Saturday, July 17, 2010

Corporate Irresponsibility, Extraction, And The Nigerian Oil Spill

The world recently watched a minute-by-minute play on the oil spill in the Gulf, but the inhabitants of the Niger-Delta region in Nigeria have been watching minute-by-minute oil spills for the past 40 years. As the world watches every single step taken by BP to clear up the oil spill, the Nigerians watch  rivers already flowing with oil due to lack of any clean up effort, giving the Gulf region a precedent of the damage that can occur, and leaving them little room to speculate about what may lay ahead for the Gulf. Large oil producing MNC's like Shell, have been spilling oil in the region with little regard for the environmental guidelines. According to the BBC, there were over 7,000 spills, large and small, between 1970 and 2000 which amounts to an estimated 13 million barrels of oil. According to News Desk article,  'Niger Delta Oil Spills Dwarf BP, Exxon Valdez Catastrophies',  Idris Musa, head of Nigeria’s oil spill response agency, said "an additional 2,405 spills by all major oil companies in the region have occurred since 2006." The discovery of oil in this region has been a nightmare for the 31 million living in the area. This has caused the pollution of water, land and air in this region. The Ogoni are the dominant ethnic group that live here and over the years, they have watched their fisheries depleted in the oil-rich area, catapulting them in to a life of hunger, disease and poverty. Although human rights groups and Nigerians have protested about the disregard of enviomental guidelines here, little improvements have been achieved. Shell, for example, has blamed sabotage for the oil spills and denied responsibility.

The oil spills in this area are a result of a mixed combination of  factors including an aging oil infrastructure, corroding pipes, and sabotage by thieves or rebel groups. Whilst Shell may not be responsible for every single oil spill, instead of making attempts to clean up the environment,  they have been using evasive tactics when it comes to Nigeria. Shell, which controls the majority of the oil industry in Nigeria, defends itself by claiming that 85% of spills are caused by sabotage instead of corroded pipelines and poor infrastructure. It seems like corporate social responsibility for Shell, is confined to select geographical locations -  Niger-Delta is not one of them. Nigerians that have resorted to protesting against the company and the government but have been met by paid armed Shell employees, and by a government clamp down, labelling protesters as mere rebels. A womens protest group protesting Exxon, was once met with armed gaurds who beat and assulted the protesters. In fact, the Niger-Delta conflict that arose in the 1990's centers around the struggle between the Ogonis and Ijaw people and the oil companies. They feel that they are being exploited and also want to see oil profit trickle down to their communities. Although, many regard their plight  and the civil war in Nigeria to inter-ethnic ('tribal') conflict over control of resources, their struggle is not simply about 'warring tribes' that dislike eachother fighting for oil. According to Walter Rodney in his book, 'How Europe Underdeveloped Africa' " accept such a contention would mean extending the definition of tribe, to cover Shell Oil and Gulf Oil!" In what some term, 'blood oil', there are definitive corporate roots in the development of the oil spills and oil crisis. In spite of a boycott by activists against Shell, and a call from the US and UN for the company to correct its wrongs, it also seems like there is more talk than action and the poor, as usual, will lose out.

While it’s easy to lay blame only on Shell and MNCs, we need to consider the role that the Nigerian government has played in branding the Niger-Delta area as a place for oil extraction and not oil investment.  Nigeria is a member of OPEC, and one of the top oil producing countries. Nigeria is the fifth largest exporter of oil to the United States and the largest producer in Africa. The government gets about 80% of its profits from oil. It turns a blind eye to the wrong doings of Shell, and in exchange, Shell keeps the governments purses filled with oil money. In  a blatant display of loyalties, Nigerian government went as far as hiring a former Shell employee as the minister that overseas the oil sector. With recent progress, it makes, one wonders what image or brand Nigeria is trying to portray to the world about itself and its people. The stereotypical Nigeria or the new Nigeria under Goodluck Jonathan, that's trying to shake and rebrand its negative reputation and leave it behind them. The President, incidentally, is of Ijaw ethnicity, born in the Niger-Delta and has been able to stabilise the area in terms of attacks so far. He also has a degree in zoology and has worked for the environmental protection department. Hopefully, these factors and his desire to maintain good international relations (particulary with the Obama administration), will spark an interest in cleaning up, both politically and environmentally, the Niger-Delta crisis.

The rebranding of Nigeria began a few years back through the launch of the the Nigeria Image Project in 2004.  It was taken a step further in 2009 with a campaign to rebrand Nigeria. According to Robin Sanders of Galaxy television, the aim is to "not only aimed at improving Nigeria's image in the international community, but to position her as a good destination for tourism and investment in Sub-Saharan African." In the controversial documentary, "Welcome to Lagos", the Nigerian government is shown making progress towards trying to rebrand itself as a government concerned about the welfare of its people. They are seen cleaning up the streets for Lagos from loiterers, landscaping the city, implementing a sanitation and 'clean up' day once a month, and razing shanty towns which they cite as a breeding ground for crime and disease. Its actions in the Niger-Delta  region the past few years however, are a sharp contradiction from the country that its trying to become. A government needs to put its people first, and send out the message that it thinks all of its people deserve clean air, water, and land. Only when the Nigerian government is able to send a consistent and paternalistic  message through actions that protect its people from the big oil companies, only then it can truly realise the transformation that it seeks as a rebranded nation. Only then can we truly say that we see an image change in the country, a new Nigeria. Right now, Shell enjoys an extractive relationship with Nigeria, making other areas of development investment challenging.  One cant attract long lasting foreign direct investment with a system of extraction. The manner in which Nigeria is letting Shell treat its people is also the manner in which other people will treat Nigeria as a nation.

In a surprising  move though, the government did slap Shell with a fine of over $100 million in punitive damages for oil spill damages in Rivers State, Nigeria, which Shell has been violently protesting, claiming that such a fine will effect its future $40b  investments in the area. Claims which are ludicrous since that amount is really minuscule in comparison to the profits oil companies gain. The amount of money BP is spending for the Gulf oil spill fund alone is $300b dollars, an amount which people criticized BP for because it pales in comparison to the profits it earns. Shell should be prepared to shell  out more for its consistent history of abuses and violations in the area. The oil industry is very lucrative and 'black gold' is a commodity that the world relies on. Oil producing countries, in essence, are in a position where they can make demands on the companies that rely on oil. Cleaning up after an oil spill is a  socially and environmentally responsible demand to make and the Nigerian government should begin make better efforts. The chances of MNCs actually pulling out of the country are very slim since its a lucrative commodity.What we must do now is sit and watch to see if this fine will be paid or if the case will disappear in the system. It is also important to note that in spite of all the revenues earned by oil, the Nigerian National Petroleum Corporation (NNPC), is unable to meet all its financial obligations which indicates that some of the oil revenues have also somehow disappeared in the system.

Since the Nigerian oil crisis can be seen as a precedent to the damage and abuses caused by oil companies, we also hope that other countries take heed and learn from it. American media attention is certainly keeping BP honest in the Gulf but unless  there is this type of pressure, many coporations will continue to neglect enviromental law for profits. They will continue to place profits over people.  They will continue to let pipes erode, spills to occur, and people to suffer... It certainly is the right time for Nigeria to move forward in making demands from the oil companies. Uganda is going to be an oil producing country in the next 5 years and may become an unwelcome competitor for Nigeria. It will also provide the oil companies with alternatives. I only hope that Uganda take the necessary precautions so that they don't create another Niger-Delta crisis in Uganda. Uganda will need to make an effort to brand its oil sector as investment and not extraction through greater controls. The discovery of oil should be able to uplift a country in to wealth and not impoverish it. With Libya, we have seen it taking several decades before their oil money has really began to create wealth in the country and trickle down. Under Gaddafi's new course for Libya, many of the recent public works and infrastructure developments have been long overdue. In certain aspects, for countries like Malawi, where their is evidence of oil but also where oil in Lake Malawi has not been fully explored, it may be a blessing in disguise. None of the Malawian Presidents have made oil drilling in Lake Malawi central to their economic goals perhaps its diverse population of Cichlids has been the lakes saviour. What will be the saviour for the crisis in Niger-Delta? Perhaps, the discovery of new energy sources.

1 comment:

  1. Anonymous4/8/12

    Short Al Jazeera video on the affects of the oil spills in the area.