Brent Spar: ditching defence for dialogue

In the summer of 1996, Shell Centre was crawling with newly hired PR men and “expert” consultants. The headquarters of the Anglo-Dutch oil major was on crisis alert. Twelve months previously, a handful of Greenpeace activists had clambered onboard Shell’s Brent Spar oil storage buoy in the North Sea. The action sparked a standoff that was to wake the world to a new player: the activist NGO.

I was a Shell intern that summer, occupying a little noticed seat in public affairs. In the thick-carpeted offices above, the powers-that-be were sitting on a report from New York’s Stern School of Business. It contained a detailed cost analysis of the still unresolved Brent Spar fiasco. The final figure ended with lots of zeros, let’s put it that way. The troubled execs didn’t want a repeat.

When the Greenpeace campaign first hit, Shell’s response had been typical for the time. ‘Decide, Act, Defend’ (D.A.D) ran the motto of the day. The sensible, technical-minded folk at Shell (remember, this is a company dominated by logical engineers) had evaluated the options and made their decision. Legally, operationally, financially, even environmentally, sinking the buoy in the North Sea ticked all the necessary boxes. Now was the time to act. So a few mad (this was pre-political correctness; ‘misinformed’, let’s say) ‘greens’ took issue. So what? Shell had seen worse in its then ninety-year history. And when it came to defending, its army of PR pros and legal whizzes presented a formidable force.

What Shell hadn’t realised was that the rules of the game had changed. To be fair, at that stage, no-one really had. The internet was just taking off. Modern media was toying with satellite-fed imagery. 24-hour news channels were starting. The anti-globalisation movement was beginning to mobilise. Brent Spar was the “tipping point”, as a senior Shell spokesperson puts it in a detailed analysis of the case in Ethical Corporation’s recent ‘Classic Case Studies’.

For two months, Shell slugged it out the old way. Reason, it figured, would eventually win out. It didn’t. The oil major tried challenging Greenpeace on the science, notably the claim that Brent Spar would be sunk with 5,500 tonnes of oil on board (a mere 10 turned out to be closer to the truth). It succeeded in winning an apology from the campaign group. But by then the battle was lost. The TV footage had already been broadcast. The anti-Shell editorials already published. And the boycotts had begun. As Greenpeace’s membership department was becoming overrun, Shell realised it had to change tack.

Negotiations to decide an alternative solution kicked off. Those concluded almost three years later. By the time the fated buoy was tugged into a Norwegian harbour and dismantled for use in a ferry terminal, Shell was unrecognisable. D.A.D had been ditched. It was now all about D.D.A (Dialogue, Decide, Act). The significance was more than some jiggling in the letters. Shell was accepting the importance on ‘dialogue’. It was coming down from its ivory tower and talking to concerned parties. And not just friendly parties. Critics too. In doing so, Shell was admitting for that their voice was legitimate. It was also breaking new ground.

The idea had a persuasive internal logic to it: namely, if you could identify “issues” (as the in-house jargon had it then) early on, then you could nip them in the bud. Future Brent Spars were that way supposed to be avoided. The command to ‘Defend’ could also, theoretically, be consigned to the dustbin (pardon, recycling bin).

It sounds easy. In practice, it’s far from it. Identifying issues requires going out to speak to your ‘stakeholders’. But which ones? And how? And about what? In the early days, dialogue was a very structured affair; lots of focus groups and the like. Those still play a role. Now in the age of social media, however, approaches are changing quickly (as is companies’ ability to control the dialogue process).

In Brent Spar, Shell learned some important lessons. Not ignoring hostile voices is probably the most important. Being more open and transparent comes a close second. To its credit, the oil major did its best to adapt. It became one of the first big proponents of triple-bottom line thinking (‘People, Planet Profit’, as it coined it, with help from those experts – genuine ones, for once - at SustainAbility). Then came the ‘Tell Shell’ campaign, an early experiment in online dialogue. Next came weighty, well-meaning corporate social and environment reports. In short, Shell was out there testing and toying with the management theories and tools that were collectively becoming branded as “corporate social responsibility”.

Over the last decade and a half, stakeholder expectations have changed dramatically. So has their power to voice them. Those shifts lie at the root of corporate efforts to become more accountable, transparent and engaged. The Brent Spar affair meant Shell had to learn faster than most. Yet the lessons are equally relevant to all. 

Business for Social Responsibility (BSR): more than just a love in?

I vividly remember the first BSR conference I attended. It was 2003. A three-day corporate responsibility jamboree in the subterranean conference hall of an anonymous Los Angeles hotel.

Fun? Not exactly. An ethical clothing catwalk was about as risqué as it got. Otherwise, it was mostly PowerPoint presentations and breakout sessions.

Yet I left on a high. Less for the specifics (too much podium time and too little nuts-and-bolts, I seem to recall), but more for the bonding between fellow believers. Where else would whispered conversations about supply chain metrics fill the corridors?

Founded in 1996, San Francisco-based Business for Social Responsibility (BSR) has established a name for itself as North America’s premier practitioner membership group. It has a tested ability to convene and convoke. But do such organisations need to do more than provide a love-in for lonely corporate responsibility practitioners?

Very much so, argues expert commentator Mallen Baker in Ethical Corporation’s latest issue. Based on an extended interview with current president Aron Cramer, Baker’s profile of the US membership group shows how BSR has gradually broadened its reach.

First is geography. Before, 95% of BSR staff used to be based in the group’s San Francisco HQ. Now only about 40% are, with the remainder mostly in Asia. As business looks East for future opportunities, BSR has gone with it. A wise move.

Second come services. It’s not all about cuddly get-togethers any more. BSR has branched out into consultancy services in a big way, developing particular expertise in areas such as stakeholder engagement, supply chain management and reporting.

It is also getting its hands dirty. It has undertaken on-the-ground projects in more than 75 countries, including direct work in factories in China, Mongolia and Peru.

Much of BSR’s influence remains in its power to convene. The focal point has not shifted from the annual conference, but that too has changed. According to Cramer, the audience is more international in scope and more varied in function (lawyers and communications experts are just some of those found treading the floorboards). The content of the parallel sessions is also more detailed and action-focused than previously (good to hear).

Corporate responsibility (CR) membership groups are not without their struggles. In tough times, subscriptions are often the first to go. Even in the good times, membership fees rarely cover costs. Hence, BSR’s move into consultancy.

It is the role of groups such as BSR to keep moving the agenda forward. Companies need to be challenged if they are to continually improve their performance. BSR can cajole, where NGOs might simply criticise. That in itself is a powerful contribution. As long as they keep pushing at the boundaries of the debate, their relevance will remain intact. And hopefully their internal finances too.

The Netherlands and CSR: Moths or Behemoths?

For a small country, the Netherlands has more than its fair share of big companies. Aegon, AkzoNobel, Heineken, ING, Philips Electronics, Royal Dutch Shell, TNT, Unilever – the list rolls on. Many will be familiar to those that follow sustainability indices. There are a dozen Dutch multinationals in the benchmark Dow Jones Sustainability Index.

But does big necessarily mean beautiful? That’s the question behind Ethical Corporation’s recent Country Briefing. The answer all depends, author Stephen Gardner concludes, on who’s doing the beholding.

If it’s a box-ticker, then ‘yes’. More than six in ten (63%) of major Dutch companies produce an annual sustainability report – a figure far in advance of European counterparts such as Germany, Italy and Spain.

Internationalists are also likely to answer positively. From the days of the Dutch East India company, the Netherlands’ sights have been firmly set overseas. It’s a perspective to which its modern multinationals have remained true. As with its government, private companies rank international development highly. And not just in cash terms. Programmes such as the Sustainable Trade Initiative are making strides in spreading efficient, ethical standards away from home. Their supply chain record is no less impressive. The vigilance of Dutch campaign groups and investors has a lot to do with that.

For others, big means bad. Not all Dutch companies are whiter than white. Global bank ING, for instance, has recently come under scrutiny for its holdings in controversial companies”, such as cluster bomb and landmine component makers.

But for most, big simply means cumbersome. Dutch companies have a reputation for following, not leading. Most are a century-plus old. That slows the dynamo somewhat. As Gardner puts it: “Though Dutch companies are among the best, they are generally not the very best, or they are the best only in certain areas.” Shell stands as a case in point. It recently slipped from the Dow Jones Sustainability Index, the first time since the ranking’s inception over a decade ago. The reason has yet to be published. Problems in the Niger Delta could be to blame. But more likely, the company just stood still and let others go past it.

Yet the Netherlands is not without its ethical innovators. It’s just a case of where to look. The real action is happening at the other end of the telescope, among the moths not the behemoths. The Dutch know these small, nimble players as “double goal” firms. Triodos Bank, the ethical finance pioneer, is perhaps best known. Its fames for using its $3 billion balance sheet to finance those “working to make the world a better place.” Others - like union-founded bank ASN, local brewer Gulpener and pro-organic fashion label G-Star Raw - are less well known. (The Briefing includes a case study of carpet manufacturer Desso’s cradle-to-cradle production approach should anyone need convincing).

Of course, there’s always a danger that the Netherlands’ ethical minnows might sink rather than swim. In an age of austerity, government incentives are few and far between. That said, the Dutch government does now apply sustainable purchasing criteria to all public contracts.

But government support is confined mostly to the realm of the rhetorical. “Inspiring, innovating and integrating” runs the current mantra from the Staten-Generaal (the Dutch Parliament). If you’re on the look-out for examples, it’d be as well to think small as it would big. 

Big Pharma, Big Question: Access to Medicine

 Simon Nkoli died at the age of forty-one. The year was 1998. Cause of death, AIDS. He was not the only one. The HIV/AIDS pandemic was running rampant at the time. Hundreds of thousands in Nkoli’s home nation of South Africa had already contracted the disease. Millions more around the world were falling victim too.

The human immunodeficiency virus that lies at the root of the AIDS disease is indiscriminate. Rich or poor, developing world or developed, HIV ruthlessly eats away at the immune system. The pharmaceutical trade, in contrast, is heavily discriminate.

As Nkoli lay dying, patients in richer countries with better health systems were fighting off the disease. Behind their successful struggle lay groundbreaking anti-retroviral drugs. Developed at great expense, the drugs did not come cheap. Access, logically, was restricted to those with deep pockets.

Nkoli, an apartheid activist and gay rights campaigner, didn’t think restricting access to life-saving drugs was fair. Again, he was not alone. His death triggered a small but influential group of gay activists to establish the Treatment Action Campaign. The Campaign’s message was straightforward: increase access to HIV treatment. The idea found a passionate and influential advocate in the then president, Nelson Mandela.

Fast forward three years and the scene had expanded in scope and profile. Around the world, manufacturers of generic drugs were popping up with low-cost alternatives to Big Pharma’s antiretrovirals. A new law in South Africa could, theoretically, open the door to the import of the cheap generics.

Activists and HIV/AIDS sufferers saw the move as a lifeline. The pharmaceutical industry saw it as the death knell. Amassing their collective weight, 39 international pharmaceutical companies challenged the South African government in the courts. The global reaction was immediate. And it did not lie in the companies’ favour. Big Pharma quickly, albeit reluctantly, backed down.

Ethical Corporation’s recent ‘Classic Case Studies’ picks up the story from there, describing how the global pharmaceutical industry has had to develop new business models to deal with changing societal expectations.

Like all CSR stories from the last decade, the industry’s journey has been an iterative one. From philanthropically-motivated donation programmes, Big Pharma has experimented with price innovations, patent pools and new research streams. By its own confession, it hasn’t yet got all the answers.

A recent report by the World Health Organisation finds many essential medicines remain “unaffordable” to poor people. If practices don’t change, UN Millennium Goals on access to medicine will fall wide of the mark.

The lessons from the story are multiple and open-ended. More must come. This is an evolving story. Yet what all the various parties agree – companies, governments, citizen groups and health agencies – is that collaborative solutions hold the most hope.

Today, the pharmaceutical industry boasts some of the largest and most serious cross-sectoral initiatives of any industry. Low medicinal access is not just an issue of high prices. Weak health infrastructure and sub-standard local capacity play their part too. Working together could just resolve these.

It’s too late for Simon Nkoli. But not necessarily for the millions of others currently suffering from treatable diseases.

n.b. other stories from the Classic Case Studies report include the Bhopal disaster, Exxon Valdez, the McLibel case, Brent Spar, Monsanto’s European fall out over genetic engineering, the Kimberley process, Trafigura’s toxic spillage and Toyota’s global recall.