May 31, 2001

Nigerian groups protest dangerous
World Bank/Shell partnership

"We understand that Shell has, in recent years, invested heavily in an image laundering campaign in Europe and North America. However, the media campaigns have not resulted in improvement in practice of the company in the Niger Delta of Nigeria". Environmental Rights Action (Friends of the Earth, Nigeria) and a broad grouping of Nigerian civil society groups concerned about the environmental and human rights situation in the Niger Delta area have expressed grave concerns about the proposal of the International Finance Corporation (IFC), a member of the World Bank Group, to support the activities of Shell in Nigeria. The proposal involves the IFC contributing US$15 million to a fund to be managed in a partnership with Shell Nigeria and an unnamed Nigerian Bank. The purpose of the fund is to provide loans to so called small and medium-sized local contractors working for Shell and other Shell affiliates in the Niger Delta area of Nigeria.

Representatives of Environmental Rights Action (ERA/ FoE-N) stated that "We are shocked that the IFC will ignore the safeguard policies of the World Bank in this project. It will impact on the environment, livelihood and communal integrity in the violated Niger Delta area of Nigeria."

It appears that the IFC has considered the profitability of the proposed investment and ignored the social and environmental costs to be borne by the communities of the Niger Delta area as a result of the proposed project, due to the following factors:

1. Shell Nigeria, otherwise known as the Shell Petroleum Development Company has been widely condemned for human rights abuses, including its collusion with the Nigerian authorities for the mass murder of community people impoverished as a result of the devastation of their natural environment and the destruction of community sources of livelihood by Shell and other transnational oil companies operating in the Niger Delta area. ERA stated that "We understand that Shell has, in recent years, invested heavily in an image laundering campaign in Europe and North America. However, the media campaigns have not resulted in improvement in practice of the company in the Niger Delta of Nigeria".

"Shell and her contractors continue to disregard even basic environmental
precautions in the forests, wetlands and community farmlands as oil spills
are burnt openly and waste products are disposed of indiscriminately."

"Shell is very tardy in investing in the elimination of the destructive flaring of associated gas. And the company continues to be protected by soldiers in some of its installations in Rivers, Bayelsa and Delta States."

It is exactly the activities of companies like Shell that have made the Niger Delta area risky for investors like the IFC, and most importantly, for the local communities in the area.

2. The contractors to Shell have been operating in an environmental and socially destructive manner as Shell does not encourage real compliance with standards and as the Nigerian government continues to treat environmental protection of the Niger Delta as low priority issue.

3.. Oil and gas contracts and oil and gas contractors do not create jobs in a sustainable way. Contractors to Shell operate on a hire and fire basis depending on the availability of contracts. During brief spells in the employ of Shell contractors, workers are forced to operate under difficult working conditions with very low wages and working days of up to 12 hours.

"Shell is increasingly relying on contractors to avoid providing real employment. We should point out that the unsustainability of oil and gas contract employment has resulted in hundreds of thousands of displaced unemployed labourers inhabiting the slums of oil cities such as Port Harcourt and Warri in the Niger Delta."

4. The pattern of award of contracts to local contractors by Shell suggests a tendency towards bribery of influential individuals within communities who become agents of destabilisation within their communities. Many communal crises in the Niger Delta area are a direct result of the mode and execution of contracts by Shell.

5. The oil industry as presently structured can create huge profits for companies and revenue for government but cannot be relied upon for eradication of poverty in communities. On the contrary more investments in the oil-mining sector will exacerbate poverty and dislocation in the communities of the Niger Delta area of Nigeria. This is also the experience of other communities in developing tropical countries.

"Considering the foregoing, it is our position that the proposed IFC partnership with Shell Petroleum Development Company is irresponsible and is in contempt of the communities of the Niger Delta area. We, therefore, call on the IFC and the World Bank Group to abandon the dangerous idea of the so-called Niger Delta Contractor Revolving Credit Facility. We implore the World Bank Group to discontinue lending and strategic support to unsustainable oil and mining activities that destroy our
environment and impoverish our peoples."

Endorsing Organisations:

Agape is a Birth Right, Port Harcourt, Rivers State
Centre for Participatory Rural & Urban Development (CEPRUD), Uyo, Akwa Ibom
State
Chikoko Movement, Yenagoa
Civil Liberties Organisation (CLO), South Zone, Benin City
Concerned Youths of Ogbogolo, Egboama-Ogbogolo, Rivers State
Eket Rights Initiative (ERI), Akwa Ibom State
Elimotu Movement, Otuasega, Bayelsa State
Ijaw Council for Human Rights (ICHR), Port Harcourt
Ijaw Youth Council (IYC), Port Harcourt
ILARPE - Erema Town, Ahoada Rivers State
International Centre for Development & Environmental Planning (ICDEP), Port
Harcourt
Institute of Labour and Labour & People Empowerment, Port Harcourt
MAAP/MOPEP, Ahoada, Rivers State
Movement for Reparation to Ogbia, Bayelsa State
Movement for the Survival of Ogoni People (MOSOP), Port Harcourt
Niger Delta Project for Environment, Human Rights and Development,
Nchia-Eleme Rivers State
Niger Delta Women for Justice (NDWJ), Port Harcourt
Nigerian Institute of Human Rights (NIHR), Port Harcourt
Okpolom Imo Engenni, Rivers State
Our Niger Delta, Port Harcourt
Pan African Youth Movement (PAYM), Port Harcourt
Persons with Disability Network, Benin City
Public Interest Lawyers League (PILL), Port Harcourt
African Network for Environmental and Economic Justice, Benin City, Edo State
Degema Youth Council, Degema, Rivers State
Society for Awareness & Growth in Etche, Port Harcourt
Youth Action Network, Calabar, Cross River State
Oodua for Nature Conservation, Yaba, Lagos
Journalists for Democratic Rights, Maryland, Lagos
Supreme Egbesu Assembly (SEA), Yenagoa, Bayelsa State
The Concerned Ilaje Citizen (CIC), Warri
Watch the Niger Delta (WAND), Ahoada, Rivers State
Women In Nigeria (WIN), Port Harcourt
Women Political Action Committee (W-PAC), Port Harcourt
Youths Rights Action Network (YORAN), Port Harcourt

Womenlight Foundation, Port Harcourt

Letters of concern can be sent to:

James D. Wolfensohn, President, The
World Bank, 1818 H Street, N.W., Washington DC, 20433, USA.
| download a copy of the draft letter |.

For further information contact:

FoE Australia national liaison office.
Ph: 03 9419 8700
Email: foe@foe.org.au
Box 222, Fitzroy, 3065.