The case illustrates the contrasting – and often conflicting approaches – between high-flying business executives and their public relations counterparts. The former are more likely to allow an errant colleague to play fast and loose with a company’s reputation because they see the world through the prism of shareholder value. The latter know all too well that a firm’s image can be destroyed in an instant if it is subsequently discovered to have condoned or concealed such behaviour.

The response of Oracle CEO Larry Ellison underlines the point. Describing Hurd’s dismissal as “the worst personnel decision since the idiots on the Apple board fired Steve Jobs many years ago”, he failed to grasp that Jobs was originally dismissed from Apple not for making false expense claims but for a failed corporate coup.

Once the HP Board had knowledge of the allegations surrounding their chief executive, they had to work on the assumption that it could only be a matter of time before the media printed them, and that the tabloids would give them a far more salacious treatment than the ‘responsible’ old ladies of the broadsheet world.

The question then was how to get ahead of the story so as to minimise the impact when it finally broke. It’s true that the share price took a beating initially but that was due to the uncertainty that always grips investors when a successful CEO departs suddenly. The impact would have been far greater if the board had ignored the crisis and allowed an external, less authoritative, source to break the news.

The first principle of crisis management is to anticipate the worst and believe it will happen. The HP Board did exactly that. An outside communications consultancy wrote a mock, sensational account showing what could happen if the story broke without HP disclosure.

That article would have had an important, but by no means a decisive influence, on events that followed. Hurd departed the company quickly with a multi-million dollar payoff and while HP now has the task of hunting for a new CEO, things would have been a lot worse if the firm allowed the story to get away, as BP did in the Gulf.

‘Security of supply at the heart of Corrib Gas controversy’

Anyone who has observed the stand-off between Shell & Enterprise Petroleum Ireland on the one hand, and the Rossport 5 / Shell-to-Sea campaign on the other, especially from a distance, will have been struck and surprised at why and how much things were allowed to get out of hand. Even when it was clear that neither the firm nor the protestors could win, no-one shouted stop.

The Corrib gas controversy didn’t flare suddenly. It was years in the making and was handled so ineptly at every stage that open conflict was both inevitable and unavoidable. Shell’s decision to seek the jailing of the Rossport 5 has already gone down as one of the most bizarre acts of corporate madness, one from which the company may never fully recover. Where then for a compromise?

Gurus call this type of thing escalation of commitment. It’s a fever that grips people and organisations, when they take more and greater risks to get something, which they feel may be slipping further and faster from their grasp. As a result, they are prepared to turn logic on its head, even when self-interest dictates they should pull back and re-group for an alternative course of action.

The report by mediator Peter Cassells is the second major prong of the current offensive to right the initial wrongs of this project. The first was the safety review by Advantica, which recommended a drastic cut in pipeline pressure, along with beefed-up safety measures, independent audits and inspections, and a full review of the pipeline if it was ever to work beyond its normal retirement age.

The Cassells Report is significant, not so much for its content, but for its implicit acknowledgment that there are few enough options available to settle this long-running row. In truth, the bones of the mediator’s solution have been around for a year or more, and they would be sensible thinking in any event.

Mr Cassells’ key proposal is that the pipeline should be re-routed, as it comes too close to certain houses along the original route. To the extent that he addresses the safety issue, it is to say that consent to operate the pipeline should only be given when the 144 bar pressure limit proposed by Advantica is in place.

The idea of involving Bord Gais is aimed primarily at providing reassurance to a doubtful public that safety is a key priority. But does it also suggest that the mediator found the atmosphere between two of the sides to be so difficult that only a third party respected by objectors would be trusted to finish the project?

Shell must now be hoping that its stock is rising fast in north Mayo. Its acceptance of both the safety review and the mediator’s proposals; and now, its decision to re-route the gas pipeline and scale back legal proceedings, seem to be part of a deliberate strategy, albeit belated, which seeks to get the firm working with communities rather than driving a coach-and-four through them.

However, though the company may feel satisfied that the issues of safety and proximity have been adequately and comprehensively addressed, it may not be out of the woods just yet. The Shell-to-Sea campaign does not see the world in such black-and-white terms. And while it certainly doesn’t represent the full spectrum of local opposition to the project, as the grouping most closely aligned with the five men who were prepared to go to jail rather than allow a production pipeline through their community, it is a potent force that must be reckoned with.

Separate to the mediation process in Rossport, there have been some important parallel moves going on, which might or might not help in terms of improving the mood. The Energy Regulator, for example, has announced a study into how individual towns, and towns grouped on a geographic or regional basis, could be hooked up to the gas network. Depending on how this pans out, it could mean that Ballina, Castlebar, Claremorris, Westport and others will get natural gas soon. Under the old policy, they would have found it hard to get gas at all.

The Department of Communications, Marine & Natural Resources, meanwhile, is to carry out a feasibility study and cost/benefit analysis for a new gas-fired power station to serve the west and north-west. Bellacorick has been mentioned as a possible location. It’s hard to avoid the conclusion that both moves reflect a greater sense of clarity and cohesion in official policy, which simply wasn’t there before this controversy exploded onto the national stage.

For now though, all eyes are on Rossport and the surrounding communities, as people wait to see what will happen after the summer break. The Shell-to-Sea group have already binned the Cassells Report in the sense that they claim it will simply shift an old problem onto a new community. Local people who always wanted the project, and those who favoured it but with genuine safety concerns, must now decide if enough has been done, or committed, to justify their support.

Now that Shell has agreed to put more money into improving the safety of the project, and decided to change the route of the pipeline itself, and accepted it has a responsibility to ensure that greater benefits accrue to the local community and the region, the way might just be about to open for an honest compromise.

The Energy Regulator has recently warned that to maintain supplies in the event of further delays at the Corrib Gas Field, we might have to spend as much as €200m upgrading the interconnectors with Scotland. In the long run, we might have to do this anyway, but bringing indigenous supplies ashore now would mean that these funds could be put to a more productive use now, here in the West.

Ireland is at the mercy of external supply and price pressures because we depend increasingly on imported gas to meet our needs. Rather than being at the end of the pipe, we could be at its beginning instead. We could draw all we want, store what we might need and export the remainder. True, we would have little or no control over the prices we pay, but at least our supplies would be secure.

‘Beggared on a beach of gold’

Outside Bangor Erris, a massive roadside hoarding tells you that you’re about to enter the crucible that grabbed national and international news coverage throughout the summer of 2005. Up near Bellinaboy, site of the processing terminal for the Corrib Gas Field, another single large sign sits uneasily among a myriad of small, hastily painted, plastic signs denouncing the corporate intruder.

Crosses in remembrance of the eight Nigerians “murdered by Shell” are driven into the ground opposite the gates; and the abundance of tricolours flapping in the winter wind suggests there is a view here that the resource causing all the ructions belongs to the people and not to private business, even if this private business has done everything by the book and spent years trying to get this project where it is today.

At Bellinaboy, the most memorable sign is the one marking the 94 days, which the Rossport 5 spent in jail. In just one afternoon, the vast middle ground of public opinion, which had been there for the taking, swung instead behind a handful of local men, who were prepared to go to prison rather than agree not to interfere with work on the pipeline. Every day since their release, from 7 in the morning to 7 in the evening, teams of local people stand guard at the terminal, reminding the company that the one last consent it needs, the will of the people, has not yet been given.

Shell has always hoped that concerned local residents could be persuaded to accept the rational argument that a production pipeline operating at potentially very high pressures would nevertheless be safe. Shell might well be right, but the problem with a rational argument presented in complicated language is that it ignores people’s fears, their emotions, their beliefs, and their need to feel that they will not be exposed to unacceptable risks and potentially catastrophic consequences.

However, both sides now find themselves beggared on a beach of gold, a situation that is due as much to happenstance as circumstance. Because they have spent most of the past five years talking past each other rather than to one another, there is little by way of understanding between them, and areas where they might be able to find common ground are obscured in the thick air of mistrust and recrimination.

Shell has no chance, at this time, of completing the terminal or building the pipeline, not just because of its abject failure to explain the project, its complexities and its challenges in a language that is simple, clear, persuasive and reassuring; but also because it took the unacceptable step of having people locked up when it should have been listening to their concerns and engaging to try and address their fears.

However, the people of Rossport, Bangor Erris and Bellinaboy have also lost out. Few believe that the release of the five men was a victory for the community. Fewer still would believe that the gas field should be plugged because of what happened last summer. Yet the prospect of face-to-face engagement between company, community and government, aimed at finding a way of bringing the gas safely through and ensuring real, lasting benefits for communities in the west, seems as far away as ever.

Last August, I outlined in this newspaper, a possible solution to the impasse. I proposed then that both sides should agree to be bound by the outcome of the safety review, and that the company should agree to implement any additional measures that might be recommended by the consultants. I also proposed that Shell should consider handing over the construction work to a third party, or alternatively that it would retain responsibility for the construction, but oversight for the project would transfer to a permanent group with expert representation from local people.

Though it undoubtedly doesn’t give both sides everything they wanted, the safety review carried out by Advantica seems to offer more than a glimmer of hope. The consultants have called for a drastic cut in pipeline pressures, along with beefed-up safety measures to keep the pressure within these new lower limits, independent audits and inspections while the pipeline is being built and while it is in operation, and a thorough review if it was ever required to work beyond retirement age.

Shell lost any support it had with the silent majority when it sought the injunction that led to the imprisonment of the Rossport 5. Yet the basic problem it faces hasn’t changed. Essentially, the company needs to get the gas safely to its refinery while the men and their families in particular need every assurance it can be taken there safely. The Advantica Report might just be the catalyst for addressing their genuine fears.

Whether Shell can ever win concerned residents over, and restore the confidence of the silent majority before its own shareholders lose patience and pull the plug, only time – and talk – will tell. Trust will be hard won and even harder to keep given past experience. But it will never happen if the two sides don’t start talking soon, either directly or through the mediator, former trade union congress chief, Peter Cassells.

Shell may yet find it easier or more practical to let another company finish the construction work it started, or concede to the involvement of local people through expert representation in the management of the project itself. In any event, there would seem to be enough in the Advantica Report to get the two sides talking about how they might try to balance their interests rather than holding to their positions.

Even small, simple things done now could make a significant difference in helping to build trust – for example, replacing the massive roadside signs with something a little more understated, which says even to an outsider passing through, there is a partnership between this company and the community.

Government too must play a part in resolving this crisis. People are entitled to ask why there appears to be no development blueprint for ensuring the gas is fed into places like Ballina, Sligo, Westport, Castlebar and Claremorris; and they are also justified in asking why local political representatives do not seem to be making the case for such a plan at every turn.

In the absence of a clear political vision of the benefits which this natural gas find could bring to the West of Ireland, and given the company’s continued insistence on fighting for the project on purely rational grounds, the spotlight remains fixed on health and safety issues, especially the consequences rather than the risks of pipeline failure. If the safety review is to achieve anything, it would be to focus the primary debate on risk rather than consequence. Only the parties involved can decide this.

A few miles over the road, the solstice sun pokes through the low evening cloud and lights up the ghostly wreck of the old turf-fired power station at Bellacorick once again. Maybe it’s far fetched to think that a new Bellacorick could yet be fired by the natural gas that lies deep under the seabed nearby, but it’s worth remembering that this station, like many others of its age, was built on a vision of how natural resources could be used to support communities, both economically and socially. The Corrib gas field has as much if not more potential. Let’s hope that all sides can realise it.

‘Compromise key to Corrib Gas impasse’

Now that Shell and the Rossport 5 have fought each other to a standstill, and the political temperature has cooled, the way may be clear for a viable solution to the problem. Although both sides remain deeply entrenched and intensely hostile towards each other, there is a sequence, a solution that might get both sides off the hook.

Clearly the first priority has to be for the men to get out of prison so they can attend talks. If Shell was prepared to stand down the injunction, the men say, they would be able to consider purging their contempt of the court order and so attend those talks.

Shell’s continued insistence that there are legal impediments preventing this simply doesn’t hold water. It may have more to do with the company’s fear of conceding any ground now that might be difficult to recover if the going got tough in the talks. Shell is right though when it insists that there is an issue between the men and the courts, which must first be settled to enable the Rossport 5 to return to hearth and home.

What should have been a cause celebre for the entire nation – the prospect of enough gas to keep this country going for up to a century – has now divided an area, which has long since lagged the rest of the country in its economic development and profile.

Instead, five ordinary men who should be out and about, getting on with their work and their lives, are in prison – convinced that the construction of a high-pressure pipeline so close to their homes poses an unacceptable risk to life, limb and property.

For the Rossport 5, the critical issue is that a high-pressure pipeline will impose an unacceptable health and safety risk that may last long after the Corrib gas field is exhausted. With enormous additional reserves nearby just waiting to be tapped, the men and their supporters wonder why they should bear all of the risks for so little direct benefit, especially as accountability for health and safety seems so muddied.

But there are deeper issues, which are not easily resolved: respect for individual property rights; the ability and willingness of the State to exploit mineral wealth for the common good; the adequacy of our planning laws and oversight arrangements for major infrastructural projects; the need for full and proper adherence to the terms of consents; deference to the environment; respect for the courts and the law itself.

With the project now on hold, all sides have gained valuable breathing space. Shell’s decisions to defer installation of the offshore pipeline; and to suspend construction of the onshore section pending the outcome of the safety review ordered by the Minister, are welcome. Previously, the company also indicated that if the courts were satisfied with the men’s assurances, it would not object to their release from Cloverhill.

Mr Dempsey has done as much as he can for now: the high-level technical group, more broad-based in composition than the departmental division that was responsible for monitoring the project up to now, will select the consultancy that carries out the review, examine its conclusions and ensure more rigorous project monitoring.

The High Court itself has accepted there are significant issues involved and that it is prepared to give these a full hearing once the men purge their contempt of the court order, which was handed down in light of the facts presented and the law as it stands.

Ultimately, there has to be a compromise between the parties themselves, though there is probably enough there already to start a sequence of events that would lead quickly to real talks, with the courts providing a safety hatch if that were needed.

Both sides can save face and make progress by moving to break the deadlock at the same time. Although trust between the parties may not to be that important in terms of the men leaving prison, there does need to be a realistic understanding of the interests of both sides if the subsequent talks are not to founder within hours of beginning.

Shell will not willingly agree to the off-shore refining option because of the cost implications. Nor can the State withdraw the consents it has given without exposing the taxpayer to an enormous liability. Somehow the men must be reassured that every effort can and will be made to minimise the chances of a pipeline rupture.

Essentially, the company needs to get the gas safely to its refinery, while the men need every assurance that it can be taken there safely. The State’s main role at this early stage has to be to take all steps necessary to ensure an adequate safety regime.

What then might be the sequence for getting the men out of prison and into talks, and what might the solution to the substantive problem be? Six bases need to be covered.

First, Shell would reiterate its decision to mothball the project pending talks through a third party, and honour its previous commitment not to object to the men’s release.

Second, the five men would signal that they are prepared to put their trust in the courts to hear and adjudicate on substantive legal issues if necessary; and that as the company is maintaining a moratorium on construction work, there is no need for them to engage in any activity covered by the court order. By announcing that they will trust in the integrity and even-handedness of the courts, the men would create a context in which they could apologise for defying the original court order.

Third, the safety review would be undertaken by a consultancy not linked to Shell.

Fourth, both sides would agree to be bound by the outcome of the review, with the company agreeing to implement any additional measures that may be recommended to assure the safety of the entire gas-pumping and refining infrastructure, including any re-routing or re-configuration of the pipeline for health and safety reasons.

Fifth, government would agree to review the existing regime for exploration and exploitation of mineral and hydrocarbon resources, with a view to realising greater benefits for the state, especially in terms of regional development and job creation.

Finally, Shell would hand over all matters related to the construction of the onshore pipeline to a trusted third party, competent to deliver it to the highest international standards of construction and safety, in line with the approved development plan and consents, having regard to any specific measures contained in the safety review.

Alternatively, the firm would retain responsibility for the construction work, but oversight for the entire project would transfer to the (permanent) high-level group, which would have an appropriately-qualified expert nominated by local people.

It could be argued that the final two proposals are a very big ‘ask’ of Shell and that the company would not willingly agree to them. But even if substantial modifications to the current project were recommended on health and safety grounds, these would still be cheaper than the off-shore facility. It would also give confidence that health and safety issues are the number one concern for both the short and the long run.

Both sides need to accept that making concessions is not the same as admitting or inflicting defeat. Each party has to give something, but neither should feel they are being forced to blink. Compromise is inevitable. It is in nobody’s interest that the men should remain in prison, or for the gas to stay where it is, for one minute longer.

With fuel prices rising by the day, the country needs a stable, secure supply of energy now. Having fought each other to a standstill, the company and the men can deliver it.

Published: Western People, 30 August 2005

Why? Crisis are caused by many factors, including human error, mechanical failure, lapses in judgment, a failure to anticipate events or react in time, and the mistaken but commonly-held belief in most organisations – “it couldn’t happen to us”. You would think that a £260 billion global giant like BP – especially a £260 billion global giant like BP – would be prepared for all eventualities given the high-risk nature of its activities. You would be wrong!

On 20 April 2010, while drilling the ‘Macondo Prospect’ off the south coast of the United States, one of the world’s most sophisticated subsea drilling rigs, which had been leased to BP, exploded in a massive fireball, killing 11 workers. Two days later, the Deepwater Horizon sank, leaving a broken well-head a mile under water, gushing 35,000 to 60,000 barrels a day into the Gulf of Mexico.

Most – if not all – of the usual causes were at play in the run-up to this crisis, not least of which was the belief among senior management that they could walk on water. Yet the fact that oil and gas is still gushing in vast quantities from the broken wellhead three months after the Deepwater Horizon exploded and sank is a testament to just how badly BP was prepared.

CEO Tony Hayward appeared completely ill-equipped to deal with the public relations pressures of what quickly became the biggest environmental catastrophe ever to hit the US. Gaffes like, “I want my life back” and this is a small spill in a big sea, were insensitive and ill-judged to say the least. Worse, Hayward seemed indifferent to, and even contemptuous of, his inquisitors when called to account for his company’s response before a key congressional committee on Capitol Hill.

A textbook example of how not to do crisis communications. So what rules should you follow?

Rule #1: Believe the worst will happen. That way, you stand a better chance of avoiding nasty surprises and of getting respect for your response, even it it seems over the top later on.

Rule #2: Ensure you have a plan that deals with all potential crises. If you’ve prepared fully in advance, you have a fighting chance of saving and repairing your reputation.

Rule #3: Don’t waste any time putting the plan into effect when the crisis hits.

Rule #4: Put people first. Show what you are doing to deal with the crisis and to help the people affected by it. You don’t want to be asking for your life back when others have lost theirs.

Rule #5: Take control of the situation quickly, communicate effectively and efficiently, and ensure your organisation is seen as the sole, authoritative, source of information.

Rule #6: Learn from the good and bad experiences of others.

Rule #7: Rehearse your Crisis Plans regularly so you are ready to go.