Shell, Greenpeace, and Brent Spar
Copyright © 2002 by David P. Baron. All rights reserved. Reprinted with permission.
General framework
Screening
Generation
of
Alternatives
Elimination of
alternatives
contrary to:
- law
- company
policy
- ethical
consensus
Analysis
Interests
Motivations
Nonmarket
action
Institutions
Predictions:
market
reactions
nonmarket
reactions
Refinements, reconsideration,
generation of new alternatives
Choic
Evaluation
of
e
claimed rights
Application of
normative
principles
Choice and
strategy
formulation
Implementation
Shell UK’s process – Compliance (case-by-case)
a UK issue; a
Shell UK issue
case-by-case
alternatives
identified
within Shell
• Sink at Sea
• Dismantle
on Land
Screening
Neither
alternative
eliminated:
UK Law
IMO
Shell policy
X “ethical
consensus”
Analysis
• BPEO criteria*
• Narrow
definition of
interests and
institutions**
• Closed process
only official
consultations
• Compliance:
satisfying UK
requirements is
sufficient
Choice
Ignored claimed
rights/views of
interests (GP)
and broader
public.
Narrow strategy:
secure approval
through the
official
government
channels.
Implementation:
tow and
sink
X
* Engineering complexity, risk to health & safety of workforce, environmental
impact and cost, acceptability to government and to “officially designated
parties,” which included government bodies and “legitimate users of the sea”
as designated in 1987 Petroleum Act)
** UK Department of Energy
Missing Components
Screening
Analysis
Additional
• sensitivity to
alternatives:
“ethical
• reuse
consensus”
• solicit bids
• develop a
• consult
company
policy rather
within Shell
• consult greens than case• co-opt/bargain by-case
• view it as an
• disposal in
industry
other
issue
countries
Consider
broader
range of
interests and
institutions
-- Dept. of
Environment.
Shell is
vulnerable to
nonmarket
action.
Choice
• Consider
claims and
interests of
groups and
their likely
actions
• Revise
strategy
based on
analysis (I.e.,
loop back)
Refinements, reconsideration,
generation of new alternatives
Implementation
Susceptibility to public protests/boycotts

products
– consumer products
– products with low switching costs
– a brand name that can be damaged

operating environment
– operations that produce negative externalities
– operating in an interest group-rich environment
– multinational/global operations -- issues can spill over
to other units and countries
– operating in developing countries

organization
– a decentralized organization, so that external effects,
including intracompany, are not naturally considered
Lessons
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Nonmarket issues can spill across borders – company
borders; country borders
Global companies are especially vulnerable
Government approval is necessary but not sufficient
Closed processes on nonmarket issues can be risky
Use a broad definition of interests--not just “official” or
even legitimate
View interests as choosing strategies in nonmarket
competition; try to anticipate their strategy
Attempt to predict nonmarket action
– media’s role in nonmarket action; have your messages
ready
– prospects for spill-over into the market environment and
to other political jurisdictions
– have a crisis management plan in place
Activists can alert a company to practices and issues that
will be of concern to the public and governments
Shell’s Revised Process
Generated
alternatives
publicly by
inviting bids
Screening
Analysis
Evaluated 30
proposals
from 19
contractors;
selected 7.
- law-OSPAR
- company
policy
- impact on
environment
- cost
Consultations
with interest
groups
(Greenpeace)
Consultations
with
governments
Determined
what was
acceptable
Choic
Selected
BPEO
e
based on
environmental
impact, risk,
cost, and
acceptability to
interest groups,
the public, and
governments
BPEO:
dismantle at
sea and use
for a quay
in Norway
Brent Spar Update
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Shell towed (vertically) Brent Spar to a fjord in
Norway.
OSPAR (13 European nations) voted a moratorium on
deep sea disposal in the North Atlantic. UK and
Norway voted no.
In 1998 Shell selected a plan to slice Brent Spar
horizontally and use the sections to extend a quay at
Mekjarvik in Norway. The rest was disposed of on
land. Cost was 23-26 million. (Did Shell UK initially
consider disposal alternatives only in the UK?)
Shell consulted with Greenpeace and other groups
throughout this process.
UK Environmental Minister announced that future
disposal would be on land (Labour government).
Disposal was completed near the end of 1999.
A second rig will be taken to Norway and disposed of
similarly.
Interacting with Activists and Interest Groups
identify the relevant interest groups and activist
organizations in your market and nonmarket environments.
understand their agenda, preferences, and
capabilities
understand the broader public support for their agenda
consult with them on important issues
-- a number of companies are setting up regular
forums for exchanging information and views
--Shell met with Amnestry International to discuss possible
operations in Iran
cooperate when that is beneficial
-- McDonald’s and Environmental Defense Fund
fight when you are right and can win -- but be careful
British Petroleum and Greenpeace
BP strategy post-Brent Spar: going green. For
example, commitment to solar energy, addressing
global warming through an aggressive voluntary
CO2 reduction program.
 Began to meet with Greenpeace late in 1995
 In August 1997 two Greenpeace members
occupied the Stena Dee oil drilling platform under
tow to a new BP exploration area in the North
Atlantic
 Greenpeace’s objective: stop oil exploration and
production in the area
 What should BP do?

Shell - BP Differences
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Shell was first. BP had learned a lesson.
Greenpeace had lost some credibility as a result of
inaccurate Brent Spar estimates
Greenpeace took journalists along--fog hindered filming
and rough seas made journalists seasick; Greenpeace
refused to bring them home; BP brought them home
BP case did not involve disposal -- lower on societalsignificance dimension and audience-interest
dimension (stop oil exploration?)
BP had come out green. Did this help with the public?
BP offered showers and not water canons.
BP sued Greenpeace and Greenpeace leaders for
damages; i.e., the lease costs on the oil rig
Greenpeace backed down and BP withdrew the lawsuit;
an uneasy truce
BP had monitored Greenpeace’s ships and knew in
advance of the boarding and was prepared