Mario Aquino Alves, Professor of Public Policy and Corporate Social Responsibly at FGV-EAESP, digs deep into Shell operations in Brazil to show how corporations often use litigation and blame-shifting to deal with environmental disasters.

Disaster in the Making: How not to play the blame game in crisis management by CoBS Editor Afifeh Fakori. Related research: Book chapter entitled “Blame and Litigation as Corporate Strategies in the context of Environmental Disaster” penned by Professor Mário Aquino Alves and his colleagues Maria Paola Ometto and Paulo Cesar Vaz Guimarães.

None of us enjoy waking up to the news of an earthquake annihilating a city or a forest fire consuming an entire village. Yet, it is true that in the wake of a natural disaster, altruistic feelings are triggered amongst people who cooperate with each other in unprecedented ways. In contrast, there is this other type of disaster which might be less dramatic than a tornado, but which leaves behind a far deeper socioeconomic impact – these are the OBEDs or the Organisationally Based Environmental Disasters.

An OBED does not occur overnight; instead, it incubates over a period of time and involves the power of corporations, governments, and society. The devastating consequences of an OBED are more enduring than those of a natural disaster as the harm inflicted is more ambiguous and leads to litigation and the development of corrosive communities. So, what’s the best way to deal with an OBED?

Crisis Management: It wasn’t me!

For large corporations, a classic way of dealing with environmental disasters is blame-shifting. In the aftermath of an accident, they often resort to impression management strategies and institutional arrangements to manoeuvre away from the blame. In response, civil society organisations engage in protests demanding adequate compensation, and before you know it, the protests escalate into convoluted litigation and the social actors mobilise legal rhetoric to identify the causes of the disaster and then assign blame.

A very good case in point is Shell, which became entangled in two serious cases in Brazil during the 1990s. In both cases, Shell’s industrial activities contaminated groundwater for decades, causing health problems for employees, their families, livestock and communities around the plants. Lengthy litigation processes were involved each time. The ensuing blame-shifting and juridical strategies only exacerbated the plights of the actual victims. Prof. Mario Aquino Alves et al have used data from the 20-year period between 1993 and 2013 to illustrate how Shell applied a blame-shifting strategy to evade responsibility for their soil contamination at both Vila Carioca and Paulínia in Brazil. Shell’s actions transformed critical events into full-fledged disasters.

The Vila Carioca Case: How far can victim-blaming take you?

Apparently very far! In the 1940s, Shell was using two estates in Vila Carioca to store fuel and other chemical products. For over three decades, it buried the oil sludge from tank cleaning directly in the soil, contaminating the soil and the water that was used for drinking purposes. Finally, in 1993 Greenpeace and others stepped forward to file a complaint in court. Although investigation results were clearly against Shell, it managed to evade fines until 2003.

However, following a public civil lawsuit filed against Shell, public hearings produced irrefutable evidence that Shell’s activities created adverse environmental and health effects in the Vila Carioca communities. The fact that the mortality rate in Vila Carioca was twice that of the surrounding Ipiranga district did not help Shell’s case either. At this point, Shell blamed the local people for the presence of contaminants in the soil. Apparently, according to Shell, the deposits of contaminants had resulted from the agricultural and other practices of the local people. It even went so far as to redirect the blame on the Brazilian government and on Cetesb – a public agency responsible for pollution prevention and control. Shell argued that the state had been rather inefficient in conducting the investigation, diagnosis, and treatment of citizens exposed to the environmental damage which Shell had caused, claiming that the government had failed to implement measures to intervene and cleanse the contaminated areas.

Throughout the Vila Carioca case, blame for the environmental disaster shifted so much that the problem itself became diluted. Despite the involvement of some prominent non-profits like Greenpeace, no powerful voice emerged to mobilise the community, and Shell’s lengthy litigation and blame-shifting worked out perfectly well for them. They managed to avoid both reputation damages and heavy fines, all the while continuing to store automotive gasoline and other organic solvents in Vila Carioca.

The Paulínia Case: Power of collective mobilisation

When Shell began operating a pesticide production plant in Paulínia in 1977, recurring clashes over waste disposal followed almost immediately. Shell hired two laboratories to evaluate water quality, and while the ­first found nothing, the second identifi­ed several pollutants. Not surprisingly, Shell only released the favourable report. However, once the situation became public in 1999, people started to mobilise, camping in front of the Shell facilities to protest.

At a 2001 public hearing, Shell went along with a pro-environment discourse, assuming some of the blame for environmental pollution but completely denying any health risk. At this point, former Shell employees took a very firm stand and established a committee to defend their rights. Health examinations conducted by the Paulínia City Hall and the Labour Attorney had revealed that 156 of 181 area residents had at least one type of toxic waste in their body. In response, Shell filed a lawsuit against the doctors who conducted the examination. But the Labour Attorney obtained government funding for another medical study to focus on former employees rather than the entire population. This study, too, found credible evidence that the employees had been exposed to hazardous conditions in their work environment. Consequently, a public civil action was filed against Shell in 2007 to guarantee the rights of former employees. Shell continued to deny having intoxicated its employees, stressing that contaminations had resulted from the natural environment and not the work environment.

However, the labour union played such a powerful role that in 2010, the Labour Court of Justice finally decided that the employees’ plea was fair. The 1,058 former employees were awarded their rights to healthcare for life and compensation for moral and material damage. Shell was also fined $390 million in compensation for moral damages caused to Brazilian society.

Unlike the Vila Carioca case, in the Paulínia case, blame shifting was less prominent and the complaints were more focused, resulting in victory for the victims.

Communities vs Corporations in disaster management

Both the Vila Carioca and Paulínia cases highlight Shell’s blame-shifting strategy. But the outcomes were very different because of the power of the community. In Vila Carioca, the litigation occurred under civil law, whereas in Paulínia, the litigation occurred under labour law, with the labour union strongly focusing on the single issue of workers’ health.

We believe that in cases of Organisationally Based Environment Disasters, three important dimensions must always be considered:

1. Litigation is an essential part of blame shifting: Awareness of this point can enable communities to ensure that complaints are not diluted amidst all the blame-shifting.
2. Time is of the essence: Lawsuits are always lengthy. It is up to communities to determine if they want to utilise this time to mobilise a robust, collective litigation strategy against the perpetrating company or to simply let the intensity of the situation die down.
3. Confrontation by collective powerful opponents mitigates corporate litigation and blame-shifting strategies: This does not necessarily require the involvement of prominent NGOs. Sometimes, a strong labour union is enough. As seen in the Paulínia case, the union was able to mobilise people for their cause, by organising demonstrations in front of the court and producing a short documentary for dissemination.

In a nutshell, corporations will always resort to litigation and blame-shifting to dilute a critical event which can subsequently transform into a disaster. But, in spite of this powerful phenomenon, a robust mobilisation of civil society organisations and communities can counterbalance the effects of a corporation’s blame-shifting strategy.

Useful links:

• Link up with Prof. Mario Aquino Alves via LinkedIn
• Read other features articles on Mario Aquino Alves’ teaching and research
• Discover the FGV-EAESP Brazil programme portfolio
• Visit the FGV-EAESP Center for Sustainability website (GVces)

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