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Opruimen van vervuiling: Shell in Nigeria

26-10-2012 | Visie | Sylvia van Waveren

Vervuiling en gasaffakkeling zijn twee van de problemen waar Shell in Nigeria mee te maken heeft. Sylvia van Waveren rapporteert over wat ze aantrof toen ze de activiteiten van het bedrijf in de Nigerdelta bezocht.

(Dit artikel is Engelstalig)


Shell in Nigeria

The case against Shell

The Niger delta in southern Nigeria is one of the most polluted places on earth. Amnesty International claims that between nine and 13 million barrels of oil have been spilt—on land and offshore—as a result of Royal Dutch Shell’s operations in the area over the past 50 years. The main factors causing this have been corrosion of oil pipes, poor maintenance of infrastructure, spills and leaks during processing, human error, oil theft and deliberate vandalism.

The region is also afflicted by the effects of gas flaring—burning off the natural gas produced during the petroleum-extraction process, as the infrastructure to use the gas is not in place. Shell has been heavily involved in flaring, even though it has been illegal in Nigeria since 1984.

Shell is currently defending itself in court in the Netherlands, with four Nigerian villagers accusing the company’s operations in the country of polluting land and waterways around their homes in the Niger delta. If they are successful, it could open the door for further claims.

Although Shell is not the only oil major to operate in the country, it does have the largest presence there. It also has the worst image problem.

Shell’s response
For its part, Shell cites external sabotage as the main cause of the spills. In 2011, for instance, it claimed that 98% of spills are caused by sabotage, although it has since revised this figure down to 70%. Meanwhile, Shell is leading discussions with the Nigerian government and other groups to set up a USD 1 billion fund to clean up the heavily-polluted Niger delta.

One complicating factor is that Shell operates in Nigeria as Shell Petroleum Development Company (SPDC), a joint venture that is majority owned by the Nigerian government. Royal Dutch Shell only has a 30% stake in SPDC. This means that it has only limited power to enact change.

What did we find?
Visiting the region, we were struck by the complexity of the problems that Shell faces. Huge quantities of oil have been polluting the delta for decades. It will take years to clean this up fully.

Moreover, Nigeria is an intensely corrupt country. Well-organized, professional gangs steal oil in huge quantities, damaging infrastructure in the process, and even refine it themselves afterwards. Such gangs have little regard for the environment, resulting in frequent oil spills. Once Shell mends the pipes that the gangs have broken to steal the oil, it often does not take long before the saboteurs damage them again.

However, Shell must also shoulder some of the blame, something the company acknowledges. Its oil infrastructure is often in an extremely poor state of repair, and cleaning up spills resulting from theft and corrosion is its responsibility. It is now addressing these problems, albeit rather late in the day. The question remains whether Shell will pay damages to communities if spills are proven to be its fault—which is the subject of the current lawsuits.

 

“Shell needs to recognize that illegal sabotage and the resulting pollution are problems it has to address proactively”

 


There is also good news. Shell’s gas flaring is as good as over, as the company has invested around USD 8 billion in the infrastructure necessary to use the gas without burning it. In fact, Exxon and Chevron, which are also active in the delta, are somewhat behind Shell in this respect.

Furthermore, Shell has stated that by the end of 2012, it will have cleaned up all leaks emanating directly from its pipelines that have occurred since 2005. This will not solve all the region’s pollution problems, and the promise is late in coming, but it is nonetheless heartening.

Meanwhile, we found that Shell is improving its transparency, thus making it easier for stakeholders to monitor the progress of its clean-up process. Last year, for instance, it launched a website that allows users to track how it is dealing with each confirmed spill from its facilities. In addition, it has agreed to launch an independent panel to review and recommend improvements to its practices in the clean-up of spill sites.

That’s not all. Early this year, Shell contracted Bureau Veritas, an international verification organization, to independently audit its spill-management practices. Furthermore, during our visit, Shell was very open about its practices, and was happy to let us visit NGOs that have been critical of the company.

Conclusions and remaining challenges
Our visit revealed the considerable efforts that Shell has made to improve its practices and clean up the Niger delta against a backdrop of widespread and extreme corruption.

Nevertheless, Shell remains subject to repeated criticism in the media, which we believe reflects the shortcomings in how the company often frames its challenges in Nigeria to external stakeholders and to the media. While often attributing responsibility for spills and pollution in the region to saboteurs, Shell highlights its full responsibility for the positive economic and social impacts of its operations on Nigerian society.

Rather than distancing itself from the negative impacts while embracing the positive, Shell would be much better served by adopting a more balanced stance towards its Nigerian operations. Shell needs to recognize that the challenge of illegal sabotage and the resulting pollution is very much a problem that it has the responsibility to address proactively.

By adopting a more balanced perspective that clearly accepts its role and responsibility in both the positive and the negative impacts of its operations, Shell will likely undermine much of the NGO and media criticism directed at its Nigerian operations.

But there’s a more important aspect to this. By taking a broader view of its responsibility for the challenges it faces, Shell will make a clearer recognition that the business success of its operations in Nigeria is very much tied to the well-being and success of Nigerian society as a whole.

Based on the findings of our trip, Robeco believes that Shell has an important opportunity to improve its communication on Nigeria, given the positive progress that we witnessed on the ground. The issues will not be resolved quickly, but Shell can already make a considerable difference by changing its overall approach in characterizing its challenges to the outside world.

For our part, we plan to maintain close contact with the company, urging it to continue to improve transparency and to see through its plans to clean up the Niger delta together with the other parties involved.

Sylvia van Waveren is a Senior Engagement Specialist at Robeco

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