Shell's poor crisis management of its operations in Ogoniland led to protests and negative publicity. The company initially denied issues, reacted late, relied on government relations instead of addressing community concerns, and did not effectively communicate with stakeholders. This allowed rumors to spread and perceptions of Shell to become negative regarding its environmental record and treatment of local communities. The crisis demonstrated the importance of proactive stakeholder engagement and communication in crisis planning and response.

1. CRISIS MANAGEMENT IN PUBLIC
RELATIONS PRACTICE
The Oil Industry Experience
By
Bolaji Okusaga
Managing Director,
The Quadrant Company

2. Outline 1
PART 1: Corporate Objective and Stakeholder Management
• What is Corporate Objective?
• Corporate Objective and Sustainability Principles
• Outcomes of a Sound Corporate Objective
• Identifying Stakeholders
• Demands of Stakeholder Engagement
• Types of Stakeholder
• Understanding Stakeholder Dynamics
• Public Relations in Organisation/Stakeholder Dialogue
• Stakeholder Management
• Expectation from Relationships
PART 2: Agitations from Oil-Producing Communities and the Oil
Industry Reality
• Historical Context
• Background of the Problem
• Nature of the Problem
• Fall-outs from the Problem

3. Outline 2
• PART 3: Public Relation Challenges: The Shell/Ogoni
Affair as a Case-Study
• PR and a Changing Business Landscape
• PR as an Advocate
• An Advocate for Good or Bad?
• PART 4:– Crisis Management: The Shell/Ogoni Affair as a
Case-Study
• What Constitutes a Crisis?
• Dimensions of a Crisis
• Types of Crises
• What is Crisis Management
• When things go wrong
• Crisis Planning
• PR and Crisis Management
• What is Crisis Communication?
• Shells Mistake
• What Shell Should Have Done
• Lessons Learned

4. PART 1:
Corporate Objective and
Stakeholder Management

5. What is Corporate
Objective?
• Corporate Objective articulates a Company’s manner of
doing business and the kind of relationships it need to
create with its Stakeholders to deliver on its purpose.
• These objectives are summarized in the organisation’s
mission, vision and culture and help set the tone for
interactions with its Stakeholders.
• Corporate Objective asks the questions: What is the
purpose of our organisation? What value do we intend to
create? What kind of ideals bind our stakeholders
together?
• By answering these questions, Corporate organisations are
able to differentiate, plan, execute and deliver exceptional
performance.

6. Corporate Objective &
Sustainability Principles
Principles Components
Technology The creation, production and delivery of products and
services...based on innovative technology and organization that
use financial, natural and social resources in an efficient, effective
and economic manner over the long-term
Governance Companies should operate based on the highest standards of
corporate governance including management responsibility,
organizational capacity, corporate culture and stakeholder relations
Shareholders Shareholders' demands should be met by sound financial returns,
long-term economic growth, long-term productivity increases,
sharpened global competitiveness and contributions to intellectual
capital
Industry Companies should lead their industry's shift towards sustainability
by demonstrating their commitment and publicizing their superior
performance
Society Companies should encourage lasting social well being by their
appropriate and timely responses to rapid social change, evolving
demographics, migratory flows. Shifting cultural patterns and the
need for life-long learning and continuing education
Source: World Commission on
Environment and Development

7. Outcomes of a Sound
Corporate Objective
• Growth in Market Share
• Market Leadership
• Impressive Turn-over
• Good Operating Margin
• Huge Gross Profit
• Increase in Market Capitalisation
• Stock Price Commands Premium
• Absence of Crisis borne out of a healthy Operating Environment -
*** (This is the most important role of PR in
furtherance of a Company’s Corporate
Objective)

8. Identifying
Stakeholders
Anyone on the Street
Influencers
Core Target

9. Demands of
Stakeholder Engagement
• Every organisation relates with different publics - from
the Shareholders, Staff, Customers, Industrial Unions,
Government and Regulatory Bodies, Counter-parties, the
Press to the local community.
• These stakeholders are different in terms of their
interests and expectations.
• Organisation therefore need a deep-seated
understanding of these interests and expectations to
maintain a dialogue, enhance relationships and retain
its goodwill among its stakeholders.

10. Types Stakeholders
• Advocate stakeholders - active and supportive. should be
approached with action-oriented messages and engaged in
third-party endorsements.
• Dormant stakeholders - ready to be involved. Messages
should focus on creating awareness and understanding of
issues, or on reducing barriers to action and increasing
emotional attachment to the issue.
• Adversarial stakeholders - don't respond to defensive
messages, which actually can cause these opponents to dig in
deeper. Conflict resolution strategies that seek win-win
solutions work better.
• Apathetic stakeholders – should not be ignored, even
though that is often management's style. A better strategy is
to increase awareness of the issue with an invitation to
collaborate before the issue morphs into a crisis.
Source: Brad Rawlins, Brigham
Young University

11. Understanding
Stakeholder Dynamics
ACTIVE
Adversarial Advocate
Stakeholders Stakeholders
NON-SUPPORTIVE SUPPORTIVE
Apathetic Dormant
Stakeholders Stakeholders
INACTIVE
Source: Brad Rawlins, Brigham
Young University

12. Public Relations in
Organisation/Stakeholder Dialogue
• Public Relations is the art and science of building relationships.
• Public Relations engenders purposeful communications between an
organisation and its publics, it is proactive and future orientated,
and has the goal of building and maintaining a positive perception
of an organisation in the mind of its publics.
• In the dialogue between Organisations and their stakeholders, the
following branches of Public Relations suffice:
• Employee / Labour Relations
• Customer Relations
• Investor Relations
• Media Relations
• Government Relations
• Community Relations
• Reputation Management
• Issues Management
• Crisis Management

13. Stakeholder Management
CONSUMERS
PORTFOLIO MANAGERS / INVESTORS
COMMUNITIES / PRESSURE GROUPS
BUSINESS LEADERS
PA
PA
FINANCIAL ANALYST / BUSINESS PRESS
E
NC
TH
TH
RE
OF
FE
FI
REGULATORS
NF
RE
NF
MAJOR
LU
LU
OF
CUSTOMERS
EN
EN
TH
DISTRIBUTION / CHANNEL
CE
CE
PA
PARTNERS
POTENTIAL EMPLOYEES
EMPLOYEES
Source: Regis McKenna

14. Expectation from
Relationships
• EMPLOYEES / POTENTIAL Career Opportunities,
EMPLOYEES Competitive
Remuneration,
Good Management
• CUSTOMERS Trustworthy, Good/Successful
Products
• DISTRIBUTION / CHANNEL
PARTNERS Attract Customers, Make Sales
• REGULATORS Ethical, Compliant
• COMMUNITIES Philanthropy, Good Corporate
Citizenship

15. PART 2:
Agitations from Oil-Producing
Communities and the Oil Industry
Reality

16. Historical Context
• Oil was first discovered in Nigeria in 1958 at Oloibiri in the
present day Bayelsa State.
• Nigeria gained Independence in 1960 and with Independence
came the active rivalry of the Regions and political actors
leading to political turmoil and subsequently, a Coup’dtat.
• With the Coup came Military rule followed by the declaration
of a Civil war.
• At the end of the war, an era of active prospecting began
leading to the Oil boom of the 1970’s.
• With the Oil boom came prosperity and the development of
mega-cities such as Lagos, Port-Harcourt and Abuja.

17. Background of
the Problem
• With the discovery of Oil, came the licensing of Multi-National
Oil Corporations, the allocation of On and Off-Shore Oil Blocks
and a Joint Venture Partnership Agreement which spells out a
revenue sharing ratio without a sound legislative platform
which looks at environmental pollution, community
relations and business continuity.
• Oil was dubbed the Black-Gold and with this gold came the
Udoji Salary award which created a bogus bureaucracy and
led to an era of crass-materialism and corruption.
• While all these were going on, trouble was brewing in the
Niger-Delta…

18. Nature of the
Problem Oil exploration activities led to the flaring of
dangerous gases unchecked and Oil spills
Environmental Pollution which led to the pollution of farm-lands
and water-ways, which affected the
People’s source of livelihood.
There was a dearth of Community Relations
in the local community where these Oil
Community Relations Companies operated as they restricted
their activities to mega cities such as
Lagos and Port-Harcourt where they had
Corporate Offices and carried on purely
technical services in their host
communities while honouring their joint
venture agreements and paying their
taxes to the authorities as at when due
Government, more or less, abandoned the
oil producing communities as Oil was
Business Continuity placed on the Exclusive legislative list
with very little allocation made in honour
of the principle of derivation. The down-
stream sector was undeveloped as
Government paid lip-service to private-
sector led development of refineries and
petro-chemical plants which would have
generated more employment and help
reduce tension.

19. Fall-Outs from
the Problem A failed cessation bid in the late
Isaac Adaka Boro’s Peoples sixties. This was an early warning
Liberation Army signal
An Anti-Environmental
Degradation movement which
Ken Saro-Wiwa’s Movement got to the attention of the world,
for the Survival of Ogoni led to the withdrawal of Shell from
People Ogoni Land in 1993 and
eventually caused the death of the
protagonist
A militant Resource Control
Ansari Dokubo’s Niger Delta Movement which started after
Liberation Front Government’s bombardment of
Odi and has crystallized into an
organised movement which
regularly captures and holds
expatriate oil workers hostage

20. PART 3:
Public Relations Challenges:
The Shell/Ogoni Affair
as a Case-Study

21. PR and a Changing
Business Landscape
• One of the most fascinating crisis management case studies is the
Shell-Ogoni affair.
• This affair led to the emergence of "PR ploy," "PR maneuver" and
"PR effort" - the demeaning labels used to describe the way the
situation was handled, as it tested the Crisis Management frame-
work of a big Trans-national Corporation like Shell.
• In order to ride the challenges occasioned by the rapidly changing
operating environment, Shell initially had uncoordinated approaches
to dealing with issues arising from the activities of Human Rights /
Green Movements around the world.
• This was largely due to the fact that the operating environment was
unexpectedly distorted by the Ogoni affair and in the absence of a
structure to deal with it, Shell’s image continued to dip with the
unrelenting degeneration of relations with its host communities and
the boycott of its products and services across the globe.

22. PR as an Advocate
• At the height of the Crisis, the PR professionals working
for Shell became Propagandists, taking controversial
positions on issues of Human Rights, Environmental
Pollution and Resource Control, which were essentially
the factors responsible for the Crisis.
• But you know what? They had every right to do so.
After-all, Public Relations is an advocacy profession.
• The objective of every PR activity is to influence public
opinion.
• The ultimate goal is to get people to take positive action
on behalf of client, organization or cause. And that in
itself is controversial.

23. An Advocate for
Good or Bad?
• PR holds a powerful position and because of this power, PR
activities are often called to question by the public, the Shell/Ogoni
Affair tested PR’s power on the following issues:
– Misleading Information: There were allegations by MOSOP, Amnesty
International and a host of Green movements that Shell was peddling false
or incorrect information designed to lead policy-makers, consumers and
interested Public astray.
– Influence of Policies and Government’s Action: Where Shell had
the ear of Policy-makers, how Shell exerted its PR power became a cause
for concern.
– Discrimination: It was alleged that Shell had discriminated against their
host Communities in their employment policy.
– Destruction: It was also claimed that Shell deployed PR to soften its
destruction of the Environment and aquatic life in the Communities where
they operate.
– Casualisation and Pay Inequities: Casualisation and Pay inequalities
between Expatriates and Nigerians became an issue.
– Gain at Expense of Others: It was claimed that Shell was making
money at the expense of the ill-fortunes of their host communities.

24. PART 4:
Crisis Management:
The Shell/Ogoni Affair
as a Case-Study

25. What Constitutes
a Crisis?
• A Crisis is a situation that is threatening or could
threaten to harm People or Property, seriously
interrupt business, damage reputation and / or
negatively impact organisational value.
• Crisis create conditions that make it difficult for
Managers to make good decisions and communicate
well.
• Crises place Organisations experiencing them in public
spotlight and calls management competence into
question.
• Crisis impose a need for organisations to communicate
quickly, accurately and skillfully with a number of
important groups.

26. Dimensions of a
Crisis
• A Crisis usually has several critical dimensions which if
poorly handled can disrupt or destroy best efforts at
managing them.
• Failure to respond and communicate in ways that meet
community standards and expectation will result in a
series of negative consequences.
• The following are some of the critical dimensions of a
crisis:
- Operations
- Victims
- Trust / Credibility
- Behaviour
- Professional Expectations
- Ethics
- Lessons Learned

27. Types of Crises
Financial Crisis
Short term liquidity or cash flow problems; and long
term bankruptcy problems.
Public Relations Crisis
Negative publicity that could adversely affect the
success of a company.
Strategic Crisis
Changes in the business environment that call the
viability of the company into question.

28. What is Crisis
Management?
• Crisis Management basically refers to the management
of the reality of a crisis.
• It involves identifying a crisis, planning a response to the
crisis and confronting and resolving the crisis.
• Crisis Management is applicable to any field of
endeavour.
• The theory of crisis management can be divided into
crisis bargaining and negotiation, crisis decision
making, and crisis dynamics.

29. When Thing Go Wrong
• At the height of the Crisis generated by the Shell/Ogoni
affair, the following went wrong:
– Operational response broke down.
– There were huge losses to Shell based on reduction in
daily production of Crude Oil and colossal damage to Oil
wells by the aggrieved Community.
– Stakeholders (both internal and external) did not initially
know what was happening and were angry and
negatively reactive.
– Rumours thrived as to the activities of Shell and real
intensions of the leaders of MOSOP.
– Shell was perceived as inept and criminally negligent.

30. Crisis Planning
• Crisis Management is usually neglected by
many organisations untill a crisis reveals the
lack of planning.
• Crisis Planning thinks of situations that might
arise to create difficulty for an organisation.
• It involves the rehearsal of various scenarios
and the mapping of ways in which to mitigate
them rather than reacting after a Crisis has
happened.
• Public Relations is crucial in Crisis Planning.

31. PR and Crisis
Management
• Public Relations is an anticipatory practice which
attempt to foresee events, trends and issues which
may develop to disrupt important relationships.
• Crisis precipitate a break-down in relationship because
it disrupts the normal flow of interaction between an
institution and its stakeholders.
• Since Public Relations manages the expectations of the
crucial stakeholders of an institution, it is thus a
veritable tool in Crisis Management.
• The special area in Public Relations which deals with
the management of Crisis is Crisis Communication.

32. What is Crisis
Communication?
• Crisis Communication is a methodic process
through which perception is shaped and positive
reactions obtained from crucial parties in an
emergency or disaster situation.
• Crisis communication can take various forms:
- Media Relations
- Shareholder Relations
- Employee Relations
- Community Relations

33. Shell’s Mistakes
1. Shell initially pretended as if nothing was happening
2. They reacted to the crisis situation after it had gone
public.
3. They relied on the goodwill they had built with the
Government and local Chiefs.
4. They distance themselves from the media.
5. They were reactive to the information MOSOP was
releasing and not proactive.
6. Shell spoke above their audience by speaking only
with the Policy makers and not the aggrieved
Community.
7. They assume that truth always conquer lies.
8. They ignore the feelings of their host Community and
address issues only.
9. They avoided the crowd and use third parties and
written statements only.
10.Shell did the same things again and again and
expected positive results.

34. What Shell
Should Have Done
1. Build a Crisis Communication 10. Identify key messages
Team. 11. Deploy strategy
2. Identify Spokespersons. 12. Obtain feed-back
3. Train Spokesperson. 13. Be open to criticism
4. Establish Communications 14. Fine-tune strategy based on
Protocol. feed-back and criticism
5. Identify the most crucial 15. Empathise with victims, don’t
Stakeholders. just focus on the issues
6. Decide on Communication 16. Where crisis emanated from a
methods. dispute, be ready to negotiate
7. Anticipate issues likely to 17. Act to resolve the issues
arise from Crisis. 18. Give information on steps
8. Assess the Crisis situation taken to resolve the issues
9. Develop holding statements.

35. Lessons Learned
DON’TS DOS
2. Don’t make the media the only 2. Communicate directly with your
means of communicating with most important audience.
your crucial publics.
3. Remember that your employees
3. Don’t direct all your efforts at the are a critical audience.
external targets only.
4. Do integrate Legal and PR
4. Don’t operate in ignorance of the strategies
Law.
5. Say “I’ll very much like to
5. Don’t say “no comments” if you comment but I don’t have the
haven’t had a chance to review facts yet.” You may also request
the case. the inquirer to fax or e-mail the
6. Don’t threaten to sue the media, details to you.
it may escalate the crisis because 6. Seek the understanding of the
most media organisations enjoy media by showing empathy and
being sued. It may result in a a willingness to reverse the
sensational hit for them. situation.
7. Don’t assume you know how to
talk to the media.
8. Get media trained.
8. Don’t depend on others to tell 9. Consider becoming you own
your story.
publisher by posting messages
on the crisis on your web-site.

36. Thank You