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Shell in Nigeria

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The Government documented 6,817 spills practically one a day for 25 years but analysts suspect the real number may be ten times higher. The Niger Delta is one of the worlds most polluted regions
National Geographic, Sights and Sound of the Curse of the Black Gold, February 20071

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Djeneba Sidibe Summer 2007

Djeneba Sidibe SMPP 297, Summer 2007

SMPP 297

Shell in Nigeria

Djeneba Sidibe SMPP 297, Summer 2007

Table of Content

I. II. IV. V. VI.

INTRODUCTION...............................................................................................................................................3 BACKGROUND OF NIGERIA........................................................................................................................3 DESCRIPTION OF THE IMPACT THAT SHELL HAS ON THE ENVIRONMENT..............................8 LEGISLATION.................................................................................................................................................12 WHY HAS SHELL FAILED ITS SOCIAL RESPONSIBILITIES AS A CORPORATION?.................12

III. THE OIL INDUSTRY IN NIGERIA................................................................................................................5

VII. CONCLUSION..................................................................................................................................................14

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I. Introduction The case study that I have chosen to discuss is about the impact of the petrochemical business in Nigeria, more specifically in terms of global warming. I decided to discuss this topic not only because it addresses corporate social responsibility issues by a British/Dutch corporation with operations in the U.S. and the U.K., but also because it tackles corporate social and government responsibility in Africa. As of January 2006, Nigeria had more than 35 billion barrels of proven oil reserves. It is the largest oil producer in Africa and the 10th largest producer of crude oil in the world2. As of 2007, Nigeria is the Federal Republic of Nigeria fifth largest exporter of crude oil and petroleum to the U.S.3. In the 1970s, the country saw an oil boom and joined the Organization of Petroleum Exporting Countries (OPEC). Most of the oil is extracted from the southeastern Niger Delta region and, over the years, the oil spillages in Nigeria have had dramatic effects on the environmental and societal tissue of the country. The impacts are often reported in the news, yet, so far, they have not echoed far enough for action to be taken. In this paper, I want to a) describe the Nigerian background and the oil industry, b) assess the impact of Royal Dutch Shells oil drilling business in Nigeria, and c) understand why they have failed their social responsibilities as a corporation. II. Background of Nigeria

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It is important to understand Nigerias background to understand the climate in which Shell operates. Nigeria is situated on the gulf of Guinea and is surrounded by Benin, Niger, Cameroon, and Chad. With more than 133 million inhabitants, Nigeria is the most populous country in Africa. History
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Capital Largest city Official languages Government - President - Vice President Independence - Declared and recognized - Republic declared Area - Total - Water (%) Population - 2005 estimate - 2006 census - Density GDP (PPP) - Total - Per capita Currency

Abuja Lagos English Federal republic Umaru Yar'Adua Goodluck Jonathan from the United Kingdom October 1, 1960 October 1, 1963 356,667 sq mi (31st) 1.4 133,530,000 140,003,542 374/sq mi 2005 estimate $175.5 billion (47th) $1,188 (165th) Naira () (NGN)

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During the 16th century, the British colonized an African coastal area that is now known as Nigeria. They kept on penetrating inland until the beginning of the 20th century. By then, they had established a protectorate to establish their trade businesses. Nigeria encompassed more than 250 ethnic groups that were until then unrelated. The British governed the country by establishing two separate regions in 1914, Northern and Southern Nigeria. In the south, they introduced Christianity mainly to the Igbo (also spelled Ibo), while in the north, Islam prevailed with the Hausa and Fulanis. In 1960, Nigeria gained its independence from the British. Since then, the country has been reorganized as a federation of 36 states spread over a surface two and half times that of California. For most, it is no surprise that, til this day, feelings of nationalism are linked to very strong ethnic and religious interests. While the country is rich in natural resources such as natural gas, petroleum, iron, coal, and zinc, ninety-five percent of exports are in petroleum and petroleum products. The country is the fifth largest exporter of crude oil, after Canada, Saudi Arabia, Mexico, and Venezuela.4 Oil is mainly found in the southeast of the country, the Niger Delta region, populated by the Ogoni, Ijaw, Igbo, and Itsekiri. Conflicts Post-colonialism, Nigeria has had a tumultuous history. In 1967, the Nigerian Civil War erupted, when the southeast region of the Biafra declared its independence. The war was ignited by the short-lived coup led by Igbo officers and the violent confrontation that ensued with the Muslim Hausa and Fulanis as a reprisal: Lieutenant Ojukwu declared the independence of Biafra, a mainly Igbo populated region. In the process, he annexed other oil-rich areas populated by the Ogoni and the Ijaw to gain access to the sea. The Federal Government in Lagos refused the secession. The war lasted for three years and it is estimated that millions died of famine and illness. Yet, in the past years, there has been a public resurgence of pro-Biafra sentiment among some Igbo who claim they are marginalized. This movement is led by a separatist group, the Movement for the Actualization of the Sovereign State of Biafra (MASSOB).5 Also, clashes between Christians and Muslims (usually Igbo Christians and Hausa or Fulani Muslims) have been continuous since the end of the civil war. Since independence, the country has been ruled by several military governments and plagued by corruption. In the 1990s, the spotlight was brought on the plight of Ogoni people by the Movement for the Survival of the Ogoni People (MOSOP) and its leaders trial and execution (Ken Saro-Wiwa). Saro-Wiwa was a writer and businessman who became a political activist bringing to the forefront issues faced by his people. The 1990 Ogoni Bill of Rights demanded more autonomy, more profits from the oil extractions, and reparations for the environmental damages made the southeastern region of the country, the Ogoni land, by Shell Petroleum. In
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1994, Saro-Wiwa was arrested for the third time and was tried and sentenced to death by the autocratic and sanguinary Abacha regime. He was executed in 1995 with eight other MOSOP members. The international community expressed outrage and Nigeria faced expulsion from the Commonwealth nations, suspension of bank loans, an UN Human Rights Commission investigation, all while worldwide protests took place. Yet, these sanction had little effects because the leading global economic powers did not want to slow the outflow of oil. Western countries are also afraid of destabilizing Nigeria because of the countrys economic and geopolitical importance in Africa and beyond. It is believed that Shell aided and abetted and facilitated the torture and death of Ken Saro-Wiwa. A 2001 Greenpeace report found that two witnesses that accused them later admitted that Shell and the military had bribed them with promises of money and jobs at Shell. Shell admitted having given money to the Nigerian military [].6 In 2003, Shell Nigeria acknowledged that we sometimes feed conflict by the way we award contracts, gain access to land, and deal with community representatives.7 In 2002, a New York City court granted relatives of Ken Saro-Wiwa the right to sue Shell for a suit filed in 1996: it still might take years for the case to be heard in court. The Current Nigerian Crisis The latest Nigerian crisis is the consequence of years of abuse by the oil companies and the failure of the local and federal governments in fulfilling basic needs. The local inhabitants have grown to support the militant groups because they were neglected by officials and foreigners. The Movement for the Emancipation of the Niger Delta (MEND) has been leading the latest crisis by attacking oil infrastructures and kidnapping foreign oil workers. MEND is an Ijaw movement that is demanding that both the Nigerian government and the MNCs listen and act upon their requests or get out of the Niger Delta. What are their requests? Simply put, MEND wants a share of the oil profits that are sucked out of the ground in the region and never make it back into their communities. The Ijaw want the control of their oil, their environment, their lives, their profits, and their future. III. The Oil Industry in Nigeria Description The first discovery of oil in Nigeria was in 1956, close to Port Harcourt in the south of the country. Since then, all of the major oil companies have established more than 7,200 kilometers of pipelines, 159 oil fields, and 275 flow stations, their gas flares visible day and night from miles away.8 By law, all oil companies have to enter the Nigerian oil market through a joint venture with the Nigerian National Petroleum Corporation (NNPC).The two biggest players are: 1. NNPC: The NNPC is the Nigerian government-owned corporation through which it regulates and supervises the country's upstream and downstream developments and the petroleum industry as a whole. In 1972, the Nigerian government passed a law to guarantee its portion of the oil revenues. Over the years, several additional laws were passed by the military governments: in 1975 a decree increases increased federal government share in oil sector to 80%, with only 20% going to states; and in 1977 a merger of the Nigerian National Oil Corporation and the Federal Ministry of Mines and Power led to the creation of the NNPC.

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2.

Shell Nigeria: Shell Nigeria is a joint venture operated by Royal Dutch Shell, which holds 25.6%, while the NNPC holds 49%, TotalFinaElf holds 15% and Agip holds 10.4%. Shell Nigeria is by far the largest oil multinational in Nigeria and it brings in 40% of the of the total crude oil production (880,000 to 1,000,000 barrels a day). Shell Nigeria is comprised of four different entities9 focusing on the upstream business but also doing some downstream business through Shell Nigeria Oil Products : Shell Petroleum Development Company (SPDC) - Shell Petroleum Development Company (SPDC) is the largest oil and gas company in Nigeria and has over 6,000 kilometers of pipelines and flowlines, 87 flowstations, eight gas plants and more than 1,000 producing wells. Shell Nigeria Exploration and Production Company (SNEPCO) Shell Nigeria Exploration and Production Company (SNEPCO) is geared to become Africa's leading deepwater oil and gas company. SNEPCO has made an immense contribution to technology transfer into Nigeria through the introduction of complex deep water technology. Shell Nigeria Gas (SNG) Natural Gas may be the driving force behind Nigerian industry by 2010. Shell Nigeria Oil Products (SNOP) A serious player in the downstream sector developing the market for Shell branded products and services.

The organization that I will be focusing on is the SPDC, the petroleum branch of Shell Nigeria because it is the most important part of Shells business in Nigeria. The Company discovered the first commercial oil field in the country at Oloibiri Bayelsa State and the joint venture agreement for the SPDC involves the NNPC, which holds 55%, Shell 30%, Total 10% and Agip 5%. The SPDC employs more than 4,500 people directly of whom 95% are Nigerians. Some 66% of the Nigerian staff members are from the Niger Delta. Another 20,000 people are employed indirectly through the network of companies that provide supplies and services. Other Stakeholders There are many stakeholders involved in the Nigerian oil business. The Nigerian Federal Government, the local government and authorities, activists and the media, local communities, and the international community are some of them.

Federal Govt Federal Govt

Customers Customers

State & Local State & Local Govt Govt

Media Media

Local & Intl. Local & Intl. Community Community Civil Civil Society Society & NGOs & NGOs
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Employees Employees

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The Nigerian Federal Government: Oil is a crucial source of revenues for the West African nation: in 2003, oil receipts account for 80% of total federal receipts and it is estimated that the Nigerian government has received $200 billion from oil exports between 1970 and 1990.10 The Nigerian government receives 60% of the profits from the field whereas the most Nigerians live on less than a $1 a day. 11 This is not surprising since Nigeria is listed 146th out 163 countries on Transparency Internationals (TI) 2006 Corruption Perception Index (CPI). 12 TIs CPI lists the most corrupt countries in the world. It is widely recognized that corrupt in all of its forms -bribery, embezzlement, extortion, cronyism, nepotism -- is an impediment to economic, human, environmental, and social development, as well as an obstacle to political stability. Corruption creates inefficiencies and distrusts in the system. The fact that Nigeria has had various military regimes in place also has been a key factor of the involvement of the government in the oil business. Military regimes are known for their instability and each regime came to power with a number of changes. In 2007, amid much controversy about fraud and (irregularities, a new president, Umaru Yar'Adua, took office. The government has yet to make climate change a priority.

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The Local Government: the local governments are key players in the oil industry in Nigeria. Most of the funds that are supposed to be redistributed from the federal government to the local communities go through local authorities and never reach the local populations. Also, demands by the local populations never get heard at the federal level because the local representatives are easily bribed. However that is not the extent of the role of the local governments. They have made serious demands from Shell to obtain compensation for the damages to the environment. Nevertheless, when Shell and other oil companies make payments to the local government officials, most of the money is siphoned into individual bank accounts. Thus, the local government becomes the main bottleneck to an efficient and transparent usage of funds from both the federal government and the MNCs. The federal government and the MNCs know it but they want to keep this system running to accommodate their own shady dealings, rather than spending more money on environmental issues that affect the livelihoods of the local populations. The Activists and Media: it is through the activists and the media that alarms have been sounded about Shells involvement with the MOSOP and Ken Saro-Wiwas death, the oil spills,
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and the environmental consequences of Shells actions. Organizations such as Human Rights Watch, Transparency International, media outlets such as the National Geographic, BBC News, and the availability of news via the Internet and satellite, have renewed the pressure on the Nigerian government and Shell to take action. The International Community: the international community is a key player because they are the purchasers of oil and they are also the country of incorporation of the multinationals causing the damage. Shell is a British/Dutch company and it clearly uses a double standard. It does not abide by the same rules in the U.K./Netherlands and in Nigeria. Various countries could put more pressure on the Nigerian government to act, but those foreign governments then face both their taxpayers unhappiness when faced with higher gas prices, and the powerful oil lobbies. The Local Communities: the local communities of the Niger Delta suffer the most from the effects of the oil business, yet they have the smallest voice of all, unless they take an extreme stand such as the MOSOP, the Niger Delta Vigilante (NDV) or the Movement for the Emancipation of the Niger Delta (MEND) have done. In those instances, they have displayed their power to rock the oil prices worldwide and that they are a voice to be reckoned with. IV. Description of the impact that Shell has on the Nigerian environment Over the years, the impacts of Shells business practices have been documented by various organizations and media outlets. Not only is it because Shell is the largest oil producer in Nigeria, but it is also because, for years, Shell has been brazen in its denial of the issues that affected the region. Historically, Nigeria has had a combination of vast mangroves, wetlands, tropical forests and savannah grassland. Local populations have displayed safe environmental practices, which were interwoven with religious, mystical, and cultural practices. With the colonization and the exploitation of oil, all of those practices were discounted. Yet, a few laws were passed to protect the environment. Socio-Economical Impacts: Although, oil revenues have increased throughout the years, unemployment, illiteracy, water-related diseases, and poverty are high in the Niger Delta region. Safe drinking water, proper sanitation, and electricity are scarce. The pollution of the environment has led sources of food and income to be destroyed. The large fishing industry is almost no longer existent because of the polluted waterways. Moreover, the reliance on oil, caused Nigeria to fail to diversify its economy and to encourage new industries. On their website, Shell states that it is aware of the problems face in the local communities and that it is contributing to the socio-economic development of the Niger Delta where [they] operate [They] are equally committed to supporting the government in promoting transparency and tackling corruption. Ecological Impacts: environmental protection is a tough issue to tackle in any developing country. Though several of Shells oil spills have been documented, several have gone unnoticed. Oil spills are the most dramatic accidents and they usually garner more attention. It is estimated that from 1976 to 1996, more than 79 million gallons of oil have been found their way into the environment. One of
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The mangrove forests of Nigeria rank as the largest in Africa, the third largest in the world. 7000 km2, of the African total mangrove stock of 9,730 km2, is found in the Niger Delta. The Delta is important for biodiversity and human survival. Up to 60% of fishes caught between the Gulf of Guinea and Angola breed in the mangrove belt of the Niger delta. Environmental management of offshore oil 9 development and maritime oil transport, Sandra Kloff and Clive Wicks (2004)

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the biggest incidents was the March 1998 spill of 840,000 gallons in the mangrove forest from Shells Jones Creek Station. The accident, blamed on a pipeline failure, polluted the water and killed the fish. A study by the World Bank documented the reasons for Shells spills in the Niger Delta, with the first cause being corrosion of equipment. It is also believed that to avoid taking

responsibility for damages to the environment, Shell has tried to use claims of sabotage to avoid costly lawsuits or clean-up costs.14 Oil & Gas Flaring Still, other events have occurred throughout the decades, endangering the ecosystem in the Niger Delta, such as oil flaring. Oil flaring refers to the practice of burning-off surplus combustible vapors from a well, either as a means of disposal or as a safety measure to relieve well pressure15. The practice contributes significantly to global climate change, and more specifically global warmng, by adding about 350 million tons of CO2 in annual emissions16. Worldwide, the country that practices the most gas flaring is Nigeria. For the first 20 years or so of the industry, almost all the AG was flared: 2.1 billion cubic feet per day (bcf/d) or 92% in 1981 for example. This percentage barely declined during the 1980s, standing at about 88% in 1989. It seems to have reached about 2.6 bcf/d in the late 1990s, including venting, though by then this was about 75% of all gas production17. This is 60% more than Russia, the second top gas flaring country.18 Indeed, Nigeria currently flares up to 75% of the gas it produces. Historically, the then-called Shell-BP was the first company to flare gas in the 60s because it is the cheapest way to dispose of natural gas. During that same period, the British government publicly stated that the practice was dangerous and that it should be discouraged. However, it did nothing to pressure Shell-BP to take the necessary actions or build the required infrastructures, contrary to its national policies that minimized gas flaring in the U.K. Shell-BP never took it upon itself to invest in environmental protection, even though in the U.K. it was seen as a good corporate citizen. This is a blatant example of the double-standard in the corporate strategy of the organization. I cannot help but think that had the British government taken a difference stance in the 60s in regards to its former colony, the Nigerian gas flaring situation might have never reached these catastrophic heights. At the time, the U.K. government was more interested in the profits that were repatriated to Europe. Meanwhile in 1976, the U.K. passed a law banning the flaring of gas on its territory (section 12 of the Energy Act 1976).
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SPDC is the biggest oil company in Nigeria, it flares the most gas. Here is a table of SPDCs own figures in mmcf/d. It is worth mentioning that these numbers have been questioned and several CSOs have accused SPDC of underestimating the problem.

There several reasons why so much gas is flared in Nigeria: - Undeveloped domestic market for gas and gas products - Low gas and gas product prices - Lack of gas infrastructure - Security issues - Minimal electricity transmission and distribution network19 Various stake holders have been calling for the national goal of zero flaring in 2008, but that goal is unlikely to be met. However in 2004, the government, the NNPC, and the GGFR met and in an effort to reduce GHG, they agreed to build carbon credit capacity building and focus on gas flaring reduction. However, the Nigerian government is trying to reduce its dependency in oil and in doing so, increase its production of natural gas and develop opportunities for investment in that sector: Nigeria is believed to have an estimated 124 trillion cubic feet (Tcf) of proven natural gas reserves - 9th largest in the world.20 Acid rain, which is a combination of sulphur dioxide and nitrogen oxides with atmospheric moisture, is one of the most visible consequences of gas flaring in Nigeria. Acid rains in the West African nation have polluted waterways, killed vegetation and crops, and damaged infrastructures. Nigeria signed and ratified the Kyoto protocol. It is part of the non-Annex 1 countries, meaning that it is not required to take any action to reduce its emissions by 5% compared to 1990 levels by 2012 like the Annex 1 countries are. Therefore, Nigeria is not as worried by the restrictions imposed by the protocol but by the environmental consequences that will affect the country if emissions are not reduced globally. In the event of global warming, the country could face the following: a) The low-lying lagoonal coasts would be threatened by sea-level rise, especially since the largest cities are on the coast.
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b) Large amounts of environmental refugees migrating to the coastal areas because of rising temperatures c) Endangerment of food production and security, especially in the northern part of the country d) Diseases, such as vector- and water-born illnesses and mutations of previously existing diseases. e) Disruption of electricity generation and hydroelectric dams due to temperature increase since Nigeria relies heavily on hydroelectricity (which accounts for over 36% share of its electricity energy sources). To address gas flaring several options are available to Shell Nigeria: - Capture and re-injecting the gas into the oil reservoir, - Capture and delivery through a pipeline to an end user, and - Capture and process the gas into liquids (that is, liquefied natural gas [LNG], gas-to-liquids [GTL], or liquefied petroleum gas [LPG]) that can be transported and sold locally or internationally. 21 In general, choosing the appropriate option(s) depends on upstream conditions, such as field characteristics and the oil-to-gas ratio, downstream market opportunities for the recovered gas, and the legal and fiscal frameworks that may include various incentives and penalties.22 SPDC has been focusing on the third option, capturing and processing the gas to be sold as energy. In 2001, SPDC outlined the following plan to stop gas flaring:

SPDC Corporate Strategy for Ending Gas Flaring in Nigeria, A Paper Presented by Basil Omiyi, then External Relations Director, SPDC, at a seminar on Gas Flaring and Poverty Alleviation in Oslo, Norway, 18th-19th June, 2001, page 13.

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The SPDC set 2008 as a deadline, until 2003, when it announced The SPDC had agreed to the 2008 deadline, until 2004, when it announced construction of ...[gas gathering facilities]... will only be completed by the end of 2009, which means that gas flaring from the relevant flowstations will not be eliminated until that time. Then in 2004, the SPDC followed-up: construction of ...[gas gathering facilities]... will only be completed by the end of 2009, which means that gas flaring from the relevant flowstations will not be eliminated until that time. The culprit that SPDC blames in its 2006 Nigerian annual report? Sabotage: At Sapele, SPDCs facilities are completed but the gas uptake could not start due to sabotage. Since then, no new updates have been made available by SPDC.

V. Legislation The Federal Ministry of Environment is responsible for all activities undertaken to address climate change in Nigeria. In 1978-79, the federal government enacted the Land Use Act which declared all minerals, oil, natural gas, and natural resources were the legal property of the Nigerian federal government. In my estimation, this law also puts the burden of responsibility more heavily on the government than on other parties. In 1994, Nigeria signed the UN Framework Convention on Climate Change (UNFCC), whose ultimate objective is the stabilization of greenhouse gas concentrations in the atmosphere. In 2004, Nigeria signed the Kyoto protocol, and then ratified it in 2005. In 1996, the Federal Government of Nigeria prepared a report called "Vision 2010", in which it set 2008 as the flares-out date. In 2005, a Clean Development Mechanism was put in place through the Kyoto protocol mechanism and supported by the World Banks Global Gas Flaring Reduction Public Private Partnership (GGFR) to reduce greenhouse gas emissions (GHG). In 1984, the Nigerian government had passed the Associated Gas Reinjection Act: under section 3 of the act, gas flaring is illegal. However, the law has never been enforced. In 2005, based on that law, several local communities sued the NNPC and Shell to stop gas flaring. The communities were acting with the support of the Environmental Rights Action/Friends of the Earth Nigeria (ERA), a nonprofit organization focusing on environmental issues. VI. Why has Shell failed its social responsibilities as a corporation in Nigeria? In 1996, Shell was the first energy company to publicly state its support of the 1948 Universal Declaration of Human Rights. In 2003, Shell was the first oil company in Nigeria to publish the amount they paid the Nigerian Government. Since 2000, the company has been pursuing a strong community development strategy in the Niger Delta to promote sustainable social and economic

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development as well as partner and work with NGOs to build capacity. Yet, Shell still has ways to go. There are several reasons why Shell has not been held accountable for its actions in Nigeria: - The lack of political stability and strong legal system: the successive regimes in Nigeria have sought to enrich themselves and have used the MNCs to fatten their pockets. The civilian regimes that had more chances of creating a change were always short-lived. The lack of political stability has enabled Shell to use the military as its own police and taken the law into its own hands by repressing protests and demonstrations in the Niger Delta. Both Shell and the Nigerian government confessed that Shell funded the military in the Niger Delta region: Under the auspices of "protecting" Shell from peaceful demonstrators in the village of Umeuchem (10 miles from Ogoni), the police killed 80 people, destroyed houses and vital crops in 1990.23 The rule of law in Nigeria appears to be the rule of money. This leads to the next flaw, corruption. In contrast, Shell has a whole political and governmental infrastructure supporting them in the U.K. and the Netherlands. - Corruption: After 50 years of oil in the Niger Delta [ ], corruption siphons as much as 70 percent of annual oil revenues24. Corruption is rampant at several levels of the administration of the country. This is due to partly due to poverty in a country where 70 percent of its population living on a dollar a day, and 91 percent live on less than $2 a day. Gas flaring and other infractions can easily be concealed if the right parties are bribed. Another reason for the high levels of corruption is the lack of law enforcement. This can be traced to the decades of military rule, that obstructed freedom of speech, weakened the role of public institutions, and established a culture of unaccountability. Moreover, of all the oil producing countries, Nigeria has the highest cost of production of about $6 per barrel, compared to 2 to 4 barrels in other countries. The high cost is attributed to corruption.25 - Lack of power of the local populations: there several groups living in the Niger Delta, and they speak different language. The lack of trust between each other leads to fragmentation of power and cohesiveness. None of the ethnic groups living in the Niger Delta is part of the major ethnic groups (Igbo, Yoruba, or Hausa). These smaller communities and do not have the representation it takes to be heard. Whistleblowers and journalists who dare to talk are harassed by government officials and run the risk of being thrown in jail Hence, the rise of militias to protest against Shells practices and detrimental effect of gas flaring. - Lack of education: over the year, there has been a better understanding of the impact of Shells action on the environment. The companys tactics were not understood. Thanks to the media and activists and a shift in worldwide mentalities towards the environment that is slowly changing. - The international power of oil: oil is a precious commodity worldwide and the international community, especially the U.S. that is by far the largest consumer of Nigerian oil, is reluctant to put pressure on Shell or the Nigerian government, by fear of raising oil prices. The U.K. which has a long-standing relationship with Nigeria, also finds itself in a tough position to try to regulate Shell in the U.K, but also trying to promote development in its former colony without straining their relationship. Oil is used for transportation, heating, cooling, and in almost all industries. Shell also has
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powerful lobbies in various Western countries in which it operates, especially in the U.S. For example, the U.S. has been quick to indict the Nigerian government and the MNCs verbally for human right violation, corruption, military coups, and forged elections, but it has never taken action. The U.S. also cannot condemn Shells action in Nigeria when itself has not signed the Kyoto Protocol The United Nations has denounced the environmental actions and the human rights violations in Nigeria, but it has yet to take any action. However, the U.N. singled out Shell for its actions in Nigeria in several reports in 1998.26 Stronger public relations: over the year Shell has built a strong public relations division to promote a seemingly more socially conscious organizational image. With oil prices on the rise, the company could afford to ramp up positive publicity.

VII. Conclusion It is estimated that Shell makes $170 to 190 million in profits out of Nigeria every year. 27 That is huge incentive to continue operating as usual. However, over the year, people across the globe are realizing that environmental protection and corporate social responsibility (CSR) does not only affect the local populations, but the globe. Issues such as global warming have brought those concerns to the forefront and the scandals of Enron and other large corporations have sounded the CSR alarm. The Nigeria government has promised to tackle the problem of corruption and is organizing, this year presidential elections. The country has recouped some of the $64 billion stolen by the Abacha regime and is re-investing it in infrastructures around the country. The international community has praised Nigerias efforts. Shell is talking about making changes while fighting tooth and nail to not pay any retribution to the populations whose lives they have destroyed over the years. Still the focus is more on economic development than on climate change. True, Gores An Inconvenient Truth has resounded around the globe, but it truly has not succeeded until action is taken. The flow of information and the shift in mentalities of environmentally-conscious investors are making Shell pause but not enough to radically change their strategies. I believe at for years, the government, the MNCs, and the international community have all turned a blind to the situation in Nigeria. It is the governments responsibility to crackdown on corruption, release illegally detained whistleblowers, enforce the law, and fight for its people against the environmental abuses committed by the MNCs. It is the MNCs responsibility to be socially responsible and mange in foreign land as they would in their home countries. It is the international communities and our responsibility as individuals to react to the danger to our planet and not reduce the value of a Nigerian life to a number at the gas pump. In the meantime, changes are slow to reach the majority of the population and groups such as MEND will keep on demanding the right to control their destinies by any means necessary until they rest assured the future generations will have a land they can call their own.

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Food for thought:

Not only have the oil, gas and mining industries not helped the poorest people in developing countries, they have often made them worse off. Scores of recent academic studies and many of the bank's own studies confirmed our findings that countries which rely primarily on extractive industries tend to have higher levels of poverty, child morbidity and mortality, civil war, corruption and totalitarianism than those with more diversified economies. Does this mean extractive industries can never play a positive role in a nation's economy? No, it simply means that the only evidence of such a positive role we could find took place after a country's democratic governance had developed to such a degree that the poorest could see some of the benefits. Before the fundamental building blocks of good governance a free press, a functioning judiciary, respect for human rights, free and fair elections and so on - are put in place, the development of these industries only aggravates the situation for the poorest
Dr, Salim, Editorial, Financial Times June 16, 2004

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Sources

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Sights and Sound of the Curse of the Black Gold. Dir. Ed Kahsi. 2007. Web Video. National Geographic. U.S. Energy Information Administration. Country Analysis Brief, Nigeria. http://www.eia.doe.gov/emeu/cabs/Nigeria/Oil.html 3 Energy Information Administration, Crude Oil and Total Petroleum Imports Top 15 Countries, June 11, 2007. http://www.eia.doe.gov/pub/oil_gas 4 Energy Information Administration, Crude Oil and Total Petroleum Imports Top 15 Countries, February 16, 2007. http://www.eia.doe.gov 5 Shirbon, Estelle. Dream of free Biafra revives in southeast Nigeria. July 10, 2006. Reuters. http://www.swissinfo.org/eng/swissinfo.html?siteSect=105&sid=6885495 6 Suassuna, Karen. "Contamination in Paulina by Aldrin, Dieldrin, Endrin and other toxic chemicals produced and disposed of by Shell Chemicals of Brazil. Greenpeace, 2001. 7 BBC News. Shell admits fuelling corruption. June 11, 2004. http://news.bbc.co.uk/2/hi/business/3796375.stm 8 ONeill, Tom. Curse of the Black Gold: Hope and Betrayal in the Niger Delta. National Geographic. February 2007. 9 Shell Nigeria Website http://www.shell.com/home/content/nigeria/about_shell/dir_about_shell_nigeria.html 10 Adenikinju, A.F. (1998) Productivity growth and energy consumption in the Nigerian manufacturing sector: A panel data analysis. Energy Policy 26 (3), 199-205. 11 Lawal, Y. Economic Crimes Panel now try oil theft cases. The Guardian, Monday, 19 July, 2004. Lagos. 12 TI Corruption Perceptions Index 2006. http://www.transparency.org/policy_research/surveys_indices/global/cpi 13 Jedrzej George Frynas. Political instability and business: focus on Shell in Nigeria. Third World Quarterly, 19:3, 457 478. 14 Okoro David Ogbonna. The geographic consequences of petroleum in Nigeria with special reference to the Rivers State. Ann Arbor, MI: University Micro lms, 1981, p 254. 15 Oil & Gas Forum. www.oilandgasforum.net/oefonline/gasflaring.htm 16 World Bank. Global Gas Flaring Reduction public-private partnership (GGFR). http://www.worldbank.org/ggfr 17 EIA Country Analysis Brief: Nigeria,: http://www.eia.doe.gov/emeu/cabs/nigeria.html 18 World Bank. Global Gas Flaring Reduction public-private partnership (GGFR). http://www.worldbank.org/ggfr 19 Nigeria: Carbon Credit Development for Flare Reduction Projects. ICF Consulting Ltd and Triple E Systems Associates Ltd. 2006 20 Ikeme, Jekwu. Assessing The Future Of Nigerias Economy: Ignored Threats From The Global Climate Change Debacle.Africa Economic Analyis. 21 Nigeria: Guidebook for Carbon Credit Development for Flare Reduction Projects. ICF International, 2006. http://siteresources.worldbank.org/EXTGGFR/Resources/NigeriaGGFRGuidebook_ICF.pdf 22 Nigeria: Guidebook for Carbon Credit Development for Flare Reduction Projects. ICF International, 2006. http://siteresources.worldbank.org/EXTGGFR/Resources/NigeriaGGFRGuidebook_ICF.pdf 23 6. Ellis, Glenn (Director), "The Drilling Fields," 1994, text from film by Catma Films. 24 Sights and Sound of the Curse of the Black Gold. Dir. Ed Kahsi. 2007. Web Video. National Geographic. 25 Ihekweme, Fabian. State-Making, Nation-Building and the Civil Society; Nigeria, 1960 1999. Hamburg, 2000. 26 Sorabjee, S.J. Situation of human rights in Nigeria. U.N. Economic and Social Report. February 1998. 27 Der Spiegel, 35, 1996.
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