In June 2009 we reported that a Shell Nigeria insider had disclosed to us that senior colleagues had a commercial relationship with militant leaders of gangs carrying out attacks on Shell employees, pipelines and installations. We established that the source was authentic. Indeed, to our surprise we discovered that The Financial Times had already confirmed the basics of our sources allegations (see Shell gives Nigerian work to Militant companies).
There were two possible interpretations.
The first being that Shell entered into the murky dealings against the backdrop of a very difficult situation and with the worthy objective of keeping the oil flowing, believing this would be in the best overall interests of Nigeria and Shell stakeholders, including Shell Nigeria employees.
The less attractive possibility is that there is much more money to be made by Shell on a global basis by stemming oil flow from Nigeria than in keeping it flowing. Production cuts due to militant attacks take place with alarming frequency. It only takes a small crimp in the oil pipeline applied on a regular basis to drive up the global oil price and keep it at a high level, thereby generating billions of extra dollars in annual profits.
The same subject – Shell getting into bed with the militants – has been covered in a document just released by Friends of the Earth Netherlands
From page 13 of “Royal Dutch Shell and its sustainability troubles” – Background report to the Erratum of Shell’s Annual Report 2010
The report is made on behalf of Milieudefensie (Friends of the Earth Netherlands)
Author: Albert ten Kate: May 2011.
In 2006, it became clear that some of the militant leaders linked to the attacks on oil facilities in the Niger Delta earn tens of thousands of dollars from contracts with Shell. Leaders of the Federated Niger Delta Ijaw Communities (FNDIC), involved with violent activities in Delta State in 2003, later ran contracting companies working with the oil majors. The payments included incident free bonuses. Officials told the Financial Times that subcontracting work to local strongmen is one method some oil companies have used to buy off militants threatening attacks on oil facilities in the Delta.61
In September 2008, the Shell Executive Vice President (EVP) for Shell Companies in Africa, Ms. Ann Pickard, said that Rivers State Governor Rotimi Amaechi lacked the connections among Rivers State militant leaders to successfully co-opt them as the governors in Delta and Bayelsa states have done with militants in their states.62
Co-opting militants seems to be one of the tactics to (temporary) reduce conflict. However, it can also be seen as a measure that serves conflict and corruption.