Shell Nigeria In 1958 the Royal Dutch/Shell Group started drilling for, transporting and refining oil in Nigeria. Nigeria's large supply of high quality crude oil helped Shell climb to the top, by 1994 Shell made more money than other company in the world. Everything changed for Shell in 1996 when the world became aware of their unethical business practices in Nigeria. Shell had raped the environment, violated human rights of the Nigerian people and manipulated local governments for profit. Royal Dutch/Shell Group and Nigeria Royal Dutch/Shell Group is the most successful large corporation in the world.
In 1994 it recorded profits of nearly 6. 2 billion dollars on revenues of 94. 9 billion. Shell, a British import and export company, began in the oil business in 1907 when it merged with Royal Dutch Petroleum.
In the 1930's Shell started exploring for oil in Africa. It was not until 1956 that they found oil, one of the largest reserves in the world, in the delta region of Nigeria. While Nigeria was still under British rule, in 1958, Shell started oil production, setting up drilling facilities, pipelines and refineries. Nigeria gained freedom from British rule in 1960 and have struggled for identity. Like most eastern countries that rely on one source of income Nigeria has had major economical turmoil. Since 1970 the country has suffered through seven military coups, several of which were bloody.
Several attempts have been made at democracy with each being overturned by a military coup. In the 70's the Shag ari government tried to use oil income to fund an ambitious economic development program called "green revolution." The largest focus was to lower the amounts of their main imports, food, textiles and manufactured goods, by producing them internally. The philosophy worked until the price of oil plummeted. Cutting their budget from 20 to 10 billion, this resulted in a massive recession that caused a bloody military coup in 1990. Environmental Issues The oil industry can never operate without having a detrimental effect on the environment, but many people say that the environmental destruction in Nigeria is much greater than that in other countries where the oil industry operates.
Oil spills, gas flaring, and poorly situated pipe lines form much of the problem, but other issues include landfill sites, waste water produced from operations, drilling, waste disposal of chemicals, ozone depleting gases and land use. The number of oil spills in the country is outrageously high. An independent record of the spills reported that the company spilled 7. 4 million liters of oil in 27 separate incidents from 1982 to 1992. This totals around 40% of the total number of Shell's oil spills worldwide in that time period. Shell uses sabotage as a tactic so as not to take the blame for the spills.
However, records indicate that only 11% of the spills between 1976 and 1990 can be attributed to actual sabotage attacks. Gas flaring is also a significant problem in Nigeria. As much as 76% of the natural gas pumped up with crude oil in Nigeria is burned off compared to 0. 6% in the United States. The gas flares emit 34 million tons of carbon dioxide and 12 million tons of methane, making petroleum operations in Nigeria one of the world's largest contributors to global warming.
Flaring has contributed to the death of plants and wildlife, the pollution of air and water and it has left some residence with hearing problems and respiratory diseases. Social and Political Issues Shell's presence in Nigeria has also had enormous social consequences, particularly in the Niger Delta region. The people in this region are dissatisfied for many reasons with Shell's presence on their land. The poor relationship between the company and the people of Niger Delta has arisen from many different factors. One of the largest reasons is the Nigerians have seen very little of the money made by the operations largely because of the Nigerian military dictatorships of the past have not distributed the money. The violations of human rights have also played a major role in these conflicts.
The most publicized violation of human rights in Nigeria was the execution of Ken Saro-Wiwa and eight others in November 1995. Saro-Wiwa had been involved in the organization of peaceful demonstrations against Shell's practices in the area of Ogoni. It has been suggested that pressure from Shell led to the government arrest of Saro-Wiwa but this cannot be firmly proven. The executions of Saro-Wiwa and others give only a glimpse of the state of human rights in Nigeria. These are just some of the many conflicts, which a reoccurring in Nigeria. Other conflicts caused by Shell include land degradation, overfishing, deforestation, loss of bio-diversity, and water contamination.
What is being done There are many organizations in Nigeria fighting for the right of the people and the ecological healing of the Niger Delta. The main organization is the Movement for Survival of the Ogoni People (MO SOP). In 1990 they creates the Ogoni Bill of Rights requiring Shell to do the following: 1. Clean up of oil spills. 2. Reduction of Flaring.
3. Fair compensation for lost land, income, resources, and life. 4. A fair share of profits gained from oil drilled at their expense.
5. Self-determination. Other groups include the Environmental Rights Action (ERA) and Niger Delta Human and Environmental Rescue Organization (ND-HERO) are doing research and educating about the environmental and social impacts oil industry has had on the area. Vocalizing the problems of the people and demonstrating against the large corporations that profit from the situation. Shell, only after major conflict and a public relations nightmare, has started to help. In response to the Ogoni Bill of Rights Shell presented the following proposal: 1.
Reduce the incidence of operational spills. 2. Reduction of Fl arity as a high priority. 3.
A need to work with consultants and the Nigerian government to monitor air and water quality. 4. Improve understanding. 5. Reassess present methods of negotiation and levels of payment for land. 6.
Review the possibility of introducing employment programs. 7. Obtain a Public Affairs staff to "ensure the quality and levels of a professional standard suitable to undertake the sensitive activities." Shell hopes that, by working with the Nigerian people in deciding what needs to be done to correct the current damage as well as preventive measures to prevent future damage to the Nigerian people and their country the possibility of a mutual agreement has a better possibility for all to benefit from. The efforts from Shell and other oil companies to help the environment and the people are to little to late.
There is more that needs to be done to right the wrongs that have been committed. Shell must refuse to operate under an unjust system. 50% of Nigeria's budget is provided by oil related business, therefore they have the influence to help political and social reform. Shell must push for demilitarization of the Ogoni land and the Delta region.
The forces the government has issued to protect Shell's interests have to cease the brutal and violent acts against protesters. A environmental impact assessment needs to be made by a third party. Shell has published some of their assessments of the area, but an independent research has to be done by someone who has no company loyalties. This must be followed by a study to insure that all areas are completely cleaned up. Monetary compensation for loss of land, resources, income and life to people in oil producing regions in the Niger Delta who have experienced environmental devastation and human rights violations.
Finally, Shell must learn to respect the views of communities in the regions it operates in. Works Cited Post, J. , Lawrence, A. , & Weber, J.
(2000). Contemporary business issues. [Customized for the University of Phoenix. ] Boston: McGraw Hill. Greenpeace staff writers (1998). Shell-Shocked the environmental and social costs of living with Shell in Nigeria[Online].
Available: web Encarta 98 (1998). [CD-ROM]. Seattle, WA: Microsoft Corp.