Running on Empty: Shell in Nigeria

Royal Dutch/Shell rides at the top of the list of TNCs. Not only is Shell the largest refiner and exporter of oil in the world but it also possesses the largest foreign assets. Considering its dominant position in the world of business and industry, its potential for leadership in addressing the crisis of atmospheric pollution and global warming and demonstrating stewardship towards natural resources, as called for in Agenda 21, Shell has been a big disappointment. In 1992, when Stephan Schmidheiny published his book Changing Course, Lodewijk C. van Wachem, Senior Managing Director for Royal Dutch/Shell, was listed as one of the signatories to the "Declaration of the Business Council for Sustainable Development." The Declaration emphasizes how "business will play a vital role in the future health of this planet," that as business leaders they recognize "that the quality of present and future life rests on meeting basic human needs without destroying the environment on which life depends." The Business Council Declaration also points out that the global trend toward deregulation calls for corporations to "assume more social, economic and environmental responsibility in defining their roles," that companies "must expand our concept of those who have a stake in our operations to include not only employees and shareholders but also suppliers, customers, neighbors, citizens' groups, and others." Since the Earth Summit and the signing of the Business Council Declaration, Shell has attracted worldwide attention for a series of environmental scandals and human tragedies which mock any claim Shell may have had to global leadership in sustainable development. Ironically, Schmidheiny listed Shell's human resources efforts in Nigeria in as an example of a "best practice." One of the lessons learned from Shell's example, Schmidheiny wrote, was that "investments by multinational corporations can make significant contributions to local development objectives." Little did he know that Shell would soon stand out as one of "the world's top ten worst corporations," and one of the more widely known violators of environmental integrity and human rights. As Sierra Club's Steve Mills put in it in his testimony to a US Congressional committee, Shell is "an example of how development should not occur in Africa."

Crude Conduct

In 1993, one year after the Earth Summit, General Sani Abacha annulled the Nigerian presidential election that was supposed to restore civilian rule. At this time, Shell was a major force in the country's economy. Whereas Abacha's opponents and critics have been jailed or assassinated, the foreign oil executives continue to receive a warm welcome. Of the $10 billion of oil export revenues delivered each year to Nigeria's military leaders, half is produced by Shell. Beginning their operations in 1953 in the Niger delta where the Ogoni people have lived, fished and farmed for ages, Shell has extracted $30 billion in oil from these once fertile and productive agricultural lands. In return for this extracted wealth, the Ogoni have been treated shamefully and their land devastated. According to a recent report from the World Council of Churches, Ogoniland is afflicted by "a quiet state of siege" involving "intimidation, rape, arrests, torture, shooting and looting" by government soldiers sent to curb local protest against the "oil spills, dumping of oil into waterways and pollution, gas flares, overground oil pipes." In contrast to the promise they made in the Business Council Declaration to expand their concept of stakeholders in their operations, Shell's behavior in Ogoniland appears more like a that a ruthless thief protected by brutal thugs. Now hosting 96 oil wells, four oil fields, one petrochemical plant, one fertilizer plant, and two refineries, the once rich 400 square miles of Ogoni farmland, rainforest and mangrove habitat has been "laid waste by oil spills and the venting of toxic gases." At the same time, the Ogoni people receive none of the monetary benefits of the ongoing plunder, remaining poor and lacking basic necessities such as running water, electricity, adequate schools or medical care. According to Ogoni environmental activist Ken Saro-Wiwa, the gas-flaring of Shell operations has poisoned the air and water, destroyed plant and wild life, and damaged the hearing and respiratory systems of residents: "Whenever it rains in Ogoni, all we have is acid rain which further poisons water courses, streams, creeks, and agricultural land." Between 1982 and 1992, the company is said to have spilled 1.6 million gallons in 27 incidents.

Ecological War

In an effort to empower their community and campaign against what they call Shell's "environmental terrorism" of the Ogoni homeland, Saro-Wiwa and other Ogoni leaders formed the Movement for the Survival of the Ogoni People (MOSOP)./29 On January 4, 1993, Saro-Wiwa and 300,000 Ogoni (out of a population of 500,000) drew international attention to their situation by a peaceful protest march through Ogoniland. A few months later, during a demonstration against pipe being laid across Ogoni farmland, soldiers opened fire on a crowd, killing one person and wounding several others. Military presence and further incidents soon escalated into a series of brutal attacks, arrests, and general repression./30 Since 1993, the Nigerian military has destroyed 20 Ogoni towns, killed 1,800 people, and left 50,000 Ogoni homeless. In November 1995, Ken Saro-Wiwa and eight other Ogoni leaders were executed, despite world-wide protest. In his final statement to the military tribunal before being hanged, Saro-Wiwa expressed his confidence that "the ecological war that the Company has waged in the Delta will be called to question sooner than later..."

Politics Is the Business of Government

Since the execution, conditions in Ogoni have gotten worse. In 1996, according to MOSOP, 36 people have been executed, 246 detained, and 19 communities assaulted by military raids. Ogoni land is now occupied by the military, with dusk to dawn curfews. On January 1, 1997, 1,000 additional troops were stationed in Ogoni communities. Internationally, there has been a call for both a world wide boycott of Shell and economic sanctions. The reasons for the boycott, Project Underground explains, is because Shell has:

• Devastated the environment of the Niger delta;
• Imported arms for the Nigerian military;
• Paid the Nigerian military to conduct operations in Ogoni;
• Provided logistical support to armed units of the Nigerian police and military;
• Bribed witnesses at Ken Saro-Wiwa's trial;
• Continues to be the single largest source of income for the brutal Nigerian regime.

Although Shell disputes these charges, the boycott campaign continues to receive strong support from many NGOs and other organizations. The demands of the boycott are for Shell to:

• Withdraw and cease efforts to reenter areas of Niger delta under military rule;
• Actively seek release of the Ogoni 19 -- who are still awaiting "trial" on same false charges for which Ken Saro-Wiwa was executed;
• Stop its practice of "double standards" and support an independent environmental assessment of Niger delta.

Sierra Club, another supporter of the boycott, also calls on the company to:

• Admit responsibility for the environmental devastation in Ogoniland;
• Cease all other operations until Ogoniland has been cleaned up;
• Pay reparations to the affected communities;
• Promise to adhere to more stringent pollution standards in Nigeria.

In response to the demand to seek release of the Ogoni 19, Shell continues to maintain its position that "it is not [Shell's] place to interfere in the legal system." While the ToBI Statement urges reduction of the political influence of corporations on government, Shell maintains it does not and should not have such influence. Shell repeats this notion time and again: Some campaigning groups say we should intervene in the political process in Nigeria. But even if we could, we must never do so. Politics is the business of governments and politicians. The world where companies use their economic influence to prop up or bring down governments would be a frightening and bleak one indeed."

Oil Slick

Shell's claim to have no political influence should be judged in relation to the tremendous influence which Shell and the oil industry has on government policy, legislation, and elections, particularly in their home countries. If there is any possibility of legislation being passed that will impact company profits, companies like Shell immediately mobilize legal expertise, money, and political connections to influence a pro-oil outcome. One of the important investments by business and industry is in influencing political decisions. In his book Losing Ground, Mark Dowie describes the industrial lobby:

Corporations finance a lobby that is willing to spend almost unlimited time and money combating a process - environmental regulation - they claim costs them $125 billion a year. Chemical manufacturers, oil companies, big agriculture, timber interests, and their PACs [political action committees] will, unless campaign finance laws are reformed, always have greater access to the legislature than environmental lobbyists.

The question of the influence of Shell, oil companies, and corporations in general on politics is one of the more important but least discussed issues for the United Nations and its members. The practice of political lobbying by corporate representatives and the huge flows of financial contributions to influence elections and legislation present major questions about the future of democratic governance. The privileged position of the World Trade Organization to overrule all other national and local laws and regulations which might interfere with trade stands as one of the controversial test cases for resolving these questions about democratic governance. The campaign for sanctions against Nigeria, although receiving initial support by several world leaders (including Nelson Mandela and the European Parliament), continues to be just an idea - due to major lobbying by both the Nigerian government and oil companies. As one writer described it in the Washington Post, "Nigeria's lobbying success is a textbook example of how even the most unpopular of foreign regimes can neutralize their opposition in Washington with money and influential friends." In the United States, oil companies such as Mobil, Conoco, Amoco and Chevron, as well as several interested non-oil firms, contributed thousands of dollars to lobby Washington and prevent imposition of sanctions. Conoco and Chevron, for example, each contributed $10,000 to the Corporate Council on Africa to lobby against Nigerian sanctions. The Nigerian government is said to have spent more than $10 million in the United States for lobbying and public relations efforts since the Saro-Wiwa hanging. If "politics is the business of politicians" and corporations should "not be using their economic influence," then industry should get out of the business of political lobbying and allow government and civil society to make and enforce laws beneficial to society. 'When companies will only exert their influence to protect business interests then governments must exert their influence over businesses to protect the interests of society. Another boycott demand is for Shell to stop practicing "double standards." One goal of the ToBI Statement is to get all corporations to stop practicing double standards. Shell's behavior in Nigeria would not have been tolerated in the Netherlands, the United States, or many other countries having higher standards. However, even in democratic countries, Shell demonstrates a ready willingness to hold profits above public safety and to play politics to get its way. One U.S. court ruling (Leonardini v. Shell Oil Company) on the company's legal harassment of a consumer advocate is illustrative of Shell's double standard with politics:

As found by the jury, Shell engaged in a continuous course of conduct to thwart the open governmental process of resolving conflicting claims on a subject of marked public interest. Seen in this light, Shell's conduct threatened the indispensable rights of all citizens to appear before their government and to speak out in matters of public health and safety without fear of legal retaliation....The use of superior fiscal position to silence opposing voices in public debate by the misuse of the legal process strikes at the very heart of the democratic process. The game Shell elected to play was a legal game and the object of its suit the suppression of speech.

In Nigeria, Shell has shown itself no defender of "the indispensable rights of all citizens to appear before their government and to speak out." In Nigeria, however, it is not Shell's legal department attempting to stifle criticism, but the military. What is the role of government and the U.N. in such situations? What international body can the Ogoni or any other community go to with their claims of abuse by a transnational corporation? What mechanisms exist to assess such claims? What international legal mechanisms exist for social and environmental justice that have the same standing as the WTO protecting the free flow of trade?

Next: Scraping Bottom: Freeport McMoRan in Irian Jaya (Case Study #3)