Summary

Shell, one of the largest multinational oil companies planned to dispose of the Brent Spar, which was huge floating oil storage and loading buoy, by sinking it at a site in the deep Northern Atlantic, with full UK Government approval. But a combination of Greenpeace, European Ministers and the public stopped them. In order to ensure that no similar incidents occur in the future, the Shell UK should seek to build an open and transparent process, involve environmental interest group like Greenpeace.

Issues
Disposal Options: In the last analysis, there were two options; horizontal on-shore dismantling and deep water disposal. Shell qualified the deep water disposal option as Best Practicable Environmental Option (BPEO).
BEPO Process: Several options were evaluated according to engineering complexity, risk to health and safety of workforce, environmental impact, cost, and acceptability by the British authorities and other interested parties, such as fishermen’s associations. It is important to that stakeholders such as Greenpeace were not included.
Deep water disposal option: The deep water disposal option had the advantage on the grounds of engineering complexity, risk to health and safety of the work force, and cost (about 11 million pounds versus 46 million pounds).
Regulatory Principles: The International Maritime Organization’s (IMO) guidelines and UK legislation stipulate that sinking in the ocean is an acceptable option.
Shell’ position: Shell was seen to be greedy. As stated above, the public saw that it was no coincidence that the declared option was the cheapest. Hence, Shell was seen as an easy target to boycott. People felt that they had acted in an environmentally correct way without considering which option was environmentally acceptable in real life.
Greenpeace: Greenpeace had great skills to appeal to the public with simple message through television coverage. In addition, Greenpeace had to cut its budget by about 10% and dismiss more than 90 staff members due to a drop in contributions. Therefore, one of their main strategies is to desperately attract the public attention through extremely confrontational actions in order to strengthen their influence and recover their budget.
UK Government: The UK government approved Shell’s BEPO and would not reconsider its decision because UK was confident that its decisions would be based on sound science and take account of the full range of significant factors.
Other European Government: Politicians were heavily engaged in condemning Shell as it was an easy way of attracting green votes. The German government was the first European government to lodge a formal protest against Shell and the UK government. This protest became the catalyst for a growing storm of protest from Europe.

Possible approaches

1. Exit disposal options and Include Greenpeace among the stake holders to be consulted in its review of options and the development of a new BPEO

Pros: This was received with joy by the public and the new BPEO process will become more open and transparent, which reduces risks of public criticism. Greenpeace’s influence was beneficial for Shell in terms of justifying Shell’ decision if Greenpeace became an ally.

Cons: This option was received with an angry response by the British government. Greenpeace does not have formal consultative status and British government would not include Greenpeace among their guidelines, which led to trouble in being approved of a new BEPO. In addition, the new BPEO process will become complex to determine.

2. Fight against Greenpeace by strengthening public relations section of Shell

Pros: In this case, Greenpeace’s insistence was nonsense for environmental protection indeed and their estimates were inaccurate. Nevertheless, Shell failed to communicate with the public and other governments around the North Sea, in spite of the fact that the deep water disposal option was environmentally balanced with other options and was supported by a wide range of authorities, such as the UK government and scientists. It could be an option to strengthen Shell’s PR sections and communicate effectively with the public in order not to reach an “untenable position”.

Cons: Even if Shell argued that the deep water disposal option was the best environmental option, there was little hope that Shell successfully convinced the public that it was true because of Shell’s bad fame and the technical difficulties for the public. In addition, if Shell failed, it would seriously make matters worse.

Recommendation

I consider the key lesson from this case is that even when a regulatory process was relevant and consulted by technical experts to make an appropriate decision that was sound on all significant factors, this would count for nothing if the public simply did not have confidence in that process. In light of the lesson, I believe that 1st option is the best for the following reasons.

First of all, people were simply more willing to trust the NGO than the oil company or the government. Both multinational companies and governments find it difficult to compete with NGOs, especially those concerned with unquestionably good causes such as the environment, when it comes to the issue of trust.
Secondly, an innovative solution could be discovered through a new process. Environmental interest groups vividly showed their ability to appeal to the public. Likewise, they also had huge amount of innovative ideas and resources. Because an old BPEO was consulted within limited members and resources and because disposal options were taken for granted, other possibilities such as reuse or recycle of facilities were not fully considered.
For these reasons, I believe that 1st option is the best and as a long term strategy, I would like to recommend that the Shell UK should hold a “Public- Private Multi-stakeholder Forum” including Greenpeace as well as the UK government, in order to create a new regulatory process which is legally robust and is effective to coordinate by taking full advantage of the UK government’s influence.