The Shell Petroleum Development Company (SPDC) and its joint-venture partners - particularly the Nigerian National Petroleum Corporation - have earned billions of dollars from the oil extracted from the land of the Ogoni in the Niger Delta. The Ogoni however complain that they have not seen adequate benefits; rather the oil has cost them dearly in terms of a deteriorating environment and underdevelopment and mobilized a successful national and international campaign against the Nigerian government and Shell. Despite the avowed non-violent nature of the campaign, military repression resulted in thousands of Ogoni killed, raped, beaten, detained and exiled and the main leaders executed. Under pressure from the Ogoni, Shell was forced to pull out from Ogoniland in 1993. Since then, Shell International has re-invented its corporate strategy in line with principles of sustainable development and it has committed itself to a level of stakeholder engagement on its environmental and social performance which would have been unthinkable in 1995. So for Shell, a return to Ogoni would be a powerful symbol that their corporate commitment to being a socially responsible company is being translated into action on the ground. However, there is still little trust between the company and the Ogoni people and their representative organization, the Movement for the Survival of the Ogoni People (MOSOP). Many of the issues raised by the Ogoni (such as the need for locally sustainable development, distribution of oil wealth, community projects and environmental issues) have yet to be addressed. This paper is the first of a trilogy examining the issues, relationships, management and strategic implications of the case. Copyright © 2001 John Wiley & Sons, Ltd and ERP Environment

In the first paper in this trilogy (Boele et al., 2001) we described the history of the Royal Dutch/Shell Group from its inception in 1890 through to the year 2000, discussed briefly the importance of corporate reputation to the group and described the significant impacts on Shell of the events of 1995 in Nigeria. We traced the relationship of the Shell Petroleum Development Corporation in Nigeria to impacts on the natural and social environments of the Niger Delta and more specifically on the Ogoni. Finally we discussed the emergence of political resistance and significant conflict between Shell and the Movement for the Survival of the Ogoni People (MOSOP) and concluded that, despite significant apparent changes in attitude at the group level, distrust and antipathy towards Shell remained entrenched in Ogoni. In this second paper, we explore in more detail issues raised by economic globalization for the practice of corporate social responsibility and stakeholder management, and contrast these concepts with an alternative ‘rights‐based’ approach to sustainable development. We relate our observations to Shell's current approach and conclude that the Shell group and specifically the Shell Petroleum Development Corporation in Nigeria may require an alternative approach to sustainable development if they wish to merit the full confidence of communities in areas of the world as complex and distressed as Ogoni. Copyright © 2001 John Wiley & Sons, Ltd and ERP Environment

Summary As a result of the ruling neo‐liberal paradigm and increasing economic, social and political globalisation, the nature of the relationship between transnational corporations (TNCs) and non‐governmental organisations (NGOs) has been transformed significantly. TNCs are increasingly perceived as more powerful than governments. In response, NGOs identify TNCs as prime targets to affect change and have diversified their responses and strategies accordingly New alliances have been forged and new types of integrated NGOs have been created. In addition, NGOs have sought direct engagement with corporations through strategies of engagement and confrontation. With this three‐tier response (alliance‐building, integration and engagement), NGOs have driven the corporate responsibility agenda, which, while part of a longer history, is a particular response of both NGOs and TNCs initiated by the value‐changes brought about by globalisation.

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In the first two papers of this trilogy we explored the history of the Royal Dutch/Shell group both internationally and locally in Nigeria. We described a catastrophic failure in relations with the Ogoni and the consequent fall‐out with NGOs and opinion formers more globally. In response to these events Shell embarked on a revision of its business principles and initiated a multi‐million dollar exercise in stakeholder outreach and communication. We also explored the limitations of a purely instrumental approach to ‘stakeholder management’ in Nigeria and suggested that a rights‐based approach might provide a more useful framework for managing relationships and achieving reconciliation between Shell and the Ogoni. In this third paper of the trilogy we explore Shell's current approach to strategy formulation and implementation in the context of what this means for Shell's ability to pursue the ideal of sustainable development. We apply two models for testing the level of integration of business strategy with sustainability and we observe that, whilst Shell's business principles and corporate strategy now embrace notions of market sensitivity and internal and external accountability to an unprecedented degree, the company has yet to maximize opportunities arising from its approach to sustainability and stakeholder responsiveness at the business unit level in Nigeria. Copyright © 2001 John Wiley & Sons, Ltd. and ERP Environment