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A New Chief at Shell, and a Rocky Inheritance

The New York Times

GREEN INC.

By TOM ZELLER Jr.
Published: July 5, 2009

NEW YORK — Even as Jeroen van der Veer was preparing to pass the baton to Peter Voser, who took over as chief executive of the oil giant Royal Dutch Shell last Wednesday, the contentious legacy of the company’s activity in Nigeria was nipping at its heels.

Just a few weeks earlier, Shell had agreed to settle a court case stemming from the execution of Ken Saro-Wiwa, a leader of the indigenous Ogoni environmental movement in Nigeria who had protested against Shell’s environmental practices in the oil-rich Niger Delta.

On the basis of dubious charges, Mr. Saro-Wiwa and eight other activists were tried and ultimately hanged in 1995 by the country’s military government.

Families of six of the victims subsequently filed numerous lawsuits against Shell, one of the oldest and largest companies operating in the region, accusing it of complicity in a variety of human rights abuses, including events that led to the executions.

Shell denied having had any part in the matter. Instead, the company said June 8 in a statement, the settlement — totaling $15.5 million — constituted a “compassionate payment to the plaintiffs and the estates they represent in recognition of the tragic turn of events in Ogoni land, even though Shell had no part in the violence that took place.”

Then, on Monday last week, the largest militant group in the nation, the Movement for the Emancipation of the Niger Delta, announced that it had once again attacked Shell’s oil infrastructure — this time, an offshore platform.

It was the latest in a wave of recent attacks on foreign oil operations in the country, and Shell’s communications director for Africa, Olay Lisone, told Reuters on Tuesday that “in the past 10 days we have had five attacks that have reduced our oil production to around 140,000 barrels per day.”

That is about half of what production was earlier in the year.

None of this, presumably, was a surprise to Amnesty International, which observed the change in executive leadership at Shell with its own assault, a 143-page report, published last Tuesday, that accused Shell and other oil companies of decades of environmental and human rights abuses in the region.

The report, titled “Nigeria: Petroleum, Pollution and Poverty in the Niger Delta,” noted that while oil business in the region had generated about $600 billion during the past 50 years, the majority of the 31 million people living in the area remained pitifully impoverished.

Amnesty, quoting a U.N. report from 2006, described the region as suffering from “administrative neglect, crumbling social infrastructure and services, high unemployment, social deprivation, abject poverty, filth and squalor, and endemic conflict.”

Much of the blame, the group said, lay at the feet of the oil industry generally and, in many cases, Shell specifically.

Shell and the Nigerian government vigorously disputed the claims made in Amnesty’s report.

“The root causes of the Niger Delta’s humanitarian issues are poverty, corruption, crime, militancy and violence,” Shaun Wiggins, a Shell spokesman, wrote in an e-mail message to my colleague, Jad Mouawad, who reported on the Amnesty report at our Green Inc. blog last week.

“This report does not acknowledge these issues to any substantive degree,” Mr. Wiggins continued, “but concentrates on the impact of oil and gas operations in isolation.”

“As such,” he added, “its value is limited.”

Meanwhile, Levi Ajuonoma, a spokesman for the state-owned Nigerian National Petroleum Corp., told reporters that “pipeline damage is a major cause of pollution,” and that blame for that should be directed at militants and their repeated attacks.

Mr. Wiggins echoed that point, suggesting that about 85 percent of the oil spills that occurred in the region last year were attributable to vandalism or other criminal activity. Many of the spills reported by Amnesty, the company added, occurred on Ogoni land, where Shell ceased production operations in 1993 — though its pipelines still crisscross the area.

Audrey Gaughran, Amnesty’s head of business and human rights and a co-author of the report, granted that violence played a role in the problems in the delta. But she also suggested that accurate data on oil spills are hard to come by, particularly given that oil companies have the incentive — and the ability under Nigeria’s lax regulatory system — to attribute any spill to sabotage.

Oil spills are just one part of an entire tableau of environmental wreckage in the delta, Ms. Gaughran said. Waste dumping, gas flaring, the dredging of rivers, road and canal construction — all have contributed to a decline in soil, water and air quality for a population that relies heavily on fishing and subsistence agriculture.

And these problems, Ms. Gaughran said, are not products of recent militancy, but of decades of wanton development by the oil industry.

“There are a lot of attempts to focus on the symptoms today and not the root causes,” she said. “The environmental damage and destruction of the water supply is a root cause.”

“Shell sees the conflict as something outside of them,” she added, “rather than something they’ve been a part of creating.”

Shell said last week that it shared Amnesty’s concern that the people of the Niger Delta had not benefited from the extraction of oil and natural gas — though in a statement on its Web site, the company appeared to suggest that it had little control over this, either.

The Shell Petroleum Development Co. and other Shell companies operating in Nigeria “pay taxes and royalties each year into the federal budget,” the statement reads. “The government then decides how to spend and distribute this money among the states.”

Shell has “made its views known,” the company said, “and contributed to debates aimed at improving governance of the allocation of oil revenue to oil-producing communities.”

Ms. Gaughran suggests that is simply not good enough and that oil companies are too often using the complex web of competing interests and actors on the ground in Nigeria as a defense — and an excuse.

“Complexity has become their stock answer,” she said. “But complexity shouldn’t be an excuse for doing nothing.”

NYT ARTICLE

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