How companies seek to maintain their legitimacy after a negative event

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UNIVERSITEIT VAN AMSTERDAM

How companies seek to maintain their

legitimacy after a negative event

Name: Melike Onbas

Student number: 10854118

Thesis supervisor: C. (Conor) Clune MSc Date: 19 June 2016

Word count: 17.640

MSc Accountancy & Control, specialization Accountancy Faculty of Economics and Business, University of Amsterdam

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Statement of Originality

This document is written by student Melike Onbas who declares to take full responsibility for the contents of this document.

I declare that the text and the work presented in this document are original and that no sources other than those mentioned in the text and its references have been used in creating it.

The Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.

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Abstract

This study investigates how Shell tried to legitimize two oil incidents in 2008 that led to a lawsuit. The theories of legitimacy as well as the legitimating strategies are discussed to support the findings. Furthermore, Fairclough’s critical discourse analysis is applied for a comprehensive analysis of the incident, the response of Shell and its stakeholders. Although, a major part of the findings from this research are consistent with the suggestions of similar investigations, an exception is that Shell doesn’t end up taking full responsibility for the incidents. A possible explanation for this behavior might be that if the company

acknowledged their negligence in maintaining the pipelines they could get accounted for previous oil spills from the last fifty years, which could result in a severe damage to their image and a regular visit to the court.

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1. Introduction

The Niger Delta has been dealing with oil spills since the last fifty years; their environment damaged by big corporations like Shell. The communities aren’t able to get compensation for the damage their livelihood receives and they can’t force the companies to clean up the oil spills either (Amnesty International, 2013). One reason for their

powerlessness is that the Nigerian government has a major interest in the oil operations; 90% of the Nigerian income comes from the oil revenue (NNPC History). However, two oil spills from 2008 brought a change and opportunity to the communities (Shell, 2008). In that year an old pipeline from Shell burst twice and caused massive spills. A large group of the Bodo community went to the London court for compensation represented by English lawyers (John Vidal - The Guardian Weekly, 2011). Shell denied the accusations of the magnitude of the oil spill and the real cause, but later on admitted responsibility for the leakage. After pressure from lobby groups such as Amnesty, independent assessments of the spill and the UK court Shell also admitted that they underplayed the amount of those spills (John Vidal - The Guardian, 2013). Finally, in the year 2015 a settlement was reached between Shell and the Bodo community (Shell, 2015).

The struggle between Shell and the Bodo community lasted for around six to seven years and during this time Shell received damage to its legitimacy. The pressure to maintain their legitimacy could have increased by the growing demand for sustainability as it has become a recent trend which expanded over the last twenty years. Therefore, companies are generating sustainability reports to show the economic and environmental impacts the company has with its activities, since they are held responsible for the impacts they have on the environment and the society ( (GRI, 2010); (Hahn, 2012); (KPMG, 2013)). Ernst & Young’s report (2013) support this claim as they suggest that if companies fail to participate in this process it could have a negative impact on performance, reputation and even the ability to raise capital. However, firms seem to white-wash their reports which could lead to

suspicions about the report’s credibility (KPMG, 1993); they suppress negative news while on the other hand disclosing positive information (Deegan & Gordon, 1996).The reason for not disclosing negative information could be that such a disclosure can threaten a company’s legitimacy, when it seems that a company is outside the bounds of the society’s norms and values (Deegan & Rankin, 1996). For companies - that already form some kind of hazard to the environment - like oil companies and mining industries the suspicions could be stronger around the overly positive reports. That’s why the following research question is stated:

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5 ‘How do companies who operate in controversial environments legitimize negative incidents?’

This research is about how companies legitimize negative incidents and what kind of reporting strategy they use to maintain their legitimacy. The focus will be on the oil company Shell and how it tries to legitimize the two oil spills from 2008 that occurred in the Niger Delta. For a company that has different oil operations around the world and has threatening activities that harm the environment it seems rather difficult to whitewash their sustainability reports. Furthermore, this research gathers the necessary material over a period of time concerning the scandal instead of only taking one year. This is necessary in order to examine how the company reacts to criticism from stakeholders and if they change their strategies in response.

For this study understanding legitimacy is essential and therefore explained in the theory section. Legitimacy means congruence between the social values linked to

(organizational) activities and what the larger social system perceives as acceptable behavior ( (Dowling & Pfeffer, 1975); (Pfeffer, 1981); (Pfeffer & Salancik, 1978)). Organizations have to act conform the conditions of their ‘social contract’. The social contract displays the expectations that society has about how an organization should operate (Donaldson, 1982). Also, the strategies a company can adopt to legitimize an incident are explained in order to relate the findings with these strategies. There are two types of strategies a company could use. To maintain their legitimacy they could use preserving strategies, like emphasizing the good news in order to deflect the attention on the bad news. To regain their legitimacy they could use restoring strategies. For example, a firm could use denial to disengage their name with the accident or they could accept responsibility and show remorse for the consequences of their activities.

To find an answer to this research question Fairclough’s critical discourse analysis is applied. It concerns a three-dimensional investigation, namely the social practice level, the discursive practice level and the level of text. The social practice level considers the social environment which the incident is part of; this investigation is done to understand why social events, organizations and actors are demonstrated and arguments are constructed in a certain way. The discursive practice level is about how the authors of text make use of existing discourses to create text and on how readers of text consume and comprehend the text. The level of text’s focus lies on formal characteristics like vocabulary, grammar and sentence

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6 consistency. These levels will provide help to understand the society’s as well as the

company’s reaction to the incident and the firm’s possible motive behind it.

This research contributes in three ways. Limited research has been done about negative disclosures in sustainability reports (Lougee & Wallace, 2008); (Holder-Webb, Cohen, Nath, & Wood, 2009). Therefore, this study contributes to the literature on

sustainability reporting as little research has been done about the disclosure of incidents by big multinationals who are involved in activities that pollute the environment. Furthermore, for papers that do a similar investigation ( (Elsbach, 1994); (Elsbach, 2001); (Elsbach & Sutton, 1992)) the focus lies on the companies as they interviewed the people from those organizations; little attention was paid to the responses of the society in a comprehensive manner. Since it’s much more difficult for Shell to gain support from stakeholders for an incident as they’re known for their harmful activities this thesis applied the critical discourse analysis, which isn’t done often (Beelitz & Merkl-Davies, 2011). As an extra element, various theoretical explanations about legitimacy strategies are provided, making Shell’s findings more consistent. Lastly, this research could provide a useful insight to the legitimacy of MNEs (Multinational Enterprise) as Kostova and Zaheer (1999) put doubt in the traditional thought that legitimacy is necessary to access resources and to survive. It’s probable that organizations don’t have to be legitimate as a whole and still make profit if they have access to other resources.

The rest of the thesis consists of five sections. First, papers that did a similar research are discussed. Afterwards, the legitimacy theory as well as the legitimating strategies to restore or preserve legitimacy are explained. Then, Fairclough’s critical discourse analysis, the data collection as well as the analysis of the data are described to provide a clear understanding on how the findings were attained. Third, the findings are obtained by the three-dimensional analysis, which consists of the macro-, meso- and micro-level, or in other words the level of social practice, the level of discursive practice and the level of text. For the macro level the relevant electronic documents are used to explain the environment in which the incident occured. Newspapers are used for the meso level and read carefully. The relevant parts of the newspapers are marked to put the case in a chronological order and re-read the important information to provide a logical narrative of the incident with the stakeholders as the main focus. The micro level involves the response from Shell and therefore mostly Shell’s documents are analyzed carefully with relevant keywords as the documents are quite large. To complete the analysis of Shell’s reaction newspapers are also used to find additional evidence

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7 for the strategy they adopted. The legitimating strategies mentioned in the theory section are applied in the micro level. Lastly, the findings are reviewed in the conclusion and the

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2. Literature review

Studies about organizational legitimacy, like Dowling & Pfeffer (1975); D’Aunno et al. (1991); Meyer & Scott (1983), will be useful to find an answer to the research question of this thesis with its theoretical framework. Academics have illustrated organizational legitimacy as an organization being acknowledged and accepted by its environment and they argue that legitimacy is crucial for an organization’s survival (Dowling & Pfeffer (1975); Hannan & Freeman (1977); Meyer & Rowan (1977)). Some researches imply that the value of legitimacy for organizations is most present and also threatened when the company is involved in a controversy (Chen & Meindl, 1991); (Elsbach & Sutton, 1992).

Many studies have been done about how companies tried to maintain their organisational legitimacy. One of those researches (Beelitz & Merkl-Davies, 2011) analyse how a Swedish Energy company – Vattenfall – tried to maintain its legitimacy after an incident in a nuclear power plant in Germany. They found that the firm switched tactics by engaging with

stakeholders instead of resolving the issue. Although they changed their communication strategy it doesn’t fit with the change in the values of the organization and their activities. Therefore, it creates symbolic management instead of substantive. Substantial legitimation involves a modification of actions, goals or structures, while with symbolic strategy the intention is to alter the stakeholder’s view of these processes. The authors of this research imply that engaging with the stakeholders is used as a tool in order to appease them and gain their approval, as those stakeholders are holding a hostile position towards the organization. Moreover, they see it as an ethical issue when a company bends reality to only benefit

themselves at the cost of the society. Their study contributes to several other studies that come to the conclusion that corporate narrative reporting is not seen as an aid to provide

accountability and transparency, but is rather seen as a device to centralize the private interests of corporations (Cho, 2009); (Mäkelä & Laine, 2011); (Merkl-Davies & Koller, 2011).

Elsbach ( (2001); (1994)) had two researches that involved organisational legitimacy and for both investigations she had similar conclusions. The first research (1994) involved the California cattle industry, as the firm was involved in a controversy. The organization’s first response was denial, like “we weren’t involved”. Then, the company’s representatives seemed to acknowledge the incident in order to reduce the firm's responsibility or to weaken the negative views on the events. Moreover, she found that acknowledgement is seen by the

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9 audience as an indication that the firm understands the concerns of the public and that they feel their fears. Also, the study suggested that the firm wasn’t trying to evade the problem, but were rather open about it. The second research was also about a controversy involving Sears (2001), where cars in top condition still got unneccessary auto repairs or charged for repairs that didn’t take place, she shows that the company’s first reaction was to deny the allegations. However this strategy didn’t work to protect their legitimacy. Finally, after a lot of evidence was gathered that supported the claims of fraudulent activities the company admitted that the incentive system caused the auto mechanics to overcharge customers. Although admittance proved to be effective since the reports about undercover investigations dropped and press coverage declined, the company’s business and legitimacy didn’t fully recover. Both firms began with denial, but in the end they had to admit it in order not to damage their legitimacy further.

A similar case where a company uses denial first is seen from Kernisky’s research (1997). He showed the impact Dow Chemical’s strategy had on the relationship between the firm and the public, as their product, Agent Orange, caused health concerns in Vietnam Veterans. They found that Dow’s initial hostile stance changed into a more cooperative one. This change and a dialogic approach changed the views of a group of people in regard to the company’s legitimacy.

Apart from controversies, when it comes to a company accident - like oil spills or plane crashes - Marcus and Goodman (1991) found that companies use denial a lot. These denials involved claims about how the incidents were caused by a technical deficiency, vandalism or a human error. Recurrently, these denials had to showcase how the organization made

reasonable actions and that it couldn’t predict nor prevent the incident.

While the companies mentioned before tried to restore their legitimacy after an incident another organization tries to gain legitimacy by commiting illegal actions. This organization is called ‘Earth First’ and they wanted to gain attention in order to achieve their objectives. Elsbach and Sutton (1992) examined how this organisation managed to get organisational legitimacy with these actions. They conclude that with impression management the spokespersons constructed the voting public’s view on the illegal events. Additionaly, the organizational design features made the spokespersons’ tactics more believable.

Lastly, the organizational legitimacy of a multinational enterprise (MNE) is a different case as is shown by Kostova and Zaheer (1999). They imply that there are multiple levels of

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10 organizational legitimacy to an MNE. In such complex organizations there’s the issue of the legitimacy of one whole organization as well as the sub-units of it. The average legitimacy of all the organization’s parts doesn’t become the legitimacy of the organization as a whole. Also, they argue that an MNE is more vulnerable to damage its legitimacy as it operates in multiple environments that have different legitimacy requirements. Additionally, this increases their chance to be attacked by lobby groups. Lastly, they mention that MNEs shouldn’t become self-satisfied as they’re more exposed to cross-border legitimacy spillovers than domestic firms.

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3. Theory

3.1 Legitimacy theory

For an organization like Shell which provides services that are controversial in nature it’s important to justify their existence. In order to understand how they try to achieve

legitimacy this section elaborates on the legitimacy theory and the legitimizing strategies a company can adopt.

A number of definitions have been given to legitimacy over the years and some of them vary slightly from another. Maurer (1971) sees legitimacy as a process that an

organization can use to justify its existence to a peer or a higher ranking system. On the other hand, Dowling & Pfeffer (1975), Pfeffer (1981) and Pfeffer & Salancik (1978) are convinced that legitimacy is actually congruence between the social values linked to (organizational) activities and what the larger social system perceives as acceptable behavior. Also, Suchman (1995) suggests that legitimacy is reliant on an audience rather than particular observers as legitimacy represents congruence between shared views of a social group and the actions of the organization. Lindblom (1994) believes that legitimacy must be distinguished from legitimation as legitimacy is a status and legitimation a process that will lead to that status. She describes legitimacy as:

…a condition or status which exists when an entity’s value system is congruent with the value system of the larger social system of which the entity is a part. When a disparity, actual or potential, exists between the two value systems, there is a threat to the entity’s legitimacy (p. 2)

These different views end in a likewise conclusion. Organizations have to act conform the conditions of their ‘social contract’. The social contract displays the expectations that society has about how an organization should operate (Donaldson, 1982). Moreover, the society regards the legitimate company as more meaningful, predictable and trustworthy as legitimacy doesn’t only change how people act towards the company, but also how the company is understood by them. The term legitimacy gives a sound explanation about what the company is doing and why (Jepperson, 1991).

Since perceptions and expectations are susceptible to change, an organization should monitor the society. They have to avoid falling out of their legitimacy zone (Johnson & Holub, 2003). Losing one’s legitimacy can take place because of things like different interests among stakeholder groups and industry action or inaction. This indicates that legitimacy can

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12 be short-lived; once captured it can also be lost again. Furthermore, organizations that work in a controversial industry could bring more damage to their reputation when they commit a ‘bad’ action in comparison to organizations that don’t work in such an environment. Even ‘good’ actions could lead to hypocrisy as leaning onto an intensive legitimacy-seeking approach could lead to damaging results. That’s why an organization has to monitor how stakeholders - that are important for their reputation - react to their advances that are constructed to increase their support (Elsbach, Managing organizational legitimacy in the California cattle industry: The construction and effectiveness of verbal accounts, 1994); (Sonpar, Pazzaglia, & Kornijenko, 2010); (Winn, MacDonald, & Zietsma, 2008).

It is important for organizations to disclose information, since their legitimacy stems from the society’s view on organization’s behavior. When an organization realizes their activities might not comply with the social contract – threatening their legitimacy - they can adopt different kinds of strategies in order to maintain their legitimacy. In the next section different legitimacy strategies are discussed.

3.2 Reporting strategies

A theoretical framework of the reporting strategies the companies use involving negative incidents is of great importance for this research. The legitimacy strategies involve two approaches, namely restoring legitimacy (reactive) and preserving legitimacy (proactive).

3.2.1 Restoring legitimacy

Benoit (1997) offers five kinds of strategies a company could use to restore its image. The first is denial and it has two variants. The organization could deny the negative event they have caused by not admitting to the facts. Benoit gives an example that involves Pepsi and Coca-Cola. Pepsi blamed Coca-cola for increasing its prices for only a few clients and not all of them, but Coca-cola simply argued that those charges are false. Another variant is to point fingers at others and give them the blame. For example, the Chairman of Exxon blamed state officials and the Coast Guard for the delay in the oil spill clean-up, because Exxon could not immediately get authorization on the scene.

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13 The second strategy is evasion of responsibility and it has four versions. The company could argue that their response was reasonable against others’ acts that caused provocation. An organization could for example move their factory to another country and explain they did it because of a new accounting regulation in their previous location that could affect their profit. Another form is defeasibility; missing relevant information or lack of control over a situation. An employee who misses a meeting could argue that he wasn’t told about the change in the schedule. The following version is to claim that a certain action happened by accident. If the organization manages to assure the audience that it occurred by accident then the company could be shown some lenience regarding their accountability and the possible blow to their image can be mitigated. The last version is that the company could argue that the offensive act beheld good intentions. For example, the company Sears tried to convince the audience that they had good intentions when they were accused of systematically

overcharging car repairs. They argued they would never intentionally violate the trust of their customers.

The third strategy is to reduce offensiveness and it has six different approaches a firm could adopt. In order to cancel out the negative feelings that the offensive act brought the firm could strengthen the audience’s positive feelings to the company. They could explain the positive actions they have carried out in the past or portray the positive characteristics they have. The next approach is the attempt to mitigate the negative feelings. A firm could downplay the consequences of their wrongful action, which Exxon did when the oil spills occurred in Alaska. On one hand it was explained that tens of thousands of birds and other animals were retrieved from the sea, but Exxon argued they counted only a few hundred. A third approach is to differentiate; the act is set apart from other likewise but more offensive acts. Sears for example explained that the redundant repairs were preventative maintenance. With this kind of argumentation the acts sounds less offensive as it doesn’t fall in the category of fraud anymore. The fourth version is transcendence; seeking to put a wrongful action in a more supportive context. Benoit uses as an example a company that uses animals for their research and that the firm argues that the benefits for the humans counterbalance the damage done to animals. The fifth approach is to attack the accusers. For example, Coca-cola

indicated that Coke is more beneficial than Pepsi, but Pepsi attacked with advertisements and one of the ads argued that Coke’s prices for other companies are higher than McDonald’s. The last approach is compensation. A company that acted offensively to a group of people or

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14 an individual could seek for a settlement to compensate the victim(s) and if the victim accepts then the company’s image should improve.

The fourth strategy is called corrective action. This means that the company promises to find a solution for the problem and fix it. A possible approach is to recover the situation to how it was before the occurrence of the wrongful act and/or assure that such an act won’t happen again.

The last strategy of Benoit’s paper is mortification. An organization could confess to the incident and seek forgiveness by apologizing to the ones affected, but a disadvantage of this strategy is that it might be followed up with a lawsuit from the victims.

Suchman (1995) has strategies similar to the ones of Benoit. According to him when a problem occurs the managers will first try to deny the incident, the same as one of Benoit’s strategies. When that doesn’t help they’ll question the company’s moral responsibility. This often results in blaming employees or external authorities. However it also gives the

impression that managerial control is rather weak. To prevent this kind of presumption they can rearrange the means and ends to justify the incident so that the disruption will seem in line with the general morals and beliefs. Lastly, if the previous tactic doesn’t work the managers could explain the event in such a way that it maintains a supportive worldview. This can be done through strategic restructuring. Instead of exerting the audience’s belief the company could acknowledge that only a few aspects of their operations contain some deficiencies and then visibly try to repair those defects.

A company can use one of these strategies if the negative sustainability event has already occurred. If the negative incident has not been made public yet companies could use the strategies in the next section to preserve their legitimacy.

3.2.2 Preserving legitimacy

Merkl-Davies and Brennan (2007) and Lindblom (1994) explain strategies a company could use to preserve their legitimacy.

Merkl-Davies and Brennan (2007) suggests impression management; managers focus on two types of behavior, namely concealment and attribution. It’s a defensive response that

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15 moves the burden for the negative consequences away from themselves. Concealment has two components, namely obfuscation of the bad news and accentuating good news and there are six strategies in total. Two strategies are for obfuscation of the bad news. The first one is to manipulate the easiness of reading information by composing a complex text making it harder for readers to understand. The second strategy is to use persuasive language; the information could contain rhetorical features, like a passive voice. The remaining strategies are for accentuating the good news by verbal and/or numerical manipulation. One tactic is to manipulate the theme of the financial report in order to emphasize positive words and to showcase a good financial performance, by for example using positive or negative key words. Another tactic is to manipulate the display of information and how it’s structured, which is called visual and structural manipulation. A firm could also implement benchmarks that illustrate the financial performance in the best way. And the last strategy involves the decision for an earnings number, which is to choose one of number of earnings for publication in order to display a beneficial financial performance.

Attribution involves individuals’ views and reasoning of the events. They have a tendency to declare more responsibility for accomplishments than for losses. For example, in a financial report the achievements are associated with the internal factors, like a good organizational structure and system, whilst failures are entitled to external factors, like the economic crisis or a change in the regulations.

Lindblom (1994) explains about the strategic disclosure and found four strategies that an organization can implement in order to maintain their legitimacy or obtain it.

An organization could make internal changes and communicate it to the outside world. This strategy is called ‘communicate changes’. The company gives information to the

important groups and educates them about what they have changed in their activities. As Lindblom and Dowling and Pfeffer (1975) state, an organization could release information in order to ward off or cancel out the negative news that’s available through public sources by for example the media.

The second strategy is that the company could try to change the society’s perception by showcasing how appropriate their output and measures are, while no internal adjustment takes place. A firm could for example reveal information to those groups concerning beneficial aspects of their organization which was previously unknown.

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16 Another tactic is to not make internal adjustments and neither try to change society’s view, but instead the company would try to manipulate society’s perspective by associating itself with symbols that have a high legitimate status. The organization could twist attention from the problem to other issues. For example, the company could down-play the negative sides of their business, like air pollution, by attracting attention to their strengths, like a green project that they’ll start next year.

And the last strategy is to adjust society’s expectation by informing and educating them, so that they can change their expectation on their performance. This one is applicable when the organization decides that the important groups have unrealistic expectations of the company’s responsibilities.

See table 1 for a summary of all the strategies mentioned. Tabel 1 Legitimacy strategies

Restoring legitimacy Preserving legitimacy

Benoit:

 Denial;

 Evasion of responsibility;  Reduce offensiveness;  Corrective action;

 Confess and seek forgiveness.

Merkl-Davies & Brennan:

 Obfuscate bad news;  Emphasize good news;  Attribution.

Suchman:

 Denial;

 Put the blame on employees or external authorities;

 Rearrange means and ends to justify incident;

 Manipulative explanation of the incident to maintain support.

Lindblom:

 Communicate changes;  Change society’s perception;  Associate with high legitimacy

symbols;

 Inform and educate society.

The restoring strategies are used when an incident has already occurred and the stakeholders (e.g. the local people, media or investors) are aware of it. The preserving

strategies are useful when an incident has occurred, but the society isn’t yet aware of it. These strategies will be used during the level of text (micro level) at the findings section. The

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4. Research method

4.1 Case setting

This study analyzes how the oil company Shell tried to legitimize the two oil spills in Nigeria that occurred in 2008. For this research the methodology is based on Fairclough’s critical discourse analysis. During a scandal or a crisis an organization can use discourse to reformulate its relationship with stakeholders. So, discourse is a middle an organization can use to clear a problem that arose between the firm and its stakeholders by giving indications that its norms and values are in line with the society again. This brings forth an ethical concern as the organization tries to influence the society’s ideas and tries to regulate their perceptions in order to get their consent (Fairclough, 2003). Therefore, using discourse analysis is important as it relates with concepts of power and hegemony – in other words dominance – and allows a research on the manufacturing of the ‘truth’ and legitimacy (Tregidga, Milne, & Kearins, 2013). Fairclough ( (2003); (Jorgensen & Phillips, 2002)) has made a framework to analyze the discourse of a social practice. His method contains a complicated three-dimensional model which will soon be explained.

Fairclough sees the discourse not only as a constitutive but also as constituted, which creates a critical difference between this method and other critical discourse analyses.

Meaning that, the discourse recreates as well as changes the knowledge, identities and public relations while it is simultaneously molded by different social practices. Unlike Laclau and Mouffe (1985) he puts a distinction between non-discursive components and discursive components. A non-discursive element is for example the physical side of constructing a house, while journalism is mainly discursive. In his methodology he analyzes the discursive components. For his approach the analysis of oral and lingual language that is used in for example news papers and press releases are very important. He tries to combine three practices, which are:

 A detailed analysis of text regarding the area of linguistics;  Analyzing the social practice on a macro-level;

 An analysis on micro-level, where people’s activities are seen as a series of mutual rules and practices.

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18 Aside from text analysis Fairclough insists that an interdisciplinary is necessary that links textual and social analysis. The advantage of a macro-analysis is that it takes into

consideration that social practices are formed by social groupings and power relations; people are generally oblivious of these developments. Discourse causes the development of social identities, social relations and systems of knowledge and meaning. There are two dimensions of importance in discourse, which are the communicative event (e.g. a movie, video or an interview) and the order of discourse. The latter implies the use of all discourse types for a social institution or social field. These discourse types have discourses and genres. A genre is a specific use of language that plays a role in, and creates, a section of a social practice, for example a news genre. A communicative event is the occurrence of language use that consists of three dimensions (which can also be seen in figure 1):

1. Text that occurs in a dialogue, written version, an image or a combination of those;

2. Discursive practice which contains the creation and consumption of texts; 3. Social practice.

Figuur 1 Fairlcough's three-dimensional model for critical discourse analysis (1992b:73)

The research is focused on the linguistic characteristics of the content (text), the developments in regard to creation and consumption of text (discursive practice) and the expanded social practice which the communicative event, in this case the oil spills in 2008, is

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19 part of. It’s important to note that there will be an overlapping with the analysis of the text and discursive practice. However, both dimensions show perspectives that differ from each other.

The social practice level

This analysis is done to find out why social events, organizations and actors are demonstrated and arguments are formed in a certain manner. The social practice level

considers the social environment which the communicative event is part of in order to explain the conclusion of text analysis. The focus of the analysis depends on the text; it could be a historical, sociological or economic formation or a combination of several components. During the analysis the shifts in the social formation, the cause(s) for these shifts and the details of the social formation are of importance. For this thesis, the focus will be on the previous oil spills that have occurred in the Niger Delta.

The discursive practice level

The investigation of discursive practice concentrates on how producers of texts use existing discourses to create text and on how readers of text employ accessible discourses and genres to consume and comprehend the text. The newspaper for example is a news genre that includes diverse discourses like neoliberal discourse and genres like hard-news. Viewers’ interpretation is formed by the newspaper and later during a discussion they might use the discourses and genres that were used in the newspaper in combination with other discourses and genres. This part of the analysis is about the actors’ position in the discourse and their contact with each other. For example, a sustainability report is about analyzing the relation between the management and stakeholders, which include investors, lobby groups and the media.

Legitimacy is continuously being formed by the communication between the organization and its stakeholders (Ginzel, Kramer, & Sutton, 2004). Negotiating on

legitimacy contains a minimum of three levels: the firm gives their explanation of the event, stakeholders give a response on the company’s interpretation and then the firm tries to find a middle point for its initial explanation and the response they received from their stakeholders (Suchman, 1995). As the organization gives its initial response about a negative incident the stakeholders could reject their explanation and this could harm their reputation and thus their legitimacy. In this case the organization could change its strategy to find a middle point.

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20 Text analysis level

Text analysis focuses on formal characteristics like vocabulary, grammar and sentence consistency, from which discourses and genres arise. There are different tools to analyze text to show how discourses are developing textually and it’s helpful to make an interpretation. The tool that will be used for this thesis is the grammar; to be more specific we will focus on two grammatical elements, which are transivity and modality. Transivity analyzes the link the events and processes have with the subjects and objects, if there’s a link present. For example the sentence ‘3 chefs were dismissed yesterday’ has a passive form and therefore the agent (an example of the agents could be their manager) is left out. Firing the chefs seems like a natural phenomenon as if the agent wasn’t responsible. The structure of the sentence focuses on the effect and ignores the action and process that caused the effect in the first place.

Nominalisation is another form that diminishes agency and accentuates the effect by the use of noun, for example ‘there were a lot of dismissals at the restaurant’. Modality analyzes the speaker’s inclination or connection to its statement. There are various forms to give your opinion about the temperature, like ‘it’s warm’, ‘I think it’s warm’, and ‘perhaps it’s a little warm’. These statements give a different affinity and connection to the speaker. The form the speaker chooses has a different effect on the discourse. A type of modality is truth, for

example the sentence ‘drinking alcohol lowers driving ability’ shows a claim that is true and accurate, but if the sentence was constructed differently like ‘drinking alcohol may lower driving ability’ presents a lesser degree of assurance. Permission is a modality type that creates social relations in a specific way. The speaker speaks in such a way that he/she gives permission to the listener, for example ‘six weeks after the operation you can work-out again’. Intonation is also a form of modality as well as hedges. A speaker shows lesser affinity to a statement when he/she hedges by using things like ‘well’ or ‘a bit’.

The selection of the written texts for analysis is determined by the research objective. In this case it’s about how Shell tries to legitimize the oil spills in 2008 and therefore the focus will be on Shell’s written documents (e.g. sustainability reports) and other documents of Shell that mention the incident. An important part of this analysis is to first find keywords that give an indication for the kind of strategy the company uses and then how it changes over time with the reaction of the stakeholders that will be discussed in the level of discursive practice.

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21 The discursive practice forms a bridge between texts and the social practice. Thus, with the involvement of the discursive practice – where language is used to create and consume text – texts mold and are molded by social practice. Simultaneously, text has an impact on the creation and the consumption process.

So, investigating a communicative occurrence encompasses: evaluation of the discourses and genres that are expressed in the creation and consumption of the content (the level of discursive practice), evaluation of the lingual arrangement (the level of the text) and a contemplation about whether the discursive practice copies or actually rearranges the current structure of discourse and what kind of effect it has on the broader social practice (the level of social practice).

4.2 Background Shell’s case

In 2008 two pipeline incidents took place in Nigeria. Shell reported in its annual report that the spills were around 8,100 tonnes in total and that 5,900 tonnes was due to sabotages and the rest happened due to operational activities (Shell, 2008). However an independent investigation by the US firm Accufacts Inc. revealed the spill was greater than 100,000 barrels (4.2 million gallons) (The Guardian, 2014).

Furthermore, during a Q&A after the 3th quarter (Shell, 2011) it was asked how the spill situation in Nigeria was and Shell mentions the following:

“Some 70% of SPDC’s spill volumes over the last 5 years is the result of sabotage, making this the main cause of spill volumes. SPDC cleans up all spills related to our

operations, regardless of the cause and Shell pays compensation to affected communities for spills resulting from operational failure.”

However, environmentalists like the Amnesty were enraged by Shell’s negligent behavior of the oil spills and how they failed to clean it up. In their own report they argue how Shell understates the problems by giving lower estimations of the spills. They also explain about how the people affected by these incidents in the Niger Delta have to deal with it in their daily lives. They have no choice but to use the polluted water to cook and to shower with, eat contaminated fish and farm on spoiled land, because of the oils spills that occurred in the last fifty years (Amnesty, 2015).

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22 An investigation by the UN environment programme (Unep) (Environmental

Assessment of Ogoniland, 2011) argued that oil firms and the Nigerian government could count on spending as much as $1 billion to take care of the oil spill; it would be the most long term and wide-ranging clean-up ever done. Moreover, they conclude:

“The Ogoni people live with this pollution every minute of every day, 365 days a year. Since average life expectancy in Nigeria is less than 50 years, it is a fair assumption that most members of the current Ogoniland community have lived with chronic oil pollution

throughout their lives. Children born in Ogoniland soon sense oil pollution as the odour of hydrocarbons pervades the air day in, day out.”

4.3 Data collection

Data was obtained from multiple sources in order to triangulate the information. All corporate narrative documents were collected that are related to the two incidents for a time-period from 2008 till 31st December 2015.

Shell’s sustainability reports were gathered from 2009 till 2015. These reports were retrieved from Shell’s official website. Since there wasn’t a sustainability report in 2008 as the organization began generating sustainability reports from the year 2009 the annual report from 2008 was also included in the research. This report was found on Shell’s official webpage. Furthermore, the news- and press releases from Shell were collected from Shell’s official webpage with the key words ‘Shell’, ‘Nigeria’ and ‘oil spills’ and a specified time period. A total of six relevant articles were gathered.

Media publications were collected through the database LexisNexis from the year 2008 till 2015. All articles from two newspapers were found, which are ‘The New York Times’ and ‘The Guardian’. For ‘The Guardian’ the following source names had been used in LexisNexis database: ‘The Guardian’, ‘The Guardian London’, ‘The Guardian Unlimited’ and ‘The Guardian Weekly’. There was, however, no data available for the ‘The Guardian

Unlimited’ and no relevant newspapers could be found in the New York Times. In order to find the related news articles the search terms ‘Shell’, ‘Nigeria’ and ‘oil spill’ had been used. A total of 25 useful articles were found.

Other external sources that were retrieved include three reports from the lobby group Amnesty as to get a better understanding of the level of discursive practice. Also, the United

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23 Nations Environment Program´s report with regard to the oil spills (UNEP, 2011) was used in the research. Moreover, electronic sources like the website of Extractive Industries

Transparency Initiative and Nigerian Petroleum Industry were applicable for the level of social practice to provide historical background.

4.4 Data analysis

Before starting the analysis a timeline was made for the level of discursive practice and text where the documents are categorized according to date (See Appendix 1).

Level of social practice and discursive practice

For the levels social practice and discursive practice the same data analysis was

conducted. The relevant documents for the level of social practice were read carefully in order to get a picture of Nigeria’s situation. For this level a combination of historical, political and economical background was used.

For the discursive practice the main documents were the newspaper articles, the Amnesty reports (2009, 2011 and 2013) and the Unep report (2011). The newspapers were gathered for each specific year and read carefully, highlighting important information. After finishing one year the articles were re-read in order to make sure all the relevant information were highlighted. Depending on which year was investigated other reports were also taken into the analysis, as the Amnesty reports are only from the year 2009, 2011 and 2013 and the Unep report from 2011. In order to effectively find relevant information from these reports key words such as ‘2008’, ‘Nigeria’, ‘oil spills’ were used. When finished reading all the relevant material for one year and highlighting the important lines, the findings were assigned to that specific year. After the findings were written from the year 2008 till 2015 the articles were re-read again to ascertain that no important information was missing in the findings section. The same confirmation process was done for the level of social practice.

Level of text

First, the sustainability reports and all the other documents released by Shell itself were read for each year and the important lines were copied to a Word document. The reading for the annual report and sustainability reports were done just like the Amnesty and Unep

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24 reports. These reports contained a lot of information and not all of the information was

relevant for this research. Therefore, the key terms ‘2008’, ‘Nigeria’ and ‘oil spill’ were used to find the information in an effective manner.

After gathering all the relevant information, the notes were re-read to find out what’s going on. This was necessary in order to see if the seperate notes could be linked to the findings in the level of discursive practice and if it was relevant for the research objective. This was done for each year seperately. While analyzing the information the tool explained in the Fairclough paragraph was applied, namely transivity and modality. Using the notes the type of legitimacy strategy Shell used in a specific year or situation was analyzed. There was a possibility that one note is applicable to two or more legitimacy strategies. Therefore, a note would be added to one category only and an additional note was added that refered to the other strategies. After the notes were categorized and the data was confirmed to be relevant it got reviewed again to ascertain that the information is in the right category. At the end, the original documents were read again to ensure that all the information needed for this research was indeed categorised.

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5. Findings

The findings consist of three levels in accordance with Fairclough’s method. First, the findings of the macro level (the level of social practice) are outlined, which are mainly about the oil industry in Nigeria. Afterwards, the results of the meso level (the level of discursive practice) are explained, giving insight to the reactions of various stakeholders in a chronic order. Lastly, the micro level (the level of text) is discussed, which is focused on Shell’s reactions and strategies. During the micro level the theory is adopted to categorize Shell’s responses; this theory wasn’t applicable to the other two levels.

5.1 Level of social practice

Nigeria produces and exports the most oil in Africa ( (EITI, 2011); (TWB, 2015)) and is ranked sixth among the largest oil producing countries in the world (Nigerian National Petroleum Corporation). Of the government revenues more than 80% comes from oil production (EITI, 2011).

Oil has changed Nigeria’s economy in 1956 when it was discovered that the oil quantity could be used for commercial ends. From the 1970s onwards oil contributes about 90% of gross income and therefore agriculture - which was the backbone of the economy - was shoved to the background. Moreover, Shell, Mobil, Chevron, Agip, Elf and Texaco dominate the oil activities in Nigeria together with the Nigerian government. The government posseses all the oil rights and therefore has a large interest in the oil acitivities (NNPC History).

The government is normally a democracy, but there has been much involvement of military dictatorships (Friends of the Earth, 2004). This is linked to the oil wealth as corruption, damage to the environment, poverty and violence increased over time (O'Neill, 2007). Despite the income from the oil activities, it’s still a developing country as poverty is strongly present and politics are fickle (The World Factbook, 2016). The United Nations Development Programme (UNDP) explained that the district is in misery due to things like negligence, bad social infrastructure and services, a high rate of unemployment and poverty. A large part of the Niger Delta is unable to use clean water or make use of health-care (Amnesty International, 2009). Adesnik (2007) points out the absurdity of the situation by

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26 arguing that the oil provides enough money to aggravate continuous and brutal conflicts, but it’s insufficient to help the Nigerian society with poverty and disorder.

The three year investigation of UN (2011) shows that there’s a massive contamination present and the clean-up of the spills might take 25 to 30 years and might amount to $1bn. This clean-up of the Ogoniland could become the largest and longest one ever done if water, land, creeks and ecosystems have to be restored to their original state.

Their report shows the pollution from the last 50 years and they investigated more than 200 locations, examined 122 kilometres of pipeline, assessed over 5,000 medical records and had conversations with more than 23,000 locals.

At first glance some areas seem undisturbed, but are actually seriously contaminated underground. The report advises to take immediate action in order to assure the people’s health and to lower the risks to afflicted communities. For example, in one district the drinking water contains benzene which its level exceeds the World Health Organization’s guidelines over 900 times.

“The oil industry has been a key sector of the Nigerian economy for over 50 years, but many Nigerians have paid high prices, as this assessment underlines,” Achim Steiner, UN Under-Secretary General and UNEP Executive Director, said.

Shell’s legitimacy has been under fire more than once as Shell was accused of being involved in the execution of Saro-Wiwa and eight other environmentalists by the Nigerian Government in 1995. Despite Shell’s denial a settlement was done for the victim’s families in 2009 with an amount of $15.5m (John Vidal - The Guardian, 2011).

The year after, in 2010, Shell had to stand for the Dutch court accused of environmental damage inflicted by oil activities in the Niger Delta. Friends of the Earth Netherlands and four Nigerian farmers wanted compensation and said that this was their last resort as they came up empty handed before while trying to get Shell to clean up the spills and to stop them from further damaging their environment (Terry Macalister - The Guardian Weekly). However, the court didn’t find the parent company responsible. Evert Hassink, a spokesman of Friends of the Earth, found the court’s decision disappointing, but also stated the following:

“We’ve succeeded in establishing the principle of going to court in the Netherlands or Europe because of what happened in another country. I expect, both in the U.K. and in the

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27 Netherlands, that other villagers will be going to court with NGO’s (D. Jolly & S. Reed - NYT, 2013).”

Evert Hassink was correct with his statement as the two oil spills that occured in 2008 were brought to the London court in 2011 (John Vidal - The Guardian, 2011). The spills were related to an aging pipeline as a weld broke in September 2008 and it wasn’t repaired until 7 November 2008. This 50-year-old pipeline brought 120,000 barrels every day across the Niger Delta. There’s a high possibility that 2,000 barrels a day have gone into the water.

In December 2008 the pipeline broke again and this wasn’t taken care of until 19 February 2009. Experts claim – after studying the evidence of the two incidents on film and on the ground – that over 280,000 barrels might have been spilled. (John Vidal - The Guardian, 2011) They also state that the amount of spills in 2008 are almost the same as the 1989 Exxon Valdez disaster in Alaska and that it might take up to 20 years to clean it up.

Shell’s initial offer in 2011 was £4,000. The offer increased to £18m in 2013, but was still refused. Shell stated that the locals wanted £300m for the harm Shell had caused. Before the court both parties agreed for a settlement that amounted to £55m; £35m for individuals and £20 for the Bodo community.

The people in the Bodo community are currently happy with the settlement. They hope that Shell will take the other communities in the Niger Delta seriously and that they will clean the entire Ogoniland (John Vidal - The Guardian, 2015).

This settlement brought a change amongst the communities. They try to sue the oil companies in London instead of Nigeria, since going to Nigerian courts will only end in the victory of the oil companies (John Vidal - The Guardian, 2015).

The issue of the oil thefts in more detail

The Guardian Weekly brought out an article providing more insight into the theft and sabotage. Various voices had been rising about this matter. Philip Mshelbila, head of Shell communications in Lagos, said that the thefts are done by an organized and wide network. One oil trader in Port Harcourt was convinced that the military has control of the oil platforms and looking at their chain of command it reaches the very top. He added that a major part of the oil is stolen by wealthy people:

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28 “Clearly this is a sophisticated organisation. Where do people get vessels, the money for bribes and security? It costs millions (…) The racket goes deep into the security and political systems (…) All the authorities are involved – the oil companies, the military, the politicians.”

Stakeholder Democracy Network (SDN) calculated that 75% of oil that was stolen is transported and the rest is refined in illegal facilities. Over 500 of these facilities have

apparently been set up in the last five years. The Delta locals acknowledged ther involvement, but accused poverty and contamination for their deeds. As the contamination was extreme due to oil theft the community chiefs pointed the oil companies and government out as responsible instead of the ones who steal the oil. They argued that there’s a high rate of unemployment present and that these illegal facilities were constructed in response to oil companies’

negligence to their environment and their disinterest in compensating for it (John Vidal - The Guardian Weekly, 2013).

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5.2 Level of discursive practice

2008

No newspapers were found following the events of the two oil spills in 2008 as oil spills are a regular occurence when one looks at Shell’s reports. This occurence could be in line with Audrey Gaughran’s statement, who works for Amnesty International:

“Instead of being in the dock when there is an oil spill in Nigeria, Shell gets to act as judge and jury. The Niger delta is the only place in the world where companies admit to massive oil pollution from their operations and claim it is not their fault. Almost anywhere else they would be challenged on why they have done so little to prevent it (John Vidal - The Guardian, 2015).”

2009

In 2009, the attention was more on the settlement of the Saro-Wiwa execution and the Dutch court that Shell had to face over Niger Delta. However, Amnesty brought out a report showing their concern for the environmental damage in the Niger delta, including the two oil spills in 2008 (Amnesty International, 2009). Their report shows how organizations benefit from weak regulatory systems and how this leaves the poorest people defenseless. The community claimed that the spill occured on 28 august 2008, while SPDC (Shell Petroleum Development Company) argued that the spill was reported to them on 5 october 2008. While the incident brought harm to an important food source – fishery - no relief was arranged for a few months after the incident and the food that was delivered wasn’t enough for the entire population in the Bodo community, which has around 69,000 people.

Kate Allen, director of Amnesty International UK, prompted Shell by stating that the company has to change the way it works in the Niger Delta, by cleaning up the oil spills, compensating the locals suffering from the incidents and encouraging an independent regulation and not lobbying against it (Kate Allen - The Guardian, 2009).

2010

In 2010, the Financial Times decided at the last moment not to publish an anti-Shell ad made by Amnesty International. The plan was to show the ad on the same day as Shell’s annual meeting in London. Amnesty claimed that due to a lot of oil spills – which aren’t

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30 cleaned up appropiately – the Nigerian communities have to do it with contaminated water, fish and spoiled land. Contrary to the Financial Times, The Metro and the Evening Standard both ran the ad (Roy Greenslade - The Guardian, 2010).

Further that year the affected districts were angered by the results of a research done by the United Nations (UN). While the local people tried to get the oil companies to clean the spills and compensate, this research shows that Shell is only for 10% responsible for the oil spills in Ogoniland. The other 90% happened by ‘bunkering’ gangs, who tried to steal oil. Although the communities acknowledged that fact they argue that stealing is a new occurence and the major part of pollution was caused by Shell.

Ben Amunwa – from London-based oil watchdog Platform – argued that the investigation was dependent on the information received from Shell and the incomplete documents from the government.

Mike Cowing, head of UN team responsible for the research, responded by saying that Unep isn’t accountabe for dividing reponsibility for the spills in Ogoniland. They have

witnessed bunkering on a regular basis and perceive it as a serieus problem. He added that the oil companies gave the official spill list and that it was approved by the government agencies. Moreover, as the investigation was paid by Shell the UNep had been accused of being

influenced by them or the government, but Cowing denied it as it is deemed appropiate that the polluter pays for the investigation (John Vidal - The Guardian, 2010).

On the other hand, Nnimmo Bassey, who is chair of Friends of the Earth International and the director of Environmental Rights Action, claimed that they assess the spills on a regular basis and their conclusion is in contrast to what UNEP is planning on reporting (John Vidal - The Guardian Weekly, 2010).

2011

It’s noticeable that when the UN research is released in 2011, there’s no such comment in the report about Shell being responsible for only 10%. The Guardian states in another article -released a half year later – that the UN report will not mention who’s responsible for the spills (John Vidal - The Guardian, 2011). Better yet, the 275 page report creates shock with its findings. The Guardian criticized the Dutch and British government by stating:

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31 “Shell is primarily a Dutch company, but beyond taking many billions of dollars in taxes, the Dutch government gives no direct aid to oil-affected communities. Britain, which also reaps vast taxes from Shell, has, but in the next five years plans to give nothing directly to people affected by oil pollution in the Delta (John Vidal - The Guardian, 2011).”

The article further claimed that WikiLeaks cables showed that the company put people into main ministries in the Nigerian government, exchanged information with US government and gathered information on militants and activists.

Also, in 2011 the London law firm Leigh Day and Co represented the Bodo community regarding the two oil spills in 2008. International oil spill assessment experts claimed that it might amount to more than $100m in order to clean it up and to recover the magrove forests. At first Shell argued that the damage was no more than 40,000 gallons that year and blamed vandalism. At the time no effort was made to clean it up. Later on, Shell acknowledged full responsibility for these two incidents (John Vidal - The Guardian Weekly, 2011), but indicated that 98% of all its oil spills happened because of vandalism, theft or sabotage by militants and districts (John Vidal - The Guardian, 2011). According to the Guardian, Shell’s acceptance for the two oil spills paved a way for similar damage claims against the firm (John Vidal - The Guardian, 2011).

Contrary to Shell’s statement Groobadi Petta, president of the Bodo city youth federation, stated that youngsters started stealing oil only after the occurence of these two oil spills. She put the blame on Shell’s negligence as they destroyed the lives of the locals and the youth – who were desperate to survive – learned to steal (John Vidal - The Guardian, 2011).

Amnesty published another report containing the two oil spills of 2008 (Amnesty International, 2011). They argued that Shell reported a spill of 1,640 barrels in total, while experts hired by the UK law firm estimated a leak of 4,000 barrels a day. The Bodo community tried to force Shell to clean it up for three years, but the area remained contaminated. Moreover, Shell responded to Amnesty’s letter by stating that the spills occured due to sabotage and bunkering.

2012

(John Vidal - The Guardian, 2012) Due to the difference in what Shell offered as compensation and what the Bodo people wanted, the negotiation didn’t lead to anything early in 2012. They couldn’t agree when the spill actually occured. The amount of the spill is an

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32 important matter as the compensation is largely based on it. The community apparently wants around $150 million to clean up the spills.

Last year Amnesty stated the error in Shell’s estimations of the oil spill. In 2012 the Guardian wrote an article, indicating rising doubts about this matter as well. An independent US oil spill consultancy firm, Accufacts, claimed that 103,000 barrels to 311,000 barrels of oil were leaking into the water every day for 72 days, which is the amount of time that passed before repairing the pipeline. They made this conclusion based on the video footage of the leak they received from the locals. To create a better understanding of the situation the following example has been made:

In 72 days there are 103,680 minutes (60 minutes * 24 hours*72 days). And one barrel is approximately 158,987 litres. This means that every minute around 158,987 to 476,961 litres of oil was spilled. For 72 days these amounts increase to around 16,5 million litres to 49,5 million litres. To link these amounts to a familiar picture we’ll take a look at the olympic-size swimming pool. Its volume is approximately 2,5 million litres (Hoefs, 2013). This means that the oil spill could easily fill 6,5 to almost 20 olympic pools.

Audrey Gaughran, director of global issues at Amnesty International, responded by saying that Accufacts’ calculations are at least 60 times bigger than Shell’s estimations. Shell responded to this by arguing that the amount they reported was stated together with the communities, regulators, operators and security agencies and that they will stand by their findings of 1,640 barrels. Moreover, they claimed that the community prevented them from repairing the pipeline. They also wrote a letter to Amnesty saying that they should wait for the court’s decision for the amount of spill and to not publish something that could mislead the public. Audrey Gaughran however disagreed by stating that the oil spill is still larger even if they used Shell’s date of the start of the leakage. She added that it has been over three years and Shell didn’t attempt an appropriate clean-up or compensation.

Patrick Naagbanton, co-ordinator of the local oil watch group Centre for Environment, Human Rights and Development (CEHRD), claimed that: “Shell seems more interested in conducting a PR operation than a clean-up operation.”

2013

The Guardian newspaper stated in one of its articles that the legal development on the two oil spills in 2008 came when Netherlands National Contact Point (NCP) largely agreed

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33 with Amnesty and Friends of the Earth about Shell’s continuous insistence that the spills occur due to sabotage and that they base these findings on investigations that are conducted with the information given by Shell itself. NCP reprimanded Shell’s attitude about the ratio of spill brought on by sabotage and the data they used for the investigations.

However both Amnesty and Friends of the Earth insisted that NCP could have been much stricter with their criticism. They argued that Shell amplifies the sabotage issue to cover their inability to prevent oil spills. Also, they added that companies only have to compensate when they’re responsible for a spill but the problem lies in the fact that the companies

investigate the spills themselves, indicating that the system is misused. Shell’s reponse to this was that they didn’t create the investigation system and that they worked conform the

Nigerian law.

(John Vidal - The Guardian, 2013) As Shell and the representatives of the Bodo locals met up in London, Martyn Day - senior partner with London law firm Leigh Day - said that Shell tried to avoid responsibility for the full length of damage, even blaming the Bodo locals whom Shell had identified as a responsible community before the incident. Shell countered by claiming that the amount of victims, the damage and the desired compensation was

enormously inflated.

(John Vidal - The Guardian, 2013) A few days later the next article came out stating that the Bodo victims rejected Shell’s offer of £30 million (for each victim it would be £1,100), finding it insulting and cruel. Since their negotiation failed again it was possible that a court in London had to decide on the compensation amount. Martyn Day said that the amount was equal to two to three years of their earnings, but the locals had been suffering the consequences for five years and it might take 20 tot 25 years before they can work properly again.

Shell expressed its disappointment over the failure of the deal, but stated that there was improvement over the clean-up procedure. They added that they hadn’t been able to conduct a clean-up operation due to the communities who wanted to receive compensation first.

Shell’s compensation offer and how it has been handling this situation received lots of criticism. International and regional groups accused the company of financial racism and implementing different standards for clean-up operations in Nigeria in comparison with the

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34 other places they operate. The chair of Oilwatch International, Nnimmo Bassey, outed his displeasure by saying that Shell wouldn’t even compensate the people after bringing tremendous harm to the environment, but wouldn’t allow this kind of event in its own country.

Amnesty report brought out in 2013 showed the difference between Shell’s report about the oil spills and the evidence of the damage done in the Niger Delta. On one hand Shell rejected the claims about overdoing the percentage of sabotage in order to deflect scrutiny on their operations and claimed to seek clarity and independent overview to the oil spills. On the other hand Amnesty and The Centre for Environment, Human Rights and Development in Nigeria suggested that there’s evidence about Shell changing the real cause of the leakage, including one event where they try to convince community members on the investigation group to not blame it on equipment failure. A US spill-monitoring firm also assessed a footage concerning the spill in 2008 and concluded that Shell under-reported the volume and that their repetitious claim to investors, clients and media that spills occur majorly due to sabotage isn’t supported by the facts (John Vidal - The Guardian, 2013).

Amnesty questioned Shell as it had used lack of access as reason for being unable to decommissionize their facilities in Ogoniland. Amnesty threw Shell’s excuse out the window as they argued they could have had access to Ogoniland over the last 18 years despite some restrictions that could have occured; the company could have even started the clean-up operations suggested by the Unep report (Amnesty International, 2013).

2014

On june 2 2014 is it’s reported in the newspaper that Shell’s new chief executive, Ben van Beurden, will visit Nigeria for a clean-up plan for the old spills. A month before Shell was chastised for the spills at their AGM in The Hague and the company had to reveal that they didn’t make much progress on the matter. Any progress they did try to make lead to a response from Celestine Akpobari, executive director of Social Action. He stated that Shell’s plan to help the affected ones on restoration led to undesirable consequences as communities split up by those who are paid by Shell and support the company and those who are not paid. Shell opposed to this, but acknowledged that they hired locals for the clean-up to build employment (Terry Macalister - The Guardian, 2014).

How companies seek to maintain their legitimacy after a negative event