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Shell’s outrage

The oil firm must be held to account for its failings in Bodo and elsewhere

29 April 2012

Nigeria’s tortured relationship with international oil companies operating in the country attained new lows when it was announced recently that Shell Nigeria Plc had substantially underestimated the amount of oil that leaked from an oil spill in Bodo, Rivers State, in 2008.

According to Shell’s official estimates, the equivalent of about 1,640 barrels of crude oil were released into creeks surrounding Bodo. However, estimates from Accufacts, an independent oil spill consultancy firm, put the actual figure at between 103,000 and 311,000 barrels of oil, at least 60 times greater than Shell’s estimates.

In addition, Shell’s assertion that the oil spill began on October 5, 2008 is contested by both the Bodo community and oil-industry regulators, who claim that it actually began on August 28, 2008. Clean-up operations began on November 7, 2008, but were apparently halted by the lack of the community’s co-operation, according to Shell. The Bodo community has taken Shell to a London court, where it is seeking damages for the environmental devastation caused by the spill, as well as the company’s funding of thorough clean-up.

Coming after decades of accusations that Shell and other oil companies have consistently failed to adopt international best practices in their operations in the Niger Delta, the Bodo case points to a stark failure on the part of the oil companies, oil-industry regulatory agencies and the Nigerian government.

The problems of poorly-executed and badly-regulated oil exploration in Nigeria are only too well-known: environmental devastation so profound that hitherto-flourishing agricultural and fishing communities are turned to virtual wastelands; long-term health problems for inhabitants of oil-producing communities; the rise of poverty, unemployment and despair which eventually combined to produce the militancy that virtually crippled the country’s oil export capacity at its height.

It is surprising that, given this sad history, Shell Nigeria would seek to further taint its bad reputation by denying apparently undeniable facts. The company has become notorious for its steadfast refusal to admit wrongdoing, even when all evidence points to the contrary. Its main tactic has been to attribute almost all oil spills at its facilities to the breakage of oil pipes by oil thieves and militants. However, while rampant oil theft in the Niger Delta cannot be denied, it is difficult to believe that it is the only cause: many of Shell’s facilities are relatively old and subject to frequent breakdowns.

The very fact that the oil company is such a consistent target of accusations like these clearly shows that it is not approaching its operations in the Niger Delta with the consideration that it displays in many other parts of the world. Part of the blame for this anomaly must go to the Federal Government which is supposed to ensure that its citizens are not victimised by commercial interests.

Through the Nigerian National Petroleum Corporation (NNPC), the Federal Government is the majority shareholder in the joint venture operations executed by Shell. It rarely calls its partner to order when environmental crises like that of Bodo erupt. Instead, it provides the company with the security forces to subdue protesters and intimidate activists. The regulatory agencies which are supposed to ensure that relevant policies are fully implemented are allegedly dependent on the oil companies for many of the highly-specialised aspects of their operations, and therefore unable to carry out their duties with the necessary neutrality.

Even Nigeria’s justice system is implicated in this lamentable state of affairs. Oil-producing communities have so little confidence that they will get justice in their own country that they are compelled to take offending oil companies to the United Kingdom and the United States. The vaunted amnesty programme does not seem to have achieved as much as its promoters hoped for. Although hundreds of militants have been brought out of the creeks and attacks on the country’s oil industry have largely ceased, fundamental issues pertaining to the operations of oil companies are yet to be resolved. The Petroleum Industry Bill, which has long been touted as the panacea to much of the sector’s problems, is yet to become law.

Shell and other oil companies operating in Nigeria are able to get away with outrageous acts of corporate malfeasance because of policy and regulatory lapses on the part of their hosts.

Any attempt to remedy this situation must ensure that Nigeria’s oil industry is no longer a place where corporate irresponsibility will be tolerated. A new system of reporting must be developed which will compel oil firms to truthfully state the exact circumstances of oil spillages and similar environmental emergencies. The agencies in charge of monitoring and regulating the activities of oil companies must be fully equipped to enable them perform their duties independently of the businesses they are overseeing. Nigeria’s crude oil must no longer be a curse to those in whose communities it is extracted.


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