Financial Times: FRONT PAGE – FIRST SECTION: Shell gave work to groups with links to Nigerian rebels

By Dino Mahtani and Daniel Balint-Kurti in Lagos, Financial Times
Published: Apr 27, 2006

Royal Dutch Shell, the oil group, has admitted to subcontracting work to companies run by Nigerian militant activists involved in a 2003 insurrection that shut40 per cent of the country’s oil output.

The activists have links to a rebel group, the Movement for the Emancipation of the Niger Delta (Mend), that attacked Shell oil facilities this year. Analysts say subcontracting work to local strongmen is a practice used by companies to buy off militants threatening attacks on oil facilities in the region.

Shell told the Financial Times it had used two companies, Shad-Ro Services and Integrate Production System Surveillance, for waste disposal and pipeline security work. Caroline Wittgen, a spokesperson for Shell International, said they were on a list of companies registered to work with the oil company. It is not known if Shell uses them now.

Shad-Ro Services is run by Shadrack Otuaro, half brother of Kingsley Otuaro, the secretary-general of the Federated Niger Delta Ijaw Communities, a militant group involved in the 2003 uprising that targeted Chevron, the US oil company. Many FNDIC officers were given jobs or paid off by their state governor to quell tensions after the insurrection.

Earlier this year, the government used FNDIC members to persuade Mend to release foreign hostages taken during attacks on oil facilities. There is an overlap between the groups’ memberships of the two groups.

The Otuaro brothers recently attended an Abuja meeting with Olusegun Obasanjo, Nigeria’s president, to discuss insecurity in the region.

IPPS is run by Messio German – who works closely with Kingsley Otuaro and other FNDIC members – to undertake pipeline surveillance for Shell. Mr German said such contracts had been worth more than $100,000 a year since they began in 2004 and Shell had sometimes paid IPPS “incident free” bonuses.

All three men are now engaged in political campaigns on behalf of the Ijaw people. Many Ijaw leaders complain their impoverished people have been cheated of their oil wealth by the government and oil companies.

Last year Chevron abandoned its corporate policies on community relations in the delta, saying they had contributed to conflict among communities.

FNDIC members have de-nounced Shell’s corporate policies on community development. But Shell says it continues actively to “seek the involvement of local communities in the contracting process”.

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