Resource Exploitation and Corporate Recklessness in Nigeria

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The deposit of natural resources in any area by God is a design to provide for the needs of the people living on the land. But the people of Niger Delta have not been lucky enough to derive such benefits from the resources found in their land. Who are the people benefiting from the resources and why are they extracted at the detriment of the host communities? The answers to these questions are what AFJN works to answer in fulfillment of its commitment to issues of peace and justice in the troubled regions of Africa.

Nigeria is a country endowed with abundant natural resources including oil, but is among the 30 poorest countries in the world with 60% of the population living below the poverty line, according to the UNDP Human Development Index 2006. The oil wells are found in the Niger Delta region with many of them located offshore. At the time the oil industry was being developed, environmental protection and impacts on the host communities were not given full consideration.

Moreover, Nigeria being a former colony of Britain gave concessions to Shell BP without a complete evaluation of the long-term consequences of oil extraction on the environment.  Furthermore, there are inadequate legal frameworks to handle the environmental problems created by oil exploitation. Such lack of domestic structures to deal with legislative and policy issues is of great concern in the oil industry. Also, most of the local laws and decrees that are enacted are not in accordance with international agreements.

Nigeria is the world's eighth-largest oil exporter, with significant oil and gas reserves and a daily output of 2.6 million barrels. In 2006, Shell Development Company of Nigeria paid $3.5 billion in taxes and royalties to the Nigerian government in addition to the $75 million paid to the Niger Delta Development Commission for community development, and another $53 million spent on the company’s community development program, according to their annual report. Significantly, Shell made a total profit of US$22.94bn in 2006. Nigeria currently supplies 10 percent of Shell’s global output – in other words, an average of $ 2.294bn in profit from Nigeria alone.

Oil pollution in Nigeria is enormous and controversial because the oil companies are not prepared to internalize the negative externalities, even though its impact on the health of the people of oil producing communities is recognized.  In most cases, oil companies attribute oil spillage to sabotage or accident.  According to research conducted by the Nigerian Environmental Society in 1985, offshore and onshore oil spillage amounts to 1,711,354 barrels between 1970 and 1983. In 2006 alone, Shell recorded a total of 241 oil spills in its operation in Nigeria; this figure may not include minor spillage which is less than 25 barrels in inland water and those in their operational areas.

The number of species destroyed cannot be determined, but the impact on the health of humans and animals living in the Delta area is devastating. According to a report compiled in 2006 by independent experts from  the World Wildlife Foundation UK, the World Conservation Union and  the Nigeria Conservation Foundation, the Delta was identified as one of the five most polluted spots in the world. The report highlighted the destructive impacts on rare species including primates, fish, turtles and birds, and noted that pollution is destroying the livelihoods of many of the 20 million people living there, damaging crops and fuelling an upsurge in violence. Finally, it concluded that corruption and mismanagement further deprive the Niger Delta people of the benefits of the region’s resources.

There is an urgent need for the Nigerian state to live up to its responsibility of protecting its citizens against the unwholesome practices and policies of transnational corporations by promulgating legislations and policies that will give the oil-producing communities greater control and management of  the resources found in their area. In order to provide a platform for effective development planning, there is also the need to combine environmental considerations with the socio-political and economic perspectives in the development framework.

-Joseph Effiong