Ten Years On

At the other end of the hydrocarbon value chain, oil companies were having a mixed press for their impact on the communities under which much of their resources are drawn. In Nigeria, communities in the oil producing Niger delta went to court to try and stop ‘gas flaring’ – the burning off gas during the production of crude oil. Natural gas is released during the extraction of crude oil, and it is estimated that this flared gas from Nigeria could be pumping 35 million tonnes of carbon dioxide and 12 million tonnes of methane into the atmosphere annually. The gas flaring has been linked to local acid rain, and poor health in the region. Shell announced earlier in the year that it would not be able to capture the gas so as to stop the flaring by 2008, as required by the government. Meanwhile, accusations continued that oil companies in the region are supporting local militia in order to quell an uprising and protect their oil operations.159

This is reminiscent of the situation 10 years previously, which brought Shell’s operations in Nigeria into the international spotlight. On November 10^th 1995 nine Nigerians who claimed that the regime of dictator Sani Abacha and Royal Dutch/Shell were complicit in oppressing the Ogoni tribe, were executed. Their leader was the charismatic writer and activist Ken Saro-Wiwa, and at the trial before his death, he pointed the finger at Shell, and called for an international boycott of the company. That boycott spread to three different continents, and the impact on the company helped spark the contemporary corporate responsibility movement. It demonstrated that civil society had grown and become internationally connected, had turned its attention to the malpractices of companies, that consumers had become aware of the power and therefore responsibility of large corporations, and that their abuses in the global South would no longer go unnoticed.

Nevertheless, 10 years on, the jury is still out on Shell, the oil industry, and the usefulness of voluntary corporate responsibility more generally. At its 2005 annual meeting activist shareholders circulated the third alternative Shell report, called "Lessons Not Learned", which argues that despite commitments made in previous years, Shell still disregards the environment and the rights of the people living near its operations in many parts of the world.160

Amnesty International published a report that focused on a number of other oil companies operating in Africa. Amnesty argued that agreements signed ExxonMobil and other companies with the governments of Chad and Cameron requires these governments to give priority to the oil company interests over and above those living in the vicinity. The organisation said that there had already been abuses in these areas with farmers displaced and refused compensation, and the agreement threatened further human rights problems for the local population.161

Meanwhile the government of Chad has taken steps to report on its anti-corruption efforts in the oil industry. An Oversight Committee (Collège de Contrôle et de Surveillance des Revenues Pétroliers) appointed by the Chadian government has detailed the findings of its first inspection of the implementation of projects financed by Chad’s 2004 oil revenues. According to the World Bank, ‘publication of this report is a demonstration of the Chadian government’s commitment to the transparency of its oil revenue management’. However, the World Bank also expressed its concern with some of the report’s findings, which suggest there is some way to go.162 This effort toward greater transparency of the use of revenues derived from the oil industry is one response to the outcry in 1995 about Saro-Wiwa, as it attempts to address the financial incentives that have fuelled government corruption and oppression.

The Extractive Industries Transparency Initiative (EITI) is the broad intergovernmental effort tackling this challenge. It has now gained the support of most major multinationals, and the government of Nigeria is playing a leading role. At the G8 Business Action for Africa Summit, African firms also expressed their support for EITI and other initiatives that fight against corruption in their home countries.163 If EITI is successful, regimes like the Abacha dictatorship will be far more difficult to maintain, and the allure of dictatorial power in such countries could wane.

The current government of Nigeria points to increasing foreign investment, such as US$150 million from Coca-Cola, as a sign that it has turned away from its past of corruption and mismanagement. Although that particular investment came in for some criticism from some Nigerian NGOs in July, due to various concerns about water, pollution, labour rights, and nutrition, the argument that Africa needs investment not just charity was made clearly by a range of corporate leaders, the G8 and the New Partnership for Africa's Development (NEPAD).

Interestingly, given the history described above, a foundation established by Shell, has been taking a lead in this arena. The Shell Foundation announced a new $100 million fund to address the lack of finance and business skills for small African businesses. In addition, the Foundation announced a project with retailer Marks and Spencer, where the Foundation will invest US$ 1 million in local flower and fruit growing enterprises that are involved in the retailer’s supply chain.164 The Chief Executive of the Royal Dutch/Shell Group, Jeroen van der Veer, said that it is important for the company, and others like it, to explore how to tackle poverty in Africa through their everyday business operations, although he argued that government has a key role to play in providing a context for local economic development.165

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