Oil firms showcase giving ahead of Nigeria poll, but many blame them for environmental damage

• JON GAMBRELL  Associated Press
• First Posted: March 27, 2011 – 10:49 am

PORT HARCOURT, Nigeria — Posters show smiling students posing after receiving university scholarships. New roads appear on formerly potholed mud tracts. Millions of dollars are promised to improve the lives of the desperate poor.

These campaigns by oil company Royal Dutch Shell PLC and other foreign firms make it seem they are running for office in crude-rich Nigeria, which will hold crucial presidential, federal and local elections in the coming weeks. The multinational firms have spent hundred of millions of dollars toward projects they advertise as improving the life of those living in the country’s troubled Niger Delta.

But state-paid teachers are rarely hired for the newly built schools and hospitals lack the lifesaving drugs that government should provide. The oil companies may advertise their improvements, but alienated communities blame them for the long-term environmental damage the region has suffered over half a century of oil production. Meanwhile, the billions of dollars that oil produces for Africa’s most populous nation fuels an opaque government dominated by graft and corruption.

“Sometimes, you look at it as a no-win situation,” said Funkakpo Fufeyin, a government and community relations manager for Shell. “There will always be people … who will feel neglected and they go out and make these kinds of accusations. What better can you do to bring everybody together?”

Shell first discovered oil in Nigeria in 1956 and quickly became the dominant oil company in the country’s Niger Delta, a region of creeks and mangroves about the size of South Carolina. Its Nigerian subsidiary pumped oil after the country’s independence from Britain in 1960, during its Biafran civil war that saw more than 1 million people die and through its decades of military rule.

Nigeria now pumps out about 2.4 million barrels of oil a day, making it Africa’s top producer. The OPEC-member nation serves as a major supplier of crude oil to the gasoline-thirsty United States, meaning interruptions to supply can affect prices.

Oil money, after years of booms and busts, now provides about 80 percent of all government spending in Nigeria. But those billions rarely translate into services in a country considered by analysts to have one of the world’s most corrupt governments. Transparency International recently ranked the state-run Nigerian National Petroleum Corp., which partners with foreign firms to pump oil, as having one of the poorest accountability records in the world.

President Goodluck Jonathan has spent billions of dollars in the country’s reserves ahead of the election with little or no oversight.

Meanwhile, activists accuse oil firms of cozying up to military rulers and leaders who employed violence to keep the region pacified. A U.S. lawsuit accused Shell of playing a role in the 1995 executions of activist Ken Saro-Wiwa and other civilians by Nigeria’s former military regime. Shell reached a $15.5 million settlement to end the lawsuit in 2009, but acknowledged no wrongdoing.

Today, tripled-fenced compounds for foreign oil firms operating in the delta resemble quiet U.S. suburbs with manicured lawns and bicycle-riding police. Outside, children with polio crawl on their hands and knees across highway ramps begging for money. Military convoys roar down roads in trucks labeled “Vampire,” with masked soldiers arming mounted machine guns.

More than two-thirds of people living in the delta earn less than $75 a month.

“The needs are so vast in these communities for basic services and basic infrastructure, this kind of spending can make a difference, at least near the company’s operations,” said analyst Philippe de Pontet of the Eurasia Group. “That can essentially earn them a social license to operate.”

This kind of spending also comes in handy as the country considers passing a bill to overhaul the petroleum industry, which could cut into foreign firms’ profits.

It isn’t just Shell that has such programs. U.S.-based Chevron Corp. recently announced a $50 million, four-year project with USAID to promote economic development in the delta. French oil giant Total SA and ExxonMobil Corp. also have similar development efforts.

However, Shell has embarked on a campaign to showcase its good works ahead of Nigeria’s coming elections. It recently brought journalists along to see a Port Harcourt hospital it operates, where expectant mothers lined up for health screenings and to nurse newborn babies on clean-sheeted cots. A yearly membership to the hospital costs about $25.

While providing needed services in a country with a high infant mortality rate, many deep in the creeks of the delta would be hard pressed to travel there. Local clinics in the region, often faded cinderblock buildings, have no lifesaving antimalaria medication nor other drugs.

The company remains clearly hesitant to discuss the clear failings of the government in Nigeria. Shell spokesman Precious Okolobo repeatedly told a Dutch journalist that questions about government performance were “not valid for us to answer,” even after a presentation about the company building roads, providing electricity and commissioning schools — all matters for Nigeria’s leaders.

“The companies can do as much as they want to do, but you need the superstructure of the government,” Fufeyin said at one point. “If you build a school in a rural community, you have to bring the teachers.”

Yet government control disappears outside of the city, where militants and armed gangs operate. A low-level insurgency began here in 2006, though it recently calmed after a government-sponsored amnesty program. Some estimate as much as 550 million gallons of oil have spilled in the delta from failing pipes and attacks since production began — at a rate roughly comparable to one Exxon Valdez disaster per year.

Shell flew journalists in a helicopter over a cleared area in the delta where locals ran makeshift refineries turning stolen crude tapped from pipelines into diesel and kerosene. The company blamed nearly all of its oil spills in 2009 on sabotage from thieves and militants. Environmentalists and community activists routinely blame Shell for the spills, pointing at the company’s aging pipelines and poor cleanup efforts.

As the helicopter flew over the region, one could see the rainbow-sheen of spilled oil running across the water.

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Photographer Sunday Alamba contributed to this report.

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Online:

Royal Dutch Shell PLC: http://www.shell.com

Chevron Corp.: http://www.chevron.com

Total SA: http://www.total.com

ExxonMobil Corp.: http://www.exxonmobil.com/

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