Educating a Shell Worker

Educating a Shell Worker

Ever since ex-President Obosanjo threw the gauntlet to Nigerians in general in to prove the acts of corruption of General Babangida (rtd) (Nwaobi 2004), it has become fashionable for specially interested Nigerians to ask for proof of obvious crimes and malfeasance carried out against the nation and its people by either privileged individuals or organisations with a sole purpose i.e. the presumed impossibility of individuals to provide the proof asked for. That is a very delusional precedent for Nigerians to uncritically follow since in reality there is abundant proof of Babangida’s acts of corruption.

Firstly, George Ayittey of American University in his book “Africa Betrayed” provides evidence that Babangida pocketed over US$ 10 billion in 1991 which was windfall gains from oil price hikes due to the first Gulf War in 1991 (Ayittey 1993). Secondly, it was credibly investigated and demonstrated by ex-footballer John Fashanu that Babangida was involved in and made enormous exclusive gains from the $6 billion debt buy-back scheme during his regime and to which accounts the money went (Nwaobi 2004). Thirdly, Financial Times, London at the behest of the World Bank on the 23rd of July 1999 published the names of the 20 top Nigerians with foreign accounts. General Babangida accounts that topped the list were quoted as £6.26 billion in the UK, US$ 7.42 in Switzerland, US$ 2 billion in USA and DM 3 billion in Germany (Nwaobi 2004).

There is even much more credible evidence to the fact. But Obosanjo simply refused to accept the facts; it was exceedingly expedient to do so. I simply want demonstrate with the examples above the fact that an absence of public (i.e. government or other) acknowledgement of crimes and malfeasance carried out against Nigeria and Nigerians does not mean that hard quantitative and qualitative evidence of it does not exist (See Awojobi 1982; Truell & Gurwin 1992; Useh 1993; Nwankwo 1999; Nwaobi 2004).

Before I go further, Shell has expediently systematically captured the political will of able and prominent Nigerians since the 1950s (and earlier); the influence of Shell over the institutions of Nigeria is like a white hot knife cutting through butter. Political capture is a process where corporations use financial and other incentives to influence or corrupt office holders in government in order to attain their special interests (Olson 1982). Needless to say Shell is the Uno Numero of special interest groups. There are very few truly influential or prominent Nigerians living or dead in the past few decades that have not had congenial or close links to Shell. The Shell scholar was trained by Shell, the Shell worker was pampered by Shell and the Shell contractor was enriched by Shell; these Shell-fed people are the upper elite of Nigeria.

Nigeria’s first millionaire was on the Shell board of directors. So Shell has always had its way with the Nigerian elite whether it pollutes lands or has people repressed or had a hand in the killing Saro-Wiwa (Roy 2005). According to Hawley (Hawley 2000), corruption is actually exported by developed nations to developing nations but Western literature avoids talking about the bribe-giver and focuses on the bribe-taker. Shell is perhaps the biggest bribe-giver in Nigeria but so many elite Nigerians owe Shell so much for previous favours offered that “favour-exchange” has replaced “bribery” in many situations and contexts. So when we talk about Shell we are not talking about a corporation that is devoid of intended ruthless in achieving profit regardless of its superb formal and informal public relations machinery in Nigeria. But it is fair to add that Shell is no worse than any other large corporation in the world operating in Nigeria or elsewhere in Africa.

I will now answer the questions you posed to defend Shell’s operations in Nigeria.

Question 1: Is there any documentary evidence to show that Shell has been solely responsible for polluting the environment in the Niger Delta?

Answer 1: Yes, Shell is the sole onshore polluter in Nigeria (see to Question 3 below).

Oil spillages resulting from Shell activities in Nigeria date back to as early as 1959 and consistently so since then. These were times long before the sabotage of pipelines by community groups came into existence or fashion (Ketterigde 1973). Then the spillages were blamed on human error and difficult terrain on the one side and lax Nigerian laws on the other side (Ketterigde 1973). Now pipe-leakages are blamed on militants, even though there is abundant evidence of the out-dated structure of pipelines in the land that would cost so much to replace with modern updates (Brown 2006). It is so much more convenient and cheaper to bribe the government and blame militants. Besides even with the leaks Shell’s operations in Nigeria are still hugely profitable; it is the people, their livelihoods and the land that suffers.

Greenpeace in 1992 commissioned a ten-year quantitative oil spill record that culminated in the document called the Oil Spill Intelligence Report”. The report stated that the total of Shell’s major oil spills (not sabotage spills) in Nigeria was an unenviable 7.4 million litres. It is interesting that the same report states 40% of all Shell’s oil spills occurred in Nigeria alone.

The Financial Times, London in 1992 revealed that 77% of all Natural Gas extracted in Nigeria is flared instead of being re-injected into the soil or converted / contained. The environmental consequences at the local (environmental degradation, organic toxins in the food chain, health hazards etc.) level and the global (climate change) level are enormous. The major economic consequence is that Nigeria is losing US$ 500-600 million in revenues due gas flaring at the convenience of oil companies operating in Nigeria (2007).  World Bank sources say Nigeria may be losing up US$ 2.5 billion in revenues due to flaring (World Bank 2005).

Carbon footprint or any footprints can be used as deceptive euphemisms for environmental destruction. As for gas flaring in the Niger Delta, it is estimated that flaring in Nigeria is estimated at 2.5 billion cubic feet daily  which is equivalent to 71 million cubic metres daily producing 71 million tonnes of carbon dioxide and vast amounts of other green house gases plus toxic materials (World Bank 2004). To top it up Shell is the largest flarer of natural gas in the world and is responsible for 87% of the flaring in Nigeria (FOE 2007b).  Equate that to a foot print.

Why is that pipeline operators like Shell leave radioactive pipeline fault analysers in the bush unprotected? Can Shell do that in developed countries where it has operations? Several hundreds if not thousands of unwitting rural dwellers in the Niger Delta have been exposed to radiation burns and diseases (causing cancers, miscarriages, deformed babies, mutations etc.) which can contaminate others by way of mere contact (Nigerian Nuclear Regulatory Agency 2004). Leaving radioactive devices in the bush that people are known to traverse is contempt for both the people and the land. The only time the public get to know about the toxicity of these devices is when they have caused numerous radioactive casualties necessitating media campaigns for victims to come forward for treatment. It is not surprising that several indigenous petroleum engineers support the practice; they are so well-paid and taken care of.

Question 2: What about cases of sabotage where indigenes of the Niger Delta vandalise the pipelines belonging to the oil companies?

Answer 2: Many published academic and governmental documents blame majority of the oil spillages in the Niger Delta on sabotage carried out by restive community groups. These reports (most notably OMPADEC 1998, Aprioku 2003) while blaming sabotage by community groups for oil spillages and dismiss or ignore factors like human error and equipment failure as major or even contributory causes. However, there is a consensus amongst environmental advocacy groups that these reports are either grossly exaggerated or even fictitious due to methodologies used to acquire the evidence for the reports and the works of forensic pipeline experts who implicate human error and equipment failure for the vast majority of spills.

Furthermore, Shell has the biggest and best funded public relations department in corporate Nigeria. It is easy for them to wage media campaigns against impoverished, disenfranchised and voiceless people who cannot reply adequately or even at all, except through prominent individuals who get killed, jailed or well-bribed or through ordinary people who take up arms.

But why pipeline sabotage by normally peaceful peoples? My people say “there is no greater cheek than surreptitiously immiserating a man, then accusing him of overreacting when he finds out”. According to OMPADEC (1998) instances of sabotage of pipelines by community groups mainly occur when they have not been adequately compensated for the damage done to their environment and livelihoods; there is no denial of the fact that the deliberate of sabotage does happen but the scale is relatively small since there more effective ways of getting compensation. Shell actively and adequately provides financial compensation for communities that have suffered damage it has inflicted on the lands and livelihoods of peoples in the Niger Delta.

Shell knows perfectly what it is doing because it has been doing it all along. As a long standing strategy it was a much cheaper and convenient strategy for Shell to un-transparently pay considerable monies to a select few leaders / elders of each community it had to compensate than to compensate whole communities transparently. The leaders / elders simply pocketed the compensation money for decades without taking care of the community and Shell knew all along about it, after all they have sophisticated community intelligence operations.

When the wider community eventually learnt of the obscure but lucrative compensation game, their reaction gave birth to restive community groups in the Niger Delta seeking compensation directly Shell (and other oil companies) and occasionally resorting to antics such as pipeline sabotage, kidnapping of expatriate oil workers, invading production stations etc. So one may ask – who started the Niger Delta crisis in the first place? Perverse settlements strategies always tend back-fire in the end.

Question 3: Is Shell the only oil major operating in Nigeria? What about the activities of Total (Elf), Exxon-Mobil, NAOC (Agip), Chevron-Texaco, and other smaller players?

Answer 3: It is true, Shell is not the only the oil company operating in Nigeria. The last updated NNPC website states that,

“A joint venture operated by Shell accounts for more than forty percent of Nigeria’s total oil production (899,000 barrels per day (bpd) in 1997) from more than eighty oil fields. The joint venture is composed of NNPC (55 percent), Shell (30 percent), Elf (10 percent) and Agip (5 percent) and operates largely onshore on dry land or in the mangrove swamp” (NNPC 2008).

By way of simple arithmetic, Shell’s production capacity and share of the oil and gas market is double that of all the other oil companies combined. What also distinctly distinguishes Shell from Agip, Total, Exxon-Mobil, Chevron-Texaco etc. is that Shell mainly produces oil in Nigeria through onshore operations i.e. on dry land and swamp land, if you like, mainland Niger Delta.  The rest of the oil producing companies, with the exception of small onshore operations by Chevron (-Texaco), produce oil from offshore sources. By unequivocal inference, while you can hold other oil producing companies operating in Nigeria responsible for polluting the ocean offshore (if that matters at all in the context of the Niger Delta condition and it should), it is Shell that pollutes the mainland of Niger Delta, onshore.

Question 4: What is wrong in reporting £12 billion profits? Was the entire profit made from Nigeria alone? Shell made this money from its operations worldwide, and not only from Nigeria.

Answer 4: There is nothing wrong whatsoever with corporations making and reporting (increasingly) vast profits wherever the profits are made in the world as long as they are ethical. However, if the processes and methods of making that money are unethical or criminal or immoral, then questions can be raised. According Georgetown Consultants working on behalf of the Bureau of Public Enterprises in 2001 produced a report that exposed the nefarious financial practices of oil producing companies in Nigeria.

Firstly, oil services companies operating in Nigeria for between 20 – 30 years have never declared profits; in fact they have declared between 20-40% losses annually throughout their entire years of operations Nigeria, robbing the nation of taxes obtainable only from profits. How companies can survive and expand in the face of constant losses beggars’ belief.  Secondly, since oil companies are cartels, they tend to award contracts to themselves at heavily inflated rates to appear as cost on the balance sheets; another method of tax evasion. Thirdly, oil companies will award contracts to cartel members who get paid in escrow offshore accounts for work done on Nigerian soil under the provisions of Nigerian Acts of Law and Licences without paying the government tax; yet another source of tax evasion. Nigeria for at least two decades has lost an average of US$ 5 billion annually in oil company tax evasion practices. And Shell is the biggest player. The government and their agents are complicit in the tax evasion but that does not rid Shell or other oil companies of guilt.

Has Shell given back sufficiently to Nigeria from what it has taken out as it has done elsewhere? The answer is no. Shell invested heavily in oil and gas extraction infrastructure and logistics in Nigeria and nothing else. It did not even bother to invest in gas re-injection and / or gas containment / conversion which would have boosted Nigerians revenues by a couple of US$ billions per annum and provided more good jobs for citizens and created less environmental / health hazards. That would have been the investment to make but it was expediently avoided. Shell’s profits do not generate significant taxes in Nigeria which could potentially be a good indirect benefit of their presence there; if the government officials do not pocket such revenues – it it evident they will. Shell’s major social and economic investment in Nigeria has been education which it has used as a political reward instrument of capture and domination of the power elites in Nigeria. Well, the employment and contracts they provide to less 0.25% of the population can be considered derisory in comparison to their economic profile in Nigeria.

The questions you posed I have tried to answer as I can. I go on to say that it is wrong for anyone to presume factual qualitative and quantitative documented evidence of corporate and government evils (in Nigeria) do not exist. You only have to search well and presume less.

March 3rd 2008

(This article was written on a private forum in response to defensive claims made in favour of Shell and the Nigerian government by a member who works for the company).


P.S.  John Fashanu as of 2010 has retracted the contents of his findings on Babangida’s acts of corruption and interestingly the former military head of state is running for presidency in 2011. Recently, in autumn of 2010 the Ogoni people have called for the resignation or sacking of a United Nations Environmental Programme (UNEP) Project Manager, Mike Cowing, for claiming in a report that 90% of oil spillages are caused by local citizens and oil 10% by oil companies. It would  be interesting to see Mike Cowing’s audit state of the oil pipeline infrastructure in the region. Perhaps, one day we will hear or read indigenous and international green Niger Delta environmentalists  proclaim that Shell and other oil companies in fact never actually spilt a drop of oil in the region ever.

Grimot Nane

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