The oil footprint in the Niger Delta: The relationship between conflict and Shell’s corporate social responsibility

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The oil footprint in the Niger Delta

The relationship between conflict and Shell’s corporate social responsibility

Wai Yin Liu 10787720 Bachelor Thesis Group: Political Ecology August 14th, 2017 Supervisor: Andres Verzijl

Source: Hjelmer Visser, Amnesty International

Source: International Business Times (2015)

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Abstract

Oil exploitation in the Niger Delta is responsible for more than three quarters of Nigeria’s national budget. However, Nigeria’s oil industry is also indirectly connected to the emergence of conflict in the delta. Oil exploitation left communities dispossessed of their land, barely provides economic benefits for delta communities and causes environmental degradation impacting the livelihoods of communities. Adding the aforementioned negative effects of oil exploitation to already present political and economic struggles in Nigeria, conflict in the Niger Delta becomes reality. In an attempt to compensate for the externalities, oil companies such as Shell make use of corporate social responsibility (CSR). The main aim of CSR is to provide social and economic development in the delta. However, CSR remains ineffective in providing social development in the whole of the Niger Delta and also fails to address conflict adequately. An important factor for this failure is the absence of a strong Nigerian government providing an enabling environment for CSR practices. Therefore, a new approach to CSR and government responsibility will be critical for social development and conflict resolution in the delta.

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1. Introduction

Today’s global energy systems are largely reliant on fossil fuels and the use and exploitation of these energy resources has direct social and environmental consequences. Besides the fact that fossil fuels are contributing to global climate change when burned, the process of extracting these fossil fuels also has negative social-environmental consequences, especially when the extraction is not handled properly. Externalities connected to the exploitation of fossil fuels that impact social and environmental systems can be witnessed in the Niger Delta. The Niger Delta is the largest river delta and mangrove ecosystem in Africa and its wetlands are considered to be very important ecosystems, for they provide ecosystem services that are essential for the livelihood of communities living in the area (Kuenzer et al., 2014). Additionally the region has a high biodiversity and contains lots of unique coastal flora and fauna found nowhere else (Okonkwo, Kumar & Taylor, 2015). Nyananyo (2006, as cited in Adekola et al., 2015) has identified several plant species that are important as cultural, food, timber and medicine materials. Moreover, fish in the delta are the most abundant source of animal protein for consumption and income generation for the delta communities (Adekola et al., 2015). Thus, livelihoods and ecosystem services are closely connected in the Niger Delta. However, over the course of half a century, oil spills have adversely impacted both communities and the environment in the oil rich Niger Delta in Nigeria (Pegg & Zabbey, 2013).

Commercial oil exploitation in the delta started in 1956, when Shell British Petroleum discovered large quantities of crude oil (Kadafa, 2012; Anejionu et al., 2015). Roughly 50 percent of Nigeria’s oil exploitation is situated in the delta (Nriagu et al, 2016). The Shell Petroleum Development Company of Nigeria Limited (SPDC), a subsidiary of Shell, has the largest oil extraction footprint of all international oil and gas companies in Nigeria (Shell, n.d.). Though Nigeria has other natural resources, the oil sector is most important for its economy. Nigeria is ranked as the largest oil producing country in Africa and the eleventh largest producer in the world (Nriagu et al. 2016). Oil has proved to be important for the Nigerian economy. The revenues from the oil sector contributed up to 77 percent of the national budget in 2010 (Renouard & Lado, 2012). Consequently, because of the strong connection of oil and the Nigerian state, Nigeria has sometimes been recognised as a rentier state (Odukoya, 2006). A rentier state is characterised by having a mono-economy in which natural resources are the prime sources of income (Omeje, 2006). However, oil spills occur regularly in the delta. Causes range from pipeline corrosion, poor maintenance of infrastructure, human error to oil theft and intentional vandalism or sabotage (Nriagu et al., 2016). Just between 1976 and 1996, an estimated 2.369.470 barrels of crude oil was spilled into the environment, causing significant negative impact on ecosystems and reducing the quality of life of inhabitants (Olobanyi & Omo-Irabor, 2016). The total amount of oil spillage since the start of commercial oil exploitation is unknown, but estimates show that between 9 and 13 million barrels over 50 years has been leaked into the environment (Nriagu, 2016).

1.1 Problem statement

The negative consequences of oil exploitation on the livelihoods of communities are reflected in the loss of ecosystem services such as fisheries and freshwater sources as a result of oil spills. However, oil spills cannot be seen a stand-alone adverse consequence of oil exploitation in the Niger Delta that impact the environment and livelihoods of communities. Rather, a complex relationship between oil exploitation and conflict can be identified in the Niger Delta. According to Obi (2014) there is a nexus between oil and violent conflict in Africa that can be partly linked to an oil curse. Conflict in the Niger Delta can be dated back to before oil was important for Nigeria’s political economy (Obi, 2014), there has always been conflict between tribes about unequal power distributions (Obi, 2014). Nevertheless, oil serves as a catalyser of conflict because of several factors, according to Mähler

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2 (2012). First off all, oil pollution causes environmental damage creating a sense of grievance within communities. Furthermore, oil production creates interethnic and intercommunal struggles over the distribution of wealth. Thirdly, oil creates volatility when oil prices drop due to the dependency of Nigeria’s economy on oil, which indirectly increases the risk of violent conflict. Fourthly, oil indirectly funds militant groups, therefore creating conflict. Moreover, the inhabitants of the delta are often dispossessed of any claim or right or ownership over land or petroleum by the federal government (Idemudia & Osayande, 2016). These social and environmental issues are hampering (sustainable) development of the delta region (Ejumondo et al., 2011). It is important to stimulate development in the Niger Delta for it might create peace and help with protecting the delta’s unique environmental resources and flora and fauna.

The question that arises is how oil companies cope with these environmental issues and social conflict, directly and indirectly connected to oil exploitation. An important strategy for firms operating in foreign soils is to apply Corporate Social Responsibility (CSR). CSR is often used in extractive industries because they produce externalities on the economy, societies and environment (Renouard & Lado, 2012). The oil and gas sector have been leading industries regarding the use of CSR (Fynas, 2005). Additionally, the need for CSR is greatest where the government has not (yet) been successfully providing public goods and services, according to Frynas (2009, as cited in Rouard & Lado, 2012). Researching the topic of CSR in the Niger Delta is interesting because of several reasons. Oil companies operating in the delta have been causing externalities for over half a century and the government is not solving, or is not able to solve, the issues connected to oil production on their own. Moreover, critics are questioning the effectiveness of CSR, the true intentions of businesses and their actual behaviour and impact in practice (Frynas, 2005). The aim of this research is to provide a clear overview on the relationship between oil and conflict, and describe the CSR practices of oil companies as response to conflict.

The paper is divided into five sections. First of all, the theoretical framework will provide an overview of important concepts related to oil exploitation, corporate social responsibility and conflict in the Niger Delta. These will not only be explained, but also analysed using other related concepts. Secondly, a chapter addressing the research and sub questions will follow. Thereafter, the methodology section will discuss the usage of analysis methods and will elaborate on the data collection. Following the methodology section, the results section will be dissected into three parts to provide answers to the sub-questions. The first part will provide an overview on the history of oil exploitation, the role of Nigerian state and the Shell Petroleum Development Company in the Niger Delta. The second part will mainly be discussing social conflict in the delta. The last part will provide an insight on CSR initiatives of the SPDC and its effectiveness. Thereafter, the conclusion will be used to summarize the research and provide an answer for the main research question. Lastly, a short discussion follows.

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2. Theoretical framework

To research the complex relationship between oil exploitation, conflict and corporate social responsibility present in the Niger Delta, the following theories and concepts appear to be promising:

- Rentier state - Resource curse - Contentious politics

- Corporate Social Responsibility (CSR)

The aforementioned concepts can be categorised under the banner of political ecology, but political ecology is a complex and broad concept. Political ecology began to establish itself as a dominant field of human environmental research and social science in the 1970s (Walker, 2005). The emerging significance of political ecology was partly due to the influence of colonial and post-colonial global market economies on local societies. Early research in political ecology focused on unequal power relations, conflict and cultural ‘modernisation’ as key forces that reshaped and destabilised human interaction with the physical environment (Walker, 2005). The most cited definition of political ecology in social sciences comes from Blaikie and Brookfield (1987, as cited in Swyngedouw, 2003; Walker, 2005). Blaikie and Brookfield claim that:

'The phrase "political ecology" combines the concerns of ecology and a broadly defined political economy. Together this encompasses the constantly shifting dialectic between society and land-based resources, and also within classes and groups within society itself'

Blaikie and Brookfield’s research showed the ways the environmental actions of a land manager are shaped by economic, ecological and political marginalisation, pressure of production and flawed (environmental) policies (Walker, 2005). Thus, political ecology encompasses and links capitalist development with ecological change across multiple temporal and spatial scales (Neumann, 2009). Additionally, Schmink and Wood (1987, as cited in Swyngedouw, 2003) claim that political ecology provides an explanation on how economic and political processes determine the way natural resources have been exploited. Currently, the field of political ecology can also be used to analyse the social and ecological effects of development by focusing on property rights (Neumann, 2009). Property rights are the expression of social relations and are often locally generated meanings of land and its resource. Social economic change however can alter ownership. The significance of the oil industry for Nigeria’s economy as well as the global oil market, has impacted local social and environmental systems. For example, oil spills has had adverse consequences for ecosystems and livelihoods. Moreover, access and control over ecosystem goods and services, and oil resources are examples of contested property rights in the oil rich Niger Delta. Hence, political ecology in this sense, focusses more on the ‘political’ side of human and environment interaction, as opposed to the ‘ecology’ side. However, the branching out of contemporary political ecology into the political side of things while paying less attention to ecology has attracted critique from scholars (Walker, 2005). Yet, focusing more on the politics is detrimental and inevitable for this research, since this research primarily focuses on the relationship between oil exploitation, CSR and (social) conflict in the Niger Delta region. Moreover, the used concepts in this framework are inherently political in nature.

2.1. The rentier state

The concept of a rentier state was first introduced by Hossein Mahdavy in 1970 and describes the political implications of resource abundance. According to Mahdavy, a rentier state is a state that receives substantial rents from foreign individuals or governments (Sandbakken, 2006). In recent studies, a country is classified as a rentier state if the government received at least 40 percent of its revenues in the form of rent (Sandbakken, 2006). Typically, these rents are generated from the

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4 exploitation of natural resources as opposed from production (labor), investments (interest) or the management of risks (profit) (Jensen & Wantchekon, 2004). In the case of Nigeria, the country is largely dependent on oil mining rents, taxes and royalties paid by oil companies (TNOCs). However, the Nigerian state does receives profit from its equity stakes in TNOCs investments (Omeje, 2006), thus Nigeria diverts slightly from the typical rentier state as brought forward by Jensen and Wantchekon. In addition, rent can also be identified as foreign aid and external development assistance, in this case these rents are called ‘strategic rents’ (Omeje, 2006). These strategic rents in the Niger Delta come in the form of CSR initiatives that aim to help social development. Furthermore, there are several additional features that characterise an oil rentier state. First, Mahdavy has recognised that oil revenues make the state autonomous from their population since it does not need to rely on taxes for income (Sandbakken, 2006; Jensen & Wantchekon, 2004). This reduces the sense of accountability and representation on the government’s side, and also reduces the demand for accountability and representation by citizens. A second feature of an oil rentier state is that oil rents directly go to the government. The government also have direct power over how these revenues are spent (Sandbakken, 2006). In Nigeria, the state has direct control in solving conflicts or creating conflicts depending on how oil revenues are spent. Spending revenues for development purposes could potentially dampen conflict, while spending money on the securitisation of the delta fuels conflict. The rentierism of the Nigerian state also shows itself in the oil related legislations according to the research of Omeje (2006). These legislations are primarily aimed at access and control of oil resources, as will become apparent in later sections of this paper.

2.2. Resource curse

Another relevant concept is the resource curse thesis, first introduced by Richard Auty. In his paper, Auty (1994), analysed the development of six newly industrialised countries. One of his findings was the paradox between economic development and resource abundance. Resource rich countries seemed to stagnate in economic development, whereas resource poor countries continued achieving economic growth. This is further underlined in Shaxson (2007). He adds that a resource curse is when mineral-dependent states fail to utilise resources for national development, in some cases the availability of resources even harm national development. The poorer and weaker a country is before the oil discovery, the more likely it is to be harmed by it. A recent IMF paper states that the living conditions in most oil producing countries are close to or below the average for sub-Saharan African countries (Shaxson, 2007). In oil producing countries such as Nigeria, oil booms promote only bursts of temporary headline economic growth, but economic growth in the long term often lower than it would have been without the resource (Shaxson, 2007). Thus the reason why some call the resource curse a paradox of plenty. In addition, resource abundance can create incentive for armed conflict. However, some scholars have criticised the generalising nature of the resource curse thesis.

The notion that resource abundance and dependency impede economic growth remains heavily contested, since some resource abundant and dependent countries do enjoy significant economic growth (e.g. Norway) (Brunnschweller & Bulte, 2008). Bunschweller and Bulte (2008) further argue that the literature on the resource curse thesis should distinguish resource abundance (a measure of in situ resource wealth), resource rent (income derived from the resource wealth) and resource dependence (the degree to which countries have access to additional sources of income) more clearly. These factors are correlated but cannot be seen as equivalent. The oil related conflict in the Niger Delta is not necessarily caused by resource abundance, but it is the dependency on oil as the prime source of national income that fuels conflict in several ways. This is why I think making a connection between the rentier state and the resource curse is crucial in for this particular case. Resource dependency can generate a greater risks of violent conflict, greater inequality, less democracy and more corruption (Shaxson, 2007). Moreover, economies that are dependent on

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5 natural resources are more likely to be associated with worse governance and poor policy choices (Jensen & Wantchekon, 2004; Obi, 2014). The rentierism of the Nigerian state has increased the strategic importance of oil. Therefore, the Nigerian state has consolidated its access and control over oil resources in the Niger Delta by using legislations. In addition, the government has increasingly militarised the delta and has violently squashed any protest regarding the distribution of oil wealth and oil exploitation over the years. The aforementioned policy choices has left local communities marginalised and only fuelled conflict in the delta, hence paving the way for the emergence of a resource curse. The resource curse, as a result of resource dependency, can be a causal factor in a (rentier) state for corruption, misrule, authoritarianism or general political instability (Obi, 2014). The Niger Delta is a prime example that shows this connection between rentier state and the resource curse.

2.3. Contentious politics

The Niger Delta is renowned for its ongoing oil related violent conflict. Protests against the oil exploitation scheme, the unequal revenue distribution and political marginalisation come in various forms. On the one hand, Social movements peacefully protest for social and environmental justice. On the other hand, militant (youth) groups make use of violence, theft and sabotage to attack the Nigerian state and the oil industry under the banner of either achieving economic gains and/-or achieving social justice. As such, conflict in the delta can be categorised as a (political) struggle for change. There are two main theories that are applicable for analysing the political contention in the delta, the theory of Scott regarding ‘everyday’ resistance and the theory of contentious politics introduced by Mcadam, Tilly and Tarrow.

Violence, theft and sabotage is part of what Scott (2008) calls everyday forms of resistance. This kind of resistance is called everyday because of its emphasis on small scale individual actions. Most forms of everyday resistance are used to disrupt some appropriation by the state and/-or the superior class. Though the conflict in the Niger Delta is all but small scale, the significance of James C. Scott’s theory for this case is that he recognises that such individual everyday forms of resistance can become patterns of resistance when sufficiently generalised. It eventually results in what Scott calls the class struggle between the subordinate and ruling class. The ongoing conflict between the Nigerian state and the oil companies on end, and the social movements and communities on the other end, pictures this class struggle.

The theory of contentious politics as introduced by scholars Doug McAdam, Sidney Tarrow and Charles Tilly supplements the work of Scott. Where Scott lays an emphasis on the individual nature of everyday resistance, Mcadam, Tarrow and Tilly focus on the collective nature of political struggle. According Tilly (1997), contentious politics is defined by combining the definitions of ‘claims’ and ‘governments’:

- Claims are statements of preference with respect to the behaviour of specific other people; they include demands, attacks, petitions, supplications, affirmations of support or opposition, and declarations of obligation.

- A government is an organisation controlling the principal concentrated means of coercion within some substantial territory; the government is a state if it does not clearly fall under the jurisdiction of another government and receives recognition from other relatively autonomous governments.

Contentious politics is consequently defined by McAdam, Tarrow & Tilly (2001) as occasions where a group of people make collective, public and visible claims on others, which would in turn affect the interests of at least one of the claimants. In addition, one claimant is a government, an object of

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6 claims or a party to the claims. Wars, ethnic conflicts, social movements, collective seizures of commodities and more are all categorised as contentious politics (Tilly, 1997). Furthermore, contentious politics can be divided into contained and transgressive contention. In contained contention, all parties to the conflict were previously established as constituted political actors. In transgressive contention, at least some parties to the conflict are newly self-identified political actors, and/or at least some parties employ innovative collective action. Innovative actions are, for example, means that are either unprecedented or forbidden within the regime (McAdam, tarrow & Tilly, 2001). Transgressive contention is more apparent than contained contention. The reason being that militant groups adopt illegal strategies to make claims on the government and social movements are not established political groups.

Additionally, scholars argue that at the root of contentious politics lies a combination of two mechanisms (Regan & Norton, 2005). Nkwanko (2015) and Regan and Norton (2005) make a distinction between ‘(rebel) greed’ and the ‘grievance’ mechanisms. The ‘rebel greed mechanism’ is one in which domestic groups engage in (quasi-) criminal activities in order to in pursuit self-interested benefit from natural resources. The ‘grievance mechanism’ assumes that some form of resource or political deprivation is at the root of conflict (Regan & Norton, 2005). Therefore according to the grievance mechanism, violence is a means to protest and challenge existing structures of deprivation (i.e. the oil exploitation scheme) and a struggle for change, as well as a response to the frustration caused by the lack of (promised) social economic development (Omotola, 2009). The presence of the greed and grievance mechanisms as root of social conflict will become more apparent the results section of this paper.

2.4. Corporate Social Responsibility

Lastly, the concept of corporate social responsibility (CSR) is important for this research. CSR is a recent term and a clear universal definition of CSR. Thomson and Conyon (2012) define CSR as: “…the way in which firms seek to voluntarily align interests of owners and other stakeholders with the long term best interests of society”. The European Commission (2011) defines CSR as “the responsibility of enterprises for their impacts on society”. In order to achieve CSR, enterprises should: “…have in place a process to integrate social, environmental, ethical, human rights and consumer concerns into their business operations and core strategy in close collaboration with their stakeholders…” (European Commission, 2011). These stakeholders are identified by Thomson and Conyon (2012) as consumers, employees, suppliers, governments, the environment and the wider social community. However, the term “stakeholders” and “CSR” are imprecise and are up to interpretation (Thomsen & Conyon, 2012). Idemudia (2009) has researched CSR extensively and defines it as a social responsibility a business has, that goes beyond profit making to include helping solve social and environmental problems. Furthermore CSR can be used for identifying, preventing and mitigating possible adverse impacts of a company’s operation (European Commission, 2011). It is precisely the subjectivity and the lack of a universal interpretation of CSR that leads to critique. In general, businesses adapt a business case of CSR only when it is a “win-win” situation for both businesses and stakeholders (Idemudia, 2009). CSR practices are subjective and created by businesses, and it is up to them to create their form of CSR. Social-environmental problems, for which a business case cannot be made are thus neglected (Blowfield & Frynas, 2005; Idemudia, 2009). Nonetheless, the definition of CSR provided by Idemudia is most suitable for this paper, due to the fact that he has done extensive research on CSR practices and corporate-community relations in the oil industry in the Niger Delta.

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7 Additionally, the effectiveness and strength of any CSR initiative in general is inherently connected to the availability of an enabling environment provided by the public sector (e.g. the government), as Fox (2004) stated. An enabling environment implies a policy environment that encourages and provides incentives for business activities that minimize environmental and social costs while maximizing economic gains (table 1). If an enabling environment is present, the chance that a CSR initiative achieves its desired impact will increase significantly (Idemudia, 2010; Ite, 2004). Additionally, with the availability of an enabling political and economic environment, CSR can contribute to sustainable development in terms of poverty reduction, equitable resource distribution, ecosystem preservation and institutional capacity building for the long-term social, environmental and economic health of communities (Idemudia, 2010; Fox, 2004). The significance of an enabling environment relates to the idea that CSR practices do not take place in a vacuum. CSR initiatives implemented on their own (i.e without an enabling environment), cannot transform political and economic structures that (in)directly create conditions in which inequalities and social injustice can persist (Idemudia, 2010). Therefore social development in the context of CSR relies on

corporate responsibility as well as the social responsibility of the public sector (i.e. the government). Table 1. Examples of roles the public sector can have for creating an enabling environment. Idemudia

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3. Research questions

As aforementioned in the problem statement, the main issue is the presence of persisting social conflict in the Niger Delta that is, at first glance, related to oil exploitation. However, several factors shape conflict in the delta and therefore this paper analyses conflict in more detail. The influence of CSR on conflict in the delta is also incorporated in the paper, as is the effectiveness of CSR in solving social issues in the Niger Delta. However, to think of the relationship between CSR and conflict as a one-way street would be naïve, for it is possible that the effectiveness of the CSR in the delta is instead affected by the presence of conflict, oil related or not. Hence, keeping the aforementioned in mind, the main question of this paper is:

How does CSR of Shell Petroleum Development Company influence conflicts and (social) development in the Niger Delta and what are the factors that shape CSR’s effectiveness?

This main question is divided into the following three sub-questions. The theoretical framework has provided us useful concepts and mechanisms in relation to the complex situation in the Niger Delta that are integrated in these sub questions.

“What is the role of the Nigerian state in the Nigerian oil industry and how does the Shell Petroleum Development Company operate in the Niger Delta?”

The first sub-question provides an historical insight on oil exploitation in the delta. It illustrates the emergence of the Nigerian petro-economy, which is useful to understand the importance of oil and the concept of a rentier state.

“What is the relationship between oil exploitation and conflict in the Niger Delta?”

The second sub-question encompasses the root causes and oil related causes of conflict. Hitherto, much of the literature focuses on conflict in the Niger Delta as a result of oil exploitation. However, the root causes of conflict in Nigeria also need to be incorporated in the analysis of oil-related conflict, for they are connected with each other. The question relates directly to the concepts of resource curse and contentious politics and can be seen as a continuation of the rentier state thesis and the first sub-question.

“How does Shell Petroleum Development Company implement CSR to address the negative effects of oil exploitation processes?”

The last sub-question focuses on the CSR practices of Shell through the years. The aim of this section is to provide an overview of the CSR practices, its effects and the factors that shape CSR effectiveness. This chapter can be seen as a response to the second sub question, for it describes the CSR initiatives of Shell for mitigating conflict and enhance social development. As expected, this section makes use of the concept of corporate social responsibility.

The next chapter will elaborate on what research methods were adopted to acquire the data for answering the research questions.

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4. Methodology and data

The methodology of the paper will be discussed in this section. First of all, a case study is used as research design for this paper. By using a case study, the complexity of a particular case can be analysed and in depth research can be conducted (Bryman, 2012). Another characteristic of a case study is the fact that it can be used to define the context and relations between different variables. Hence the usage of a case study to assess the complex relationship between corporate social responsibility (CSR), conflict and oil exploitation in the Niger Delta. The CSR of the Shell Petroleum Development Company (SPDC) is interesting to assess because of two main reasons. Firstly, the SPDC claims it has the largest oil footprint (i.e. produces the most oil) in the Niger Delta (Shell, n.d.)1. Shell furthermore claims that their core values consists of honesty, integrity and respect for (indigenous) people. Paradoxically, Shell is also (partly) responsible for oil pollution in the delta, creating environmental as well as social issues. Because of this, Shell is an interesting company to incorporate in the research of CSR effectiveness and oil related conflict.

4.1 Content analysis

This paper utilises content analysis as research method. According to Weber (1990), content analysis classifies textual material, reducing it to more relevant manageable bits of data. In addition, Stemler (2001) claims a content analysis can be used to compress many words of text into fewer content categories. Consequently, it enables researchers to go through large volumes of data with relative ease in a systematic fashion (Stemler, 2001). Coding and labelling of text is one of the ways a content analysis can be executed. Moreover, one reason why a content analysis is useful is due to its nature that allows us to discover and describe the focus of individual, group, institutional, or social attention (Weber, 1990; Stemler, 2010). The aforementioned is especially useful for this research on the complex social and political dynamic in the Niger Delta.

Content analysis in this paper is utilised in a slightly different way. Rather by labelling and coding text, it starts off searching through academic articles focusing on the terms conflict and oil exploitation in the Niger Delta. As a result of this initial search, other important textual data are found. For example the ‘meaning’ of conflict provided by these articles connects to other social factors, such as the political background and cultural/ ethnic differences in Nigeria. Therefore, the search for conflict and oil exploitation has initialised the search for articles connected to other social and political factors in Nigeria. Using this kind of ongoing analysis of text effectively provided in-depth data necessary for this research.

4.2 Stakeholder analysis

There are multiple groups of people, institutions and companies involved in conflict and oil exploitation in the Niger Delta. Therefore, this paper makes use of a stakeholder analysis. Theoretically speaking, a stakeholder analysis can be used as a tool to identify and recognise the central role of stakeholders (individuals, groups and organisations), who have an interest and the potential to influence actions and the aims of a project, organisation or even a policy direction (Brugha & Varvasovszky, 2000). The stakeholder analysis is also useful as an approach for understanding a system and the changes in it, by identifying key actors or stakeholders and assessing their respective interests in that system (Grimble & Wellard, 1997). In addition, a stakeholder analysis can be utilised for analysing the relationships between different stakeholders by discovering different patterns of interactions (Ramirez, 1999). More interestingly for this research though, a stakeholder analysis is a powerful tool for policy analysis and shows potential in natural resource

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10 policy and programme development. According to Grimble and Wellard (1997), it can be seen as a method for better understanding environmental and developmental problems, and interactions through the analysis of different perspectives and sets of interest of stakeholders at various levels. Thus, the use of a stakeholder analysis in this sense is more directed to natural resource management, which is especially suitable for this paper since it focuses on oil related conflict and the effectiveness of CSR on mitigating externalities and enhancing social development.

The stakeholder analysis in this paper is based on the division of stakeholders as brought forward by Grimble and Wellard (1997). The fundamental division of stakeholders they describe is between those who affect (i.e. determine) a decision or action, and those affected by this decision or action (whether positively or negatively). Both groups of stakeholders can be termed active and passive stakeholders. The distinction between active and passive is not black or white, however, as some groups (e.g. indigenous people) can be involved in natural resource management in both active and passive ways. The stakeholders that are incorporated in this paper are the Shell Petroleum Development Company, the Nigerian government, local communities (e.g. Ogoni) and social movements. These actors were specifically chosen because they fit the fundamental division of stakeholders as brought forward by Grimble and Wellard. The Nigerian governments’ policy choices regarding oil exploitation influenced the rights of communities, and benefitted the production of oil. The Nigerian government can be seen as an active stakeholder. But at the same time, protests regarding the oil scheme from local communities, indigenous people and social movements influenced the actions of the SPDC and the Nigerian government. Moreover, the SPDC influences the actions of local communities and social movements, and indirectly the actions of the Nigerian government, through the (effective) use of CSR. In short, the use of a stakeholder analysis is useful for thoroughly describing the complex social-political system and relations between actors in the Niger Delta.

4.3 Data collection

It was known in advance that collecting primary data for this research is difficult due to the unstable (security) situation in the Niger Delta, in addition to time constraints. Thus data is collected through the analysis of secondary data. Academic literature, non-academic literature such as news articles, and (policy) documents of Shell and the Nigerian government were used as sources of data, and were for a large part acquired via the internet. The importance of news articles and policy documents is due to its potentially subjective nature. Subjective documents provide data from the perspective of different stakeholders. For example, while Shell and the Nigerian government might emphasize the benefits of building new oil pipelines, local news outlets will most likely emphasize on the potential harm of such projects. Collecting data from different types of sources provides more insight regarding the perception of the oil industry, the causes of conflict and social development. Academic articles were examined based on keywords such as conflict and oil exploitation in the Niger Delta, as mentioned in the content analysis section. Furthermore, by whom the articles are written is also incorporated in the data collection. Whether authors have been conducting research regarding conflict, oil and CSR for a longer period of time for example, is one of the criteria that has been used in this research. Acquiring information about the field of research of authors, strengthens the quality and trustworthiness of research. Based on this criteria, several key authors have been identified, such as Idemudia and Ite. Dr Idemudia has been researching corporate community relations and conflict in the delta while working for the York University. Dr Ite on the other hand works for the SPDC and has researched the CSR of Shell in Nigeria. Their different affiliations suits the aim of the used methodology, namely providing different perspectives. Subsequently their work has been used prominently in this paper, both being featured in chapter 5.3, since it is about the CSR initiatives and its effectiveness to influence conflict.

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5. Results

What will become apparent in the results chapter is that the Niger Delta is the ideal site of observing a so called ‘oil complex’. Several factors that shape the oil complex can be identified in the delta. According to Watts (2007), the first factor that plays a role in the oil complex is the military and other security forces. The rising geo-strategic interest in oil increases the need to protect the oil production in the Niger Delta. Secondly, local social movements and NGOs challenging the externalities, consequences and accountability of oil companies, and/-or transnational advocacy groups concerned with human rights and transparency of the oil sector, play an important role in the oil complex. Thirdly, TNOCs are involved in the oil complex through aiding the process of local development with community development, corporate social responsibility and stakeholder inclusion. The fourth factor involved are the local political forces in the form of ethnic militias and separatists movements. Their involvement is strongly related to the struggle of ownership over natural resources. The fifth factor is the relationship between oil and the world of drugs, wealth by oil theft, mercenaries and the black economy. These factors can all be found in this chapter.

The results chapter will be divided in three sections. The first section will contain an analysis of the way the Shell Petroleum Development Company (SPDC) and Nigerian state operate in the Niger Delta by giving a short description of the history of oil exploitation. It will provide an answer the first sub-question. The second section will describe the causes of conflict and the use of contentious politics by social movements challenging the externalities of oil companies in the Niger Delta. Subsequently, it answers the second question. The last section will provide an answer for the third sub-question and will elaborate on the corporate community relations, social development and the effectiveness of the CSR of Shell Nigeria.

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5.1 The role of the Nigerian state and the SPDC in the petro-industry of Nigeria

5.1.1. The emergence of a petro-economy and the rentier state.

Crude oil discovery and subsequent exploitation in the delta began in 1956 in Oiloibiri, Bayelsa state (Idemudia & Ite, 2006). But it was not until 1958 that the Niger delta became the location of commercial oil exploitation conducted by Shell. Before and after 1958, Shell had the monopoly of oil exploration concessions and exploitation (Omeje, 2006). However, following the decolonisation and independence of Nigeria in 1960, Shell’s monopoly of oil exploration concessions was lost. In this first decade of commercial oil extraction in the Niger delta following the decolonisation and political independence, the oil market opened up for other transnational oil companies (TNOCs). The Nigerian state granted other TNOCs oil exploration and exploitation licences, like Mobil, Texaco, Gulf (Chevron), Agip, Esso and Elf (Omeje, 2006). Foreign oil companies were the largest shareholders in the Nigerian oil industry. They were the operators of the whole Nigerian oil exploitation process, including production, export, marketing and equities management. The state only received royalties and taxes from the TNOCs and its oil revenues only consisted of 20% of the national export revenue (Omeje, 2006).

In stark contrast to what happened in the decade before, the 1970s was a period of nationalisation and it was in this period that Nigeria shifted from an agriculture based economy to an oil centred rentier state (Omeje, 2006). There were two main strategies that the postcolonial nationalist state adopted that caused this shift. The first strategy consisted of acquiring a dominant equity interests and control of the TNOCs. The Nigerian government went on and acquired 35 percent equity interests of foreign oil companies such as Shell-BP, Gulf and Mobil, in 1971 (Aborisade, 2010). From having 35 percent equity interest in most oil companies, the Nigerian state increased the percentage to 55 percent in 1974 and even 60 percent for some TNOCs in 1979 (Aborisade, 2010). The increase in equity interest of the state coincided with Nigeria joining the Organisation of Petroleum Exporting Countries (OPEC) in 1971. At the inception of the OPEC in 1968, the organisation issued a resolution that all member countries should undertake oil exploitation directly, or at least enter in various contracts which involved the state acquiring 51 percent equity interests of foreign oil companies resulting in greater control and ensuring payment of greater royalties (Aborisade, 2010; Omeje, 2006). The second strategy was more political in nature. The Nigerian government announced the Petroleum Decree of 1969 (now the Petroleum Act), which basically granted the state and its agencies entire ownership and control of all petroleum in Nigeria (Omeje, 2006). The Petroleum Decree also required that half of the land leased to TNOCs for oil exploitation in Oil Mining Leases, must be for transferred to the state after 10 years. Additionally, the federal government forced all foreign oil companies to start operating in partnership with the state in 1973, further expanding state influence over the oil industry. These partnerships can either be a ‘joint ventures’ or ‘production-sharing contracts’. In a joint venture, the operator (TNOCs) and the joint venture partner (Nigerian state) share the operating costs, while in a ‘production-sharing contract’, the contractor (TNOCs) bears all the costs and the profit is split between the TNOCs and the state (Omeje, 2006). Consequently, the Nigerian National Petroleum Corporation (NNPC) was formed in 1977 to be responsible for regulating and supervising the oil industry for the Nigerian government (Ite, 2004). The NNPC can be seen as the sole supervisor of the Nigerian oil industry, dictating the pace and direction of the sector. The NNPC holds an average of 57 percent interest in all joint venture partnerships with TNOC in Nigeria (Ite, 2004), meeting the recommended 51 percent interest of the OPEC resolution of 1968. The NNPC’s subsidiaries, agencies and departments focus on aspects of health, safety and the environment in the upstream (on-shore) oil industry. There are also a number of legislations directed at minimizing or curbing externalities of the TNOCs (Ite, 2004). As will become

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14 apparent in later sections however, the effectiveness of legislations regarding environmental safety is under scrutiny.

In short, the oil industry has undergone a shift to nationalisation since commercial oil exploitation began in the 1950s. The Nigerian state has become an important actor in the oil industry by granting TNOCs territorial concession for extraction, supervising the oil business and acquiring a large part of the equity in joint ventures. This has helped Nigeria evolve into an oil exporting country and a rentier state, since the revenues from the oil sector contributed up to 77 percent of the national budget in 2010 (Renouard & Lado, 2012). The rising economic importance of oil since its discovery is illustrated

in figure 1.

5.1.2. The role of the Shell Petroleum Development Company

Shell operates in the Niger Delta with subsidiary Shell Petroleum Development Company of Nigeria Limited (SPDC). Shell has several companies in Nigeria that have played an important role in onshore, shallow and deep water oil exploitation. However, according to the portfolio of Shell Nigeria the SPDC is the largest Shell company, accounting for more than 40 percent of Nigeria’s total oil production at one stage (NNPC, n.d)2. The SPDC is the operator of the joint venture between the government-owned Nigerian National Petroleum Corporation (NNPC), the SPDC, Total E&P Nigeria Limited and the Nigerian Agip Oil Company Limited, which is an ENI subsidiary. These companies all have a share in the joint venture, with the NNPC having a 55% share, the SPDC 30%, Total E&P Nigeria 10% and the Nigerian Agip Oil Company Limited a 5% share (Shell, n.d.). The 55 percent share of the NNPC shows that the Nigerian state has consolidated its dominant role in the oil industry. The joint venture allows the partners to share the costs and benefits of oil operations. It can be seen as a way to lower some of the operating costs. The SPDC has played a pioneering role since oil exploitation first began in Nigeria in 1958. It is responsible for producing Nigeria’s first commercial oil exports. Shell Nigeria produces an average of 739.000 barrels of oil per equivalent day (boe/d), 578.000 boe/d comes from the SPDC. The total average production of Nigeria in is roughly 2 million

2

NNPC (n.d.). Joint Venture Operations. Retrieved on May 9th, 2017 from

http://www.nnpcgroup.com/NNPCBusiness/UpstreamVentures.aspx

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15 boe/d (OPEC, 2016)3, which in other words means that the SPDC alone is responsible for more than a quarter of all oil production in Nigeria in 2015. Currently, the SPDC operates largely onshore and in the mangrove swamps of the delta. Figure 2 and figure 3 clearly illustrate that a hotspot of the SPDC’s operations is situated in the mangrove forests of Rivers state.

However, environmental degradation of the mangrove forest due to oil spills, as well as the policy directions of the Nigerian government regarding the oil industry, have become the main causes of oil

related conflict. The next section will elaborate on the causes of conflict and the relationship

between conflict and oil exploitation in the Niger Delta.

3

OPEC (2016). Annual Statistical Bulletin 2016. Retrieved on May 7th, 2017 retrieved from

http://www.opec.org/opec_web/static_files_project/media/downloads/publications/ASB2016.pdf

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16 Figure 3. A map showing the different vegetation zones in the Niger Delta. From Okonkwo, Kumar and Taylor (2015).

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5.2 The connection between oil exploitation and conflict in the Niger Delta

One could think that social and economic progress has been made in the Niger Delta. Especially considering the delta’s enormous oil reserve, the profits it has generated for both the government as well as the foreign oil companies and in addition to years of development efforts the Nigerian government has put in to the region. The nationalist reform of the Nigerian oil industry in the 1970s has created a massive boom for the country’s petro-economy. As aforementioned, oil nowadays is the backbone of Nigeria’s economy and provides a steady income for the state. According to the Annual Statistical Bulletin of the OPEC (2016), Nigeria’s total value of exports in 2015 was 45 billion dollars, 41 billion dollars was the value of petroleum exports. However, oil exploitation in the delta has had profound social and environmental consequences. Conflict and social injustice in the Niger Delta are still major issues and remain in a way connected to oil exploitation. This section seeks to elaborate on the causes of conflict as well as the impact of oil exploitation on conflicts and livelihoods in the Niger Delta. In the following sections, some of the key causes will be discussed, such as ethnic nationalism, resource and land control, (political) marginalisation of communities, the lack of revenue for host communities and environmental degradation. Additionally, these causes of conflict in the Niger Delta can be divided into two categories in this chapter. On the hand there are root causes of conflict and on the other hand there are oil related causes of conflict. Making a distinction between the two is important for a better understanding of the complex dynamic between oil and conflict present in the delta. The two categories of causes are in a way connected with each other, but are not the same. However, it is the accumulation of both categories that creates conflict, in this case in the form of contentious politics. Therefore, following the analysis of the causes of conflict, this section also provides examples of contentious politics in the delta.

Figure 4. The relationship between causes. Source: own creation.

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18 Conflict is deeply rooted in in the Niger Delta and the root causes are political and economic in nature. The Niger Delta is composed officially of nine states; Abja, Akwa-Ibom, Rivers, Bayelsa, Delta, Imo, Ondo and Edo (see figure 3), with numerous indigenous communities that are referred to as

ethnic minorities in Nigeria.

They include but are not limited to the Ijaw, Ogoni, Ikwerre-Etche and Abuah (Naanen, 2012). Tension between these communities preceded the oil exploitation in the late 50s. The ethnic minorities in the delta as well as other parts of the country have been quarrelling with each other and the Nigerian state over marginalisation, neglect and politics of exclusion.

The tension between ethnic groups became more apparent since the start of British decolonisation of Nigeria. In 1953, following a constitutional conference dominated by the elite of the three largest ethnic groups in Nigeria (the Hausa/Fulani, the Yoruba and the Ibo), constitutional negotiators opted to not form federal regions based on ethnic groups. But at the same time they formed three political regions based on the differences of the aforementioned three largest ethnic groups (Ejobowah, 2000). Furthermore, the constitutional negotiators imposed the 100 percent derivation principle, which meant that all royalties of mineral resources returned to its source (Ejobowah, 2000). This was still before oil became important for the economy and most of the resources came from the north of Nigeria. Other ethnic minorities felt that they were politically excluded due to the dominance of the Hausa/Fulani, Yoruba and the Ibo. Additionally, they voiced their concerns that their interests were virtually invisible, in the Nigerian federation dominated by the three major groups, and feared exclusion from economic development (Watts, 2006). As a result of a strong sense of ethnic nationalism and the fear of economic marginalisation, ethnic minorities now under control of the three largest ethnic groups started rebellions to declare their own sovereign states. In the Niger Figure 5. A map of the nine states of the Niger Delta. From Okonkwo, Kumar and Taylor (2015).

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19 Delta for example, the Iljaw youth formed the Niger Delta People’s Republic in 1966. These rebellions were quickly squashed by the federal government. But due to the protests, the distribution of resource revenues did not continue to follow the 100 percent derivation principle. Revenues from the north were dispersed more equally along different ethnic groups in the country. Consequently, revenues derived from oil from here on were also distributed to all groups in the country (Ejobowah, 2000). Interestingly, the distribution of revenues would become contested once again with the rise of an oil economy.

Ultimately, the Nigerian state can be classified as a product of colonialism and, according to Idemudia (2010), is a state-nation rather than a nation-state. Ethnic heterogeneity and religious diversity has caused an identity as well as a legitimacy crisis, and they remain roots of social conflict. When oil became the most important revenue source for the Nigerian economy after the nationalisation of the oil industry, it became an object of inter and intra ethnic as well as a factional struggle (Obi, 2014). Oil became a means of access to power and wealth and the distribution of oil revenues became contested. Wegenast and Basedau (2013) have recognised the risk of (armed) conflict when there is a combination of ethnic fractionalisation and the presence of natural resources. It is not the presence of natural resources that generates conflict, but it is a combination with other political and economic factors. Hence commercial oil exploitation and the discovery of vast oil reserves in the delta have only fuelled social conflict and not created it (Obi, 2014; Aborisade, 2010).

5.2.2 Oil related causes of conflict

There are a number of processes that are connected to oil related conflict in the Niger Delta, but all of them are intricately connected to deeper feeling of structural exclusion and marginalisation in the delta communities (Watts, 2008), as mentioned in the previous section. This feeling is additionally strengthened by the paradox of oil without wealth. The oil producing Niger Delta has suffered of social and the environmental consequences of oil exploitation and have received little from the massive amounts of oil revenues. This section divides the oil related causes of conflict into two subcategories, namely those related to the environmental consequences of oil exploitation and those related to political and economic exclusion and marginalisation due to the significance of oil.

Environmental damage caused by oil spills remains a critical issue in the Niger Delta and are can be easily seen as the root cause of conflict connected to oil exploitation. Given the fact that the SPDC mainly operates onshore and/-or in mangrove forests, one group of important stakeholders are the communities residing near oil wells or oil pipelines. These communities are involved in the oil exploitation because of the fact that when oil spills occur, their (traditional) livelihoods are threatened. The delta has several communities that are dependent on ecosystems for their livelihood structures, especially those living near mangrove swamps. Mangroves are biodiversity rich ecosystems providing ecosystems services such as coastal protection, water purification, maintenance of fisheries and more (Barbier et al., 2011). The majority of 69.000 residents of the Bodo community in Ogoniland, Rivers state, are reliant on the ecosystems services provided by the nearby mangrove forests in the area of Bodo Creek, for many of the residents engage in subsistence fishing and or farming (Pegg & Zabbey, 2013). Fishing and farming are both traditional livelihoods structures in a large part of the Niger Delta, therefore communities find it essential that oil exploitation is handled with care and that externalities with ecological consequences are taken care of as efficient as possible. However, oil spills occur at a regular basis in the delta both as a result of

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20 bad maintenance as well as oil theft and sabotage (Nriagu et al., 2016; Mustoe, 20164). In 2008 two major oil spills caused by corroded transit pipelines of Shell occurred in Bodo Creek, adding to the oil spills from 50 years of oil exploitation (Gosden, 2017)5_{. Interestingly, the SPDC ceased operating in} Ogoniland from 1993 because of violent protests against Shell and its employees and oil exploitation (Shell, n.d.) 6. Not mentioned by Shell though is that these protests were fuelled partly as a result of environmental degradation. The oil spills severely damaged the mangrove swamps and forests and leading to a collapse of traditional livelihoods and the local fishing economy of the Bodo community (Pegg & Zabbey, 2013). The failure of the Nigerian government to enforce environmental laws and regulations against Shell and other TNOCs and adequately monitor oil operations, has only worsened the environmental devastation in Ogoniland (Konne, 2014). Furthermore, the failure of the government has left community members in Ogoniland feeling neglected, as the clean-up of the spills have not yet fully started (Ibekwe, 2017)7. The Bodo spills are a prime example that shows the enormous impact oil exploitation can have on communities when things go wrong. Therefore communities are not always content with the oil exploitation and the externalities produced in their vicinity. Environmental degradation is one of the causes of protests from the community, that fuel conflict in the delta.

Besides the environmental consequences of oil exploitation, political marginalisation of the local people as a result of policy direction of the Nigerian government remains a factor for oil related conflict. To ensure control over the oil resources, the Nigerian state has implemented operating schemes on oil production in the form of the Petroleum Decree, as mentioned in paragraph 5.1. The second major step in establishing state-ownership of oil reserves was the promulgation of the Land Use Decree of 1978 (now the Land Use Act). The Land Use Decree was made to nationalise land ownership in Nigeria. It has helped the state to acquire the power to expropriate land from local communities and citizens for either oil exploitation, industrial and large-scale agricultural purposes for the use and benefit of all Nigerians (Omeje, 2006; Ako, 2009). The decree is perhaps the most controversial legislation in Nigeria and has been perceived by Niger Delta communities as one of the many causes of marginalisation and conflict creation (Ako, 2009). The Land Use Act in theory allows the state to claim land from communities on behalf of oil companies at little or no cost. TNOCs in practice do to a certain extent negotiate with ‘landowners’ regarding the acquisition of land, but it usually ends up in the local landowner receiving a limited amount of compensation (Ako, 2009). More importantly, the Land Use Act further underlines the unequal power distribution between state and TNOCs, and local communities. In theory, communities have no land right whatsoever, if they fail to accept land acquisition deals from oil companies concerning communal land, oil companies can

4

Mustoe H. (2016, March 2). Shell being sued in two claims over oil spills in Nigeria. BBC News. Retrieved from

http://www.bbc.com/news/business-35701607

5

Gosden, E. (2017, January 8). Why Shell’s Bodo oil spill still hasn’t been cleaned up. The Telegraph. Retrieved from http://www.telegraph.co.uk/business/2017/01/08/yet-clean-nigerian-oil-spills-two-years-compensation-deal/

6

Shell (n.d). The Ogoni issue. Retrieved on May 9th

, 2017 from

http://www.shell.com.ng/sustainability/environment/ogon-issue.html

7

Ibekwe, N. (2017, May 25). Special report: Disappointment, anger in Ogoniland over Nigerian governments delay to clean up oil spills. Premium Times. Retrieved from

http://www.premiumtimesng.com/news/headlines/232138-special-report-disappointment-anger-in-ogoniland-over-nigerian-govts-delay-to-clean-up-oil-spills.html

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21 seek intervention by the state (Omeje, 2006). Additionally, the taxation of land is determined by the government. Although the amount of money offered by the state or TNOCs is often perceived as inadequate by communities, according to section 27 of the Land Use Act ‘no court shall have jurisdiction to inquire into any question concerning or pertaining to the amount or adequacy of any compensation paid or to be paid under this Act’ (Omeje, 2006). Thus, giving the state full monopoly in valuating the communal land. In a nutshell, the Land Use act is not used to benefit all Nigerians as the government claims, it rather excludes the oil-bearing communities in the delta from participating and benefitting from oil exploitation (Ako, 2009). Additionally, laws and regulation in Nigeria state that oil companies are not responsible for any oil spillages that are not connected to neglectful maintenance (e.g. Oil in Navigable Waters Act of 1968) (Omeje, 2006). Environmental damage due to sabotage or other external drivers are often not cleaned-up. These laws marginalise host communities because they cannot claim any compensation using the legal path, thus communities are often forced to a (violent) standoff with oil companies in order to settle any compensation claims (Omeje, 2006). In short, land and oil ownership, access to resources, and the responsibility of oil spillages are heavily contested in the delta. The unequal power relations and political injustice are important causes of the increase of (violent) protest against oil exploitation in the Niger Delta. Economic exclusion is another factor in oil related conflict. The fact that revenue control system in Nigeria has continuously shifted from regional control to federal government control has only increased the economic exclusion of local communities from oil revenues (Jack et al, 2016). The use of the current revenue sharing system in Nigeria means that only 19.3 percent of oil revenues are allocated to oil producing states in the Niger Delta (Idemudia & Ite, 2006). These revenues acquired from oil exploitation in Nigeria have been benefitting only the political elite. Only, a minor portion of these revenues has reached the communities (Sandbakken, 2006). This is partly a result of the corruption in the delta. The compensation for land dispossession is often paid to the community chief or a fund created by the districts governor. However, the communities often do not benefit from the money due to the leaders being corrupt, leaving a large part of the delta communities out of the benefits of oil wealth, while enduring the environmental hazards and harms (Omeje, 2006; Aborisade, 2010). The people in Nigeria find that the political elites use religion and ethnicity to manipulate the masses while looting away resources, and that institutions are not working properly due to this corruption (Abubakar8, 2017). Due to the aforementioned, poverty is a major problem in the delta. 64% of its population and about 85% of the delta’s rural population are living in poverty (Geo-JaJa, 2010). Citizens in the delta that are affected by what Geo-JaJa (2010) calls ‘structural poverty’, the poorest that live in social and economic exclusion, endure disempowerment. Generally, these groups have no access to adequate schooling, lack work skills and do not have adequate to basic services, thus leaving them isolated and excluded from Nigeria’s overall economy (UNDP, 2006 as cited in Geo-JaJa, 2010). Even though Nigeria is one of the richest countries in Africa (Abubakar, 2017). This further illustrates the paradox of oil without wealth in the delta and leaves the communities in the delta with a feeling of being economically excluded. Access to oil wealth and the way oil revenue is allocated, is mostly dictated by the government and it is another example of unequal power relations between state and communities.

8

Abubakar, A.A. (2017, July 25). At 45% of population, children carry rampant struggles from corruption into Nigeria’s future. The Washington Times. Retrieved from

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22 Lastly, conflict in the Niger delta is hardly disconnected with foreign factors. According to Obi (2014), scholars tend to overlook that the oil and resource curse in many African states is an inherent global and regional phenomenon. Global powers fuel conflict in oil abundant states by prioritizing oil as an object of national and strategic security instead of just a natural resource commodity. Militancy in the Niger Delta is perceived as a risk by the international community because the delta’s rising strategic (oil) importance. The United States, the EU, China and India are some of the clients of Nigerian oil. An estimated 10 percent of oil imports of the United States comes from the Niger Delta region (Ukiwo, 2011). Following the September 11 attacks and subsequently the destabilisation of the Middle East, oil was becoming increasingly more securitised. Global powers are willing to ensure steady, uninterrupted access to “globally needed” oil by all means necessary, even if these means are directly or indirectly violent (Ukiwo, 2011; Obi, 2014). Coincidently, the global interest in oil goes hand in hand with Nigeria’s domestic interest. The import of the United States is the equivalent of 40 percent of Nigeria’s oil exports and oil is the backbone of Nigeria’s (mono-) economy (Ukiwo, 2011). Therefore, oil is both an international as well as national security concern, due to oil dependency. As a result, the Nigerian government has increasingly militarised the region to ensure a safe working environment for TNOCs. However, partly because of the increase of security forces, the security situation in the delta is far from ideal. Militant attacks on oil pipelines occur frequently and the use of force by the national security forces only strengthen the feeling of marginalisation and exclusion by the communities, leading only to more risk of violence.

5.2.3. Contentious politics in the delta

The accumulation of the root causes of social conflict and the externalities and social injustice that comes with oil exploitation, results in communities and militant groups challenging the oil scheme in the Niger Delta using contentious politics. Contentious politics range from kidnappings to sabotage, and (peaceful) collective action. As it is possible to link conflict over natural resources to the greed and grievance mechanism mentioned in the theoretical framework, this section will categorise some examples of contentious politics according to these mechanisms.

In the early 1990s social movements and militant youth groups began to emerge to actively challenge the practices, policies and activities of both the Nigerian state as well as the TNOCs in the Niger Delta region, which left communities marginalised (Nwankwo, 2015). Over the time, these movements and militant groups became increasingly more violent, creating conflict in the delta. An example of these militant groups are the Niger Delta Avengers, who are attacking oil installations of various TNOCs, and attacked oil pipelines of Shell in July 2016. The attacks of the Niger Delta Avengers in 2016 resulted in a 40 percent loss of crude oil production, cutting production from 2 million barrels per day to 1.4 million (Fick, 2016)9_{. The Niger Delta Avengers (NDA) are just an example of the many} violent militant groups in the delta. The NDA are the first and newest violent group to emerge since former Nigerian president Yar’Adua granted amnesty to militants seven and a half years ago (Ewokor, 2016)10. The emergence of this new militant group coincided with a 70 percent cut in funding of an amnesty programme in the Niger Delta. The amnesty programme provided monthly ‘salaries’ for tens of thousands former militants and decreased the level of violence. At the time, militants had claimed to fight for a better deal for the people who have suffered from environmental degradation and

9

Fick, M. (2016, September 24). Niger Delta militants attack oil pipeline. Financial Times. Retrieved from

https://www.ft.com/content/09bc413e-825a-11e6-a29c-6e7d9515ad15

10

Ewokor, C. (2016, June 2). The Niger Delta Avengers: Nigeria’s newest militants. BBC Africa. Retrieved from

The oil footprint in the Niger Delta: The relationship between conflict and Shell’s corporate social responsibility