Chapter 4

Case A.4
Case: Shell, Greenpeace, and Brent Spar

Presented By:
Prepared For:
Bugingo, Marie Paule
Bruce MacKeen, Instructor
Cook, Christie
ECON3340: Business and Its Environment
Demale, Kristin
Derby, Amanda
Northern Alberta Institute of Technology
Edmonton, Alberta
May 28, 2020
 01 Issues

02 Interests

03 Institutions

04 Information

AGENDA 05 Media Involvement

06 Private Politics Strategies

07 Greenpeace Strategy

08 Shell Strategy

09 Conclusion
 Introduction

This case explores several organizations and their

involvement in the disposal procedures of large offshore
petroleum facilities, namely the Shell UK oil storage facility
and tanker loading buoy called the Brent Spar.
Issues

Brent Spar operated 1976 to 1991 when it was concluded that

refurbishing the 14,500 tonne facility was economically
unjustifiable
Shell had two options to dispose of the large storage facility:
horizontal on-shore dismantling and deep-water disposal
Deep-water disposal was decided upon due to many factors:
health, safety, cost, and engineering complexity
February 1995, the British Energy Minister accepted Shells Best
Practical Environmental Option (BPEO)
Strong private politics opposing deep-water disposal by Shell in
Europe, mainly Germany, even though BPEO disposal plan was
approved by the UK
Greenpeace objected the acceptance of the BPEO
 Interests

Organized Interests Unorganized Interests

Shell UK Public (Influenced by media)
Shell Germany Motorists
Royal Dutch/Shell Group (parent)
British government
Official designated parties to BPEO
Scottish National Heritage
Joint Nature Conservancy Committee
Legitimate users of the sea, mainly fisherman associations
Greenpeace activists
Governments of Germany, UK, Netherlands and surrounding North
Sea regions
 Institutions

United Kingdom Internation Global

al
● UK legislature ● European Union ● News Media
British authorities International Maritime Social Media
British Department of Organization
Energy (Tim Eggart) German TV

All include,“Public sentiment composed of societal expectations and

norms of behavior that arise from ethics and culture” (Baron, 2000, p.
4)
Information

Study commissioned by Shell recommended deep-sea disposal

University of Aberdeen research team recommended deep-sea disposal
February 1995, Shell’s BPEO was accepted, no European governments officially
protested
Study commissioned by Greenpeace recommended on-shore dismantling of the
Brent Spar
Two British geologists from the university of London stated metals from the
Brent Spar might be beneficial to the deep-sea environment
Switzerland's Worldwide Fund of Nature thought deep-sea disposal seemed to
be the least harmful option
Information

Private politics in Europe allowed government officials to generate opinions

about the deep-sea disposal before the plan was approved.
Greenpeace's strategy of confrontational private politics engaged the press and
media to generate disapproval by the public, creating social pressure.
Shell UK and the British government neglect to inform the public of the benefits
of deep-sea disposal as opposed to other forms of petroleum facility disposal.
The public’s perspective was shaped by the critical opinion of Greenpeace so
naturally the majority of people were against deep-sea disposal.
 Media Involvement

Greenpeace confronted Shell UK by drawing attention

to the method chosen to dispose of the Brent Spar.
UNANTICIPATED
EVENT
Activist journalists were able to board the Brent Spar
and broadcast media through Greenpeace’s satellite
communication equipment.

The public and government officials retaliated against

IMPACT Shell by boycotting Shell products and the mayor of
Leipzig banned city vehicles from using Shell gasoline.
 Media Involvement

The issue is high on societal significance, and Shell should not have left a
Media Vacuum for Greenpeace to fill with their study.

● Estimate of sludge in the Brent Spar used in the Greenpeace study was
grossly overstated by 98% (Diermeier, 1995, p. 94).
● Had this estimate been more realistic, the conclusion may have resulted
the same as the Shell study that supported deep-water disposal.

This could have narrowed the space for Greenpeace to maneuver.

Media Involvement

Theory of Media Coverage and Treatment

Environmental issues are high in both Societal Significance and

Intrinsic Audience Interest

The media outside the UK granted extensive coverage and their

treatment involved both factual reporting from Greenpeace and an
advocacy position against the approved plan.

Advocacy position in the UK was support and the media gave little
coverage. Germany largely backed Greenpeace’s position.
 Private Politics
A strong activist force that has the potential to shape the nonmarket
environment through social pressure outside of the government.

Confrontational tactic directed at target

CORPORATE organizations to force change in practices.
CAMPAIGN Often successful when target has brand equity
at risk (Baron, 2000, p. 76).

The campaign enacted by Greenpeace was a corporate campaign, rather than

a market campaign that would target components of Shell’s value chain.
 Private Politics

Involves a social issue and an activist group

CONFRONTATIONAL drawing attention to that issue by confronting
PRIVATE POLITICS the involved parties and creating media
attention

The activist group would help the targeted firm

COOPERATIVE
PRIVATE POLITICS
to identify the benefits of changing their
practice
Greenpeace Organization

Greenpeace is an independent campaigning organization, which uses

peaceful, creative confrontation to expose global environmental problems,

and develop solutions for a green and peaceful future. (Greenpeace, 2020)
 Activists
Strategies
Greenpeace commissioned a policy study to consider
deep-water disposal arguments that concluded on-shore
ADVOCACY
SCIENCE
dismantling should be adopted. Nearly a year later
Greenpeace admitted estimates of sludge were
inaccurate and apologized to Shell UK

The agenda was to change the petroleum industry

practices. Greenpeace targeted Shell UK to stop the
TARGET deep-sea disposal of large offshore petroleum facilities. To
SELECTION change the petroleum industry practices, Greenpeace
targeted an individual firm, rather than the industry
because the threat of harm is concentrated with a brand.
 Greenpeace
Confrontational Strategy

● Attract public attention using Greenpeace photographers and film

crews while occupying the Brent Spar. This permits Greenpeace to be a
low-cost information source for media
● Call for Shell products boycott

● Claimed to Shell UK, “Joe Six-Pack won’t understand your technical

details” (Diermeier, 1995, p. 93).
● Connect the public's everyday experiences and values to Greenpeace's’
message opposing the deep-water disposal. For example recycling was
used to relate the public to environmental care
 Characteristics of Susceptibility to Private Politics
Shell Position

Gasoline is a low cost to

● Products with low switching costs switch brands
PRODUCTS ● A brand name can be damaged
Shell is a global brand name

● Activities that produce harmful externalities Petroleum industry is

● Operating in an interest group-rich environment interest-group rich
OPERATING ● Multinational/global operations – issues can spill over
ENVIRONMENT to other units and countries Issue spread from UK to
● Operating in developing countries Germany and Netherlands

Shell is decentralized, with

● A decentralized organization, so that layers of parent and holding
ORGANIZATION external effects, including intracompany, are companies. Operating
not naturally considered companies are largely
independent from parent.
Shell Strategy
● Shell has susceptible characteristics and therefore is in a
lesser position to bear social pressure.

● “Greenpeace is effective in using media coverage to advance

the issues on its agenda” (Baron, 2000, p. 53)
○ “Greenpeace strongholds were in Germany, the
Netherlands, and the United States” (Diermeier, 1995, p.
93)

● Shell failed to recognize the capability that Greenpeace had in

their nonmarket environment.
● Standing by their original study, Shell conceded to dismantle
the Brent Spar on-shore after being unable to defend their
position against activists and opposing governments
 Shell Strategy of Addressing Social Pressure
Identify relevant interest groups
and activist organizations in the
market and nonmarket
environment
Understand their agenda,
preferences, and capabilities
● Interest groups - Motorists, labour unions, North Sea surrounding
country government officials
● Activist organizations - Greenpeace
● Capable of “naming & shaming” Shell
● Advocate for Shell product boycott
● Spread misinformation to damage Shell brand equity
● NGO’s are perceived as credible because of the trust gap
● Their agenda could lower opportunities with increased government
control
 Shell Strategy of Addressing Social Pressure
Consult with them and establish
regular forums for exchanging
information and views
Cooperate when beneficial
● Shell did not consult Greenpeace and other environmental groups
because they, “do not have formal consultative status under the
guidelines set out for an offshore installation proposal” (Diermeier,
1995, p. 94)
● Strategy was to fight back using their study to convince governments
around the North Sea that deep-sea disposal was the favorable option
● Defensive by using high-powered water cannons to keep Greenpeace
helicopters from approaching
● Shell was reluctant to cooperate with Greenpeace
● Ignored nonmarket environment turmoil and proceeded with deep-
water disposal plans
● After an apology from Greenpeace for inaccurate estimates in its study,
Shell announced the intent to include Greenpeace in the new Best
Practical Environmental Option
Shell Strategy
● Shell operated on an international nonmarket strategy, applying the
same environmental standards and universal ethics principles to
surrounding countries of the North Sea.

○ The international nonmarket strategy was not successful

because it failed to take into account the country-specific
interests and institutions.
○ The resulting strategy focused on compliance and damage
control because the nonmarket issue was at the enforcement
life cycle stage and the impact on the firm was high.

● A multidomestic strategy using different issue-specific action plans

tailored to the regions of Germany, the Netherlands, UK, and
surrounding governments could have benefited Shell UK.
Conclusion
● The “trust gap” between large companies and Greenpeace
could have contributed to Shell UK’s inability to gain support
from surrounding nations using its own commissioned study.

● An inspection was performed while the Brent Spar was

anchored in Erfjord, Norway which cast doubt about
Greenpeace’s estimate of oil sledge that was left on the Brent
Spar. Shell had given their own estimate of 100 tons, while
Greenpeace’s estimate was 5,000 tons. Greenpeace’s estimate
was proven to be inaccurate and an apology was issued.

○ The substantial variance between the two studies could

have contributed to the difference of opinions to dispose of
the Brent Spar.
Conclusion

● Shell UK accepted Greenpeace’s apology and decided to include

Greenpeace as part of the parties to be consulted about review of
options and developing a new BPEO.

● Even though it was later discovered that Greenpeace had been

wrong in its assumptions about the environmental impact and
repercussions of the decision to dispose of the Brent Spar at sea, this
case illustrates that sometimes the influence of private political
activism and consumer opinion (boycotting) can sway a global
companies’ course of actions and influence its decisions.
 References

Baron, D.P.(2000).Business and its Environment(2nd Ed.).New York, New York: Pearson Education Inc.

Diermeier, D. (1995). Shell, Greenpeace, and Brent Spar. In D. P. Baron, Business and It's Environment
(pp. 92-95). New York.

Greenpeace. (n.d.). Retrieved May 24, 2020, from Our Values:

https://www.greenpeace.org/international/explore/about/values/

Greenpeace Logo. (n.d.). Retrieved May 25, 2020, from PNGWing:

https://www.pngwing.com/en/free-png-ypeof

Royal Dutch Shell Logo. (n.d.). Retrieved May 25, 2020, from DWGLogo: https://dwglogo.com/shell/

https://www.offshore-energy.biz/court-bans-greenpeace-from-boarding-shells-north-sea-installations/