Introduction

1.5CSR disclosures

The analysis shows that CSR disclosures for both firms are correlated with the two crises and have a determined impact on society. The analysis also shows that the managerial aimed to hide the true nature of the political situation defending itself in front of the main stakeholder groups. In the Iranian and Egyptian crises, the chairman of BP used the annual reports as a propaganda tool and succeeded in maintaining shareholders’ confidence. For instance, in 1950, the chairman disclosed that (BP) carried out vast expansion of the social services for the foreign employees including housing, school, and medical care. Also in 1956 and 1957, the chairman noted in the section on Personnel that BP would 'spare no effort’ to ensure ‘a good standard of life’ for employees ‘wherever they work’⁷⁰ and that the company would continue to devote particular attention to the training and advancement of nationals of the countries in which it operates. Thus putting much emphasis on internationalising the training; “not only do many British staff now have periods of training abroad but nationals of the countries in which we operate are increasingly serving for periods in this country”⁷¹. As a means of alleviating the rising tide of economic nationalism in 1951, BP embraced Egyptianization and supported military evacuation of the Suez base. BP was endeavouring to obtain as quickly as possible supplementary supplies from short haul sources because of the severe dislocation caused to BP shipping programme “by the stoppage both of the transits through the Suez Canal and of loadings of Iraq oil in the Eastern Mediterranean”⁷² made it impossible for the company to maintain their supply at normal level. BP needed to impress and maintain stakeholders confidence to maintain share price in order to attract new finance as and when needed (e.g. to expand tanker fleet). Furthermore, BP needed to maintain its status because it was smaller and less internationally known than Shell. Also, BP needed to demonstrate control despite dependence on precarious Middle East oil supplies.

In 1950 and 1951, the chairman of Shell also used his statement as a propaganda tool where he disclosed that he was mainly concerned about the relations between the group’s management and its staff throughout the world and the team spirit is all the more important when he considers the additional and ever growing handicaps confronting industry⁷³. The chairman also noted that “many nations are represented on our staff, and it is our considered policy as far as possible to employ in our companies abroad the nationals of the countries in which we operate. To that end staff training has been intensified and new training facilities are constantly being added in order to ensure that this policy is implemented as soon and as fully as possible. We are an international business and aim to further the cause of international goodwill wherever we can”⁷⁴. Not only that but Shell had a policy of engaging Egyptian staff similar to the Iranianisation policy with BP and consequently there was extensive disclosure in its annual reports during the Suez crisis in 1956. For instance, the chairman disclosed that Shell intends to continue the practice which it has assiduously and successfully pursued in the past, of drawing its personnel from every nation in which they operate and training each one individually so that the “training and career development need not be bounded by any of one country and increasing use is being made of that facility. In this way we shall remain well equipped to meet the changes which are taking place in many parts of the wold in the political and technical scenes, and at the same time we shall increase our effective communication between country and country and between man and man on the exchange of progressive ideas”⁷⁵. In short, the patterns of related disclosures analyzed above provide evidence that both firms are using CSR disclosures where they are useful in a bargaining situation with a host government. BP and Shell are using their annual reports to show that their operations are important to social well-being and standards of living to indicate that they are socially responsible, hence, protecting their interests and maintaining stakeholders’ confidence.

Conclusion

The public image of BP and Shell was seen as a crucial ingredient of the managerial disclosures, not least because a key objective of the management was to maintain the confidence of its own stakeholders in the face of major threats and also to absolve itself of any blame for the international crisis. Thus, annual reports were used as a means of communication and a part of a wider propaganda battle.

The successful surmounting of the Suez crisis of 1956-57 was not a foregone conclusion. It owed much to the availability of the oil supplies from Western Hemisphere, mainly Venezuela and the USA whose oil exports increased greatly during the crisis. Notwithstanding the co-operation that was made through MEEC in allocating oil supplies in Western Europe, the US governments was the major factor behind the government’s backing of oil industry in the MEEC. MEEC removed the constraints on oil supplies by maintaining tanker movements for the duration of the Suez crisis. There is no doubt that BP also played a major role in co-operation with the other international oil companies which facilitated the relatively friction-less working of the MEEC in maintaining Western Europe’s oil supplies.

BP had less influence in 1956 than in 1951 with the British government, because of differences in the geo-political situation, but also because there was a divergence of objectives between BP and the government (c/f 1951 where both favored direct intervention). BP’s position in the network of oil firms was weak (dominance of US, information asymmetries), and subject to some risk due to position of assets, but management were able to reassure shareholders and maintain confidence due to good underlying performance on profit and investment, which the annual reports emphasized. In the end the repercussions of the Suez crisis were less drastic than they were at the time expected to be and the dislocation of oil supplies following a military engagement may be an example of what may happen in the future.

Footnote references

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Documentary sources

BP Annual Report and Accounts, 1955, 1956 , 1957 & 1958.

British Parliamentary Papers, House of Commons, vol.233, col.2047, 23 December 1929.
BP 20548, Sep 1956.
BP 20548, August 1956.
BP 42366, Feb 1956.
BP 42366, August 1956.
BP 42367, 15 April 1957.
BP 42541, 17 April 1956, p.5.
BP 53332, 19 November 1956.
BP 59138, Emergency supply position, 2nd August 1956.
BP 59159, 20 September 1957
BP 62906, 15 October 1956.
Petroleum press service, September 1956 from The British Petroleum Company Ltd, Information Branch.

The Times, 5 June, 1952.

The Times, 7 May, 1957.

The Times, 8 May, 1957.

Shell Annual Report and Accounts, 1950, 1951 and 1956.

Table 2: CONTENT ANALYSIS of BP ANNUAL REPORTS

Theme year/annual reports	Actions of foreign governments	UK tax rates	Foreign Taxes	Trade barriers and government interference	Justification of trade practices and profit levels	CSR policies of the firm (foreign employees)
1950	Extensive (almost the whole annual report is discussing the Iranian government nationalisation of AIOC assets revealing that the company’s status and rights in Iran have been seriously affected)		1 page (Alarming effect of royalty payments to Iranian government)		1 ½ pages (. Profits have been seriously affected by the cessation of Iranian supplies which completely cut off AIOC income)	¾ page (The AIOC carried out vast expansion of the social services for the foreign employees including housing, school, medical care)
1951	2 ½ pages (The Iranian government had disputed the jurisdiction of the International Court to deal with the British Government dispute).	¼ page	Tax rate is reduced in some countries in the Middle East (ex. Kuwait, Iraq)	2 pages (increasing trade barriers by the Iranian government and British government as they failed to reach a solution.	2 pages (Display of graphs and photos for the first time addressing new agreements in the Middle East other tan Iran. Disclosures about AIOC continued operations although the flow of supplies was disturbed by nationalisation event).	Neutral (few lines) Tribute to staff
1952	2 ½ pages (Owing to the continuance of the dispute with the Iranian government, no operations of the company or its subsidiaries took place in Iran during 1952). .	¼ page (Damaging UK tax rate). High level of taxation on motor fuel which affects all users.	¼ page Tax rate is damaging (a claim has been made for relief from UK taxation in respect of Kuwait taxation)	2 pages (increasing trade barriers as the Iranian government entered into negotiation with an organisation of an international character, in which the company would have participated for the purchase of large quantities of oil over a period of years).	Anti-trust litigation in the U.S.A. 8 pages of photos and images to justify the company practices.	Neutral (few lines) Tribute to staff
1953	2 ½ pages (The Iranian government had announced the resumption of diplomatic relations and the two governments would proceed at the earliest mutually agreed moment to negotiate a settlement of the oil dispute which had recently clouded relations between them).	1/2 page (Damaging UK tax rate Very high rates of duty so frequently imposed by governments on motor spirit, often representing more than half the price paid by the consumer.	1/4 page (The claim for relief from UK taxation in respect of Kuwait taxation has still not been agreed by the UK revenue authorities).	1 page (There is coming more into evidence the problem of maintaining in the Eastern Hemisphere the necessary balance between the proportions in which the main refined products are needed and the proportions in which they can be produced from crude oil).	2 pages of photos only To justify the company practices.	Neutral (few lines) Tribute to staff
1954	Neutral tone	1/2 page The rate of taxation on motor fuel remained at a level so high as to constitute a restriction on the growth of road transport.	1/4 page (The claim for relief from UK taxation in respect of Kuwait taxation is still under discussion with Inland Revenue authorities).		2 pages of photos illustrating the Queen’s visit to Kent oil refinery and a refinery in Western Australia.	Neutral (few lines) Tribute to staff
1955	Neutral tone		As regards Kuwait taxation, necessary adjustments of previous years’ profits have been credited to General Reserve.		2 pages of photos illustrating BP group oil production, refinery throughput, in going tanker tonnage and BP group sales of crude oil and refined products.	Neutral (few lines) Tribute to staff
1956	3 pages on Suez crisis			4 pages	14 pages of photos illustrating maps of oil movements, BP group statistics, photos of drilling, refineries and sea transport.	½ page (Stress on effort to improve employee conditions)
1957	Suez crisis -Neutral tone			1 page	15 pages of photos illustrating graphs of BP group oil production, refinery throughput, in going tanker tonnage and BP group sales of crude oil and refined products. There are also photos of drilling, refineries, service stations, BP aviation service and BP research centre.	½ page Throughout the worldprovide good conditions, internationalisation..
1958				½ page Reasons for fall in oil prices this year (The year 1959 began in).	12 pages of photos illustrating graphs and BP of group oil production, refinery throughput, in going tanker tonnage and BP group sales of crude oil and refined products. There are also photos of off-shore drilling, refineries and service stations.	Neutral (few lines) Tribute to staff

Table 3: CONTENT ANALYSIS of SHELL ANNUAL REPORTS

Theme year/ annual reports	Actions of foreign governments	UK tax rates	Foreign Taxes	Trade barriers and government interference	Justification of trade practices and profit levels	CSR policies of the firm (foreign employees)
1950	Neutral	2-3 pages Tax rates damaging to the nation		Industry needs more freedom		¼ page (the chairman was mainly concerned about the relations between the group’s management and its staff throughout the world.
1951	1 ½ pages Iran- warning to governments not to breech contracts	1 1/2 pages – tax rates too high	Alarming effect of taxes on national prosperity		1 page	½ page (Extensive disclosure)
1952	Neutral tone	¼ page (Damaging UK tax rate).	¼ page Tax rate is damaging	1 page- Damage to world trade of increasing trade barriers	US government anti-trust case not relevant in Europe	Neutral (few lines) Tribute to staff
1953	Neutral tone	1/2 page -Damaging UK tax rate.	1/4 page- Damaging tax rate but some are reducing	1/2 page Damage to World trade of increasing trade barriers		Neutral (few lines) Tribute to staff
1954	Neutral tone	1 1/2 pages Tax rates damaging	Tax rates damaging	Increasing trade barriers	2 pages disclosing the progress of group activities.	Neutral (few lines) Tribute to staff
1955	Neutral tone				2 pages about the general progress of the company	Neutral (few lines) Tribute to staff
1956	Suez crisis 2-3 pages			2 pages	Extensive disclosure	½ page (Extensive disclosure)
1957	Suez crisis -Neutral tone			½ page	1 ½ page	Neutral (few lines) Tribute to staff
1958	Soviet oil-neutral tone		Disapproval of Venezuelan tax rise	US import restrictions	1 ½ page	Neutral (few lines)

1 Walker, Accounting in crises, 5.

2