Monday, October 11, 2004

The environmental and social costs of living next door to Shell

The environmental and social costs of living next door to Shell

'... SPDC [Shell Petroleum Development Company] always tries to minimise the impact of operations on the environment but also to ensure that local communities gain real benefits from having a Shell company as a neighbour.'21 _ Richard Tookey, former Head of Public Affairs, SIPC
While this report focuses on the record of Shell in the Niger Delta, it serves as an example of the way in which oil companies operate in different parts of the world. While oil companies' operations in developed regions are usually accompanied by environmental impact assessments, social and environmental policies _ and not to mention a great deal of effort to appease the justified concerns of local communities _ these practices are not exported to lesser developed regions where little or no media attention is paid and where accountability is unheard of.

In what is the largest exploration and production venture in Nigeria, Shell's subsidiary, Shell Petroleum Development Company (SPDC), operates a joint venture agreement with the Nigerian National Petroleum Corporation (NNPC)22. Shell's Nigerian operations have a capacity of one million barrels a day and its importance to Shell as a source of revenue cannot be over- emphasized.

But Shell's operations in Nigeria have been dogged by local unrest and criticism from communities within the oil-producing areas and drawn increasing condemnation from abroad.

Since the beginning of Shell's operations in the Niger Delta, the company has wreaked havoc on neighbouring communities and their environment. Many of its operations and materials are outdated, in poor condition and would be illegal in other parts of the world. The problems described here in Ogoni are indicative of the problems experienced by other communities along the Delta.

Gas Flaring
Many of Shell's gas flares are situated very close to villages, sometimes within a hundred metres of Ogoni homes. The company has been flaring at some sites for 24 hours a day for more than 30 years23.

But Shell, responding to criticism over gas flaring at close range, has stated24:

'... Flares are usually located far from human habitation and protected by earth bunds. When communities have expanded in the direction of production facilities, SPDC has taken appropriate action, including relocation of flares. There is no evidence that flares affect crops.'

Local reports present evidence which proves otherwise25:

'... Apart from physical destruction to plants around the flaring areas, thick soots are deposited on building roofs of neighbouring villages. Whenever it rains, the soots are washed off and the black-ink like water running down the roofs is believed to contain chemicals which adversely affect the fertility of the soil.'

Ken Saro-Wiwa, author and spokesperson for the Movement for the Survival of Ogoni People (MOSOP), argues26:

'The most notorious action of both companies [Shell and Chevron] has been the flaring of gas, sometimes in the middle of villages, as in Dere, (Bomu oilfield) or very close to human habitation as in the Yorla and Korokoro oilfields in Ogoni. This action has destroyed wildlife, and plant life, poisoned the atmosphere and therefore the inhabitants in the surrounding areas and made the residents half-deaf and prone to respiratory diseases. Whenever it rains in Ogoni, all we have is acid rain which further poisons water courses, streams, creeks and agricultural land.'

Concerning the close proximity of its gas flares, Shell argues that this is a result of communities expanding into the vicinity of oil operations. The company maintains that once this happens, gas flares are relocated away from populous areas27. However, the Ogoni maintain that Shell has never relocated a gas flare28.

Shell's high-pressure pipelines pass above ground through villages and criss- cross over land that was once used for agricultural purposes, rendering it economically useless. Many pipelines also pass within metres of Ogoni homes.

Responding to criticism of Shell's pipelines, Richard Tookey stated in 199229: '... You suggest that pipelines should be buried as a means of preventing pollution. Much of the area in which SPDC is operating is swamp, so burying pipelines could, in fact, exacerbate the risk of fractures and spillages. From time to time the positioning of pipelines is reviewed, especially when it is known that communities have expanded onto land neighbouring a pipeline, and if considered a hazard then the pipelines are re-routed.'

However, the Ogoni claim that their land is neither swampy, nor has a pipe ever reportedly been re-routed30. No consultation takes place at all: before or during pipe-laying.

But to emphasize further the fact that Shell does not apply the same standards worldwide, consider one of it's operations in the UK. For Shell's pipeline from Stanlow in Cheshire to Mossmoran in Scotland, 17 different environmental surveys were commissioned before a single turf was cut31. The company explains32:

'A painstakingly detailed Environmental Impact Assessment covered every metre of the route, and each hedge, wall and fence was catalogued and ultimately replaced or rebuilt exactly as it had been before Shell arrived. Elaborate measures were taken to avoid lasting disfiguration and the route was diverted in several places to accommodate environmental concerns ...'

This is a far cry from Shell's practices in Nigeria. The Ogoni have never seen, let alone been consulted over, an environmental impact assessment.

Greenpeace and other organizations have approached Shell to release environmental impact studies it claims to have conducted since 198233 so that a full and open analysis can be made of the extent of environmental and social damage. No impact studies have been freely circulated.

Oil Spills
The communities in the Niger Delta have been said to be 'groaning under the perennial destruction of their property and environment by oil spillages'34.

As early as 1983, the Inspectorate Division of the Nigerian Petroleum Corporation drew attention to the impact of oil on the Nigerian environment35:

'We witnessed the slow poisoning of the waters of this country, and the destruction of vegetation, and agricultural land by oil spills which occur during petroleum operations. But since the inception of the oil industry in Nigeria more than twenty-five years ago, there has been no concerned and effective effort on the part of the Government, let alone the oil operators to control the environmental problems associated with the industry.'

In one of the most recent spills in Ogoni, oil leaked from a Shell flowline for 40 days between July and August 199336 without repair, further contaminating Ogoni farmland. Shell argued that its engineers were unable to get into the area to repair the pipeline for fear of violence, but this has been vehemently denied by the Ogoni.

According to an independent record of Shell's spills from 1982 to 1992, 1,626,000 gallons were spilt from the company's Nigerian operations in 27 separate incidents37. Of the total number of spills recorded from Shell _ a company which operates in more than 100 countries _ 40% were in Nigeria38.

Concerning the Ogoni region, Shell has recently argued that in 1992, 60% of its oil spills in Ogoni were caused by sabotage39 and therefore no reflection of the company's operating standards. This is refuted by Professor Claude Ake of the UN World Commission on Development and Culture400:

'... nobody can say that most of the pollution in Ogoniland is caused by sabotage. In fact, as far as I know, what the Ogonis have tried to do is to put out the flares, which is something that importantly reduces pollution ... I think that this is the kind of irresponsible propaganda that the oil companies are putting out in order to discredit those who are trying to do something about the environment ...'

So far, we only have Shell's word that most of the spills are caused by sabotage since attempts to gain independent access to the area in order to investigate the situation have been unsuccessful. However, it is widely known that most spills occur throughout Nigeria because of malfunction or corrosion of equipment. According to the Nigerian Ministry of Petroleum Resources, there were 2,676 recorded spills between 1976 and 1990, with the largest single cause of spill in general _ 38% _ due to equipment malfunction, with sabotage only responsible for 18%. Corrosion of equipment accounted for 21% of spills. Sabotage only accounted for 3% of the total oil spilt in the time period41.

Similarly, according to the independent ten year spill record, only 4 of the 27 spills recorded from Shell's operations in Nigeria were due to sabotage. Corrosion, equipment failure, pipe ruptures and blowouts were the main cause of spillages42.

Finally, it is difficult to estimate the exact figure for spillage because many go unreported. This makes the call for a full and open assessment of the region all the more urgent, so that the effect of oil pollution damage and the causes can be measured.

Villages in the Delta are impoverished as a result of the depletion of healthy fish and poisoned drinking water43. A report submitted by the Rivers Chiefs to the World Conference of Indigenous Peoples on Environment and Development at Rio's Earth Summit in June 1992, stated44:

'Thus apart from air pollution from the oil industry's emissions and flares day and night, producing poisonous gases that are silently and systematically wiping out vulnerable airborne biota and otherwise endangering the life of plants, game and man himself, we have widespread water pollution and soil/land pollution that respectively result in the death of most aquatic eggs and juvenile stages of life of fin-fish and shell-fish and sensible animals (like oysters) on the one hand, whilst, on the other hand agricultural land contaminated with oil spills become dangerous for farming, even where they continue to produce any significant yields.

'Apart from the basic fact that contaminated soils are rendered relatively but seriously infertile and polluted, sometimes for at least 30 years, the farmers and fishermen who have thus been dislocated then observe with great anger the extremely wide gulf between the lifestyles and incomes of oil-industry workers and themselves rendered economically impotent by the same oil industry: confrontations and anger in the oil producing areas occasionally explode into calamities.'

Oil Waste
Open and unlined pits for storing drilling waste are reported to litter the area48 This contradicts Shell's claim that the company builds access roads as part of its community assistance programme49.

Community Assistance
'Shell companies throughout the world have wide-ranging programmes of community involvement and sponsorship.'50 _ Shell and the Environment report

The people of the Niger Delta, who now live in a polluted environment, claim they have received precious little in return for living with Shell and dispute both the quantity and quality of community assistance.

Vast amounts of money have been generated from oil production in the region. From 1970 to 1988, the Federal Government received a total of $183.1 billion from oil extracted from the Delta51. From the Ogoni region alone it has been estimated that Shell has extracted over $30 billion of oil52. Although Shell maintains that it has operated a community assistance programme for over 25 years53, the money spent on community assistance during the same period has been estimated at only $200,00054 or put another way: just 0.000007% of the value of oil extracted.

One of Shell's first operations was in the town of Oloibiri, Rivers State. In 1990, a BP engineer remarked55:

'I have explored for oil in Venezuela, I have explored for oil in Kuwait, I have never seen an oil-rich town as completely impoverished as Oloibiri.'

The Nigerian government is supposed to direct 3% of its oil revenue back to the communities where the oil is produced. However little, if any, of that money has reached those in need of it. Even Shell has admitted as much but maintains that it is beyond the scope of its business activities to influence the government56. The Ogoni see it differently. They see Shell as a multinational company, supported by the federal government, which was influential enough to "persuade" the government to increase the oil revenue royalty from 1.5% to 3% in 198257, but unwilling to ensure that this money is made effective use of.

Compensation for Land
Another criticism of Shell is that the company has failed to compensate landowners adequately, if at all. Shell maintains that58:

'The company has never acquired land without paying due compensation or obtaining approval of landlords.'

However, it is widely reported that when Shell acquired land in the Delta, it paid for the crops growing on the land but not the land itself59. Furthermore, Shell and other oil companies negotiate land settlements with illiterate villagers who are not in a position to specify proper terms and conditions.

A Judicial Inquiry, following the Umuechem disaster (see page 18), in which 80 innocent villagers were massacred at the hands of the Mobile Police Force during a protest against Shell, concluded that60:

'What Shell Petroleum Development Company of Nigeria Limited is under obligation to do is to pay adequate compensation for lands acquired for oil operations and for crops and economic trees on such lands; to pay adequate compensation for pollution of water, rivers and streams by oil spillage and such other liabilities as may be stipulated by law ...

'Their streams get polluted with the disposal of waste products from oil operations rendering the river void of fishes ... their farm crops planted on the remaining areas of farmland get damaged by oil pollution; their economic trees are hewed down; their economic situation bites and there is no help for them. These deprivations without any compensatory benefits, cause frustration ... The compensations paid for these deprivations are just pittance, meagre pittance, on which people cannot subsist for even six months and they become frustrated with life ..'


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