The Oil Crisis in the Niger River Delta - Cornell University 2008... · Web viewThe Oil Crisis in...

The Oil Crisis in the Niger River Delta

By:

Chris Bentley

Matt Hintsa

Mimi Liu

Liz Moskalenko

Stacey Ng

Chris Bentley, Matt Hintsa, Mimi Liu, Liz Moskalenko, Stacey Ng 1

The Oil Crisis in the Niger River Delta

The discovery of oil along Nigeria’s coast in 1956 sparked hopes of an economic boom

that would elevate the African nation’s standard of living significantly. With the presence of an

increasingly lucrative natural resource under their land and waters, Nigerians had a reason to be

excited. However, transnational oil corporations—oil corporations that operate in foreign nations

—also had reasons to be excited as the promise of oil wealth lured them to Nigeria. The presence

of transnational oil corporations, combined with the ineffective nature of the Nigerian

government and the myriad of ethnic groups, has led to a situation of political, socioeconomic,

and environmental distress.

The objective of this policy brief is to investigate the impact of oil exploitation by Shell

on the Niger River Delta and to explore governance alternatives for the oil crisis in Nigeria. The

study is examined as follows:

Introduction to Shell as a multinational oil corporation operating in Nigeria

Overview of the Niger River Delta and environmental degradation as a result of oil

exploitation

Role of government and the corrupt interactions between the oil industry and Nigerian

government

Impact of the oil industry on local ethnic groups and the abuse of human rights

Condition of Nigeria’s social capital degradation due to the oil crisis

Analysis of governance in terms of ecological modernization

And a governance prescription as a guide for alternative development in Nigeria


Transnational Oil Corporations in Nigeria: Shell

Historically, Royal Dutch Shell has been one of the more significant actors in the

Nigerian oil industry. It was Shell, under the name Shell D’Arcy, that first discovered oil at

Oloibiri in 1956,1 and it is Shell that currently exports approximately half of Nigeria’s 2.1

million barrels of oil produced per day.2 In addition, the corporation has been the target of recent

violent protests by local residents in the Niger River Delta region. For these reasons, Shell is the

corporation of focus for this policy brief as a good representative of the many transnational oil

actors in the area.

Environmental Degradation in the Niger Delta Region

The Niger River Delta region is heavily endowed with both renewable and non-

renewable resources.3 As one of the world’s largest river deltas, it has a coastal plain that

stretches over 70,000 km2. It is home to Africa’s largest mangrove forest, an extensive

freshwater swamp forest, a high concentration of biodiversity, as well as home to many endemic

species.4 While the Niger River Delta places as the 13th largest producer of petroleum in the

world, the heavy exploitation of these resources (especially oil) caused it to be ranked as one of

the five most polluted and degraded locations on the planet.5

1 Nigerian National Petroleum Corporation. “History of Nigerian Petroleum Industry.”2 Agence France-Presse. “Shell reports 169,000 bpd output loss in Nigeria.”3 K.K. Aaron. “Perspective: Big Oil, Rural Poverty, and Environmental Degradation in the Niger Delta Region of Nigeria.”4 Osuji, Leo and Augustine Uwakwe. “Petroleum Industry Effluents and Other Oxygen-Demanding Wastes in Niger Delta, Nigeria.”5 K.K. Aaron. “Perspective: Big Oil, Rural Poverty, and Environmental Degradation in the Niger Delta Region of Nigeria.”


The wetland environments of Africa are the foundations and supports of the indigenous

people who depend on their natural resources and ecology to sustain them. For years, the main

livelihood of the indigenous people was based on farming and fishing.6 In one tragic example of

the disparity between past and present, children in the delta grew up believing that they would

fish and farm as their parents did. However, because oil money dominates the area of the delta

and pollution renders the water futile to fish, the young people eventually migrated to a city or

attempted to get a job as a worker in the oil industry. Isaaz Osuoka, director of Social Actions in

Nigeria, recalls the first time he saw frozen fish during the late 1970s when he was five: “We

never had fish brought in from outside…We had no idea what frozen fish meant. There were

rumors that this fish was kept in a mortuary…Today, there is not a single person in my

community you could describe as a fisherman. We depend almost totally on frozen fish.”7

6 Adams, W. M. “Indigenous use of wetlands and sustainable development in West Africa.”7 O’Neill, Tom. “Curse of the Black Gold: Hope and Betrayal in the Niger Delta.”


Presently, the Niger River Delta remains one of the poorest regions, largely due to the

exploitation of oil and gas and the state policies that unjustly seize the rights of the native people

to use and manage their natural resources.8 Furthermore, the activities of the oil corporations

devastate the wetland coastal plain; severe environmental problems arise from oil and gas-related

development activities, oil spills, refinery operations, oil transportation, gas flaring, dredging of

canals, and from land taken for the construction of facilities. In the past fifty years, 1.5 million

tons of oil have been spilled in the area, threatening the livelihood of twenty million people.

Moreover, areas near such outfalls are subjected to chronic pollution, which is of significant

consequence for fish resources and fisheries. Overall, the land has been rendered unproductive

and the water too polluted for fish or human use.

Government in Nigeria

8 K.K. Aaron. “Perspective: Big Oil, Rural Poverty, and Environmental Degradation in the Niger Delta Region of Nigeria.”


Stepping back a little, it is important to note that the Federal Republic of Nigeria formed

after Nigeria declared independence from Britain in 1960. No longer a British colony, Nigeria

was left to ensure its own future, whether prosperous or impoverished. From then until now, the

deep corruption and centralization regarding the oil wealth has not essentially changed. In 1971,

when the Nigerian government nationalized the oil industry and controlled the energy of the

nation, Nigeria owned approximately 60 percent of the multinational oil operations onshore in

the name of the Nigerian National Petroleum Corporation.9 However, Nigeria never fully

nationalized its oil reserves or industry, thus subjecting the nation to the revenue and lax

regulation—economic and environmental—demands of the foreign transnational corporations.

Unfortunately, the Nigerian government works in favor of the oil companies more than it

favors its own people. In a phenomenon commonly referred to as the ‘revolving door syndrome,’

certain government officials and corporate CEOs hold seats of power in either (or both) the

Nigerian government or the oil corporations, then switch when their term has ended. Thus, the

government and the oil corporations work closely together, especially when their members have

stakes in both. Since 1960, corrupt government officials have stolen an estimated $380 billion

from Nigeria’s treasury, resulting in an ‘institutionalized looting of national wealth.’ Many local

governments, of which there are 774 total distributed amongst 36 states, are also led by corrupt

officials.10 These local representatives, meant to represent their communities and states, are often

bribed by the oil companies or federal government officials to represent the interests of the

‘state.’ With no voice for the people, locals have no way of effectively communicating their

interests and demands to an already corrupt federal government.

The Nigerian government responds, for the most part, inadequately to anti-oil protests.

9 O’Neill, Tom. “Curse of the Black Gold: Hope and Betrayal in the Niger Delta.”10 Polgreen, Lydia. “Corrupt Nigerian election a setback for democracy.”


When locals kidnap oil workers and turn to violence, the federal government responds in one of

three ways: granting concessions; utilizing public relations; or resorting to security measures. To

appease the communities, the government concedes to ‘development projects’ that are usually

insufficient or ineffective, meaning that they do not successfully address the needs of the people.

In response to rising oil protests, the government also willingly spends millions of dollars on

public relations in order to counter opposition to or justify the oil operations. Furthermore, the

federal government uses the state military and police to suppress or forcefully control dissidents

and protestors who are threatening the security of the ‘state.’ Rather than take measures to

increase federal government and corporate accountability or give control over the oil resource to

the communities, the federal government instead uses its power to mollify protests and justify its

forceful responses.11

Even though Nigeria transitioned from a military dictatorship to a ‘democracy’ in 1999,

elections were and are still rigged and met with violence and fear. Leading up to the 2007

elections, over 300 Nigerians were killed due to political violence, and many potential voters

were discouraged from voting from threats and apprehension. Politicians spur political violence

by hiring unemployed men to attack rivals, intimidate voters, incite unrest, steal ballot boxes, and

protect patrons. The lingering political violence after the elections are a result of politicians

losing control over the gangs they had employed. Hence, the government itself is as responsible

for the unrest in Nigeria as the oil industries.12

The Nigerian People

The establishment of oil multinational corporations in Nigeria has gone beyond the

siphoning of a nation's opportunity for wealth all the way to the crippling of its people. Not only

11 Frynas, George J. “Corporate and State Responses to Anti-Oil Protests in the Niger Delta.” 12 “Criminal Politics: Violence, ‘Godfathers’ and Corruption in Nigeria.”


are the ethnic groups politically marginalized, but also most of locals who have been subsistence

farmers and fishers their entire lives have been stripped of their sustainable livelihoods. Little

power, if any, do these ethnic groups hold against Shell and the corrupt or unresponsive Nigerian

government. Although the government has seemingly (yet unsuccessfully) made strides to

‘democratize,’ Nigerian locals still face repercussions, bribery, violence, and fear when it comes

to being properly represented in politics. In addition to the complete disregard for human rights

by both transnational corporations and the government, ineffectiveness by international

organizations to empower Nigerians, and ethnic strife between minority and majority ethnic

groups has created a rise in insurgent community groups, non-governmental organizations

(NGOs), and militant groups.

Moreover, the role of social justice in the Niger Delta region has played a huge role in the

dynamics of the institution, shedding light on the suffering, hardships, and needs of minority

ethnic groups. Over 250 ethnic groups fight for space, political power, voice, and natural

resource rights in Nigeria. Some ethnic groups have more power than others, greater size than

others, as well as more benefits and voice than others. While the dominant ethnic groups are the

Hausa and Fulani, comprising 29% of the ethnic group population, two minority ethnic groups,

the Ijaw and the Ogoni, making up 10% and less than 0.5% of the population respectively, have

played a greater role in the protest against transnational corporations.

Led by Ken Saro-Wiwa, the Ogoni people formed the Movement for the Survival of

Ogoni People (MOSOP) in 1990, with a bill of rights, bringing light to the impoverishment of

the people, the severely inadequate ‘compensation’ or ‘concessions’ for the oil drilled on their

land, and the lack of social investment provided by either the government or the oil corporations.

Ethnic groups such as the Ogoni desire autonomy, the right to fair use and control of economic


and ecological resources, respect for their culture, and the right to fair treatment, no matter the

size of the organization. MOSOP began its fight for the livelihood of Ogoni locals by holding

peaceful protests and demonstrations. However, as time passed, some members of MOSOP saw

Saro-Wiwa as ineffective, demanding increasingly violent actions. Following the murder of four

Ogoni leaders who had openly split with Saro-Wiwa in 1995, a clearly biased trial led to the

execution of Saro-Wiwa. With such severe institutional corruption and inability for mobilization

of minority groups, the tragedy of the Niger Delta continued with the establishment of militant

groups.

Two other more violent community groups include Niger Delta People's Volunteer Force

(NDPVF) and Movement for the Emancipation of the Niger Delta (MEND) both mainly

comprised of Ijaws. These groups became increasingly violent and demanding, through

kidnapping of oil TNC workers, bunkering of oil lines, seizures of oil platforms, installations and

equipment, disruptions of oil production, confrontations with state and military security forces,

and militarization of the region. While other non-governmental organizations have been

established, such as the Niger Delta Human and Environmental Rescue Organization

(ND_HERO), Ijaw Council For Human Rights (ICHR), Environmental Rights Action (ERA), Oil

Watch Group, and the Institute of Human Rights and Humanitarian Law (IHRHL), the people of

Nigeria remain in abject poverty and insecurity.

Social Capital

At this point in the study, Nigeria's major oil multinationals have exacerbated not only

the economic impoverishment and environmental infirmity of the Niger Delta region, but also

the alienation of its numerous ethnic groups.13 The Ogoni, Ijaw, Egbesu and other ethnic

minorities have collectively recognized their national government's failure to ensure

13 Klein, Naomi. The Shock Doctrine: The Rise of Disaster Capitalism.


representation for the people of the Niger Delta region as well as their almost complete

avoidance of accountability, both critical elements of any post-colonial government

improvement program.14 15 Ultimately, social capital--already precarious in one of the world's

most densely populated regions—suffers dearly.

Pretty and Ward's definition of social capital identifies several levels of cooperation to

adjust for a degree of government nestedness.16 While local connections flourish (facilitated by

ethnic pride and oppression), local-local connections are diminished. Participation between

ethnic groups occurs in part within the third sector, in keeping with Egels-Zanden and Hyllman's

(2006) definition of NGOs: "governance without government." However, terrorism by

resistance movements and militias helps deter cross-cultural cooperation—instead of

encouraging collaboration, ethnic militias create in-groups and out-groups. Discourses in

southern state youth movements focus on a "particularistic community identity" which is often

solidified by membership in a secret society or confraternity.17 So-called "area boys" enforce

communal rights, morals and laws, essentially criminalizing the social capital of local, ethnic

connections and pursuing a state of vigilantism.18 Unfortunately, the state response legitimizes

this response by deploying (often corrupt, begrudging and cruel) military occupation forces to

subdue the gangs.

This is the result, in the eyes of militant youth groups, of their government's

marginalization of southern state ethnic groups and its subsequent institutionalization of

14 Gore, C., Pratten, D. "The Politics of Plunder: the Rhetorics of Order and Disorder in Southern Nigeria."15 Manby, B. "The Price of Oil: Corporate Responsibility and Human Rights Violations in Nigeria's Oil Producing Communities."16 Pretty, J., Ward, H. (2001). "Social Capital and the Environment."17 Gore, C., Pratten, D. "The Politics of Plunder: the Rhetorics of Order and Disorder in Southern Nigeria."18 Gore, C., Pratten, D. "The Politics of Plunder: the Rhetorics of Order and Disorder in Southern Nigeria."


disorder. Though the government disagrees and sees youth movements as vectors to legitimize

illicit activities (as rebellions against an oppressive state) or regressive steps toward a "re-

traditionalization," the end effect is the same: social capital--its norms of reciprocity and trust,

its shared interest in the future, the very concepts that make it attractive--goes out the window.19

Pretty and Ward's element of communal homogeneity was never present explicitly in the Niger

Delta region with its patchwork quilt of ethnicities, but any shared interest in environmental

justice or political representation that may have provided a substitute has been repeatedly

marginalized as the full extent of the "instrumentalized distribution and disorder" of Nigeria

becomes clear.20

Environmental Governance and Ecological Modernization

19 Pretty, J., Ward, H. (2001). "Social Capital and the Environment."20 Gore, C., Pratten, D. "The Politics of Plunder: the Rhetorics of Order and Disorder in Southern Nigeria."


The first diagram represents a straightforward, mechanistic diagnosis of the oil crisis.

While this model recognizes a number of problems and may even recognize the situation as a

crisis, Shell is absolved of any obligation to be involved in the many factors that constitute a

sustainable cooperation of multinationals and local people. Environmental degradation,

economic impoverishment and other components are seen as cause-and-effect. Ethnic resistance

(in this reductionist view, essentially a rote Tribalism) is seen to exist on its own, beyond the

reach of the current socioeconomic and political climate. Ultimately, in this model, a top-down

commitment to corporate responsibility is the solution. In this way, and in its reliance on

technical quick fixes, this model--unfortunately the one currently employed--fits the bill for a

case of "weak" ecological modernization (Dryzek).


While the second diagram identifies many of the same problems, it acknowledges a

number of pathways that lead to each and places the components into a circular, self-reinforcing

network instead of an unfortunate string of events. For example, even if corporate responsibility

is enacted, a lack of environmental regulation will still cause environmental degradation. The

complexity of the diagram is representative of the complexity of any solution that seeks to

address the central problems delineated within. All must be addressed as part of the same

socioeconomic system, sorely in need of a reevaluation. This model is encouraged in place of

the former one. With its holistic, involved approach and tendency to question second-loop

(structural) problemsas opposed to simple immediate cause-and-effect (reactionary) measures, it

represents a move towards a stronger, more sustainable ecological modernization (Dryzek).


Prescription

The following prescription for governance in the Niger River Delta is the result of a

complex web of intertwined relationships between the government, society, environment and

economy. No single component of the prescription is the key to restoring order in Nigeria, and

none will be successful without progress of the others. Furthermore, the effectiveness of any

action—whether public or private, domestic or international—depends on the reworking of

national, state and local governments.

Public Accountability

Purging the Nigerian government of corruption is possibly the most important change

required for successful management. The government needs to increase transparency, or

openness, of its policies and actions to foster trust and collaboration with international

organizations, corporations and local interest groups. Furthermore, international institutions

(especially a more active United Nations) should hold the Nigerian government accountable for

its actions by monitoring the government and sanctioning abuses.

Market Influence

Media coverage in the developed world can bring Nigeria’s human rights and

environmental degradation abuses to the attention of international shareholders who are the

economic foundations of many corporations. If shareholders were more aware of the oil

exploitation in Nigeria, they may choose to stop investing in the transnational oil corporations on

moral grounds. Therefore, consumers can influence the market by actively refusing to support

exploitation of the Niger River Delta’s oil reserves, in essence holding the government and the

oil corporations accountable for their actions.

Environmental Regulation and Stewardship


Once the government’s corruption has been uprooted, progress becomes smoother in

vanquishing environmental degradation and human rights abuses. Nigeria needs regulations such

as mandatory and extensive environmental impact assessments, effective environmental

protection agencies, and subsidies for environmental protection and revitalization, both domestic

and international.

Minority Representation and Compensation

Violence from locals will continue indefinitely unless there is a more equitable and

agreeable distribution of oil revenue. Revenue should be invested in not only the areas where oil

is extracted from but also in non-oil-producing areas. Development cannot be discriminatory or

biased against minority states if the government does not wish to exacerbate ethnic tensions.

Local Clean-up Crews: Creation of a Civilian Green Corp

In the long run, Nigeria should diversify its economy and become less dependent on its

nonrenewable oil reserves. A domestic environmental cleanup industry should be created while

initially funded by international aid. Ethnic groups can use indigenous knowledge to restore local

ecosystems and build social capital by investing their pride and identity in the land that will

sustain future generations. Eventually, rival ethnic groups may unite together with the goal of

reversing environmental degradation, strengthening social networks and bonds.

In addition, assuming corruption in the federal, state and local governments has been

purged, Nigeria may benefit from increasingly nationalizing its oil industry. If resource benefits

are properly reinvested in public works and environmental remediation projects, nationalization

may ensure a greater degree of natural resource security. Economic, environmental and social

sustainability and security are goals that Nigeria should work towards over time, and no true

progress can be made unless all dimensions of the oil crisis are considered as a whole.


Works Cited

Adams, W. M. “Indigenous use of wetlands and sustainable development in West Africa.” The


Geographical Journal. Vol. 159, No. 2. July 1993: pp. 209-218.

Agence France-Presse. “Shell reports 169,000 bpd output loss in Nigeria.” April 27, 2008.

<http://news.yahoo.com/s/afp/20080422/wl_africa_afp/nigeriaoilcompanyshellunrestoutp

ut>.

“Criminal Politics: Violence, ‘Godfathers’ and Corruption in Nigeria.” Human Rights Watch.

Vol. 19, No. 16(A). October 2007.

<http://hrw.org/reports/2007/nigeria1007/nigeria1007webwcover.pdf>.

Frynas, George J. “Corporate and State Responses to Anti-Oil Protests in the Niger Delta.”

African Affairs. 2001. <http://afraf.oxfordjournals.org/cgi/reprint/100/398/27>.

Gore, C., Pratten, D. "The Politics of Plunder: the Rhetorics of Order and Disorder in

Southern Nigeria." African Affairs. 2003: 102, 407. p. 211-240.

Ikelegbe, Augustine. “Civil society, oil and conflict in the Niger Delta region of Nigeria:

Ramifications of civil society for a regional resource struggle.” The Journal of Modern

African Studies. 2001: 39, 3, 437.

Jike, V.T. “Environmental Degradation, Social Disequilibrium, and the Dilemma of Sustainable

Development in the Niger-Delta of Nigeria.” Journal of Black Studies. Vol. 34, No. 5

May 2004: pp. 686-701.

K.K. Aaron. “Perspective: Big Oil, Rural Poverty, and Environmental Degradation in the Niger

Delta Region of Nigeria.” Journal of Agricultural Safety and Health. 2005: 11, 2, 127-

134.

Klein, Naomi. The Shock Doctrine: The Rise of Disaster Capitalism. New York: Metropolitan,

2007.

Manby, B. "The Price of Oil: Corporate Responsibility and Human Rights Violations in Nigeria's


Oil Producing Communities." New York: Human Rights Watch, 1999. pp. 202.

Nigerian National Petroleum Corporation. “History of Nigerian Petroleum Industry.”

<http://www.nnpcgroup.com/history.htm>.

O’Neill, Tom. “Curse of the Black Gold: Hope and Betrayal in the Niger Delta.” National

Geographic. February 2007.

<http://ngm.nationalgeographic.com/ngm/0702/feature3/index.html?

fs=www3.nationalgeographic.com&fs=plasma.nationalgeographic.com>.

O'Rourke, D. "Market Movements: Nongovernmental Organization Strategies to

Influence Global Production and Consumption." Journal of Industrial Ecology. 2005:

9(1-2).

Osuji, Leo and Augustine Uwakwe. “Petroleum Industry Effluents and Other Oxygen-

Demanding Wastes in Niger Delta, Nigeria.” Chemistry & Biodiversity. Vol. 3. 2006:

705-717.

Osuji, Leo, Benjamin Ndukwu, Gordan Obute, and Ikechukwu Agbagwa. “Impact of four-

dimensional seismic and production activities on the mangrove systems of the Niger

Delta, Nigeria.” Chemistry and Ecology. Vol. 22, No. 5. October 2006: 415-424.

Polgreen, Lydia. “Corrupt Nigerian election a setback for democracy.” International Herald

Tribune. 23 April 2007. <http://www.iht.com/articles/2007/04/23/news/africa.php?

page=1>.

Pretty, J., Ward, H. (2001). "Social Capital and the Environment." World Development. 2001:

29(2). 209-229.

V. T. Jike. “Environmental Degradation, Social Disequilibrium, and the Dilemma of Sustainable


Development in the Niger-Delta of Nigeria.” Journal of Black Studies. Vol. 34, No. 5.

May 2004: pp. 686-701.

Interviews

Matt Hintsa interviewed Professor Nicolas van de Walle, director of the Einaudi Center

for International Studies at Cornell. Professor van de Walle’s area of research lies in African

political economies. Contributions from Professor van de Walle’s interview were incorporated in

the policy prescriptions as political and economic guidelines for Nigeria’s oil crisis.

Mimi Liu interviewed Professor Philip McMichael of the Department of Development

Sociology. Professor McMichael’s area of research lies in International Development.

Contributions from Professor McMichael’s interview were incorporated in the policy

prescriptions as political, social and economic guidelines for Nigeria’s oil crisis.

Chris Bentley attempted to contact UNDP and ERA but never received a response. He

planned to ask about the current role of non-governmental organizations and for suggestions on

future actions.

Liz Moskalenko attempted to contact UNEP but never received a response. She planned

to ask for UNEP’s perspective on the environmental impact of transnational oil corporations and

for suggestions on future actions.

Stacey Ng attempted to contact the Nigerian Student’s Association at Cornell but never

received a response. She planned to ask about the Nigerian people’s perspective on how their

lives are impacted by the oil crisis.

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