From pages 7, 8, 9 & 10 of Royal Dutch Shell and its sustainability troubles Background report to the Erratum of Shells Annual Report 2010
The report is made on behalf of Milieudefensie (Friends of the Earth Netherlands)
Author: Albert ten Kate: May 2011.
Oil spills in the Niger Delta
Oil spills from oil installations (pipelines, flowlines, well-heads, flowstations, storage tanks etc.) occur at a regular basis in the Niger Delta, some ten times a week. According to the National Oil Spill Detection and Response Agency (NOSDRA), oil companies reported 2,054 cases of oil spill incidents (spills of more than one barrel) between June 2006 and June 2010.
Amnesty International has concluded that the oil companies in the Niger Delta are linked to violations of several internationally recognized human rights as stipulated by the United Nations. These rights comprise the right to food, the right to work, the right to an adequate standard of living, and the right to health and a healthy environment. Audrey Gaughran, Amnesty Internationals Head of Business and Human Rights, describes the impacts of oil spills on communities as follows: People living in the Niger Delta have to drink, cook with and wash in polluted water. They eat fish contaminated with oil and other toxins if they are lucky enough to be able to still find fish. The land they farm on is being destroyed. After oil spills the air they breathe smells of oil, gas and other pollutants. People complain of breathing problems and skin lesions and yet neither the government nor the oil companies monitor the human impacts of oil pollution.
Shell’s spill data
Shell experiences some 150 to 200 oil spills each year12, spread out over the Niger Delta and affecting several communities.
According to Shell, the volume of oil spilled from Shell-installations in the Niger Delta has been increasing over the years: ? In the period 1989-1994 (six years), SPDC recorded a total of 37,000 barrels of oil spilled. Shell attributed 72% of this volume to ageing facilities and operational failures, and 28% to sabotage.
? Over the period 1999-2004 (six years), Shell’s spillage totalled around 169,000 barrels. Shell attributed 63% of this volume to sabotage/theft by third parties and 27% to its own operational failures.
? Over the period 2005-2010 (six years), the total spillage amounted to 299,000 barrels. Shell claims that 72% of the spillage was due to sabotage/theft by third parties.
Over the years, Shell has been using some other figures. For example, during 2009 the company stated that some 85% of the volumes of oil spilled was caused by sabotage/theft. Sometimes Shell related this percentage to 2008, sometimes it would not specify the time period. It was not until May 2010 that Shell in Nigeria revealed that its updated data for the year 2008 showed that 48% of the volume was caused by sabotage/theft.
Probably due to ongoing public pressure, in 2011 Shell has started to publicly register all the spills that have occurred in the Niger Delta, including photographs and the report by the Joint Investigation Team. The Joint Investigation Team (JIT) is the team that visits the site, after a leak occurs. The team comprises government agencies, SPDC and representatives of impacted communities. It determines the spread, the volume and the cause of the spill. During 2008 and 2009, SPDC spilled more than 100,000 barrels of oil.19 During 2010 (27,580 barrels) and 2011 so far (around 6,000 barrels as of 28 April), the volume has decreased. This can partly be explained by the amnesty given to militants in Bayelsa State and Delta State in late 2009. Since then, explosions of pipelines have decreased drastically.
Oil spill data Shell challenged
In January 2011, Amnesty International and Friends of the Earth International filed a complaint against Shell at the Dutch and UK National Contact Points dealing with the OECD Guidelines. They claim that Shell’s misleading and incomplete reporting about oil spills in the Niger Delta constitutes a breach of the OECD Guidelines, specifically Sections III (Disclosure) and VII (Consumer Interests) as well as Section V (Environment). The complainants state that the oil spill investigation system on which Shell bases its data – is totally lacking in independence. Both organisations found that in many cases oil companies have significant influence on determining the official cause of a spill. The complainants also allege that Shell, in several communications, has used misleading figures (70%, 85%, 90% and 98%) to attribute pollution and contamination to sabotage. According to Amnesty International and Friends of the Earth International, the implications of Shells repeated claims are both serious and negative for the communities of the Niger Delta. Firstly, when spills are classified as the result of sabotage Shell has no liability or responsibility with respect to compensation for damage done to people or their livelihoods. Secondly, these figures have tended to be used by Shell to deflect attention away from legitimate criticism of its own environmental and human rights impact in the Niger Delta and as such to mislead key stakeholders including consumers of Shells products and investors in the company.
The OECD Guidelines are meant for multinational enterprises that are based in OECD member countries, accession candidate countries and enhanced engagement countries, and/or with activities in these countries. The United Kingdom and the Netherlands are OECD member countries; Nigeria is not present in any of the country categories mentioned above.22 The OECD guidelines cover standards on labour rights, human rights, the environment, consumer protection, and corruption.23 National Contact Points (NCPs) handle the complaints from organizations and individuals concerning alleged violations of the guidelines. At the end of mediation between the bringer of a complaint and the defendant company, the NCP may publish a final statement with its conclusion on the alleged violation of the OECD Guidelines. It used to take a few years before NCPs would come to a final statement. Recently, however, NCPs have promised to speed up their process.
Pending court case in the Netherlands
In November 2008 and May 2009, four Nigerian citizens and Friends of the Earth Netherlands/Nigeria filed a civil lawsuit against Shell in a Dutch court. The plaintiffs in the People of Nigeria versus Shell lawsuit accuse Shell of negligence with regard to the prevention and proper clean-up of oil spills. The four Nigerians, farmers and fishers, reside from the villages of Goi, Oruma and Ikot Ada Udo in the Niger Delta. Oil from Shell-installations has leaked onto their fields and into their fish ponds. The plaintiffs want Shell to prevent any spills in the future and to clean up the remainder of the pollution. They want to fish and farm once again.
It is the first time that a Dutch company’s liability for pollution overseas is asserted in a Dutch court. The following Shell-companies were summoned: Royal Dutch Shell plc (head quartered in the Netherlands); Shell’s subsidiary in Nigeria; the predecessors of Royal Dutch Shell (Koninklijke Olie BV en Shell Transport and Trading). In May 2009, Shell stated that its subsidiary in Nigeria is a Nigerian company, and thus not required to appear before a Dutch court. There was a court session on this matter. In December 2009 and February 2010, the court dismissed Shells arguments that the Dutch court would not be authorised to rule on its Nigerian subsidiary. The plaintiffs had overcome the first hurdle in this groundbreaking case. Presently pending is the issue on Shell’s exhibition of evidence papers. Much information in relation to the oil spills that occurred near Goi, Oruma and Ikot Ada Udo resides within Shell. Already in May 2008, the lawyer representing the farmers and Friends of the Earth had asked Shell to disclose these evidence papers. Some papers were handed over by Shell, and many papers were not. Therefore, in March 2010 the lawyer asked the court to force disclosure of the evidence papers by Shell. Shell replied by saying that there are several formal reasons why it can’t or won’t hand over the evidence papers, and that it might appeal a decision by the court on this matter. On 19 May 2011, the court session will take place, with a decision expected in summer 2011. Most probably at the beginning of 2012 the court will finally be able to focus on the core issue: has Shell been negligent with regard to the oil spills?
Shell’s double standard
Asset integrity work is a term for improving the quality of the pipelines, well-heads, flowlines, flowstations and terminals to get the oil out of the ground and export it. In 2007, the managing director of SPDC, Basil Omiyi, was quite clear about the integrity of SPDC’s assets: We do (…) have a substantial backlog of asset integrity work to reduce spills and flaring. There have been a few attempts to get to know more about the (poor) status of Shell’s assets to reduce spills, and its plans for improvement.
In 2004, questioned by the NGO Christian Aid, a Shell Vice-President admitted that the overall picture of the age and condition of SPDC’s pipelines was incomplete. He promised improvements in transparency.27 These promises have not been met.
December 2007, Olav Ljosne, Shells former Regional Director Communications Africa, replied to an e-mail by U.S. professor Richard Steiner: The Asset Integrity Reviews are internal Shell operating documents designed to provide information on the state of our assets and improvements that are necessary – and are regarded as strictly confidential and business sensitive.
Late 2010, Professor Steiner concluded in a report that Shell Nigeria continues to operate well below internationally recognized standards to prevent and control pipeline oil spills. It has not employed the best available technology and practices that it uses elsewhere in the world a double standard. The author stated that, while the injured environment in the Gulf of Mexico (due to the BP Deepwater Horizon disaster in April-July 2010) stands to receive substantial funding and government attention, such environmental damage in the Niger Delta is left largely unattended. Clearly this constitutes another double standard, the author proceeds, and far greater attention needs to be paid to the chronic long-term damage from oil and gas operations in the Niger Delta.
Further extracts from this section of the report will be published in the coming days.