DEPARTMENT OF POLITICAL SCIENCE
AND PUBLIC ADMINISTRATION
UNIVERSITY OF BENIN
Apologists of multinational corporations’ (MNCs) operations argue that their existence in Third World countries have helped extend to these societies the benefits of technological revolutions already being enjoyed in the Western world. They also aver that these MNCs provide employment opportunities for the nationals of these countries, thereby, alleviating the appalling unemployment and other social conditions prevailing among them. But this is only one part of the corporate responsibility jingo. Behind this facade of altruism lies an orgy of exploitation and expropriation of not only the material resources of the people but a worrisome tale of environmental devastation and degradation, corporate neglect of fundamental social responsibilities, culminating in the people being reduced to abject poverty in the midst of plenty. The result is mutual distrust between the locals and the oil multinationals, with the state pitching its support with the latter and marshalling its instruments of mass intimidation to coerce the former into acquiescence. The significance of thin work lies in the underlying explanations to why the Nigerian State conduces to the exploitation of its people by oil multinationals operating in the country. It argues, and rightly too, that it is the weak and rentier status of the state that hamstrings its operations and precludes it from acting decisively against the multinationals. The conclusion it reaches is that the future, rather than present any better ‘-prospects for the wretched of the earth in the Niger Delta region of the country, portends danger for them.
Crude oil, they say, is a free gift from nature. Incidentally, however, it does not flow in the air but on the earth surface, which has been bequeathed to man by God for his habitation and economic reproduction. The logical implication of this is that all activities revolving around its production directly impinges on him: whether, it is exploration or exploitation, refining or distribution, people’s lives are either affected positively or negatively fey it. On the positive side oil companies have been known to provide employment opportunities and a smattering of infrastructural facilities for the locals in their areas of operation. In addition to these localized benefits their multifarious products have, like a tonic, also lubricated and energized the wheels of the macrocosmic society.
Sequel to the above humanitarian roles of the oil companies it is therefore not
altogether unexpected to find groups and/or government eulogizing, their activities and
advocating the perpetuity of their corporate existence in society. To this group the latter’s
less involvement in business activities in any society will only help in fostering
underdevelopment in such society.
Nevertheless, empirical evidence from the oil producing communities does not lend credence to the rosy picture painted above. In place of the responsible corporate citizens that the firms are supposed to represent one sees a “Leviathan” who uses his unbridled powers to pummel and pauperize the host community (ies) thereby arousing in the latter a feeling of alienation, dejection, resentment and mass protestation – a feeling which the government, especially in third world societies, has always suppressed with all the force at its disposal (Ikelegbe, 2001:469-70).
The above context forms the background in which this paper is located. It attempts to critically study the basic character of the Nigerian state and-how this has influenced its relationship with the oil multinationals operating in the country. In doing this it argues, and rightly too, that it is the rentier status of the Nigerian state that explains its kowtowing to the multinationals on the one hand, arid on the other instigates it into rolling out its instruments of intimidation and coercion to whip its citizens into line. Employing the dialectical materialism paradigm (noted for its holistic and interrelated approach to the analysis of social phenomenon) the study concludes that succour can only come for the oppressed and immiserised people of the Niger Delta when political positions in the state are occupied by nationalistic leaders who are ready and willing to play a proactive role in ensuring environment justice and human rights for their people.
This article is divided into six sections: the first section serves as an introduction to the work, the second attempts to operationalize some major concepts used in the work; the third section discusses our theoretical framework; the fourth section takes a cursory look at the history of oil production in Nigeria; the main section – the fifth – analyses the relationship between the Nigerian rentier state and oil multinationals operating in the country on the one hand, and, on the other hand, the impact of this relationship on the people of the Niger Delta. The last section, the sixth, concludes the paper.
Corporate Irresponsibility: The concept is used here to imply not only the gross neglect, dereliction and ^abdication by oil multinationals of their moral, but primary obligation to provide basic socio-economic amenities like gainful employment, good roads, electricity, portable water and schools to communities affected by their business activities but also the willful damage to the ecosystem of the people through spillage, expropriation of peasants’ lands, intimidation of local people and in a sense, the dislocation of a people’s culture and traditional health behaviour.
Rentier State: Objectively conceptualized by Lenin (1983:93-9), the term refers to a state that does not engage in any concrete production activity but depends on mineral rents from external sources be they corporate bodies or (as in the case of advanced capitalist countries of the West) profits, royalties and interest from dependent underdeveloped countries. In this work, the concept is used to describe the Nigerian state which does nothing more beside the granting of oil prospecting licenses (OPL) to the multinational companies and collecting rents from them in return. It (the state) does not have the technology to engage in direct production (extraction and refining) nor is it prepared for such long-term and seemingly time consuming activity.
The implication of the above scenario for our present study is that collection of statutory rents from the oil multinationals is mandatory in order to pursue developmental projects, meet local and international contractual obligations and, more importantly, lubricate the edges of the internal class struggles. The consequences of all these are obvious: (i) the state must pander to the wishes of some internals-forces like the local multinationals that do the investments and supply the needed technology; and (ii) because of the over-flowing rents accruing to the state, it becomes the focus of the struggle for power, very violent and intolerant (First, 1980). This is only logical because since it depends on the rent for its reproduction it cannot broach any attempt by its nationals to dis-equilibrate the status quo.
Oil Multinationals: This refers to the major oil companies operating in Nigeria but whose ownership and controls are exogenous. Like multinational corporations in other sectors of the economy, most oil multinationals have their headquarters in the United States of America or countries in Western Europe and have spread their tentacles to various parts of the world. Consequently, they are able to mobilize capital and technology around the globe and, as a corollary, they have the economic clout to arm-twist neo-colonial governments in peripheral states like Nigeria. Oil multinationals operating in the country includes Shell, Elf, Agip, Mobil, Chevron and Gulf.
Dialectical Materialism: Also called Historical Materialism, this method of analysis postulates that there are contradictions in every society and that these contradictions keep the society in a constant state of flux. Popularized by Karl Marx (and expounded later by V.I. Lenin, hence its description as a Marxist-Leninist philosophy) who himself adapted it from Hegelian idealist philosophy, Marx insisted that the driving force of change in any society is the economic substructure and hence no society can be empirically studied outside of its mode of production (a combination of its productive forces and social relations of production), nor can its socio-political and economic relations be understood or critically analyzed independent of it (Ryndina et al, 1980: 9-15; Ake, 1981: 1-8). The saliency of this method for our present analysis is therefore obvious: the capitalist mode of production imposed on the country by the forces of imperialism and neo-colonialism with its emphasis on expropriation and suppression of the productive^ class (in this case the oil bearing communities and their indigenes) for the promotion of the general interest of the bourgeoisie – both local and metropolitan – explains the unholy alliance between the Nigerian state and oil multinationals against its citizens. Expectedly, this bizarre relationship has always generated pressure and conflict within the state as various ethnic groups in the Niger Delta finding the acquiescence-pill forced-on them too odd, bitter and prolonged to swallow have always revolted against the ugly state of affairs demanding environmental justice and reparation (Ogoni Bill of Rights, 1990; The Kaiama Declaration, 1998).
OIL PRODUCTION IN NIGERIA: A CURSORY LOOK
Crude oil was first struck in commercial quantity in Oloibiri (present BayelsaState) in December 1957 (Kirk-Greene and Rirgmer, 1981:83) by Shell-BP, a consortium of Royal Dutch Shell and British Petroleum, after over twenty years of exploration activity in the country. Production was to increase steadily in the next couple of years (paling only during the civil war period) and reaching an all time high twice: during the Arab-Israel conflict of 1973/74 and the Gulf war period of 1991. At present, oil is produced, in virtually all the states in the South-South geopolitical zone of the country in addition to two other states in the South-Eastern part: Abia and Imo. The landmass covered in this “oily” activity is over 70,000 square km, homeland to more than 20 million people of different ethnic nationalities (Omoweh 2001:3-4) collectively known as Niger Delta people. As earlier noted, Shell was the first oil multinational corporation (OMNC) to successfully drill oil in Nigeria but she was soon joined in the neo-imperialist scramble by Gulf, Safrap (later Elf, now total finaElf); Texaco-Chevron and Agip-Philips. Nevertheless, she remained the major producer (Williams, 1980:93) with over sixty (60) percent of the total national output coming from her wells (Kirk-Greene and Rimmer; 1981:84-5). Consequently, most of our analyses are likely to focus on her activities among the people in her areas of operation. Our belief is that rather than being parochial, it is representative of the activities of the other actors on the scene.
STATE RENTIERISM AND LEGITIMIZATION OF CORPORATE IRRESPONSIBILITY: A NEXUS
Review of Some State Legislation in the Oil Industry
Although oil was struck in commercial quantity in the country in the late 1950s, the first major legislation in the industry was the Decree No. 51 of 1969 enacted immediately after the liberation of Bonny terminal and other oil fields in the Niger Delta from the opposing Biafran forces (Onyeagucha: 1997). Before then there had been the Petroleum Profits Tax Ordinance, of 1959 which perfunctory instituted a standard fifty (50) percent tax charge on the oil producing companies and a follow-up legislation in 1966 that reduced drastically the rate at which the oil multinationals could write off their assets for tax purposes hence enlarging the profit taxable by the state (Kirk-Greene and Rimmer, (1981:83-4).
It is not the intention of this paper to give a blow-by-blow account of legislation in the industry but to show in clear relief the basic interest of the state in specific legislation. Returning to the 1969 legislation which vested all revenue accruing from oil mineral rights on the Federal Government, it is the position of this paper that the latent motive of the Decree was not merely to emasculate the secessionist “Biafran” regime but to punitively reward the people of the. Niger delta for asking for the right to self-determination. The image of a people deprived of their natural endowments and gagged from asking for a share of the proceeds from it is better imagined than experienced. Needless to say that this bogus legislation which has not even been considered at that time in the United States of America – itself a leading producer of oil – served as the magna carta for the OMNCs to tap from and institute a tacit but obnoxious zero-sum game policy (driller takes all) in their areas of operation.
As if that was not enough, the General Olusegun Obasanjo’s regime, following the success of the 1969 Gowon Decree, enacted two more obnoxious Decrees: the 1975 Anti-Sabotage Decree prescribing the death penalty for any person caught cutting oil pipelines or unduly obstructing the activities of the oil companies, and the Land Use Decree (now Act) of 1978 vesting ownership and control of all lands and resources therein in the Federal Government, thereby securing and “pacifying” the oil fields of the Niger Delta for the nation’s compradoral bourgeoisie and their multinational over-lords. In the words of Omoweh (1995:142) “… the Land Use Decree of 1978 was the best instrument that facilitated its (Shell) exploitation of the oil producing communities”. Analyzing the import of these two Decrees, Onyeagucha (1997:5) regrettably noted that:
It is with the aid of these two blatantly unjust Decrees that successive governments in the country, in collaboration with Shell and the other Western Multinationals Companies have been plundering the oil wealth of the Niger Delta communi-ties, sometimes at gunpoint (emphasis mine).
Since then more legislation’s have followed: the Petroleum Decree of 1991; the Osborne Land Decree (No.52) of 1993; the National Inland Waterways Authority Decree (No. 13) of 1997; and the rave of the moment, the 2002 Supreme Court Judgment on Onshore/off-shore dichotomy. The import of all these is the perpetual alienation of the Niger Delta people from their God given endowments on the one hand, and the unwitting provision of an official leverage for the OMNCs to neglect their corporate responsibility to the people of the area on the other.
Historically, however, the concept of corporate irresponsibility can be traced to the colonial period. Following from the basic character of the colonial state it is not surprising that protestations from the people of the Niger Delta (the Ogonis being an example) to the Sir Henry Willink Commission of Inquiry into the fears of the minority in 1958 (see Ogoni Bill of Rights: 1990:2) yielded no more than an escapist excuse that state creation will delay political independence. It however, recommended that “the region deserved special development attention on account of its delicate ecology. And that the region should be made a special area to be developed directly by the Federal Government” (Omoweh, 2001: 4-5); a recommendation which the newly-installed post-independence regime of Sir Abubakar Tafawa Belewa perfunctorily responded to by setting up a phoney and amorphous Niger Delta Development Board (NDDB) that remained comatose till the end of the regime (Omoweh, 2001:5).
In between then and now successive regimes have attempted to woo the people in the oil producing communities through emergency legislation that hardly garb the primordial interest of the ruling class. Examples are the Oil Minerals Producing Areas Development Commission (OMPADEC) established by the General Ibrahim Babangida regime; the Petroleum Tax Fund (PTF) of late General Sani Abacha; and the Niger Delta Development Commission (NDDC) of the present administration of President Olusegun Obasanjo. The single thread that runs through all these government policies is that they were inaugurated by a “rentier state (that) receives oil revenues from the oil companies to which it is supposed to deliver ‘stability’ or Jaw and order such as required “for the continued production of oil” (Turner; 1997:4). Hence they (the policies) were supposed to provide palliatives or serve as a carrot-and-stick instrument (Omoweh 2001:6) dampeningthe juridical consciousness of the oppressed people of the area and hence allowing rent accumulation to proceed unhindered.
We have dwelt so far on the role of the Nigerian state in the underdevelopment of the oil producing communities because of our belief that once well analyzed arid understood the rest is easy. For when the state shirks its primary responsibility of providing socio-economic leverages for its people, especially the group that lays the golden egg, it invariably provides enough latitude for corporate, bodies operating in the social formation to do same. This has been the main thrust of our argument in this paper.
Mass docility and unquestionable acquiescence to this incipient socio-economic rape did not last for long. In 1984, ten thousand (10,000) women in Ogharefe, Delta State used the “tool” of stark nakedness to protest the damage a multinational oil company had done to their environment (Turner; 1997:4). As if that was the needed tonic, the people of Umuechem in Etche ethnic nationality of Rivers State in November 1990 took their destiny in their hands and peacefully demonstrated against decades of neglect; harrying away of their farmlands and environmental devastation by the oil giant, Shell. And for daring to threaten the rental sources of the state they were duly “rewarded”-by the state officials: 90 protesting villagers were killed, while 500 homes were razed down by anti riot policemen drafted in to keep the peace, (Onyeagucha:1997:5). This ugly prospect however did not deter the people of Ogoni ethnic nationality from coming together for their collective survival under the umbrella of Movement for the Survival of Ogoni People (MOSOP) and following it up by issuing a Bill of Rights to the Nigerian government in which they chronicled their tale of having “received nothing” in return for their over thirty (30) years of handsome contribution to the Nigerian state. They demanded inter alia, “the wish to manage their own affairs” (Ogoni Bill of Rights; 1990:2-4) and payment of royalties by Shell “directly to half a million Ogonis beginning with six billion dollars ($6b) in pay back” (Forrest: 1995:249;see also Saro-Wiwa 1992).
Needless to say, Shell with the covert support of the government ignored their rantings. When however, in January 1993 (26 months after the issuance of the bill and one month after an ultimatum to Shell to leave their land) the people of Ogoni peacefully launched a positive protest against Shell for not being alive to its corporate responsibility the government’s response was very swift. It immediately set up and dispatched to the area an internal security task force under the command of a misanthropic, Colonel Paul Okuntimo (later replaced, due to local and international out-cry, by Colonel Obi Umahi) who is reputed to have boasted that there are twenty-one ways to kill a man and that he has only tried five on the Ogonis.
Sad enough, rather than the innocuous “pipe borne water, electricity, job opportunities and socio-economic project’ they asked for, they got in return disaster: more than 2000 Ogoni men, women and children killed; 8,000 forced into exile; 27 villages burnt down and an undisclosed number of rural people detained in the military base (Boricamp) in Port-Harcourt (Greenpeace; 1994:1-20; Onyeagucha, 1997:6; Turner; 1997:9). The climax of it all was the November 10, 1995 judicial murder of Ken Saro-Wiwa and eight other MOSOP leaders by the Nigerian state in a desperate move to make the terrain safe for Shell to return to its rich oil fields.
Ijaw youths were also not spared for asking for resource ownership artd control, an end to gas flaring, oil spillage’s and blowouts (Kaiama Declaration; 199(62) from the OMNCs operating in their homelands. A paper presented at a recent international conference on the development of the Niger Delta noted with regret that:
Even the eleven-month regime of General Abdulsalam Abubakar displayed open hostility towards the Niger Delta as evident in the killing of hundreds of Ijaw youths at Kaiama, Bayelsa State in 1998 following the KAIAMA DECLARATION. The region was militarized all in the name of maintaining peace in order for oil to be produced (Omoweh2001:6)
The story is the same in all the oil producing communities in the Niger Delta: alienation from their God-given resources, deprivation of requisite socio-economic infrastructure as a compensation for their socio-psychological and environmental loss, and which is worse of all, intimidation by the state and even OMNCs both of whom are in a diabolical league to traumatize them.
This then brings us to the crucial question of why the Nigerian state is conducting to the exploitation and expropriation of its citizens by the OMNCs. The answer has already been enunciated although in an abbreviated manner in the preceding analysis. It may however be necessary to regurgitate it here in order to re-enforce our thesis. As a rentier state, the Nigerian state enjoys a paradoxical existence: the source of its strength is also the source of its weakness. With the enormous wealth at its disposal (which prima-facie did not come from the taxation of its citizens) it is able to sponsor softie gargantuan development projects, maintain a bloated retinue of state officials (politicians, military personnel and bureaucrats) and embark on massive importation, of goods, services and technology from abroad among other things. Unfortunately, however, this “emergency” wealth at, its disposal converts it into a theatre of vicious struggle between contending factions of the local bourgeoisie who as in other post-colonial African states have come to see the state as a veritable tool of capital accumulation. In this contest power is used to secure power (Aka, 2000) and any demand by individuals or groups on the OMNCs is seen as a direct attack on the very source of their elevated politico economic status and hence is brutally resisted. Put succinctly, the collection of oil rents which consolidates the position of the compadoral elements in the rentier state also makes the (Nigerian) state to be very brutal, repressive, violent and above all intolerant to even legitimate demands from the productive class, in this case the oil bearing communities. Omoweh (1995:139) puts it this way: “for the Nigerian state that is less than an actor in the production of crude oil but more of a collector of proceeds from Shell among other oil companies, the restive oil communities are constituting I major threat to its source of wealth, hence its adoption of various strategies to contain the unrest in the area”. The above scenario also confirms the argument in our theoretical framework that conflicts and contradictions in the process of socio-production will always be resolved by the state in the interest of capital – both local and metropolitan.
Major Themes in Corporate Irresponsibility
It may be instructive to note here that some of this corporate irresponsibility which the Nigerian state is indulging the OMNCs in order for rent to proceed unhindered are peculiar to our environment alone. One such area is the issue of gas flaring. According to irrepressible Onyeagucha 0997:3):
The World Bank estimates that 87% of all associated gas is flared into
the Niger Delta atmosphere by oil companies operating in Nigeria
compared to 21% in Libya and a minuscule 0.6% in the United States. Between 1991 and 1994, Shell flared an average of 10.3% billion m3 of gas every year. The company’s gas flaring installations in the Niger Delta are like its pipelines, old, poorly constructed and poorly maintained. As a result, they emit far more pollution than Britain’s 20 million homes combined.. Interestingly, the percentage of gas flared in the Netherlands where Royal Dutch Shell has its international headquarter is zero percent! (emphasis mine).
An explanation as to why the state allows this dangerous practice by the OMNCs to continue when in a logical sense it can lead to the extermination of the very people it was created to protect will not detain us here. Suffice it to say that albeit a mock attempt was made by the Nigerian government to protect the environment in which oil exploration and exploitation takes place (via the Gas Re-injection Decree of 1979 that gave a specific time table for the OMNCs to stop gas flaring in their areas of operations and re-inject such natural gas into the soil); the state also provided an escape route for the firms by imposing a ridiculous fine of fifty kobo (50k) for every cubic meter of gas flared. And what is more ludicrous: this fine is normally paid from the joint venture account the oil firms have with the state-owned Nigeria National Petroleum Corporation (NNPC) meaning that the state pays 80% of the fine while the companies pay the balance 20% in line with the terms of the agreement.
Another area where the Nigerian State has legitimised the corporate irresponsibility of the OMNCs is on the pipelines used by them in transporting the crude oil from one location to another and the resultant spillage that comes from it. Most of these pipelines have not been replaced by Shell since they were first laid in 1958 when the company began full operations in the Niger Delta (Onyeagucha 1997:3). Consequently, their old and rusty nature accentuate rupture when pressurized thereby spilling hundreds of thousands of barrels of crude oil into the surrounding farmlands, rivers and creeks, polluting the people’s means of livelihood and endangering their continual existence as a community. Ironically, whenever these spillages occur, rather than embark on a quick mop up of the polluted environment, the oil companies will first cry sabotage claiming that youths in the local community ruptured the pipes. State security officials like anti-riot (mobile) policemen and sometimes even the army are dispatched into the affected community to arrest and obtain forced confessional statements from the suspected saboteurs. Beyond this, the Nigerian State does not caution the oil companies on the need to implement a viable maintenance culture nor does it even conduct an independent investigation into the effect of such spillage in the community (ies). Instead what it does is to wait for the firms to do the clean-up at their own time and pace and at the end do the unimaginable: submit a report indicting itself for the spill (See Hutchful, 1985:124-35 intriguing account on the Funiwa oil blow out; and Omoweh 1995:134). The losers in alithese are the host communities (Naanem, 1995; Obi, 1997).
Contrary to the claim by their apologists, the OMNCs do not provide full and gainful employment to qualified indigenes from the host communities. Instead what they do is to cut corners by casualisation – contracting most of their positions out to a labour contractor who now supplies the needed personnel at a reduced cost while he takes a percentage of the rip off as his price. So, while the worker who is sweating it out in the sun is paid peanuts as salary and with no contract of employment, the oil companies and their local bourgeois collaborators smile to their banks. Interestingly, all these are happening under the very nose of a government whose labour laws says that no firm in the country can keep a worker as a casual staff for more than three months offering him/her full employment. Fortunately, the Nigeria Labour Congress (XLC ur.der the present leadership of Comrade Adams Oshiomole has been picketing some of the erring firms and compelling them to obey the laws of the land.
One last area that needs to be touched on is the argument on the provision of some socio-economic infrastructure by these OMNCs in their host communities. Apologists of their operations are also quick to point out that they build schools (normally 6 classroom blocks), construct narrow and thin-layer asphalt roads that usually leads to their drilling location, and provide electricity in some communities. The truth however, is that these amenities, where they exist, are usually the fruits of the martyrdom of several innocent youths and patriotic elders in the community. Having come this far, the issue to agitate our minds is whether there remains-any hope for a new deal for the host communities. The answer to this forms the concluding part of this work.
SUMMARY AND CONCLUSION
In the preceding pages we have looked at the diabolical alliance between the Nigerian state and OMNCs against the people of the Niger Delta – the nexus of which lies in the rentier character of the state. It was clear from the onset that the nature and character of a typical neo-colonial state like Nigeria will make it tenuous relative to the intimidating global status of the OMNCs which in effect implies that it must respect the wishes of the latter. This condition is exacerbated by its outright dependence on rents from the oil multinationals for its corporate existence – a condition that in the final analysis logically constrains it to act in defense of its means of livelihood. Working on this premise and guided by the purview of the research the paper theorizes that as in all class-divided societies, conflicts in the production process will always be resolved in favour of the ruling class – in this case the local elites whose corporate nest is feathered by the rent and the metropolitan bourgeoisie that own the OMNCs.
The implication of this contextual background is that prospects for taming the oil multinationals and compelling them to be alive to their responsibilities in their areas of operation are slim. This can only be possible when a new crop of nationalist leaders mount the rostrum and institute state legislation that will ensure equity for all and environmental justice for the oppressed people of the Niger Delta. By all intents and purpose this may appear Utopian but all hopes cannot be lost as such momentary flashes in history like the Murtala/Obasanjo regime nationalization of the assets of British Petroleum (BP) in 1975 as, a punishment for Britain’s intransigence in the freedom struggles of the MPLA government in Angola can still occur again. However, until that happens the future remains bleak for the people in the oil producing areas of the country.
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