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Shell Spends Big Bucks Guarding Its Nigerian Operations

Gina-Marie Cheeseman
| Tuesday August 28th, 2012 | 2 Comments

Shell spends big bucks guarding its operations in Nigeria’s Niger Delta, an area where armed groups violently clash. Shell Nigeria spent at least $383 million on security between 2007 and 2009, according to a report by the London-based group, Platform. During that time period Shell spent at least $1 billion on security worldwide. If the oil giant “were a country it would have the third highest security budget in Africa, after South Africa and Nigeria itself,” The Guardian points out.

In 2008, Shell spent more on security in the Niger Delta than in the Americas, EU and Russia combined. Shell has its own 1,200 member internal police force and network of informants in Nigeria. The report describes the $383 million spent on security in Nigeria as an “underestimate” because it doesn’t include money spent on the Shell-operated Liquefied Natural Gas plant in Bonny, or the estimated annual $200 million of “community development funds,” which the report claims are “frequently distributed to groups that threaten Shell’s operations, sparking serious violent conflict.”

Shell “axed thousands of jobs globally” yet continued to make payments to Nigerian government forces “who exacerbated the conflict and proved incapable of protecting Shell’s facilities and personnel.” In 2008, about a third ($99 million) of Shell’s global security budget was spent on third parties, double what the oil company spent on its security staff. Shell even gave the government forces it pays to protect its operations fancy equipment like gunboats, helicopters, vehicles, food, accommodation, satellite phones, and stipdends “throughout years of conflict in the Delta region.”

U.S. embassy cables suggest that Shell gave significant payments to deploy 350 the Joint Task Force (JTF) soldiers “at or near” its facilities in the western Delta when the JTF was established in 2003. Shell is considered to have given about $7.5 to $15 million for JTF’s Operation Restore Hope around the city of Warri, where “thousands were displaced and an estimated 500 people killed.” The U.S. embassy cables show that Shell and Chevron made direct payments to armed militants in the Warri region, which amounted to an average of $300 a month. As the report puts it, “These payments have added fuel to the fire of intense conflict between rival militant groups and government forces.”

The report lists the five main ways that Shell’s security spending has impacted the conflicts in Nigeria, and harmed its own reputation:

  • Reinforced the impunity enjoyed by human rights abusers
  • Enabled indiscriminate military attacks
  • Hardened the ongoing militarization of the Delta
  • Exacerbated communal conflicts and become a potent force in conflict dynamics
  • Exposed the company to potential liability for aiding international crimes

The report also makes recommendation to Shell. One of those recommendations is that Shell link every payment made in Nigeria to a “clearly and accurately recorded transaction.” Another recommendation is to stop any transaction if there is a risk that the payment could go to an armed group or worsen conflicts. “If Shell is to avoid liability for human rights abuses and corruption, hiding such payments is not a sustainable option,” the report urges.

Nigeria is not the only place where Shell has made security payments shrouded in controversy. Shell spent $8 million on security in Syria*, where it was the largest foreign investor until it withdrew in December 2011. Shell is also the largest foreign investor in Oman, and has “close relationships to the Sultan’s regime.”

Photo: Wikipedia

Related post: Shell In Nigeria: Oil, Gas, Development & Corporate Social Responsibility

*Correction: Shell spent $8 million on security in the Middle East and North Africa (MENA). It can’t be determined exactly how much Shell spent on security in Syria.


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