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Why is Shell the most hated multinational in the world?

The Anglo-Dutch oil company is undoubtedly one of the most contested in the world. Why?



Translated from Italian

Although the global market is largely dominated by multinationals, it is not new to know that many of them, in various sectors, do not hold very good reputations: in particular, the oil extraction industry is among the most opaque in the world.

Among the most criticized multinationals is the Anglo-Dutch energy giant Royal Dutch Shell plc, whose activities over the years have ended on several occasions under the magnifying glass of public opinion thanks to campaigns organized by environmental associations and human rights movements.

According to Sigwatch, an international observatory that monitors the activities of NGOs, between 2011 and 2015, Shell was the multinational that has focused the most attention of activists. In particular, the accusations of environmental disasters and the suspicion of serious violations of human rights in Africa have been the subject of massive boycott campaigns.

Environmental damage

In 2015, the oil company was on the paying end of the most expensive compensation for environmental damage in history (comparable only to that paid by BP for the disaster in the Gulf of Mexico in 2010, ed.): the Anglo-Dutch colossus had to pay a sum of about 55 million pounds (70 million euros, 83 million dollars, ed.) to repay the inhabitants of the Nigerian region of Bodo for the environmental damage caused by the spills of oil pipelines that in 2008 polluted the area of the Niger Delta. Shell has been operating in Nigeria since the 1990s in a joint venture with the national government and has often met with heated protests from the population and the international community. This may be the most striking episode, but it is not the only one to have involved the company in environmental pollution. The most emblematic cases include Brent Spar, a floating storage platform located in the North Sea that was dismantled in 1995 after criticism of the maintenance of the structure, Sachalin II, an extraction platform built in collaboration with Gazprom (despite initial opposition from the Putin government, ed.) in 1999 and still in operation in the Okhotsk Sea and the Kulluk platform whose stranding in Alaska in 2013 could have caused an environmental disaster.

Corruption and human rights

In addition to the environmental impact of its operations, Shell has been involved in national and international policy issues in the countries where it has been or is still operating. Here, too, the most significant episode concerns the multinational’s business in Nigeria. Since the 1990s, Shell and the former Nigerian military regime have met with resistance from the Ogoni People’s Survival Movement (MOSOP) led by political activist Ken Saro-Wiwa. In those years, the peaceful demonstrations were often violently and mortally suppressed by the Nigerian police until, in 1995, the public execution of Saro-Wiwa and 8 other activists. Shell did not come out unscathed and was sued for human rights violations. Fourteen years later, the company avoided the embarrassing trial by paying a fine of $15.5 million. But the admission of guilt has not changed the register: in 2011, in fact, Shell and the Italian Eni bought the license Opl 245, for the exploitation of a major oil field off Nigeria for $1.3 billion. The following year, however, the Financial Times investigation revealed that only a small part of the money ended up in the coffers of the state with the rest fuelling a parallel round of corruption. But examples abound: in 2013 Shell was accused of having benefited from and fed the policy of apartheid in South Africa through the purchase and sale of land plots. Shell’s shadow also forms the backdrop to the recent Russian-Ukrainian conflict, mainly linked to reasons of energy independence: the government led by President Yanukovich, in fact, had already reached an agreement with Shell in 2013 before the start of hostilities and inter-ethnic conflict in the Donbass region, where drilling would begin.

Energy commitment

Shell’s bulky record on the list of the most hated multinationals is mainly due to its recidivism and lack of commitment to an eco-sustainable business model. In the case of Brent Spar, for example, Shell decided to resign the platform, causing it to sink. In 2004, the company ended up at the centre of yet another scandal following the falsification of data on oil reserves and deposits: that year Shell had to pay a fine of $17 million to the Financial Services Authority and $450 million to US shareholders. The scandal cost the position of then-president Philip Watts. Also, the story of the drilling in the Arctic is well known: from 2006 to 2015, with several intermediate interruptions (including the already mentioned incident of Kulluk, ed.), Shell had tried to dig on the Arctic seabed. The strong protests of the environmental associations led to the abandonment of the project.

Goliath doesn’t always win

The NGO campaigns have been successful on more than one occasion against Shell: the work of the associations has not been limited to naked and raw activism, but also through powerful and targeted communication campaigns. In parallel to its industrial activity, over the years Shell has supported various sponsorships in various sectors (sport, culture, entertainment, etc.) often perceived by associations as a convenient way to clean up its image. On several occasions, NGOs have managed to hinder the work of Shell as in the cases of Lego and the London Science Museum, who in 2014 and 2015, respectively, publicly broke off the relationship with the oil company.


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