ROYAL DUTCH/SHELL: Human Rights in Nigeria

Introduction

In 1995, a Nigerian military tribunal, in what most observers described as a sham trial,
ordered the execution of noted author and playwright Ken Saro-Wiwa and eight other
members of the Movement for the Survival of the Ogoni People. The Ogoni are a
500,000 member ethnic group of farmers and fishermen that live in Nigeria’s coastal
plain. For several years, the Ogoni had been waging a vigorous political campaign
against Nigeria’s military rulers and the giant oil company Royal Dutch/Shell. They had
been seeking greater self-determination, rights to the revenue stemming from oil
exploration on traditional Ogoni lands, and compensation for the environmental
degradation to their land caused by frequent oil spills from fractured pipelines. Shell had
been pumping oil from Ogoni lands since the late 1950s. In 1994, four Ogoni chiefs who
advocated cooperation rather than confrontation with Nigeria’s military government were
lynched by a mob of Ogoni youth. Though he was not present, Saro-Wiwa, a leader of
the protest movement, was arrested and subsequently sentenced to death along with eight
other Ogoni activists.

Despite intensive international pressure that included appeals to Shell to use its influence
in the country to gain clemency for the convicted, the executions went ahead as
scheduled on November 10, 1995. After the executions, Shell was criticised in the
Western media for its apparent unwillingness to pressure Nigeria’s totalitarian regime.
The incident started some soul-searching at Shell about the social and environmental
responsibility of a multinational corporation in societies such as Nigeria that fall short of
Western standards for the protection of human rights and the environment.

Background

The African nation of Nigeria won independence from Britain in 1961. At that time,
many believed Nigeria had the potential to become one of the engines of growth in
Africa. The country was blessed with abundant natural resources, particularly oil and
gas; was a net exporter of foodstuffs, and had a large population that by African standards
was well educated (today Nigeria has the largest population in Africa, with over 110
million people). By the mid-1990s, it was clear that much of that potential was still to be
realised. Thirty-five years after winning independence, Nigeria was still heavily
dependent on the oil sector. Oil production accounted for 30 per cent of GDP, 95 per
cent of foreign exchange and about 80 per cent of the government’s budget revenues.
The largely subsistence agricultural sector had hailed to keep up with rapid population
growth, and Nigeria, once a large net exporter of food, now had to import food. GDP per
capita was a paltry $230, one-quarter of what is was in 1981, and the country was
creaking under $40 billion of external debt. Nigeria had been unable to garner financial
assistance from institutions such as IMF because of the government’s unwillingness to
account for how it used the revenues from oil taxes.
Political problems partly explained Nigeria’s economic malaise. The country has
suffered from internal strife among some of the more than 250 ethnic groups that
constitute the nation. In the 1960’s the country was racked by a particularly nasty civil
war. In December 1983, the civilian government was replaced in a coup by a military
regime that ruled by decree. In 1993, democratic elections were held in Nigeria, but the
military government nullified the results, declaring there had been widespread ballot
fraud.

Royal Dutch/Shell is the main foreign oil producer operating in Nigeria. The company
was formed at the turn of the century when Holland’s Royal Dutch Company, which had
substantial oil operations in Indonesia, merged with Britain’s Shell Transport and Trading
to create one of the world’s first multinational oil companies. Shell is now the world’s
largest oil company with annual revenues that exceed $130 billion. The company has
been operating in Nigeria since 1937, and by the mid-1990s was pumping about half of
Nigeria’s oil. Nigerian oil accounts for about 11 to 12% of the company’s global output
and generates net income for Shell of about $200 million per year.

Problems in the Ogoni Region

In 1958, Royal Dutch/Shell struck oil on Ogoni lands. By some estimates, the company
has extracted some $30 billion worth of oil from the region since then. Despite this, the
Ogoni remain desperately poor. Most live in palm-roofed mud huts and practice
subsistence agriculture. Of Shell’s 5,000 employees in Nigeria, in 1995 only 85 were
Ogoni. Because they are a powerless minority among Nigeria’s 110 million people, the
Ogoni are often overlooked when it comes to the allocation of jobs either in government
or the private sector.

Starting in 1982, the Nigerian government supposedly directed 1.5% of the oil revenue it
received back to the communities where the oil was produced. In 1992, the percentage
was increased to 3 %. The Ogoni, however, claim they have seen virtually none of this
money. Most appears to have been spent in the tribal lands of the ruling majority or has
vanished in corrupt deals. Although there 96 oil wells, two refineries, a petrochemical
complex, and a fertiliser plant in the Ogoni region in 1994, the lone hospital was an
unfinished concrete husk and the government schools, unable to pay teachers, were rarely
open.

In addition to the lack of returns from oil production in their region, the Ogoni claim that
their lands have suffered from environmental degradation, much of which could be laid at
the feet of Shell. Ogoni activists claim that Shell’s poor environmental safeguards have
resulted in numerous oil spills and widespread contamination of the soil and
groundwater. A Shell spokesman, interviewed in 1994, seemed to acknowledge there
might be some basis to these complaints. He stated, “Some of the facilities installed
during the last 30 years, whilst acceptable at the time, aren’t as we would build them
today. Given the age of some of these lines (oil pipelines), regrettably oil spills have
occurred from time to time”. However, the same spokesman also blamed many of the
more recent leaks in the Ogoni region on deliberate sabotage. The sabotage, he stated,
had one of two motives—to back up claims for compensation and to support claims of
environmental degradation.

On hearing of these claims, Ken Saro-Wiwa called them preposterous. Saro-Wiwa

argued that although uneducated youths, frustrated and angry may have damaged some
Shell installations in one or two incidents, “the people would never deliberately spill oil
on their land because they know the so-called compensation is paltry and the land is
never restored”. To support his proposition, Saro-Wiwa pointed to a spill from the 1960s
near a settlement called Ebubu that still had not been cleaned up. In response Shell stated
that the spill occurred during the civil war in the 1960s, and cleanup work was completed
in 1990. Subsequently, sunken oil reappeared at the surface, but Shell claims it was
unable to do anything about this because of threats made against its employees in the
region. In January 1993, out of concern for their safety, Shell barred its employees from
entering the region.

In April 1993, the Ogoni organised their first protests against Shell and the government.
Ogoni farmers stood in front of earthmoving equipment that was laying a pipeline for
Shell though croplands. Although Shell stated that the land had been acquired by legal
means and that full compensation had been paid to the farmers and the local community,
some of the locals remained unhappy about what they viewed as continuing exploitation
of their land. Seeing a threat to the continuity of its oil operations, Shell informed the
Nigerian government about the protest. Units from the Nigerian military soon arrived
and shots were fired into the crowd of protesters, killing one Ogoni man and wounding
several others.

Subsequently, in a series of murky incidents, Nigerian soldiers stormed Ogoni villages,

saying they were quelling unrest between neighbouring Ogoni tribes. The Ogoni claimed
the raids were punishment for obstructing Shell. They stated that the military had orders
to use minor land disputes, which had long been settled with little violence, as an excuse
to lay entire villages to waste. A feared unit of the mobile police with the nickname “Kill
and Go” conducted some of the raids. Although details are sketchy, it has been reported
that hundreds of people lost their lives in the violence. The cycle of violence ultimately
culminated in the killing of the Ogoni chiefs who argued for compromise with the
Nigerian government. This provided the government with the justification they needed to
arrest Ken Saro-Wiwa and eight associates in the Movement for the Survival of the
Ogoni People.

Nigeria and Shell under Pressure

Saro-Wiwa’s arrest achieved the goal that the protests and bloodshed had not; it focussed
international attention in the plight of the Ogoni people, the heavy-handed policies of the
Nigerian government, and Shell’s activities in Nigeria. Several human rights
organisations immediately pressured Shell to use its influence to gain the release of Saro-
Wiwa. They also urged Shell to put on hold plans to start work on $3.5 billion liquefied
natural gas project in Nigeria. The project was structured as a joint venture with the
Nigerian government. Shell’s central role in the project gave it considerable influence
over the government, or so human rights activists believed.

Shell stated that it deplored the heavy-handed approach taken by the Nigerian
government to the Ogoni people and regretted pain and loss suffered by Ogoni
communities. The company also indicated it was using “discreet diplomacy” to try to
bring influence to bear on the Nigerian government. Nigeria’s military leadership,
however, was in no mood to listen to discreet diplomacy from Shell or anyone else. After
a trial by a military tribunal that was derided as nothing more than a kangaroo court,
Saro-Wiwa and his associates were sentenced to death by hanging. The sentence was
carried out shortly after sunrise on November 10, 1995.

Aftermath

In the wake of Saro-Wiwa’s hanging, a storm of protest erupted around the world. The
heads of state of the 52-nation British Commonwealth, meeting in New Zealand at the
time of Saro-Wiwa’s execution, suspended Nigeria and stated they would expel the
country if it did not return to democratic rule within two years. U.S. President Bill
Clinton recalled the U.S. ambassador to Nigeria and banned the sale of military
equipment, on top of aid cuts made in protest at Saro-Wiwa’s arrest. British Prime
Minister John Major banned arms to Nigeria and called for the widest possible embargo.
Ambassadors from the 15-nationa EU were recalled, and EU suspended all aid to Nigeria.

But no country halted purchases of Nigerian oil or sales of oil service equipment to
Nigeria. The U.S., which imports 40% of Nigeria’s daily output of 2 million barrels, was
silent on the question of an oil embargo. Similarly, no Western country—many of which
had national companies working in the Nigerian oil industry—indicated they would
impose an embargo on sales to, or purchase from, the Nigerian oil industry. Alone
among public figures, South African President Nelson Mandela called for a ban on Shell.
The call was echoed by several environmental groups, including Greenpeace and Friends
of the Earth, both of which urged their supporters to boycott Shell products. However,
South Africa never enacted a formal ban, and the boycott calls met with only limited
success.

For its part, Shell indicated it would go ahead with its plans for a liquefied natural gas
operation in Nigeria in partnership with the Nigerian government. In a public notice
published in British newspapers, Shell stated, “It has been suggested that Shell should
pull out of Nigeria’s LNG project. But if we do so now, the project will collapse. May be
forever. So let’s be clear who gets hurt if the project gets cancelled. A cancellation
would certainly hurt the thousands of Nigerians who will be working on the project, and
the tens of thousands benefiting in the local economy”.

In November 1996, the Centre for Constitutional Rights filed a federal lawsuit in the U.S.
District Court in Manhattan on behalf of relatives of Saro-Wiwa who were now residing
in the United States. The lawsuit accused Royal Dutch/Shell of being part of a
conspiracy that led to Saro-Wiwa’s hanging. Shell denied the allegations and stated that
they would be refuted in court.

In May 1997, at the annual general meeting of Shell Transport and Trading in London, a
group of 18 institutional investors tabled a resolution that would have required Shell to
establish an independent external body to monitor its environmental and human rights
policies. John Jennings, the outgoing chairman of the company, told reporters after the
meeting that proxy votes from shareholders were running 10 to 1 against the resolution.

One reason for the defeat of the shareholder resolution was that the company had already
indicated it was taking steps to reform its culture and improve its own monitoring of
environmental and human rights policies. Before the shareholder meeting, the company
issued its own report on its policies in Nigeria, in which the company admitted that it
needed to improve its monitoring of environmental and human rights policies. Under the
leadership of its new head, Mark Moody-Stuart, Shell subsequently stated that it expected
its companies to express support for fundamental human rights in line with the legitimate
role of business and to giver proper regard to health, safety, and the environment
consistent with their commitment to sustainable development. The company also
embraced the UN Universal Declaration of Human Rights, pledged to set up socially
responsible management systems, and to develop training procedures to help
management deal with human rights dilemmas.

Commenting on these steps, a spokesman for Human Rights Watch stated, “I’m prepared
to give them some credit that they realised they had to look at what their own operations
were and how to respond. They acknowledged that big companies have social
responsibility, and that’s a pretty big step for the multinational corporations.”

Discussion Questions

1. Does Shell bear some responsibility for the problems in the Ogoni region of
Nigeria? In what way?
2. What steps might Shell have taken to nip some of the protests against it in the
bud, or even pre-empt them?
3. Could the company have done more to gain clemency for Ken Saro-Wiwa? What?
Should it have done more?
4. Was the response of Western governments to the execution of Ken Saro-Wiwa
about right, too excessive, or too mild? What should have been the appropriate
response?
5. In the wake of Ken Saro-Wiwa’s execution, was Shell correct to push ahead with
the LNG project in Nigeria?
6. Do you think that it is possible for a company such as Shell to reform itself from
within, or would it have been better for Shell to establish an external body to
monitor its human rights and environmental policies?