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Dutch Lawmakers Question Shell on Oil Pollution in Nigeria


Published: January 26, 2011

Royal Dutch Shell officials faced tough questions from Dutch lawmakers on Wednesday over pollution from its oil operations in Nigeria at a conference convened in the Netherlands to shed light on the oil giant’s dealings in the West African country.

Environmental organizations and business officials at the round-table meeting in The Hague differed sharply on how much responsibility Shell should take for the environmental damage. The devastation is particularly severe in the poor and fragile Niger Delta region, which has suffered more from oil production than perhaps any other place on earth after years of spills caused by rickety infrastructure, theft and sabotage.

The conference, called by the Economic Affairs Committee of the lower house of Parliament, came a day after the advocacy groups Friends of the Earth and Amnesty International lodged a complaint with Dutch officials of the Organization for Economic Cooperation and Development, accusing the company of “nontransparent, inconsistent and misleading figures” on the causes of the oil leaks.

The organizations argue that Shell understated its responsibility for spills to reduce its legal liability and that it ignored human rights abuses for the sake of profit.

Ian Craig, Shell’s executive vice president for sub-Saharan Africa, countered that 70 percent of oil spills were caused by sabotage or by “bunkering” — the organized theft of oil.

Mr. Craig conceded that the number of spills remained “unacceptably high” but attributed them partly to kidnappings or threats against employees, which have sharply reduced maintenance activities for several years. He said that the backlog was now being reduced.

He also defended Shell’s record on cleanups, saying the company was “committed to clean up and remediate all spill sites related to its operations regardless of the cause of the leaks.” But he said that Shell could not pay for spills caused by sabotage because it would create a “perverse incentive” for criminals.

Peter de Wit, chief executive of Shell Netherlands, said the company had created thousands of jobs in Nigeria and was doing “a good job under difficult circumstances.”

He also sought to deflect responsibility for defending human rights onto the government and courts, saying, “You can’t lay it on our doorstep.”

Shell’s prominent place in the life of the Netherlands, a small and environmentally conscious democracy, makes the company an object of close scrutiny, while also baring rich nations’ uneasy relationship with the developing countries that supply much of their energy. Nigeria accounted for roughly 9 percent of Shell’s oil production in 2009.

When a vast oil spill from BP’s Macondo well in the Gulf of Mexico transfixed millions of people last year, many environmentalists argued that the disaster paled in comparison to the damage Nigeria had suffered through decades of intensive oil exploitation. The country’s problems are compounded by endemic corruption and ethnic violence.

Geert Ritsema of the Friends of the Earth said at the round table that Shell tolerated levels of environmental damage in Nigeria that it would never accept at home. “When will you stop applying double standards?” he said.

Mr. Craig said that his experience with a Shell venture in Gabon showed that the issue was different local circumstances, not the application of different standards by his company.

“The physical environments are similar, the operating practices and standards are virtually the same and both operations are about 50 years old,” he said of the Nigerian and Gabonese ventures. “Shell Gabon is considered to be a good steward of the environment and is well regarded by Gabonese society. The company’s record on flaring and oil spills has created no material issues either in the country or internationally.”

“The fundamental issue onshore in the Niger Delta,” he said, “is one of high population density, the ensuing competition for resources, poverty, political marginalization and, of course, corruption, leading to frustration, violence and criminality.”

The company has also been criticized for its failure to stop burning off the excess gas it generates as a byproduct of its oil production. Mr. Ritsema said the gas burned off annually by about 100 wells was worth many millions of dollars and created emissions equivalent to those of four million Dutch automobiles.

Mr. Craig said that the company’s efforts to reduce flaring had not been as effective as the company hoped because progress had been slowed or reversed “by militant attacks on our staff and facilities and by a lack of funding” from the Nigerian National Petroleum Corporation, which holds 55 percent of the main onshore venture. Shell holds 30 percent, the French oil company Total has 10 percent and Eni of Italy has 5 percent.

Over all, the tone of discussion was calm and civil.

Sharon Gesthuizen, a Socialist Party legislator who helped to organize the hearing, said Shell officials should more openly address corruption and organized oil theft in its dealings with the Nigerian government and accused Shell of keeping silent “for economic reasons.”

Mr. Craig disagreed, saying that while the company did have a responsibility to address those issues, “some things should be discussed in private.”

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