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Shell faces new dilemma in south Nigeria

Financial Times: Shell faces new dilemma in south Nigeria

“Almost 10 years after execution of the Ogoni author Ken Saro-Wiwa and eight fellow rights activists caused international outrage, Shell is involved in another deepening dispute in the Ogoni region.”: “Shell does want to do essential maintenance in the region on the trans-Niger pipeline, which carries 185,000 barrels a day of production. It has just stationed members of Nigeria’s paramilitary mobile police – whose public notoriety is such that they are nicknamed “kill and go” – to guard its facilities after it experienced problems with tampering.”

By Michael Peel in Lagos

14 Sept 04

A tell-tale hiss sounds from two Royal Dutch/Shell-operated oil wellheads standing in a large brown slick in Ogoni, southern Nigeria. Behind the tall metal structures, known as Christmas trees because of their branching pipes and valves, a pair of old women stoop to sort through a large pile of maize. “When the spill occurred, it destroyed all the crops I planted,” says Iyamaghe Kpotu, one of the women.

Almost 10 years after execution of the Ogoni author Ken Saro-Wiwa and eight fellow rights activists caused international outrage, Shell is involved in another deepening dispute in the Ogoni region.

The historical resonances of the latest controversy – including allegations of oil spills, security force brutality and improper payments to local leaders – come amid growing accusations that multinational oil companies are failing to respond to criticisms of their activities in Nigeria and elsewhere in Africa.

For Shell, the challenge is both ethical and economic: an internally-commissioned report has concluded that conflict could force it out of onshore production in Nigeria, one of its most important markets, by 2008.

Shell, which shut down output in Ogoni in 1993 amid protests over pollution and the failure of local people to benefit from oil wealth, insists it has no immediate plan to restart production.

But Shell does want to do essential maintenance in the region on the trans-Niger pipeline, which carries 185,000 barrels a day of production. It has just stationed members of Nigeria’s paramilitary mobile police – whose public notoriety is such that they are nicknamed “kill and go” – to guard its facilities after it experienced problems with tampering.

The decision has angered local people linked to the Movement for the Survival of the Ogoni People, the organisation Mr Saro-Wiwa led until his 1995 execution by the then military regime.

They accuse the police of brutality and say Shell’s pipeline cleaning is likely to cause further pollution to surrounding land. They are also unhappy about the clean-up efforts of Casella, a UK contractor employed by Shell to clean a spill in K-Dere village, part of the Ogoni region: the earth and reeds in the area are still blackened and a large pool glints with the iridescence of petroleum.

Casella left the community in January after a dispute over its relationship with Chief Fabian Gberesu, K-Dere’s hereditary paramount ruler. Ledum Mitee, Mosop president, says the company made “inappropriate” payments to Chief Fabian that are contributing to conflict between him and members of the community opposed to Shell’s plans. A number of Mosop supporters claim they have been assaulted by members of a gang set up by Chief Fabian; several Mosop sympathisers have been arrested and charged with setting fire to the chief’s car.

Jerry Ellison, technical manager of Casella’s Nigerian subsidiary, says the company paid N450,000 ($3,360, €2,750, £1,870) for the car as part of gifts to Chief Fabian and a wider local development programme in areas such as education and health. Casella gave the chief a further N100,000 while bidding for community approval for the clean-up contract, although Mr Ellison says this is below the maximum N150,000 “homage payment” it makes to local leaders and is much less than other contractors pay. The company gave N100,000 to refurbish toilets at the chief’s palace that Mr Ellison says are community property and now have “the deepest septic tanks in the world”.

Mr Ellison, who admits Chief Fabian once asked for a helicopter but “not in such as way as we took him seriously”, says Casella’s payments should be seen as public relations and part of the contract deal rather than as bribes. “If you want to stay in business, you have got to pay,” he says. He says Casella wants to finish the clean-up and says it would be welcomed as a provider of needed employment and trade in a community that has had few opportunities since Shell’s withdrawal.

Chief Fabian claims he is being persecuted by Mosop. He suggested reporters buy him a vehicle to replace his burnt car, which he says he bought with his own money.

He declined to answer further questions until given alcohol and N10,000, which he described as a “palace fee” for his community.

Shell admits it told Casella to stay out of K-Dere after it saw signs of trouble in the community, although it says it has given the company another job elsewhere and does not think the contractor has done anything wrong.

Mutiu Sunmonu, Shell’s eastern region general manager for production, acknowledges the clean-up postponement has damaged Shell’s reputation but says this is a “lesser evil” than allowing Casella to go back and risk “bloodshed in Ogoni”.

Activists, however, see Shell and its agents as the main reason for the return of schismatic conflict.

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