Billions in company payments failing to improve lives in Niger Delta, new study shows
The hundreds of millions of dollars multinational energy companies pay every year towards development in the Niger Delta are having negligible impact on people’s lives or environmental protection, a new study co-authored by civil society organisations Policy Alert (Nigeria), Publish What You Pay (PWYP) UK, has found.
The report, “What’s in It for Us?” An action-research case study of Nigeria’s extractive industries, found that multinationals paid US $359 million in 2018 alone to the Nigeria’s Niger Delta Development Commission (NDDC), the federal government agency responsible for facilitating sustainable development in the oil-rich but poverty-stricken and polluted Delta. Between 2014 and 2019 the NDDC’s 3% annual budget levy from oil companies operating in the region delivered more than US $3.2 billion from subsidiaries of Chevron, CNOOC (China), Eni, Equinor, ExxonMobil, Royal Dutch Shell Plc, Total SA and other companies.
Ground-breaking transparency laws in the European Union, UK, Norway and Canada, and the voluntary-for-governments Extractive Industries Transparency Initiative (EITI), make this payments-to-governments information available to civil society watchdogs, media, parliamentarians and citizens.
The study documents how Niger Delta communities live in polluted and dehumanising conditions close to extraction sites. Daily realities include oil spills and gas flaring, a lack of safe drinking water and decent sanitation, meagre and inadequate healthcare and educational facilities, and rampant unemployment, especially among young adults.
Tijah Bolton-Akpan, Director of Policy Alert, who co-authored the study, said: “These findings underline how unaccountable and badly governed Nigeria’s extractive sector is and raise the question: where is all this money going? Despite millions of dollars meant to benefit Delta communities changing hands every year, the region is one of the most polluted places on earth. Responsibility for environmental harms and impoverished communities lies not just in Nigeria, but also in London, the Hague, Paris and other capitals where multinational parent companies that extract Nigeria’s mineral wealth are incorporated, headquartered, publicly listed and should be more stringently regulated.”
In what was described as a “watershed” moment, in February 2021 the UK Supreme Court ruled that two communities in the Niger Delta can proceed with a legal case against Shell for its Nigerian subsidiary’s environmental failures, because the company is registered in London.
“What’s in It for Us?” reports on Policy Alert consultation visits to oil-affected communities in Akwa Ibom State. In Ibeno, a large coastal fishing settlement, local drinking water sources are contaminated by oil and open defecation. People spoke of health problems ranging from alarming rates of respiratory illnesses to fertility issues, birth deformities and cancers. In Esit-Eket community members complained about high unemployment, local farmers prevented from accessing their farmlands by military personnel guarding oil company facilities, and economic burdens especially heavy for female-headed households.
Iniobong Usen, Policy Alert co-author of the study, commented: “The NDDC, with its vast receipts over the past 20 years, is plagued with corruption scandals and widely perceived to have failed in its mandate of delivering sustainable benefits to Niger Delta communities. Our report makes recommendations for increasing the public accountability of the NDDC and all other actors in Nigeria’s oil and gas sector. We also need all extractive contracts to be published.”
Miles Litvinoff, Director of PWYP UK, who also co-wrote “What’s in It for Us?”, said: “Oil dominates Nigeria’s economy. Niger Delta communities have experienced all the downsides with negligible benefits. The Nigerian government and oil companies must ensure that the millions meant for development reach their intended target. As the world moves away from fossil fuels, urgent action is required to prevent communities being hit by a double whammy: the impact of decades of oil and gas pollution and no decent development legacy to show for it. Those who have paid the highest price for Nigeria’s oil must be properly compensated before it’s too late.”
Notes and contacts
- “What’s in It for Us?” An action-research case study of Nigeria’s extractive industries is available in full with an executive summary report at https://www.pwyp.org/pwyp-resources/pwyp-report-nigeria-extractives/
- This report is the second of three PWYP collaborative action-research studies on countries’ extractive sectors. The first report was on oil and gas in Kazakhstan (November 2020), and the third will be on mining in Brazil.
- Oil and gas accounted for a reported 93.8% of Nigeria’s export earnings in Q4 2018, and Nigeria supplied 2.2% of world crude oil production in 2019.
- Niger Delta community testimony is backed up by numerous studies on the health risks associated with oil pollution in the Delta.
- Extractive industry payments-to-governments transparency laws have been implemented since 2016 in the UK, EU, Canada and Norway. A similar law in the United States has not yet been implemented. On the Extractive Industries Transparency Initiative (EITI), which Nigeria has implemented since 2007, see https://eiti.org/nigeria and https://neiti.gov.ng/
- The Niger Delta Development Commission (NDDC) is currently being audited following allegations by Nigerian lawmakers of financial mismanagement over the past 20 years. Policy Alert and PWYP are calling for the NDDC to be required to publish detailed monthly data on the payments it receives from the government and companies, and how it spends the money.