Oil Spillages in the Niger Delta - Case Study Example

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624 words
Harvey Mudd College
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Case study
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The oil business is one the largest industries in the world. Shell Corporation is one of the dominant players in the oil industry. The American based subsidiary of Royal Dutch shell was valued at over $200 billion in 2012. Shell Corporation is a multinational that provides fuel for 10 million customers in their 44,000 services stations every day. Fifty years ago, Shell began to drilling oil in Nigeria and transported it through Bodo area. However, in 2008, a leak in Shells pipeline cause massive contaminated the environment in Bodo area.

The oil spillages by Shells pipelines in the Niger Delta over the years has raised the concern of dependent and non-dependent stakeholders. Dependent stakeholders are those people that directly benefit from the services and products of Shell Corporation. In this regard, the dependent stakeholders of Shell Corporation are the 10 million customers served every day, shareholders, 100,000 employees, and the countries where they operate. The success of Shell Corporation has, in turn, benefited the dependent stakeholders immensely. On the other hand, the non-dependent stakeholders of Shell Corporation do not directly profit from the operations of the company. In this case, the non-dependent stakeholders are farmers living in Bodo ecosystem, international oil-spill experts, and the local Nigerian communities.

It is apparent that Shell Corporation benefits its dependent stakeholders. At the same time, Shell has had an adverse impact on the non-dependent stakeholders. Shell pays millions of dollars in dividends to its shareholders from profits made from their global operations. The Corporation also pays approximately $20 billion in fees and taxes to governments of countries where they operate. As such, governments have revenue for implementing development projects that are beneficial to its citizens. On the contrary, the operations of Shell Corporation have adversely affected the non-dependent stakeholders. The oil spillages have contaminated the ecosystem of the Niger Delta. Farmers and anglers in Bodo area can no longer produce food or rely on fish because land has contaminated their land and creeks. The local community is negatively affected by oil spills, which have contaminated the air and water in the area. In this regard, the dependent stakeholders tend to benefit more than non-dependents of Shell Corporation.

However, the situation of dependents of Shell benefiting more than non-dependent ones would change if the executives acted by the principle of corporate maximization. Administrators should make decisions that incorporate the interests of all stakeholders of Shell Corporation and not only financial claimants. In this regard, the executives would have acted as soon as reports of the first oil spillages occurred in Bodo area. They would have created a fund of $100 million required to clean up the environment after the oil spillage even without being taken to court. Nigeria has experienced spillages twice the amount of oil spilled during the Deep Water Horizon Crisis, but Shell has not acted to address the problem. Instead, the Corporation has been conducting public relation stunts without addressing the problem. It is in the best interest of Shell and the local communities in the Niger Delta to clean the environment after oil spillages. As a result, the lives of local communities will not be significantly affected by the oil spills, and Shell would continue with their operations.

Shell is a multinational corporation whose success is attributed to their big stake in the vibrant oil industry. However, oil spills in the Niger Delta over the years have negatively affected the operations of the company. The local people are not happy with the company, which has resulted in court cases. As a result, Shell has been fined so many times for oil spills. The executives of Shell Corporation can remedy the situation by cooperating with dependent as well as non-dependent stakeholders to ensure that their operations do not have an adverse impact on the society.

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