Schriftliche Fassung des Referates von Patterson Ogon in der Abendveranstaltung des Aktionszentrums 3. Welt e.V. am 5.12.00 in Hamburg:

CORPORATE GOVERNANCE IN THE SOUTH:
A CASE OF THE OIL INDUSTRY AND ECOLOGICAL DEVASTATION IN NIGERIA’S NIGER DELTA

BY
PATTERSON OGON
Director
Ijaw Council for Human Rights (ICHR)
#13 Agudama Avenue, D-Line
P.O.Box 13708, Port Harcourt
Nigeria
Tel/Fax: +234-84-236365
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INTRODUCTION

It does not matter whether the product does
good or evil, wrote a disaffected executive
of the giant IBM. What counts is that it
is consumed in ever increasing quantities.

Concern with the nature and role of transnational corporations in world economy and politics has attracted more than a passing interest in the developing countries than in Europe and North America. Volumes of documents have been churned out either as books or proceedings of conferences on the activities of transnational corporations. In spite of these, the crises that their operations generate get replicated in more macabre ways.

The dastardly activities of transnational corporations are also not new to us in Africa. The involvement of governments in the propping up and protection of corporations is also not new. Colonial extractions of resources couched as foreign investments in Africa have whittled down even the sovereignty of nations. This is because "companies and industries have a tendency of growing so large and powerful that they end up making the rules that they are supposed to obey". The arm twisting of the United Nations and the setting up of the Global Compact by the Secretary General Kofi Anan in the alliance between the UN and TNC’S, with a view to respecting human, labour and environmental rights adds to our fears. The Global Compact we understand has been established to promote nine principles, which includes.

1. Promoting fundamental principles and rights to work.
2. Protecting against social risks and human conditions of work.
3. Strengthening the social dialogue for stability in business and society
4. Building opportunities for work.

Walden Bello further raised our fears thus: "despite the Compact’s provision that membership in the compact will not be given to business entities complicit in human rights violations, the founding membership includes the worst corporate transgressors of human, environmental and labour rights like Nike, Rio Tinto, Shell, Novartis and BP Amoco etc".

TNC’s have their home countries mostly in Europe and North America. If European citizens would invite people from all parts of the globe to discuss TNC’s and corporate responsibility in Germany, one of two things is certain. It is either:

1. An attempt to reposition and repackage the transnational corporations in the ways and manner of their governments for a more vicious plunder of the resources of the south.

Or

1. The activities of the transnational corporations are in themselves causing severe social and economic dislocation to even those in the North.

The second factor is a more likely possibility.

Our attempt in this paper is to espouse the following themes:

1. The exploitation and underdevelopment of the resources and peoples of Africa and indeed the rest of the developing countries is not a new phenomenon.
2. Transnational corporations are exploitative, corrupt and oppressive of the citizens of places they do business.
3. That because the guiding principle of big business is profit, Transnational corporations do not bother about the negative effects of their activities on society.
4. The beautifully worded documents that pass on as corporate guides on business ethics and accountability do not add up because of the double standards TNC’s betray in their operations especially in the developing countries.
5. Voluntary codes of conducts as contained in such documents as the reviewed OECD Guidelines for MNE’s without a corresponding mechanism for sanctions and enforcement leaves much to be desired.
6. The Niger Delta People’s struggles with oil and gas corporations are essentially about survival, cultural protection and political fulfillment.

EMERGENCE OF CORPORATE PLUNDER IN AFRICA

Trade preceded the flag and has outlasted it.
Giant European and North American companies
continue to dominate the economies of fledging
African states. The new word for this is neocolonialism.
-Thomas Pakenham

The Scramble for Africa, 1991

Corporate rule as a phenomenon emerged in Africa in the 19^th century and received the prompting of European governments. The rivalry that this specter generated especially amongst corporations made a British colonial official in Nigeria to comment in 1878 as follows

It is almost impossible to describe the constan
bickering between these rival factories… in one
instance as many as five companies established
trading posts on one town in the Niger.

The attempt to control foreign territories for corporations in their countries led Europe especially Britain, France and Germany to convene the Berlin Conference in 1884 as a means of containing "the distended march of Europe towards over consumption". The result was the carving of African continent into areas of corporate controls.

In Nigeria for instance, the plunder began with the obtainment of a "Royal Charter" by the then National African Company (NAC) from her Britannic Majesty. This was followed by a change in name to the Royal Niger Company and finally the United Africa Company (UAC). Over a hundred years ago, the article of trade was palm oil for the production of butter, creams and soaps etc. In the nature of transnational corporations, the tendency for over exploitation emerged when frequent reports were made to the effect that women who had paddled long distances in dugout canoes to eke a living for their families by selling palm oil, were being sexually exploited by officials of the Royal Niger Company. Besides, the women were not being paid in exchange for their products.

The people of the coastal community of Nembe under King Frederick William Koko would have this no longer. In 1895, he led a struggle for liberation against the Royal Niger Company and destroyed files, drums and containers, artifacts, which for him represented the acts of plunder. In support of the company the British government deployed her gunboats and bombarded Nembe. Four thousand men, women and children were killed in that raid. The British Foreign Office had stated inter alia:

"where there is money to be made our merchants will be certain to intrude themselves… if they
established a lucrative trade (duty) compels
to protect them".

In the Belgian Congo, the atrocities of King Leopold II in the 1880s are not strange. He led the mutilation and forced labor of the local population while the Anglo-Belgian India Rubber Company continued the plunder of the country’s rubber. 10 million people were sent to their untimely graves by these forces of occupation.

OIL AND GAS COMPANIES IN NIGERIA

About 90 percent of Foreign Direct Investment in Nigeria are in the oil and gas extraction sector. The industry is dominated by foreign oil transnational companies, which accounts for 99.5 percent of total production of 2.04 million barrels of oil and 1,900 million standard cubic feet of gas daily. These companies operate in joint partnership with the state owned Nigeria National Petroleum Corporation (NNPC). While the NNPC controls 60 percent of all the concessions, it lacks the technical and organizational expertise to engage in real production. Thus, actual control resides with foreign TNC’s. The key players in the oil and gas sector in Nigeria are the Royal Dutch Shell, which is the biggest and oldest oil producer, Chevron, Agip, Mobil Exxon etc. The statistics is as shown below:

SOURCE:

The Niger Delta: A Disrupted Ecology. The Role of Shell and other oils companies Jan Williem van Gelder and Jos Moerkamp (Amsterdam: Greenpeace, 1996:13)

The industry is capital intensive. It is not labor intensive. As such only fewer persons are absorbed to work in the industry. Foreign Direct Investment (FDI) in Nigeria has contributed greatly to the dislocation of the local economy. Instead of contributing to the development, training, empowerment needs, education etc of the local population, Foreign Direct Investment has concentrated capital flow within a circle of few wealthy business men collaborators and impoverished the local population.

The wealth in Nigeria which is generated by oil and gas is controlled by less than 5% of the estimated 120 million population. It is for this reason that military coup and counter coups became fashionable in Nigeria especially by army generals who felt marginalized in the allocation of oil funds. To belong to the privileged class, the most fashionable thing to do was to hijack state power. Under military rule, the specter of violent take over of power became a strategy of breaking into that circle.

The existing local order in Nigeria confers the right of control of all lands in the central government. It is for this reasons that we have such legal but illegitimate instruments as the Petroleum Decree (1969), the Land Use Decree (1979). With these, transnational oil corporations acquire licenses from the government at the center and appropriate farmlands, forests and waters from local populations.

Legislation’s exists in Nigeria that is meant to guide the operations of the oil industry. These include the Oil Pipelines Act (1956), the Navigable Waters Act (1968), the Associated Gas (Re-injection Act) (1979), the Petroleum (Drilling and Production) Regulations (1969) and the Environmental Impact Assessment act (1992) etc. Incidentally, these laws are observed in the breach by the oil transnational. Such institutions like the Petroleum Inspectorate Division of the Department of Petroleum Resources and the Federal Environmental Protection Agency which was recently scrapped by the Federal authorities has failed to enforce the rules (HRW, 1999). The report of a recent study revealed that Nigeria’s "corrupt political environment enables the law to be prostituted to a corrupt oil mining industry".

The relationship between the oil and gas companies in Nigeria’s Niger Delta and their host communities has concentrated the minds of those interested in Nigeria and its survival. At the center of the dispute is the people’s struggle essentially for survival, cultural protection and political fulfillment. The oil transnationals have refused to accommodate in practical terms the needs of the people.

It is instructive to note that in the oil producing area of the Niger Delta and elsewhere poverty and environmental ruination are not ordained by God or by lack of resources. They are created through non-inclusive political decisions and structures.

Since 1956, the oil-bearing communities have known only poverty, misery and sorrow. This has been due mainly through oil spills which pollutes farmlands, creeks, rivers and lakes and reduces their yields and worth to local populations. Flaring of gases also poisons the air we breathe and causes respiratory ailments. Bad enough, the people are even left out of the distribution of proceeds from oil.

The activities of the transnational oil companies in the Niger Delta amounts to double standards. Oil exploration and exploitation have devastated the environment, impoverished the people and subjected local populations to state and corporate sponsored violence. Nigeria’s foremost environmental rights advocacy group, Environmental Rights Action/friends in the Earth Nigeria (ERA/FoEN) observed that the country is the world leader in gas flaring and contributes a criminally significant 76% of it to atmospheric pollution. (ERA/FoEN) submits that "the gas related pollution generated in the Niger Delta by the oil transnational corporations alone is greater than that produced by all the household in Great Britain".

In a World Bank report issued in the 1950s, the region was said to have the capacity to feed the whole of Africa. By 1995 however, it had lost ten percent of her mangroves to "the crude business of crude oil". In a veiled attempt to excuse its culpability in all this, Royal Dutch Shell, the major player in the industry which started her ecological destruction scheme in 1956 denies on her environment page in the world wide web that the loss of the mangroves has little to do with their activities but industrial growth and development. Not everybody, including Shell’s employees believe in Shell’s image laundering. Bopp van Dessel, a former employee of the company is quoted to have said "Shell were not meeting their standards, they were not meeting international standards. Any Shell site I saw was polluted, any terminal I saw was polluted. It was clear to me that Shell were devastating the area".

It was not strange therefore when in 1990, Ken Saro Wiwa, Environmental and Minority rights activist and the symbol of the struggles of the people of the Niger Delta mobilized the 50,000 Ogoni population under the aegis of the Movement for the Survival of the Ogoni People (MOSOP) to protest further devastation of their environment. The strategy of the struggle as waged by the Ogonis was non-violence. Caught between the life and survival of a people and oil profit, Shell opted for the latter. Not long after, Paul Okuntimo, a major in the army and commander of the Rivers State Internal Security Task Force sent a memorandum to the Military administrator, Col. Dauda Musa Komo on the need to create a crises within the Ogoni nation. This was to enable Shell have easy access to oil production. The memo read in part:

"Shell operations still impossible unless ruthless
military operations are undertaken for smooth
economic activities to commence.

By attempting to scuttle the continued flow of crude oil, Ken Saro Wiwa, eight of his kinsmen and several thousand Ogoni indigenes paid the supreme prize. Shell denied involvement in the atrocities of the forces of occupation. It finally admitted several years latter through Eric Nickson in the following words:

"we have paid the military, but only on two occasions,
one of which was to go and look for a fire engine.
We did pay Lt.Col Okuntimo field allowances on
that occasion but it was only enough for about
two meals a day".

Shell further stated in a statement in 1996 as follows: "the company has made no secret of the fact that it was required, once in 1993, to pay field allowances, that is meal allowances, to a Nigerian army unit.

Other operators in the Nigerian oil industry are also involved in this business of corporate violence. In a petition to the human rights investigation panel set up by the Obasanjo administration, the people of the coastal community of Okpoama in Bayelsa State wrote that soldiers guarding Agip facilities at her Twon Brass terminal attacked them on January 4, 1999 with machine guns affixed to open vans.

They gave the numbers of the vehicles belonging to Agip as:

1. AE 113 KHE, ISUZU PICK UP
2. AX 324 GBB MITSUBISHI PICK UP
3. AX 325 GBB MITSUBISHI PICK UP
4. XA 154 KPR TOYOTA PICK UP
5. AA 225 BGM ISUZU PICK UP
6. PAYLOADER

On Tuesday September 5, 2000, Agip’s spokesman Mr. Akin Aruwajoye while responding to questions by an Italian television crew in the presence of the Ijaw Council for Human Rights admitted that their action was based on the conviction that doing so would help engender peace.

Other cases of corporate violence on local populations includes:

1. Chevron’s combined attack with soldiers on the two communities of Opia and Ikinyan on January 4, 1999 to demonstrate her "tradition of care for host communities". A helicopter, 2 Sea-truck with numbers 221 and 242 were amongst Chevron’s properties used in the attack. Amongst 62 bodies that were not recovered was a woman and her five children engaged in fishing at the time of the raid. Ninety-six houses were burnt in the raid. Chevron expressed no regrets in the Killings but offered to pay a compensation of USD 5,000, which the community rejected.
2. Agip’s unprovoked killings of 8 persons from Ikebiri community on April 19, 1999. Among those shot by the army was a two-year old girl. The community had protested the refusal of the company to clean polluted sites as well as pay compensation several months after. Agip paid the community an unnegotiated USD 19,000 for the killings.
3. Agip’s invitation of the army led to the raid of Epebu Community on August 16,1999. Seven persons were killed. The community had protested against the unhealthy environmental practices of the company.
4. Peaceful rally of the people of Choba against Wilbros, an American Oil service firm on November 14 led to the rape of 28 women and several deaths. The issue was over a two-year-old agreement, which the company had kept in the breach. Wilbros paid the community USD 12,000 as burial rites for the victims. Wilbros had been doing business in the community since 1972.
5. Protest by Oshie community for the relocation of a gas flare site in the center of the village made Agip invite the army. The leader of the community youth was tortured to death.

This list is however inconclusive.

These developments may have forced Chief Damfa Ologo, a community leader to utter in dismay the following words:

When Agip enters your community with that six-legged
animal, the fire will consume and destroy your community.
That animal which is Agip’s symbol does not exist in
Nigeria, but Agip has brought it and she is behaving like that
animal-destroy and destroy.

In spite of these, corporate managers have consistently denied their involvement in human and environmental rights violations.

RESISTING TO SURVIVE

The state of political debate in Nigeria as regards the transnational companies is a rather recent phenomenon following campaigns and advocacy by civil society groups and mass movements. Groups such as the Environmental Rights Action/Friends of the Earth, Nigeria, the Chikoko Movement and others started the campaigns against profit driven corporate violations of the rights of local populations by embarking on mass mobilisation, education and empowerment of local groups with a view to challenging the evil alliance of the TNC’S and the Nigerian state. While the alliance of corporate violence between the state and the companies continue, the people on whose land the plunder of resources take place have steeled their resolve to continue to peacefully resist even at the cost of their lives. The results have been several people based demands and declarations on resource control within the Nigerian State. These include the Ogoni Bill of Rights, the Kaiama Declaration, The Warri Accord, The bill of the Rights of the Oron People, The Aklaka Declaration, The Ikwerre Rescue Charter etc.

CONCLUSION

Our strong belief in the need to regulate the TNC’s is borne out of the fact that over the years they have served as fundamental hazards to people, the society, the environment and to everything we hold dear" In Nigeria, their operations have showed no environmental concerns, neither do they seek partnership and stake-holding with local populations as necessary.

Worst still, their human rights records stinks. Our potential for sustainable development has remained unfulfilled and is now increasingly threatened by environmental depredation and worsening economic conditions.

The use of active measures through the instrumentality of independent monitoring by both local and international groups should center on remolding the transnational corporations "as any other actor co-existing with and being checked by other international organizations, agreements and regional groupings".

Northern NGOs and civil society groups should endeavor to spread the campaigns through education and mobilization of their own people if we need to win the battle that also has the support of northern governments. Collaboration between the North and South is necessary except we want the TNC’s to destroy the world by over exploitation both of labor and human resources. The companies would continue to lay claims to business codes and ethics, especially in Europe and do the reverse in Africa and the rest of the developing world.

It is our thinking that we will achieve results if groups in the North are ready to share their expertise and enhance institutional capacity building of groups in the south for effective monitoring and campaigns.

We should not fold our arms, hoping that the monster that has been after everything we hold dear will someday change into a lamb.