Free Key Ethical Issues Essay Example
Royal Dutch Oil Company was indeed founded by Aeilko Jans Zijlker back then in 1980 in East Indies when he found pools of oil by accident. It was indeed a hotspot that the Americans had already put a target on it. Had it not been Zijlker himself who set the restrictions on the ownership of the company, it would have been United States property. In order to improve operations, the Royal Dutch form a mergence with the Shell Company (Paine & Moldoveanu, 2009). The relationship was such that the Royal Dutch would deal with the production of the oil and refining of the very oil whereas the Shell Company would then transport the oil to various destinations. Over the years the two companies and their union have gained lots of benefits and profits from their relative business. However, they have come face to face with tough challenges and controversies.
The Royal Dutch incorporated with Shell together with the Federal government of Nigeria, key ethical concerns have been raised with regards to their actions towards the Niger Delta case. They are majorly environmentalism and governmental corruption. The operations of the Shell Company and the Royal Dutch in the Niger Delta for the purpose of the exploration and transport of the oil has indeed been scrutinized and criticized by the Greenpeace and other environmental groups where they claim that Niger Delta is indeed “an ecological disaster”(Paine & Moldoveanu, 2009). With such a claim, then the environmentalism ethics has been disregarded by the stakeholders mentioned above. The government in this case has failed in controlling the team which it awarded the contracts to install an oil exploration company. The main scrutiny that was alleged to the Shell Corporation and the Royal Dutch oil company was that the frequent oil spills in the Niger delta as a result of their explorations was heavily contaminating the water, a painful disadvantage to the communities that depended on the water for their livelihood.
Moreover, the Nigerian government, as per the 1996 overview, was termed the most corrupt government of that time. For instance, one of the Shell officials moving from the airport to the Central Business District of Lagos duly noted that the country was having the highest rate of unemployment that leads to increased crime, and the worst of all, was the extremism as well as the radical movements that the young in the country as well as the poor have been exposed to.
With regards to the oil exploration, there are particularly three noticeable stakeholders that participated in the establishment of the oil company in the Niger Delta. They are the Royal Dutch, the Shell Company and the federal government of Nigeria. Each of them had a major piece of role to play in the crisis that hit the Niger Delta. From the splits of the profits, the government of Nigeria received 35% of the profits while the rest was shared by the Shell and the Royal Dutch. The government of Nigeria was looking for a way to avail natural gas back to the country. However, it was impossible without exploring the oil and so it necessitated them to construct a plant that would liquefy the gas and pipe it for that matter. The government then offered to “take or pay” contracts that would ensure the gas’ supply for at least twenty years (Paine & Moldoveanu, 2009).
On the other hand, the Royal Dutch Company were the ones who established the oil company in Niger Delta for the sole purpose of exploring the oil pools that existed over there. In addition, they paired up with the Shell Company who would then transport the refined oil from the refineries and sell them through the stations. These two companies have indeed been performing in terms of economy but that is not enough to fathom that they have caused devastating disasters upon the lands of Niger Delta. The Shell company have not disregarded environmentalism for the first time, but, they were involved in the manufacture of insecticides that were deemed harmful to the environment, aldrin, Dieldrin and Endrin. In addition, the two companies have disregarded completely the safety of the waters in which they extract oil and this has met them with major conflicts with the surrounding communities.
The main scrutiny that was alleged to the Shell Corporation and the Royal Dutch oil company was that the frequent oil spills in the Niger delta as a result of their explorations was heavily contaminating the water, a painful disadvantage to the communities that depended on the water for their livelihood. This hazardous effect of the presence of the company to the Niger Delta attracted the attention of the environmentalists who then led the protests against this inhumane spillage of oil into the water. The claim that environmentalists had was that the chemicals used to separate the water and the oil was leading to the death of animal life and plant life and in so doing the livelihoods are being destroyed in the process.
The article by John Gerard Ruggie captures that global governance is actually a system for states all over the world and it has been trying to expand its reach as well as its influence that is still growing on the transnational corporations such as the United Nations. For instance, the New International Economic Order was a set of international rules that were to govern and control the developing countries even though human rights was a feature that was absent and as a result, only the Soviet was in support of it whereas the most industrialized countries disregarded the proposal. The proposal to install these rules were ceased after a decade and then efforts renewed formally in the 1992. Also in 1976, Organization for Economic Co-Operation and Development (OECD) set some multinational guidelines for enterprises whereas the International Labor Organization set the declaration principles that managed the multinational enterprises, one year after the OECD.
This article is indeed reflective of a beautiful idea that could be used to indeed control the economy of the third world countries and push them up for the better. In this case, the countries can be controlled to toe the line in which case, if the decline they face punishment. The multinational enterprises that adopt this set of rules are also bound to follow them to the latter in order to avoid being sanctioned. This will favor the citizens of the respective countries, for instance, they will receive quality products that have indeed been controlled in terms of the standards. It is indeed these soft laws and the international economic guidelines that we should follow.
Paine, S. L., & Moldoveanu, M. (2009). Royal Dutch/Shell in Nigeria. Harvard Business School, 1-27.
Ruggie, G. J. (2007). Business and Human Rights: The Evolving International Agenda. The American Journal of International Law, 101(4), 819-840
Sluyterman, K. (2010). Royal Dutch Shell: Company Strategies for Dealing with Environmental Issues. Business History Review, 84(2), 203-226.
Sluyterman, K., & Wubs, B. (2010). Multinationals and the Dutch Business System: The Cases of Royal Dutch Shell and Sara Lee. Business History Review, 84(4), 799-822.
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