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UN Office for the Coordination of Humanitarian Affairs
Wednesday 4 May 2005

NIGERIA: Oil giant admits aid policies helped fuel violence

LAGOS, 4 May 2005 (IRIN) - Oil giant ChevronTexaco is to rethink its community aid strategies after acknowledging that some of the policies implemented by its Nigerian subsidiary in the oil-rich Niger Delta have contributed in fuelling violence in the region.

ChevronTexaco said in a statement on Tuesday that its system of investment in community development in the region that produces most of Nigeria’s oil, has been “inadequate, expensive and divisive,” and would be revamped.

One major source of conflict identified by the company is a longstanding policy by oil multinationals in Nigeria of designating communities closest to oil facilities as “host communities”, to qualify them for special attention in development assistance.

“The system of designating some communities as host communities left those not so designated feeling alienated and underprivileged, inadvertently leading to or adding to the causes of conflicts among communities,” the company said.

During conflicts between rival ethnic groups and communities, projects built for beneficiary communities as such have become prime targets of attack and destruction, the company said, citing the pattern of destruction that followed a major outburst of violence between rival ethnic Ijaw, Itsekiri and Urhobo militias in March 2003.

Due to that year’s violence, more than 40 percent of Nigeria’s daily oil exports of more than two million barrels were stopped for several weeks. Three years later, ChevronTexaco is just beginning to reopen six facilities producing 140,000 barrels a day, about a third of the output of the number three producer in Nigeria after Royal Dutch/Shell and ExxonMobil.

Apart from the deaths of employees killed in the conflict and lost output, the cost of repairing facilities damaged in the fighting exceed US $500 million, the company said.

Also considered a failure by ChevronTexaco is the widespread practice among oil multinationals in Nigeria of paying local troublemakers in the Niger Delta to protect their operations against disruptions.

“Young, unemployed community men were being paid salaries as ghost workers for doing nothing at all, except that some are often found to be involved in threats, extortion and disruption of operations,” the company said.

To replace such practices the oil giant is looking at a new system of development assistance that will target clusters of communities in its operational areas without distinction, the company said. This will be managed through “Regional Development Councils” that will include government, company and community representatives.

Instead of dealing with individuals and a few community leaders who control the benefits to the exclusion of the rest, as was the case in the past, ChevronTexaco will set up a system to “guarantee that all members of communities know what the leaders are doing” as well as project costs and expenditure.

Despite its oil wealth, the Niger Delta remains one of the most impoverished regions of Nigeria, with an overwhelming majority of its estimated 15 million inhabitants lacking access to basic amenities such as clean water, schools and clinics.

Resentment has deepened over the years against oil joint ventures run by oil multinationals in partnership with the Nigerian state, perceived by locals as cheating them out of their oil wealth, and is a major factor causing the region’s restiveness.

A study by international consultants in 2003 paid for by Shell also blamed some of the company’s policies for violence in the delta it estimated was claiming 1,000 lives every year.

The study predicted that Shell might be forced to end onshore oil production in Nigeria by 2008 unless the issues underlying the region’s violence were urgently addressed.


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