Shell admits causing corruption
Oil giant Shell has admitted
it inadvertently fed conflict,
poverty and corruption through its oil activities in Nigeria.
But a Shell spokesman said the
group did not agree with independent experts that the unrest
may force it to leave. Nigeria contributes to about 10% of Shell''s
global production and is home to some of its most promising
Shell says it has been difficult to operate with integrity in
areas of conflict like Nigeria.
Government and local communities
must take the lead," said Emmanuel Etomi, Shell''s community
development manager in Nigeria.
"As part of an industry inadvertently contributing
to the problem we are prepared to help," he said.
In 2003, Shell commissioned an independent report
in order to help it better understand how its activities are affected
by, and inadvertently contribute to, conflict.
That report was written by "three internationally
known conflict resolution experts" and its conclusions fed
into Shell''s newly published 2003 People and The Environment
report on its Nigerian operations, written by Mr Etomi.
Shell has declined to publish the independent
Mr Etomi says their fieldwork highlighted how
conflict makes it difficult for it to operate safely and with
integrity and "how we sometimes feed conflict by the way
we award contracts, gain access to land, and deal with community
The three experts warned that Shell could eventually
be forced to withdraw from the West African country if violence
in the Niger Delta escalates, London-based Shell spokesman Simon
"It does say that. That is the view of the
report''s authors. It is not a view that we agree with,"
Mr Buerk told BBC News Online.
"But of course there is serious conflict
in parts of the Delta and this has the potential to get worse
if no action is taken," he said.
Shell''s view is that "government and local
communities must take the lead in ending conflict but we are also
determined to help," he added.
Shell is supporting the creation of a working
group made up of Nigerian and international experts, and representatives
of local communities, to explore ways to stem the conflict.
In 2003, Shell contributed $54.5m to the government-backed
Niger Delta Development Commission as well as $30m for its own
community development programme.
However Mr Etomi said the Commission had "made
To prevent money earmarked for community projects
being siphoned off, Shell''s Nigerian operations introduced "13
big rules" to tighten internal spending controls last year.
The rules abolish cash payments to local groups.
"When we go to a community and offer development projects,
some actually demand cash instead. Obviously once you put cash
into a community it''s hard to know where it goes," said
Mr Buerk said Shell does not tolerate corruption,
and has global regulations making this clear to staff.
Shell''s report on Nigeria says it dismissed
29 career and contract staff in 2003 for corrupt practices.
Shell relies on Nigerian oil and gas for about
10% of current production.
About one third of the recent reserves downgrade
was in Nigeria.
Shell''s image has been badly damaged in recent
years and despite efforts it is still seen by many as a company
that damages the environment and supports corrupt regimes.
A class action suit is being prepared over coming
months which will accuse the company of supporting military operations
in the Niger Delta more than 10 years ago.
It has been charged with being too slow in cleaning
up oil spills by NGOs and other international campaigners.
In a statement relating to that issue, Chairman
of Shell Companies in Nigeria, Chris Finlayson said: "We
recognise that our development activities in the past have been
less than perfect."