Case studies and contributors:
i 'Shell's Social Licence to Operate: A Case Study of Ogoni' -
Legborsi Saro Pyagbara, Movement for the Survival of the Ogoni
People (MOSOP)
ii. 'Shell's Poor Stakeholder Engagement' - Patrick B. Ereba and
Boniface B. Dumpe, Centre for Social and Corporate Responsibility
(CSCR)
iii. 'Three Challenges Facing Shell in Nigeria' - Stakeholder
Democracy Network (SDN)
iv. 'Shell in Nigeria: A Conflict Perspective' - Dr Emmanuel O.
Emmanuel, Trans-Border Missionaries Interface Initiative (TMII)
v. 'SPDC's Global Memorandum of Understanding' - Tracey Draper,
Pro-Natura International (Nigeria) (PNI)
4. Media inquiries:
Miles Litvinoff, ECCR: +44 (0)20 8965 9682, +44 (0)7984 720103,
miles.litvinoff@eccr.org.uk
Case study contributors:
Boniface Dumpe, CSCR Port Harcourt: +234 (0)84 573109 / 468555,
dumpe_bb@yahoo.com
Patrick Ereba, CSCR Port Harcourt: +234 (0)84 573109 / 468555,
patrickereba@yahoo.co.uk
Joseph Croft, SDN: +44 (0)20 7065 0846, +44 (0)7966 755751,
joseph@stakeholderdemocracy.org
5. The report is sponsored by the Netherlands-based international
development organisation Cordaid.
6. Using the report: ECCR hopes that the report will contribute to
improvement in the lives of the Niger Delta's communities by
helping clarify priorities for Shell and SPDC and providing a
framework for constructive dialogue and prompt action. ECCR
encourages engagement on the part of faith-based and other
responsible investors and fund managers - and others who seek a
more equitable and sustainable global economy in sharing concerns
with Shell directors and urging changes along the lines
recommended.
7. ECCR is a church-based investor coalition and membership
organisation working for economic justice and environmental
sustainability. A Body in Association with Churches Together in
Britain and Ireland, it undertakes research, advocacy and dialogue
to encourage companies to meet the highest standards of corporate
responsibility and transparency, as well as assisting faith
communities, their members and other investors in upholding these
same high standards through responsible and positive-impact
investment.
8. Past ECCR reports: Vulnerable Migrant Workers: The
Responsibility of Business (2009), Water Sustainability: Meeting
the Challenge (2008), and company reports on Rio Tinto (2006), BHP
Billiton (2005), GSK (2004), AstraZeneca (2003), Shell (2002) and
BP (2002). http://www.eccr.org.uk/Reports
Shell in the Niger Delta: A Framework for Change
Five case studies from civil society
February 2010
Executive Summary
This report provides an update on oil company Shell's social and
environmental impacts in the Niger Delta. Comprising case studies
from five civil society organisations that work with Delta
communities, it assesses the operations of Royal Dutch Shell's
Nigerian subsidiary, the Shell Petroleum Development Company
(SPDC), and explores potential solutions to problems identified.
Questions that the report seeks to address include: How far has
life for communities improved or worsened in recent years? What
measures do the Delta's people and civil society identify as
priorities to be addressed and good practices to be followed? What
should faith-and values-based investors urge Shell and SPDC to do
to improve matters?
Not all the Niger Delta's problems can be laid at an international
oil company's door. Recognising the state as the primary bearer of
the duty to protect human rights, our report's premise is the
increasingly recognised corporate duty to respect human rights. In
the words of Professor John Ruggie, Special Representative of the
UN Secretary- General on business and human rights: ‘[T]he
responsibility to respect requires companies to ... become aware
of, prevent and address adverse human rights impacts.'1
The case studies largely concur with the widespread civil society
view that benefits from the oil industry's operations in the Niger
Delta are outweighed by the very considerable local human and
environmental costs. Shell, as the largest international oil and
gas company operating in Nigeria, is central to these outcomes.
The case studies
1. Shell's Social Licence to Operate: A Case Study of Ogoni The
first case study, from the Movement for the Survival of the Ogoni
People (MOSOP), describes the culture and traditions of the Ogoni
and their early interactions with Shell, before summarising the
transformative impact that commercial oil extraction has had on
Ogoni lives.
Among the effects noted are environmental insecurity; all too
frequent oil spills, with poorly executed clean-ups and unfair
compensation; a devaluation of community opinion and culture;
unequal and unjust revenue allocation; a series of unsuccessful
community development initiatives; militarisation; the arrest,
trial and hanging of the Ogoni Nine; and overall a sense of
betrayed trust.
The case study concludes by advocating a new approach to dialogue
and community development in the Delta -embracing principles such
as informed consent; application of international standards to the
clean-up of oil pollution; and an end to gas flaring.
2. Shell's Poor Stakeholder Engagement The second study, by the
Centre for Social and Corporate Responsibility, focuses on SPDC's
recent implementation of Environmental Impact Assessment (EIA) and
Participatory Rural Appraisal methodologies in developing the major
Gbarain-Ubie Integrated Oil and Gas Project in the
Gbarain-Ekpetiama local government area of Bayelsa State.
Contrasting the quality of delivery with the high standards laid
down in the Nigerian regulatory framework and the company's own
policies and manuals, the case study alleges a range of
shortcomings such as exclusion of public scrutiny; inaccurate scope
and content of EIAs; questionable claims by the company of
community representation; apparent lack of transparency in
compensation for relocation of people's homes; and poorly run
community development.
Among its recommendations, the study urges more transparent and
credible public participation in future impact assessments;
independent monitoring and verification; an environmental audit
leading to restoration and rehabilitation; and a bottom-up
community-led approach to development programmes.
3. Three Challenges Facing Shell in the Niger Delta Stakeholder
Democracy Network's case study highlights key challenges that in
its opinion confront the company and how these can be addressed:
reliance on security- focused surveillance contracts; tolerance of
corruption regarding oil spills; and the failure to end gas
flaring.
Regarding security-focused surveillance, the study argues that the
company's contracting of a network of local power-brokers and
‘strongmen' has damaged its credibility and operational security.
On oil spills, the poor integrity of a largely ageing pipeline
network allows unacceptable levels of pollution to continue that
are an opportunity for exploitation by unscrupulous actors. And gas
flaring constitutes ‘a daily reminder to communities of Shell's
apparent valuing of production above environmental and public
health concerns'.
The case study recommends that Shell and SPDC adopt a reformed
approach to security; rigorously apply Shell's General Business
Principles; end gas flaring as part of a comprehensive energy
generation strategy; and improve operational transparency.
4. Shell in Nigeria: A Conflict Perspective The fourth study, from
Trans-Border Missionaries Interface Initiative, considers the
situation in terms of conflict generation and transformation. Based
on a survey of communities' living conditions, common problems
requiring immediate attention are identified: poverty and hunger;
unemployment; underdevelopment; high maternal and child mortality;
and environmental degradation. In most cases, oil industry
activities are identified as a major causative factor.
The case study examines several instances of conflict between SPDC
and communities before concluding that the company has contributed
to conflict through its poor fulfilment of regulations and
standards and its failure to fully respect the human rights of
claim holders.
Recommendations include an immediate end to gas flaring; a major
environmental rehabilitation programme; learning lessons from past
external stakeholder reviews; transfer of economic empowerment and
human capital development to community trusts; retraining of field
staff; and the establishment of community-level peace centres.
5. SPDC's Global Memorandum of Understanding The closing case
study, from Pro-Natura International (PNI), moves from an
assessment of the limitations of SPDC's past approaches to
community development to consider the current Global Memorandum of
Understanding (GMoU) model, in whose delivery PNI is involved.
Analysing the GMoU framework and intended process, the study
identifies far-reaching shortcomings in the way the work has been
implemented, and only limited successes. It concludes that while
the model is a significant improvement on previous SPDC community
engagement, rushed roll-out by the company has resulted in the
essential participatory principles being ignored.
The case study's recommendations centre on training and refresher
courses for SPDC implementation staff; removal of staff with
limited competency in sustainable development; linking GMoU
communities with state and local government; and affirmative action
to address women's marginalisation from the programme.
Conclusions and recommendations
Despite their differences of emphasis, the case studies reveal a
consistent thread of concerns. These include a continuing failure
by Shell and SPDC to operate in the Niger Delta fully according to
robust international social and environmental standards; severe
pollution of air, land and water, with disastrous impacts on health
and livelihoods; inadequate inclusion of communities in decisions
affecting their lives; a failure to dialogue respectfully, address
critical needs and maintain trust; short-termism and lack of
vision.
Shell's own General Business Principles, if rigorously implemented,
would go some way to meet these concerns. So would the
recommendations of the 2008 Report of the Technical Committee on
the Niger Delta, set up by the Nigerian Federal Government and
chaired by MOSOP President Ledum Mitee. Also worth consideration
are practices of other international oil companies that are said to
have secured more community consent in the Delta than Shell and
SPDC have achieved.
Recommendations
The report makes the following ten overall recommendations to Shell
and SPDC:
- Stop gas flaring as a matter of urgency, prioritising flares
closest to communities, if necessary halting production while
flares are eliminated.
- Mobilise resources without delay to address communities' need
for sustainable sources of clean drinking water.
- Embark on a Delta-wide environmental audit and rehabilitation
programme, cleaning up the legacy of oil spills, polluted land and
waterways, and rapidly replacing old pipelines to international
standards.
- Transform SPDC's operating culture through a continuous
programme of staff training in human rights, conflict management
and community relations. ECCR executive summary Shell in the Niger
Delta: A Framework for Change
- Apply effective social and environmental impact assessment
methodologies; respect principles of open dialogue and community
consent; establish independent monitoring and effective grievance
mechanisms.
- Scale back operations in localities where significant
unfulfilled commitments remain and community tensions exist until
problems have been remedied.
- Transform community development programmes through
participatory, inclusive and empowering strategies.
- Implement a policy of fully disaggregated revenue and
expenditure transparency.
- Affirm the findings of the Report of the Technical Committee on
the Niger Delta and publicly commit to work with others in
implementing its recommendations.
- Link the remuneration of senior company executives responsible
for Niger Delta operations to satisfactory progress on human rights
and environmental issues. SPDC's comments on the draft text
ECCR provided Shell with this report in draft form and invited it
to comment. In response, SPDC stated its view that the report is
not a sufficiently complete or balanced assessment because "the
primary and overriding authority and responsibility' for what takes
place in the Niger Delta ‘rests with the state". The company also
commented that the text makes ‘many unsubstantiated claims'. On the
few specific points that SPDC challenged, ECCR has conferred with
the respective contributors, modified the text and/or inserted a
footnote indicating SPDC's different view.
The company did, however, acknowledge ‘a convergence of ideas and
themes' and said that it had already embraced some of the report's
recommendations. ECCR has replied to Shell and SPDC by stating its
willingness to support a common agenda for action around such
points of agreement.
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