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Shell to Face Nigeria Grilling

JANUARY 4, 2011

Dutch Parliament Hearing Expected to Touch on Corruption in Oil-Rich Delta, as Spills Spur Concerns

Agence France-Presse/Getty Images

November protests marked the 15th anniversary of Nigeria’s then-military regime’s execution of activists who challenged degradation of Ogoni land in the Niger Delta.


Royal Dutch Shell PLC will this month be grilled by Dutch lawmakers for the first time over its operations in the Niger Delta, reflecting growing concern in the West about oil spills in west Africa.

Critics of Shell’s record, both in parliament and among non-governmental organizations, are expected to use parliamentary hearings, scheduled for Jan. 26, to quiz the company over its activities in Nigeria. The country’s oil sector has long been plagued by militant violence, corruption, organized crime and, by extension, environmental damage.

Oil spills, the majority of which Shell says is caused by militant attacks, have befouled swaths of the Niger Delta. Amnesty International says hundreds of oil-polluted sites have yet to be cleaned up around Nigeria, compromising locals’ water, food and livelihood.

Anglo-Dutch Shell, which hasn’t been accused of wrongdoing, declined to comment.

The hearings come as last year’s Gulf of Mexico oil spill generated heightened scrutiny of Western oil companies’ safety and environmental records. They were pushed through by Dutch opposition parties, some of whose members have long sought public discussion of Shell’s role in the Niger Delta.

Socialist Party lawmaker Sharon Gesthuizen said the debate would be more about fact-finding than apportioning blame. “We don’t believe [the problems in the Niger Delta] are all Shell’s fault,” she said in an interview. “But they’ve been going on for so long now, and we need to know why.”

Ms. Gesthuizen said she and her party would ultimately like to see European Union take action against what she said were Nigerian officials involved in the illegal oil trade, possibly imposing visa restrictions and other sanctions.

The lawmaker said that during a recent fact-finding trip to the Niger Delta, she saw oil theft going on “right under the noses” of heavily armed Nigerian soldiers. The lawmaker said it wasn’t clear whose oil was being stolen but called on Shell to be more transparent about any incidents of corruption it has encountered.

Nongovernmental organizations will also present reports at the hearings. “We see this as the first step in a process that will lead to tougher requirements on the foreign operations of Dutch companies,” says Geert Ritsema, a spokesman for the Dutch branch of international environmental group Friends of the Earth. “We need to make them more accountable for the actions of their overseas subsidiaries.”

Agence France-Presse/Getty Images

Shell’s Bonny Island terminal in the delta; pipelines and other facilities have long been targeted by militants.

Nigeria is home to the world’s 10th-largest crude oil reserves and is Africa’s largest oil producer. The oil-rich Niger Delta has become a byword for insecurity and environmental degradation. Foreign oil workers and wealthy locals have in recent years been kidnapped by groups of armed men who say they are fighting for a greater share of the region’s oil wealth.

Spills are common, caused by militant attacks on oil infrastructure or locals stealing oil from pipelines for use in illegal refineries, a practice known as bunkering. Experts estimate that at least nine million barrels of crude oil in all have been spilled in the delta since oil production began there in 1958—nearly twice as much as flowed last year into the Gulf of Mexico from BP PLC’s Macondo well.

In its annual sustainability report last year, Shell said that in 2009, 13,900 metric tons of oil—or about 100,000 barrels—were spilled in the delta as a direct result of sabotage or theft. That was more than double the 2008 total and four times the figure for 2007.

Militant attacks appeared to decline earlier last year after the government offered amnesty to militant leaders in the delta. But an uptick of violence toward the end of 2010 suggested the deal was showing signs of unraveling. Shell hasn’t released 2010 spillage figures.

Some 2,000 oil-polluted sites have yet to be cleaned up around Nigeria, according to a 2009 report by Amnesty International. The report found that thousands of spills had inflicted damage to fisheries, farmland and crops over the decades, and the lack of adequate remediation of the land had undermined food security in the region. It also accused the Nigerian government of persistently failing to enforce environmental regulation in the Niger Delta’s oil industry.

Shell has long been the target of criticism from rights groups over its role in Nigeria, where it discovered oil in 1956. In 2009, the company paid $15.5 million to settle a human-rights case that implicated Shell in the deaths of Nigerian environmental activist Ken Saro-Wiwa and others who were executed in 1995 by Nigeria’s then-military government. Shell admitted no wrongdoing in the case.

Nigeria continues to be a cornerstone of Shell’s operations. The company’s joint venture, the Shell Petroleum Development Corporation, or SPDC, is Nigeria’s largest onshore producer. Nigeria accounted for a fifth of Shell’s 2009 global production.

Shell says it isn’t responsible for the oil spills, blaming sabotage and oil theft. It says these two causes accounted for more than 70% of the oil spilled at SPDC facilities in the Niger Delta over the past five years and 98% of spills there in 2009.

Ms. Gesthuizen, the spokeswoman for the Dutch parliament’s committee on economic affairs, said Shell officials in Nigeria had told her that 30% of the spills are due to factors such as poor maintenance of oil infrastructure and equipment failure. Ms. Gesthuizen traveled to Nigeria last month, meeting officials from SPDC and other oil companies as well as representatives of local non-governmental organizations.

Late last year, leaked diplomatic cables from the U.S. embassy in Nigeria alleged the oil major enjoyed tight ties with the country’s government. In one cable recently released by the website WikiLeaks, Ann Pickard, who was then Shell’s vice president for sub-Saharan Africa, is quoted as telling U.S. diplomats that Shell had placed its employees throughout the Nigerian government and “consequently had access to everything that was being done in those ministries.”

Ms. Pickard declined to comment at the time. Shell strongly denied allegations in the media that the cables showed it had infiltrated Nigeria’s government, calling the assertion “absolutely untrue, false and misleading.”

Write to Guy Chazan at


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