and gas industries.

Notes

(61) Rosamund Thomas ed. Environmental Ethics, Chapter 10 and Appendix IV, (Bury St
Edmunds, Ethics International Press Ltd) 2nd edition, 1996.

(62) National Oceanic and Atmospheric Administration (NOAA) Office of Response and
Restoration, US Department of Commerce, http//response.restoration.noaa.gov, revised
22 June 2006.

(63) www.newscientist.com/article ‘Prestige Oil Spill far worse than thought’ 27 August 2003 by Gaia Vince.

(64) See ‘Shell Laments Blockade to Ogoni Spill Sites’ by Odudu Okpongete Daily
Independent (Nigeria) http://royaldutchshellplc.com/category/ogoni.

http://royaldutchshellplc.com/2006/04/17/daily-independent-nigeria-shell-laments-blockade-to-ogoni-spill-sites/

(65) Press Release: ‘Shell Falsifies External Monitoring Reports on Sakhalin II River
Crossings’
CEE Bankwatch Network 7 June 2006 at www.sakhalin.environment/ru/en.
Royal Dutch Shell pic, on the other hand, in The Shell Sustainability Report 2005 claims that the company has “listened to the many stakeholders” and has made several big changes to reduce environmental impacts, including those associated with the joint venture operated by the Sakhalin Energy Investment Company Ltd (SEIC). An added problem for the Shell-led project is that in May 2006 Russia’s Natural Resources Ministry called for a review of the legal agreements, signed in the 1990’s, underpinning the oil and gas developments on Sakhalin Island. The Ministry is suggesting that the agreements were damaging to Russia’s national interests. Financial Times 26 May 2006.

(66) BP is facing a criminal grand jury investigation into the Prudhoe Bay, Alaska, oil spill which triggered investigations by US Federal and State agencies. BP is already facing a grand jury probe in Texas for the accident there. Financial Times 8 June 2006.

EXTRACTS END

Centre for Business and Public Sector Ethics
Number 131,
23 King Street,
CAMBRIDGE CB1 1AH

Telephone: +44 (0)1954 710086
Facsimile: +44 (0)1954 710103 and
Email: [email protected]
Web: http://www.ethicscentre.org

Director:
Dr. Rosamund M Thomas

ROSAMUND THOMAS, Ph.D., M.Soc. Sc., MA (Cantab), Dip. Soc. Admin.

Dr Rosamund Thomas, Director, Centre for Business and Public Sector Ethics, Cambridge, is an expert in Corporate Social Responsibility, Business Ethics, and Business Management, as well as Government Ethics. She has read these subjects at the University of Birmingham (UK); Harvard University to doctoral and postdoctoral levels (USA); has taught and examined in these subjects at the London School of Economics and Political Science (1978-83), before undertaking further research in Cambridge University as a Senior Research Fellow.

http://www.ethicscentre.org/cv.shtml

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