The Role and Responsibility of Oil Multinationals in Nigeria.

• Author: Manby, Bronwen

The role played by the oil multinationals in Nigeria has received increasing attention in recent years as protest against oil production has grown, and with it the repressive response of the Nigerian government. Shell in particular, the largest producer in Nigeria, has faced a barrage of criticism over its activities in the country. This criticism reached a height in 1994 and 1995, when the government suppressed anti-Shell protests by the Movement for the Survival of the Ogoni People (MOSOP), executing MOSOP leader and internationally known author Ken Saro-Wiwa and eight other Ogoni activists in November 1995. While the Ogoni crisis is no longer in the headlines, and while the June 1998 death of General Sani Abacha ended a period of unprecedented repression in Nigeria--allowing elections that have led to the installation of the first civilian government in 16 years--protest and repression in Nigeria's oil-producing regions have, if anything, increased.

In particular, youths from the Ijaw ethnic group, Nigeria's fourth largest and the dominant group in the riverine areas of the Niger Delta, have begun to mobilize across the fragmented territories and linguistic sub-groups of the Ijaw people, along the same lines as MOSOP. While the Ogoni are a small group of approximately half a million, the Ijaw number at least 8 million people and live in some of the areas richest in oil deposits. In December 1998 a group of Ijaw youths formed the "Ijaw Youth Council" and adopted the "Kaiama Declaration," a radical manifesto similar to MOSOP's "Ogoni Bill of Rights." The initiative claimed ownership of mineral resources by those living in areas where they are produced, even though the Nigerian constitution provides that all minerals are owned by the federal government. The declaration called for oil companies "to withdraw from Ijaw territories by 30 December 1998, pending the resolution of the issue of resource ownership and control in the Ijaw area of the Niger Delta."(1) On 28 December the Ijaw Youth Council announced the launch of "Operation Climate Change," involving activities aimed at shutting down gas flares, to run from 1 to 10 January 1999.(2) On 30 December several thousand youths supporting the Kaiama Declaration held demonstrations in a number of communities across Ijawland. These demonstrations were peaceful in most places, but in Yenagoa, the capital of Bayelsa State, a heavy-handed security force response led to confrontations over the next few days between youths, soldiers and nearby communities, resulting in the deaths of dozens of youths, most of them unarmed, as well as two or three soldiers.(3)

There is every likelihood that protests of this type will continue under the civilian government headed by President (and former military ruler) Olusegun Obasanjo, who took office at the end of May 1999 following elections in February There is also serious violence among several of the different ethnic groups who live in the oil-producing regions, especially in the Western Delta. Similar to violence elsewhere in Nigeria, this conflict centers on control of political power and patronage, in which matters such as the location of local government authorities play a key role. In the Delta, however, the violence is exacerbated by the presence of the oil companies and the competition for contracts and other benefits of oil company favor. Although oil production has so far largely remained at levels approximating the quota for Nigeria set by the Organization of Petroleum Exporting Countries (OPEC), individual oil companies have at different times been forced to delay delivery on particular contracts for the supply of crude as a result of the ongoing unrest. Shell, for example, produced only 700,000 barrels per day (b/d) from August to December 1998, falling short of its production quota of 830,000 b/d set in July 1998, and shorter still of an average 899,000 b/d during 1997.(4)

Under these circumstances, all oil companies operating in Nigeria can expect to remain the focus of both domestic and international attention. Domestically, groups protesting the terms on which oil is produced will continue to target the oil companies, both to demand compensation for damage done by oil production--including an increase in spending on local development--and to draw government attention to their grievances. International attention will focus on oil company responses to such demands, including the maintenance of proper environmental standards and the commitment to raising the standard of living in communities where oil is produced. The discovery and disclosure of corporate collusion with the Nigerian government to suppress protests and protect oil production by force will also be an issue of international interest.

The oil companies maintain that they are targeted by protesters in the Delta only as surrogates for the Nigerian government; disgruntled community members realize, they say, that the oil companies are more responsive to community demands than the government and more likely to keep their promises. The companies also deny responsibility for security force actions taken by the government to suppress protest, saying that they cannot interfere in the government's legitimate right to enforce law and order. Yet this argument hides the extent to which the companies are both responsible for the discontent in the oil-producing communities and happy to hide behind--or willingly cooperate with--their joint venture partner when government action keeps the oil flowing, even at the expense of the rights of Nigerian citizens. Oil companies actively pressure the government regarding such things as tax laws, though they claim they are non-politicized and thus cannot influence governments regarding human rights.

As a recent Human Rights Watch report, The Price of Oil: Corporate Responsibility and Human Rights Violations in Nigeria's Oil-producing Communities, shows, oil production and oil-led development have caused substantial damage to the Delta environment without bringing compensating benefits. Although oil money has made some rich, most people living in the oil-producing regions are poor, and inequalities in the allocation of oil money have also exacerbated intra- and inter-community conflict. Protests over this state of affairs, whether organized or individual, have been met with indiscriminate repression from the Nigerian authorities. The oil companies, in general, have failed to distance themselves from repressive security force action. Very rarely indeed have they publicly protested human rights abuses, and then only in very guarded terms when they have faced international pressure to do so. In some cases, such as those detailed later in this article, there is substantial evidence of direct oil company complicity in security force action, though security arrangements between the oil companies and the Nigerian government are shrouded in secrecy. Although oil companies have legitimate needs for security, especially since there have been a number of recent cases in which groups of youths have taken expatriate workers hostage, they also have responsibilities to take all steps to ensure that security is not provided in an abusive manner. This includes making the terms of their security arrangements public; ensuring that security personnel are properly trained; protesting abuses committed by government security forces; and addressing, to the extent within their own control, the grievances that led to protest in the first place.

THE OIL INDUSTRY AND THE OIL-PRODUCING COMMUNITIES

Nigeria is the largest oil producer in Africa and the fifth largest in OPEC. The discovery of oil in 1956 transformed Nigeria's political economy, and for the past two decades oil has provided approximately 90 percent of foreign exchange earnings and 80 percent of federal revenue. Nigeria also has huge reserves of natural gas yet to be fully exploited. Yet instead of turning Nigeria into one of the most prosperous states on the African continent, these natural resources have enriched only a small minority while the vast majority has become increasingly impoverished. With a per capita gross national product of only $260 a year, Nigeria is one of the poorest countries in the world.(5)

At the same time, the struggle among the elite to gain access to the profits of the oil boom has been a factor in the rule of successive military governments. Since independence in 1960 Nigeria has enjoyed only 10 years of civilian rule, though the inauguration of elected President Olusegun Obasanjo on 29 May 1999 brings some hope that the days of military rule are over. Minority ethnic groups in Nigeria's multi-ethnic federation have successfully demanded that new states and local government units be established over the years in the hope that they will receive some benefits from the oil money and be compensated for the damage done by oil production. Paradoxically, however, the Nigerian federation has become ever more centralized in practice, and power and money have been concentrated in the hands of fewer and fewer people. Politics has become an exercise in organized corruption, most spectacularly demonstrated around the oil industry itself, where large commissions and percentage cuts of contracts have enabled individual soldiers and politicians to amass huge fortunes. Meanwhile the majority of Nigerians have sunk deeper into poverty.(6)

Today Nigeria produces approximately 2 million b/d of crude oil.(7) The country has estimated oil reserves of 22.5 billion barrels, mostly found in small fields in the coastal areas of the Niger Delta.(8) According to the Nigerian constitution, all minerals, oil and gas belong to the federal government, which negotiates the terms of oil production with international oil companies. Most exploration and production activities in Nigeria are carried out by European and U.S. oil companies operating joint ventures of which the Nigerian...