Nikkei BP (Japan): Gripe sites are becoming more powerful

English translation by Ryo Kuroki from his article on the website of the top circulation Japanese Business Magazine: Nikkei BP

The turmoil of Sakhalin 2 was partly a result of anti-Shell movement

(By Ryo Kuroki, 12 Nov. 2007)

In the past people who hold resentment or grudge against a company were only able to appeal to newspapers and magazines or distribute handbills on streets. However, the media only reports on a small number of cases and the effect of distributing handbills by the roadside is very limited. People can also bring law suits, but Japan’s trial takes long time and the judgement is often not fair. It does not worth legal expenses you have to spend.

Gripe sites are becoming more influential in the West

The Internet is changing the situation. In the West gripe site are becoming more influential. Such sites are also called “corporate hate website”. If you have computers and internet connection, you can quickly disseminate information from home and it cost much less money and labour compared with conventional methods.

In the United States, there are various gripe sites on companies such as those on United Airlines, K. Hovnanian Homes, American Express, PayPal (remittance service company), Wal-Mart Stores, Inc., Microsoft, etc. Site owners and readers are those who have deep resentment or grudge against the companies.

For example, in case of United Airlines people are upset with ” lack of compensation and response in a sincere manner for delayed arrival or lost luggage “, in K. Hovnanian Homes case, “I bought a house with electrical wiring and water piping problems but the company never fix them”, in case of Paypal ” I called the company to report the problem many times, but they never provide a proper answer and the representative hangs up the phone in the middle of the conversation”.

British banks returned the fee of 2.6 billion pounds

In the West it is not an unusual thing that customers are treated badly. As I live in UK, I have many such instances, too. Emergence of gripe site is no wonder.

Recently, such sites are becoming powerful and bring serious result to companies.

British banks used to charge customers a penalty fee ( usually around 30 pounds ) for bounced cheque and unauthorized overdraft. But Martin Lewis, Manchester-born 35-year-old financial journalist, pointed out such penalty fee is illegal and launched a website “MoneySavingExpert.com” in 2003. The site provides information on bank charges and people can download from the site a format for claim letter to banks.

As a result, HSBC, Barclays, Royal Bank of Scotland HBOS and Lloyds Bank had to refund fees to customers. The amount refunded by these five banks in the first half of 2007 amounted to 400 million pounds ( about 960 billion Yen ). Britain’s leading daily newspaper “The independent” estimates the amount of fees that banks have returned is 2.6 billion pounds.

The fate of Sakhalin 2 was changed by two British men

There is a case where gripe site affected Japanese companies business. Sakhalin 2, which is an oil and gas development project in the Sakhalin Island by Royal Dutch Shell, Japan’s Mitsui and Mitsubishi, had to surrender majority interest to Gazprom due to pressure from the Russian government regarding the violation of environmental regulations (formal transfer of shares took place April this year).

However, it is not well known in Japan that actions of a 90-year-old man and his son who live in a countryside in UK contributed to the above movement.

Recently, I visited them. They live in the town of Colchester, southeastern part of the UK (Essex). The train from London takes just an hour there. It is an ordinary town with population of approximately 100,000.

Their house is 10-minute drive from the train station and situated in the middle-class residential area with the woods and fields nearby. The house is a two-storey brick house.

Mr. Alfred Donovan is currently 90 years old. He fought against Japanese army in the Burmese front as a communications officer. He worked as a marketing consultant for Shell, providing them with ideas to promote sales at domestic petroleum stations, etc.

However, in the early 1990s head of marketing dept. at Shell changed and, according to the claim of Mr. Donovan, Shell used an idea which Mr. Donovan presented on a confidential basis without his consent. Both parties went into litigation. It developed to 6 lawsuits on breach of contract and defamation. Eventually, due to mounting legal expenses, risk of losing home, psychological burden associated with long-running litigation, etc. Mr. Donovan had to settle many of the litigation outside court with a small payment from Shell.

They sent E-mail to Vladimir Putin and provided a Russian government official with information.

Still being resentful, Mr. Donovan launched a gripe site on Shell. The site’s domain name is “www.royaldutchshellplc.com.” He registered the domain name while Shell inadvertently forgot to do so. Shell tried to seize the domain name through WIPO (World Intellectual Property Organization) in 2005, but their appeal was turned down because Mr. Donovan’s site is non-profit purpose and he did not launch it with an intention to sell it to Shell.

The site contains critical news on Shell. Many former and current employees of Shell contribute information to the site. The information obtained through the site seems very insider.

In October 2005 Donovans contacted Russian President Vladimir Putin through the President’s website (The site has a function to send E-mail to the president). The purpose was to provide the president with insider information on the cost overrun of Sakhalin 2 project.

Also last year, they telephoned the office of Oleg Mitvol, deputy head of Russia’s environmental watchdog Rosprirodnadzor, and sent faxes on Sakhalin 2’s project design which was not appropriate to the local environment. Later Mr. Mitvol mentioned, in the interview with Argus Media ( leading energy market media ), that the Russian side used the information provided by Donovans in negotiations with project sponsors of Sakhalin 2.

Also, in June this year, the Financial Times reported that internal memorandum of David Greer, Deputy CEO of Sakhalin Energy Investment Company, was leaked to Mr. Donovan’s site. Greer left the company shortly after that.

” I’d like to make my site not just a gripe site, but the best site on earth about Shell ”

There are gripe sites in Japan, too. Some of those are ones created by victims of excessive lending by banks during the bubble era. For example, they are “Association of victims of Mizuho Bank”, ” Association of victims of Pair Life, Daiichi-Kangyo Bank, Mitsubishi Bank” ” Association of victims of Joyo Bank” and ” Sunflower Association (association of victims of counterfeit cash card theft)”.

However, these sites are not widely known by the public. On the other hand Martin Lewis’s “MoneySavingExpert.com” has 3 million hits a month and Mr. Donovan’s “www.royaldutchshellplc.com” has 4.6 million hits a month.

Japanese banks victims sites are solely for the purpose of appealing their problems to the public, while “MoneySavingsExpert.com” provides information on how to save not only bank fees but also utility bills, telephone charges, mortgage payments, local taxes, etc. Readers can download various formats from the site, too.

Mr. John Donovan, son of Alfred Donovan, says “I’d like to make my site not just a gripe site but the world’s best information site about Shell. Otherwise the reader will not visit it again”. To achieve this goal he is checking every day various newspapers, magazines and websites seeking information about Shell at his desk on which there are three computer screens (both men are retired and do not need to work).

Donovan’s site is used various anti-Shell people such as Nigeria’s Ogoni people who are against environmental pollution by oil companies and WWF (World Wildlife Fund) which opposes Sakhalin 2 project. Those people use the site to call actions and contact with each other.

Some crisis management companies started to advise how to deal with gripe sites

In Europe and the United States some crisis management companies started to advise how to deal with gripe sites. For example, immediate future Ltd ( an internet PR company headquartered in London) advise South Korea’s Samsung and Sony Europe.

I am, as a novelist, sometimes asked what the difference is between economic novels in the past and those of these days. My answer is as follows.

“In the past, a handful of influential people were making decisions. Accordingly economic novels only describe their backroom talks. However, due to the globalization which took place during the past 2 to 3 decades, the systems have become much more influential. Those systems are, for example, markets, investment funds, international treaties, WTO (World Trade Organization), legal system, SEC (the Securities and Exchange Commission) and other regulatory authorities, etc. Therefore, novelists have to spend more time describing the systems. ”

Internet sites are also “system”. They are expected to be more and more stronger vis-a-vis companies. This is good news for consumers. On the other hand companies could suffer from serious and unexpected damages if they do not deal with them properly.

References

“Top Corporate Hate Web Sites”, Charles Wolrich, 3 August 2005, Forbes.com
“Online revolutionaries - Today’s activists are giving business a bloody nose from behind their keyboards - not the barricades. But savvy companies are joining in,” Juliette Garside, The Sunday Telegraph, 9 September 2007

http://business.nikkeibp.co.jp/article/topics/20071108/140116/

Related Articles

Prospect Magazine: Rise of the gripe site: February 2007:

one world trust Accountability in Action Newsletter July 2007: Royaldutchshellplc.com – The power of a website: 27 July 2007

The Sunday Times: Two men and a website mount vendetta against an oil giant: 19 July 2009 (Times Online)

(PDF of actual Sunday Times newspaper article with photographs)

The Guardian: 92-year-old's website leaves oil giant Shell-shocked: Mon 26 October 2009

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