Oil companies are paying billions towards development in the Niger Delta, but it’s having little impact on the ground, say Tijah Bolton-Akpan and Miles Litvinoff.

In the 65 years since the first oil well was tapped in the swamps of the Niger Delta, the region has been a case study in what development experts call the resource curse.

The Niger Delta - which covers 7.5% of Nigeria’s land mass and is home to 30 million people - is Africa’s most important oil-producing region, and one of the most polluted places on earth. Its oil has generated extraordinary wealth for some, and dehumanising poverty for others. Offshore bank accounts have swelled, as local communities have seen their air, water and land contaminated by oil spills and gas flaring.

Yet, as our new study shows, multinational energy companies have paid billions towards development in the Niger Delta. This begs a fundamental question: 

Where’s all the money going?

Disclosure

In the past 20 years, the move towards transparency in oil, gas and mining has gathered pace.

The European Union (EU), the UK, Norway and Canada, have all passed ground-breaking transparency laws (an equivalent US law is yet to be implemented). Meanwhile the Extractive Industries Transparency Initiative (EITI), the global standard for good governance in the natural resources sector, has enabled civil society, parliamentarians, the media and others to scrutinise the payments that major energy companies make to governments.

We used these laws, and the disclosures that Nigeria publishes as an EITI member, to analyse and reveal the vast amounts of money that companies operating in the Niger Delta have paid towards sustainable development in the region.  

We found that between 2014 and 2019 more than US $3.2 billion was paid by subsidiaries of major energy companies, including Chevron, CNOOC (China), Eni, Equinor, ExxonMobil, Royal Dutch Shell Plc and Total SA, towards development in the Niger Delta. In 2018 alone, multinationals paid US $359 million for development there. 

On the ground though, we also saw the negligible impact that this money is having on people’s lives and on environmental protection.

In Ibeno, a large coastal fishing settlement in Akwa Ibom State, fish stocks have declined because of oil pollution, while drinking water sources are contaminated by oil and by open defecation. People told us of the health problems they face, from respiratory illnesses to fertility issues, birth deformities to cancers. Their testimony is backed up by numerous studies detailing the impact of pollution on people’s health in the Delta.

In Esit-Eket, an area once noted for its rich yields of cassava, plantains and oil palm, smallholder women farmers complained of being stopped from accessing their land by military personnel guarding oil infrastructure. We heard of healthcare facilities so threadbare that they often can’t even treat minor ailments, while women spoke of the heavy economic burdens they face. One woman told us: “We suffer to send our children to school, only for them to come back and remain jobless. All the job opportunities are given to outsiders.”

Alleged corruption

Responsibility lies both inside and outside Nigeria.

Nigeria’s extractive sector is poorly accountable and badly governed, and the federal government agency responsible for fostering sustainable development in the Niger Delta, the Niger Delta Development Commission (NDDC), has been plagued by corruption allegations.

The NDDC - which receives a mandatory 3% contribution from the annual budgets of oil and gas companies operating in the region - is widely seen as having failed in its aim. Projects it has approved  over the past 20 years are now being audited, and Nigeria’s lower parliament, the House of Representatives, is investigating alleged NDDC corruption around procurement.  

Yet responsibility for the ecological and social disasters affecting communities living near extraction sites in the Niger Delta also lies in London, the Hague, Paris, and other capitals where the multinational parent companies whose subsidiaries extract Nigeria’s mineral wealth are incorporated, headquartered and publicly listed.

In February, in what was described as a "watershed" moment, the UK Supreme Court ruled that two communities in the Niger Delta can proceed with a legal case against Shell for its Nigerian subsidiary’s environmental failures, because the parent company is registered in London.

This decision followed another historic ruling two weeks earlier in the Netherlands. Thirteen years after four farmers from the Niger Delta together with Friends of the Earth first brought the case, a court found that Royal Dutch Shell’s Nigerian subsidiary was responsible for oil spills from its pipelines, and that the parent company had violated its duty of care. 

All of this underscores the need for greater accountability throughout Nigeria’s extractive sector, including for money meant for development that so rarely benefits target communities.

There are concrete measures which can help this happen. These include other countries - notably the United States - following the EU, the UK and others in implementing laws requiring oil and mining companies to publish what they pay governments. Extractive companies should also have a legal duty to publish comprehensive information on the environmental, social, human rights and anti-corruption risks and impacts of their operations, as part of their annual financial reports. This should include explaining how their board and management assess and manage all such risks and impacts.

And in Nigeria, the NDDC should be required to publish detailed monthly data on the payments it receives from the government and companies, and on how it spends the money.

As the world responds to the climate emergency by moving away from fossil fuels, the need for Nigeria to diversify its economy is more urgent than ever. The Niger Delta communities who have paid the highest price for the oil extracted from their lands must be properly compensated before it’s too late.  

The issue of diversifying Nigeria’s economy has been raised whenever oil prices have nosedived in recent years, only to fall away once prices rise again. Yet diversification can ease the intolerable pressure on people in the Niger Delta. 

Oil has been a real and present danger in their lives for decades. This is only likely to truly end when it’s left in the ground.

“What’s in It for Us?” An action-research case study of Nigeria’s extractive industries is co-published by Policy Alert, Publish What You Pay and Stakeholder Democracy Network. 

Tijah Bolton-Akpan is co-founder and Director of Policy Alert, an NGO in Akwa Ibom State, Nigeria, focused on promoting a more empowered citizenry, stronger institutions and sustainable communities and a member organisation of Publish What You Pay Nigeria.

 Miles Litvinoff is Director of Publish What You Pay UK, the United Kingdom national chapter of the global Publish What You Pay civil society transparency, accountability and sustainability movement.