THE PRICE OF OIL Corporate Responsibility and Human Rights Violations in Nigeria’s Oil Producing Communities Human Rights Watch New York ⋅ Washington ⋅ London ⋅ Brussels (Note: This report has been reformatted by La’o Hamutuk and does not include the illustrations in the original. Human Rights Watch was unable to supply us with the complete report in computer-readable form.) Copyright © January 1999 by Human Rights Watch. All rights reserved. Printed in the United States of America. ISBN: 156432-225-4 Library of Congress Catalog Card Number: 99-60123 Addresses for Human Rights Watch 350 Fifth Avenue, 34th Floor, New York, NY 10118-3299 Tel: (212) 290-4700, Fax: (212) 736-1300, E-mail: [email protected] 1522 K Street, N.W., #910, Washington, DC 20005-1202 Tel: (202) 371-6592, Fax: (202) 371-0124, E-mail: [email protected] 33 Islington High Street, N1 9LH London, UK Tel: (171) 713-1995, Fax: (171) 713-1800, E-mail: [email protected] 15 Rue Van Campenhout, 1000 Brussels, Belgium Tel: (2) 732-2009, Fax: (2) 732-0471, E-mail: [email protected] Web Site Address: http://www.hrw.org Listserv address: To subscribe to the list, send an e-mail message to [email protected] with “subscribe hrw-news” in the body of the message (leave the subject line blank). Human Rights Watch is dedicated to protecting the human rights of people around the world. 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It accepts no government funds, directly or indirectly. The staff includes Kenneth Roth, executive director; Michele Alexander, development director; Reed Brody, advocacy director; Carroll Bogert, communications director;Cynthia Brown,program director; Barbara Guglielmo, finance and administration director; Jeri Laber special advisor; Lotte Leicht, Brussels office director; Patrick Minges, publications director; Susan Osnos, associate director; Jemera Rone, counsel; Wilder Tayler, general counsel; and Joanna Weschler, United Nations representative. Jonathan Fanton is the chair of the board. Robert L. Bernstein is the founding chair. The regional directors of Human Rights Watch are Peter Takirambudde, Africa; José Miguel Vivanco, Americas; Sidney Jones, Asia; Holly Cartner, Europe and Central Asia; and Hanny Megally, Middle East and North Africa. The thematic division directors are Joost R. Hiltermann, arms; Lois Whitman, children’s; and Regan Ralph, women’s. The members of the board of directors are Jonathan Fanton, chair; Lisa Anderson, Robert L. Bernstein, William Carmichael, Dorothy Cullman, Gina Despres, Irene Diamond, Adrian W. DeWind, Fiona Druckenmiller, Edith Everett, James C. Goodale, Vartan Gregorian, Alice H. Henkin, Stephen L. Kass, Marina Pinto Kaufman, Bruce Klatsky, Alexander MacGregor, Josh Mailman, Samuel K. Murumba, Andrew Nathan, Jane Olson, Peter Osnos, Kathleen Peratis, Bruce Rabb, Sigrid Rausing, Anita Roddick, Orville Schell, Sid Sheinberg, Gary G. Sick, Malcolm Smith, Domna Stanton, and Maya Wiley. Robert L. Bernstein is the founding chair of Human Rights Watch. ACKNOWLEDGMENTS This report was written by Bronwen Manby, researcher in the Africa Division of Human Rights Watch, based on research in the Niger Delta in July 1997, subsequent correspondence with the major oil companies operating in the region, and information provided by Nigerian human rights and environmental activists. The report was edited by Peter Takirambudde, executive director of the Africa Division; Mike McClintock, deputy program director; and Wilder Tayler, general counsel. Elizabeth Thapliyal, Associate in the Africa Division, prepared the report for production. Human Rights Watch would like to thank its NGO partners who contributed to the report by assisting our research and providing additional information. In particular, we wish to thank the committed and courageous activists of Environmental Rights Action, without whom the report could not have been written. We would also like to thank all those who agreed to meet with us and be interviewed for the report, especially the many residents of oil producing communities of the Niger Delta. TABLE OF CONTENTS I. SUMMARY 1 The Role and Responsibilities of the International Oil Companies 2 The Oil Industry and the Oil Producing Communities 4 Protest and Repression in the Oil Producing Communities 6 The Role of Shell in the Ogoni Crisis 8 Attempts to Import Weapons 9 Threats to Community Members 9 Oil Company Failure to Monitor or Protest Abuses 10 Shell’s Internal Review Since 1995 11 Conclusion 12 II. RECOMMENDATIONS 13 To the Nigerian Government 13 To the International Oil Companies Operating in Nigeria 14 To the International Community 16 III. OIL AND NATURAL GAS IN NIGERIA 17 Crude Oil 17 The Structure of Oil Company Agreements with the Nigerian Government 18 Natural Gas 21 The Downstream Sector 22 IV. OIL WEALTH AND THE NIGERIAN CONSTITUTION 26 State Creation and Revenue Allocation 26 V. THE ENVIRONMENT 35 The Framework of Nigerian Law on Oil and the Environment 35 The Impact of Oil Operations on the Environment 37 Oil Spills and Hydrocarbon Pollution 39 Infrastructure Development 44 Gas Flaring 46 Compensation for Land Expropriation 48 Compensation for Oil Spills 50 Sabotage 52 The Niger Delta Environmental Survey 55 VI. OIL COMPANIES AND THE OIL PRODUCING COMMUNITIES 58 Minorities in the Oil Producing Regions 58 Social and Economic Conditions in the Oil Producing Communities Today 60 Oil Company Relations with the Oil Producing Communities 62 Employment 64 Development Projects 65 The Effect of the Oil Economy on Community Politics 68 The Warri Crisis 70 VII. SECURITY 73 Security Arrangements for Oil Facilities 73 Special Task Forces 76 VIII. PROTEST AND REPRESSION IN THE NIGER DELTA 79 Umuechem 79 The Ogoni Crisis 79 Attempts to Duplicate the MOSOP Protests 82 Targeting of Community Leaders and Environmental Whistle-blowers 84 Day-to-day Protest and Repression in the Oil Producing Communities 86 Suppression of Demands for Compensation: 89 Damages, Development Projects, and Employment 89 Other Abuses Resulting from Oil Company Security 98 Litigation 99 IX. THE ROLE AND RESPONSIBILITIES OF THE INTERNATIONAL OIL COMPANIES 102 Corporate Responsibility in Nigeria 103 The Role of Shell in the Ogoni Crisis 108 Attempts to Import Weapons 111 Threats to Communities 112 Oil Company Calls for Security Force Assistance 113 Oil Company Failure to Monitor and Protest Abuses 115 Shell’s Internal Review Since 1995 116 X. INTERNATIONAL LAW 119 XI. THE ROLE OF THE INTERNATIONAL COMMUNITY 121 The Commonwealth 121 The United Nations and International Labour Organization 121 The African Commission 123 The European Union and its Member States 123 The United States 124 Codes of Conduct for Business 125 XII. CONCLUSION 128 I. SUMMARY This report is an exploration of human rights violations related to oil exploration and production in the Niger Delta, and of the role and responsibilities of the major multinational oil companies in respect of those violations. The Niger Delta has for some years been the site of major confrontations between the people who live there and the Nigerian government security forces, resulting in extra-judicial executions, arbitrary detentions, and draconian restrictions on the rights to freedom of expression, association, and assembly. These violations of civil and political rights have been committed principally in response to protests about the activities of the multinational companies that produce Nigeria’s oil. Although the June 1998 death of former head of state Gen. Sani Abacha and his succession by Gen. Abdulsalami Abubakar has brought a significant relaxation in the unprecedented repression General Abacha inflicted on the Nigerian people, and General Abubakar appears committed