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SECOND ANNUAL CONFERENCE AND
GENERAL MEETING
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POLICY IMPLICATIONS FOR THE NIGER DELTA A Conference Paper By O. Igho Natufe, Ph.D.*
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This paper grapples with
the concepts of sustainable development and corporate social responsibility
with emphasis on Nigeria's Niger Delta. A region endowed with immense natural
resources, especially crude oil, the Niger Delta ranks among the largest
deltas in the world. The territory of the Niger Delta cuts across eight
of Nigeria's 36 states, but the core areas are within the states of Akwa
Ibom, Bayelsa, Cross River, Delta, Edo, and Rivers. These are the states
of primary concern to this paper. They constitute what has been referred
to as the "South-South" geopolitical region of Nigeria.
Oil exploration is the major
economic activity in the Niger Delta. The focus of this paper, therefore,
will be on the impact of this activity on the ecosystem and the people
of the Niger Delta. It will use, as a case study, the activities of the
Shell Petroleum Development Company of Nigeria Limited (SPDC) as a representative
of oil exploration and exploitation in the Niger Delta.
Objectives
The objectives are to:
Sustainable Development
In order for us to establish a global perspective on the principles
of sustainable development, it is imperative that we proceed from a detailed
evolutionary analysis of the concept as enunciated by the World Commission
on Environment and Development (WCED) in its seminal work, Our
Common Future. Since the publication of Our Common Future,
(1) the concept of sustainable development has defined
the policy options of environmentalists and industrialists, as well as
those of governments, vis-à-vis the exploitation of natural resources
and the political economy of production and consumption of goods. The imperative
to balance economic growth/ profits and ecological
protection has significantly influenced the debate of the parties.
Following
the release of the WCED's report, Our Common Future, debates
on the environment and its impact on the socioeconomic and political development
have dominated the centre stage at various international fora. Established
by the United Nations (UN) in 1983, with Gro Harlem Brundtland (the then
Prime Minister of Norway) as chairman, the WCED had the following terms
of reference:
The WCED's thesis of sustainable
development posits that the present generation has been reckless and wasteful
in both its exploitation and use of natural resources by pursuing a series
of socioeconomic and industrial policies which endanger global environmental
security. Viewed as a doctrine of qualitative societal change, sustainable
development underlines the perils of global environmental degradation -
oil spills, deforestation, acid rain, ozone depletion, toxic waste, etc.
- and calls for the institution of policies that would:
exploitation and use of natural
resources. It condemned the inequities within and among nations, and called
for a restructuring of contemporary economic relations to guarantee an
equitable distribution of national and international wealth.
Two issues emerged as vital
from the WCED's notion of sustainable development. First, nations must
reorient their developmental strategies while meeting their respective
human and societal "needs." Second, and more important, the consumptive
patterns of the present generation must not be allowed to exhaust natural
resources so that future generations can also meet their own needs. The
question of equity -- intra and inter-generational, and international
-- emerges as a critical element in the WCED's conceptualization of sustainable
development.
Thus, the authors of Our
Common Future placed on the international agenda a manifesto for social
and political change that challenged the basic assumptions underlying contemporary
developmental policies. By arguing that sustainable development "requires
meeting the basic needs of all and extending to all the opportunity to
satisfy their aspirations for a better life", the "promotion of values
that encourage consumption standards that are within the bounds of the
ecologically possible and to which all can reasonably aspire" and concluding
that it "clearly requires economic growth in places where such needs are
not being met" (4) the authors introduced
a combination of contending approaches to achieving sustainable development.
They produced a report which appeals to everybody but to nobody in particular.
For the exponents of economic and industrial development, the notion of
"sustained economic growth" becomes primary, while environmentalists underline
the implied primacy of the environment in the notion of "integrating environmental
considerations in economic decision-making", just as the proponents of
social justice hail the call for the "redistribution of wealth in the international
system."
Our Common Future has been criticized for its lack of conceptual
clarity on developmental strategy. Irrespective of the qualifier that "the
international economy must speed up world growth while respecting the environmental
constraints" the WCED has drawn criticism for advocating "more rapid economic
growth in both industrial and developing countries."
(5) In analytical terms, the WCED crafted a centrist document
designed to pacify contrasting shades of opinion in the industrial and
political continuum. In their critique, Franklyn Griffiths and Oran R.
Young argued that it "seems less and less likely, therefore, that reformist
policy prescriptions of the sort currently inspired by the concept of sustainable
development will prove adequate to cope with the far-reaching problems
that we now anticipate in conjunction with global changes", and concluded
that "the conception of development embedded in the notion of sustainable
development is fatally flawed." (6) William
E. Rees, in his thought-provoking paper, "Sustainable Development: Myths
and Realities", opined that the notion of "sustained economic growth" built
into the concept of sustainable development renders the concept meaningless.
He argued: "As sustainable development is gradually embraced by the political
mainstream, its meaning drifts ever further from the ideal of sustainable
development toward the seductive temptation of sustainable growth."
(7)
Our Common Future deals with two interrelated issues: environment
and development, and it postulates that the non-sustainable use
of one affects the quality of the other. While there is a universal consensus
on the deteriorating nature of the global environment, some of the analyses
of the WCED on this issue are empirically flawed. For example, when, in
reference to the less developed countries (LDCs), it states that: "Poverty
reduces people's capacity to use resources in a sustainable manner; it
intensifies pressure on the environment" (8)
the impression is conveyed that an affluent society would put less pressure
on the environment. However, the WCED rejects such an impression when it
recognizes that: "A child born in a country where levels of material and
energy use are high places a greater burden on the Earth's resources than
a child born in a poorer country." (9) Thus,
we can conclude that it is not poverty per
se that "places a greater burden on the Earth's resources", but
a consumptive pattern nurtured by affluence. Poverty and affluence are
antipodal, and there is no doubt that both have negative effects on the
environment. While it is imperative for us to direct our analytical tool
toward the interrelationships of those factors destroying the environment,
we should not ignore the overriding impact of a given phenomenon on global
environmental stability. This is true nationally as well as in the international
system. In doing this, however, our concern should be focussed on bridging
the gap between the two, and in the process strive to enhance the quality
of the environment.
Though the criticism has
a defined value vis-à-vis the inconsistent theoretical construct
of Our Common Future's sustainable development, it could be
argued that the WCED did not set out to produce a rigid recommendation
applicable across the globe uniformly. Again, while it could be argued
that such flexibility does not aid the process of attaining a global
approach on environmental control measures, it should be borne in mind
that sustainable development is in fact an evolving concept whose form
and content can only be determined by a series of national and global practices.
A positive aspect of Our Common Future's theoretical construct
is the broad-based endorsement it receives from contending constituencies
in the environment-economy divide. This has the basis to generate a national
consensus on the concept of sustainable development. It also has the properties
of a class struggle where the contending views of the "economists" and
the "ecologists" have come to define the ideological divide in the literature.
There are obvious grounds
on which we can differ with some of the assumptions implicit in the concept
of sustainable development. However, it should be perceived as a broad
conceptual framework for policy actions and not a rigid dogma with universal
applicability. Thus, Our
Common Future is a thought-provoking document designed to guide
and galvanize governments, environmentalists, social and political activists,
and industries into pursuing environmentally sound policies and programmes.
As a rule, however, the galvanizing aspect has exposed deep-rooted conceptual
conflicts.
It defines the fundamental
constructs of sustainable development as follows:
Sustainable
development is like a beautiful mermaid admired by all but ill understood,
due to its enchanting complexities. It magnetizes our imagination and challenges
our policy innovative skills, but cannot by itself resolve our environmental
problems without society's unified concerted efforts to grasp the implications
of its enchanting beauty. There is a global movement towards an embrace
of sustainable development, even though we are yet to agree on its meaning
and implications. This is, by no means, a healthy phenomenon since it underscores
our broad conceptual base in sustainable development, a base which needs
to be properly harnessed as we grapple with the policy challenges of sustainable
development. To attain this goal, it is vital that we have a reasoned debate
on the subject, and view sustainable development as an evolving concept
in a quest of a definitive viewpoint. As a contribution toward this process,
I will discuss and analyse the positions of opposing schools of thought
on some of the controversial aspects of sustainable development in
the section on Development & Economic Growth. But before doing
so, let us encounter Corporate Social Responsibility.
Corporate Social Responsibility
The concept of corporate responsibility or corporate social
responsibility has acquired broad support in various international
fora. In this paper,
corporate responsibility will be used interchangeably
with corporate social responsibility. While there is no universally
accepted definition of the concept, there is however a consensus that it
implies a demonstration of certain responsible behaviour on the part of
governments and the business sector toward society and the environment.
Three important international institutions have underlined the need for
governments and companies to adhere to the principles of corporate social
responsibility. These are the World Business Council for Sustainable
Development (WBCSD), the Organization for Economic Cooperation and Development
(OECD), and the Dow Jones Sustainability Indexes (DJSGI). We will review
their policies and guidelines as representing a global consensus on the
imperative of corporate social responsibility.
WBCSD:
The WBCSD is a major driving
force on the concept of corporate social responsibility.
(11) Established in January 1995, the WBCSD is an association
of 140 international companies drawn from more than 30 countries representing
more than 20 industrial sectors. Two major international organizations
- the Business Council for Sustainable Development (BCSD) and the World
Industry Council for the Environment (WBCE) - merged to form the WBCSD.
Its reports on corporate (social) responsibility have helped to focus global
attention on the necessity for governments and business to demonstrate
a degree of responsibility toward society.
The WBCSD defines corporate
social responsibility as the continuing commitment by business to behave
ethically and contribute to economic development while improving the quality
of life of the workforce and their families as well as of the local community
and society at large.
During its internal debate
on the concept of corporate social responsibility, members of the
WBCSD grappled with the problems of clarity without losing the vital focus
of the concept. The WBCSD sought a conceptual framework that would remain
loyal to its "three fundamental and inseparable pillars" of sustainable
development: the generation of economic wealth, followed by environmental
improvement, and social responsibility.
(12) It proposed a global strategic approach on how to define
its third pillar: corporate social responsibility. According to
the WBCSD, corporate social responsibility defines what a company
has to do, in order for it to win and enjoy the confidence of the community
as it generates economic wealth and responds to the dynamics of
environmental
improvement. The WBCSD posits corporate social responsibility
as a vital link "to the long-term prosperity of companies as it provides
the opportunity to demonstrate the human face of business..." and underscores
"the value of creating practical partnerships and dialogue between business,
government, and organizations." (13) The
diagram below was considered to be a more appropriate reflection of the
scope of the concept without the word "social," which some members
of the WBCSD felt was too restrictive. Thus, the term corporate responsibility
was seen as pertaining to the WBCSD "three fundamental and inseparable
pillars" of sustainable development.:
Corporate responsibility,
therefore, defines the global behavioral expectations of governments
and corporations toward the three constituent units of sustainable development.
Our
concern in this paper is with the third unit: corporate social responsibility.
The WBCSD has identified
the following "core values" as integral to corporate social responsibility:
The community is respected
as a stakeholder in the project. Thus, the company is compelled to construct
a base for close collaboration and consultation with the community, as
well as assist the community in capacity building in all aspects of social
and economic development. To achieve this level of responsibility, a company
must implement a transparent policy of working with the community to ensure
that these core values are adhered to. It must also ensure that environmental
protection is not compromised, and that any environmental risks arising
from its project must beequitably distributed among all segments
of the society, and must not be borne disproportionately by the poor. In
its broadest terms, therefore, the concept of corporate social responsibility
is inextricably linked to the notion of environmental justice. How
do governments and companies resolve the "distributional inequities in
the exposure to environmental risks?" (14)In
their study, Harm van der Wal and Klaas Jan Moning found economic instruments
to be "socially regressive" and counter productive to the concept of corporate
social responsibility as "the percentage burden is greater for low income
households than for higher income households." They argued that:
Market-based instruments reduce the powerful and symbolic appeal
of pollution control. As a consequence they may lead to a weakening in
the public commitment to a shared environmental ethic.
(15)
Corporate social responsibility is not only the expected ethical
behaviour of companies. It also defines the self interest
of companies. By investing in the core elements of corporate social responsibility,
a company is also simultaneously facilitating a base conducive to the emergence
of a healthy and well-educated community that would assist the company
in attaining its economic growth objectives. It is a win-win strategy.
OECD:
The OECD has also been engaged in developing the concept
of corporate responsibility. At its Ministerial Meeting on June 27, 2000,
the OECD approved a set of Guidelines for Multinational Enterprises.
(16) In the Guidelines, a set of "voluntary principles
and standards for responsible business conduct consistent with applicable
laws," the OECD stressed the need for both governments and companies to
demonstrate their corporate responsibility by pursuing sound environmental
and socially based policies. The Guidelines are "to ensure that
the operations of these enterprises are in harmony with government policies,
to strengthen the basis of mutual confidence between enterprises and the
societies in which they operate,...and to enhance the contribution to sustainable
development made by multinational enterprises." They challenge multinational
enterprises "to implement best practice policies for sustainable development
that seek to ensure coherence between social, economic and environmental
objectives." (17)
The General Policies of the Guidelines
(18) advise enterprises to:
A critical element of corporate responsibility is the need for
governments and companies to incorporate all the three dimensions of sustainable
development - economic, environmental,
and
social - in their
decision making process. Most countries and companies seem to ignore or
pay little attention to the social component of sustainable development.
This was apparent in a recent OECD study as it advised member states to
formulate and adopt a more robust and balanced approach to sustainable
development that will emphasize the three dimensions.
(19)
DJSGI:
The DJSGI also identified
social
well-being (or corporate social responsibility) as one of its sustainability
principles which companies must satisfy in order to be listed in the DJSGI. On
September 08, 1999, the Dow Jones Sustainability Group Indexes (DJSGI)
was launched in Zurich, Switzerland, as the first "global equity indexes
that track the performance of the leading sustainability-driven companies
world-wide." The DJSGI includes over "200 of the top sustainability companies
in 68 industries in 22 countries. The total market capitalization of the
DJSGI is 4.3 trillion USD." (20)
DJSGI Principles
(21) Companies qualify to be listed
in the index if they satisfy the criteria of sustainability of the DJSGI.
The sustainability performance of listed companies "is assessed and scored
on the basis of an industry-specific questionnaire, the analysis of company
policies and reports as well as stakeholder relations." Such companies
must demonstrate their commitment to DJSGI sustainability principles, which
are: innovative technology, corporate governance, shareholder relations,
industrial leadership and social well being.
Thus,
the concept of corporate social responsibility has been placed on the global
agenda by leading international organizations. It should be seen as a critical
challenge to environmental justice as it compels governments and industries
to address the distributional inequities of environmental risks, especially
in the natural resource sector of the economy.
Let us now review the twin
concepts of development and economic growth. These
concepts play significant role in the strategies of governments, corporations,
and environmentalists, as they attempt to deal with the imperatives of
sustainable development.
Development & Economic Growth
Development
The concept of development
has caused much controversy in the debate on sustainable development. What
is development? And how should it be understood vis-à-vis
the fundamentals of sustainable development? Simply put, development
is a qualitative change in the state of a given phenomenon. It is the sum
total of all socio-economic and technological indicators used to measure
the advancement of society and individuals' state in the society: standard
of living, life expectancy, self-regulating social institutions, industrial
base, etc.
But, how can our conception
of development be related to the fundamentals of sustainable development
as enunciated by the WCED?
The essence of the thesis
of sustainable development is geared towards the improvement of the quality
of life in all its ramifications, provided that environmentally
sound policies are pursued, and adhered to by society. The question of
whether it is possible to have both a high quality of life and, at the
same time, a high quality of the environment, is a key issue which has
generated much debate in the literature. While Ferdinard E. Banks argues
that "it is theoretically possible to have a material standard as high
or even higher than that being enjoyed today, without tolerating a further
deterioration of the environment", (22)
Griffiths and Young argue otherwise. They postulate that:
Our task is not to devise
new technologies, institutions, or policies designed to allow us to produce
more with less. We must discover new and affirmative meanings in life without
economic or material growth. The challenge before us is one of cultural
and even spiritual revolution. This, in our view, is the proper meaning
of sustainable development. It carriers far beyond the oft-cited need for
change in "lifestyles" and the like. (23)
The above views on the concept
of development vis-à-vis sustainable development represent
the contending schools of thought on the subject. Banks bases his argument
on the premise that the evolving nature of technological advancement will
make it possible to drastically reduce environmental damage while, at the
same time, increasing society's capability to produce more goods. Griffiths
and Young, on the other hand, do not feel it is "our task...to devise new
technologies, ...to allow us to produce more with less." They propagate
what is in effect a halt to development. This position is, unfortunately,
based on the doomsday forecast which foresees a "depletion of natural resources"
if the current practice of exploitation is continued. Our
Common Future
also raises this possibility when its authors posit:
As for non-renewable resources,
like fossil fuels and minerals, their use reduces the stock available for
future generations. But this does not mean that such resources should not
be used. In general the rate of depletion should take into account the
criticality of that resource, the availability of technologies for minimizing
depletion, and the likelihood of substitutes being available.
(24)
As the above argument indicates,
the WCED's main position is that the use of fossil fuels and minerals "reduces
the stock available for future generations." However, it cautions society
against the "depletion" of natural resources, thus lending credence to
the position of those who see the "inevitability" of resource "depletion."
Ansley J. Coale differs from this position. He contends that "...when we
think of our resources of such useful materials as the metallic elements
of iron, copper, nickel, lead, and so forth, we should realize that spaceship
Earth has the same amount of each element as it had a million years ago,
and will have the same amount a million years from now." He continues:
The reason that the future of our resource situation always seems
so bleak and the past seems quite comfortable is that we can readily
construct a plausible sounding estimate of the future demand for a
particular raw material, but cannot form such a plausible picture
of the future supply.... What we cannot so readily foresee is the
discovery of new sources and of new techniques of extraction, and,
in particular, the substitution of other raw materials or the substitution
of other industrial processes which change the demand away from the
raw material we are considering. (25)
If development is
to have any positive meaning, it is essential that its fundamental goals
be the proper blending of technology and energy that will contribute to
the improvement of society and the environment. After stating
that the "conception of development embedded in the notion of sustainable
development is fatally flawed", it is confusing to note that Griffiths
and Young proceeded to propose development "without economic or material
growth." While it may seem fashionable to criticize the WCED for not formulating
a universally acceptable theoretical construct of development, the
thesis of Griffiths and Young has not enhanced our knowledge of the subject.
Economic Growth
Another key fundamental argument
of sustainable development is built around the notion of producing
"more with less" energy. How can nations increase their Gross National
Product (GNP) and reduce their total energy consumption at the same time?
This is a major challenge confronting all nations, including the LDCs.
The search for alternative sources of energy, which is geared towards the
reduction of pollution and the provision of the prerequisites for
a new paradigm of development that would improve the overall standard
of living of their citizens, remains a major policy challenge for governments.
In his contribution to a recent study, Lee Solsbery discussed the environmental
implications of growing energy consumption for OECD and non-OECD nations.
(26) He argued that any gains from a continued decline in energy
intensity will be rendered obsolete by "the absolute rise in global energy
demand...resulting form the inertia in energy systems and the rigidities
in energy infrastructure." The rate of energy consumption has severe implications
for the global environmental systems. Though the use of nuclear power has
contributed significantly to lower CO2 emissions in OECD countries,
thus resulting in reduced reliance on energy (oil, gas, and coal) than
in less developed countries, it should be noted, however, that OECD countries
still consume a greater percentage of energy than less developed countries.
For example, Canada, with a population of 31,006,347 "accounts for a larger
share of global commercial energy consumption than India" with a population
of 1,000,845,550. Furthermore, while
Sustainable development does not mean "no development". A critical
element of sustainable development deals with the institution of development
alternatives that would promote the quality of the environment while satisfying
our needs. It also implies a re-ordering of our needs in alignment with
the capacity of the ecosystem. While it may not imply a negation of opportunities
to improve our collective standard of living, it does imply that we must
not exceed the bounds of the environment.
As Colin F.W.Isaacs argues
"it's not the economy or the economics that we are trying to sustain, it's
the environment and the economy that we are trying to sustain."
(30) This is not just a semantic irritant. It compels us to tackle
vital policy questions on sustainable development. Should we promote
economic growth in our pursuit of sustainable development? Can we improve
the environment as we pursue an economic growth policy? These are crucial
questions which we have to consider as we discuss the problematic of sustainable
development. Just like the concept of development, the notion of economic
growth has polarized the debate on sustainable development. Economic growth
is an integral part of a developmental strategy. Representatives of the
two schools of thought discussed above maintain their respective positions
over the role of economic growth in sustainable development. While it is
the contention of one group that economic growth is essential for a successful
pursuit of sustainable development, the opposing view contends that economic
growth does violence to the tenets of sustainable development.
As indicated above, the WCED recommends "more rapid economic growth"
in both developed and developing countries while "respecting the environmental
constraints." The business community sees this as a vindication of "growth"
while environmentalists are opposed to the idea. Simply put, it boils down
to a debate between "economists" and "ecologists." In his paper, "Coming
to Terms with Growth and the Environment", Walter W. Heller states that
for the ecologist "an end to economic growth" is considered "an environmental
imperative", while the pursuit of economic growth is viewed by the economist
as "a socio-economic imperative that requires the continuation of growth
as the price of social survival." The economist "views growth itself as
one of the prerequisites to success in restoring the environment"
(31), a position which is rejected by the ecologists. He concludes:
As resource prices rise and mines are depleted, more and more
capital must be used for obtaining resources, leaving less to be invested
for future growth.... Population finally decreases when the death rate
is driven upward by lack of food and health services.
(33)
Isaacs, (34) Rees,
(35) and Griffiths and Young (36)
express similar views in their critique of economic growth. They all believe
that a curtailment of economic growth will stop pollution but have not,
on the other hand, given any thought to the consequences of a zero growth
policy on the society. It is interesting to note that in The Limits
to Growth study frequently cited by anti-economic growth theorists,
the authors of the study did not include price as one of the trends
they studied. The trends they studied - "accelerating industrialization,
rapid population growth, widespread malnutrition, depletion of non renewable
resources, and a deteriorating environment" - were not only empirically
biassed but were presumed to operate outside of a market mechanism. In
a review of this study Peter Passell, et. al, describe it
as "an empty and misleading work...which takes arbitrary assumption, shakes
them up, and comes out with arbitrary conclusions that have the ring of
science" and that the authors "are out to show that pollution and malnutrition
cannot be attacked directly, but only by stopping economic growth."
(37)
The argument that economic growth by itself leads to resource depletion
remains a fundamental misconception of the proponents of "the limits to
growth." This study supports the thesis that sustainable development can
be sustained on the platform of combatting pollution and preventing environmental
degradation, without the burden of an inexplicable futuristic notion of
resource depletion supposedly caused by economic growth. William D. Nordhaus
and James Tobin view it thus:
The nightmare of a day of reckoning and economic collapse when all fossil
fuels are forever gone seems to be based on a failure to recognize the
existing and future possibilities of substitute materials and processes.
(38)
In The Doomsday Myth: 10,000 Years of Economic Crises,
Charles Maurice and Charles W. Smithson could not find any evidence to
support the thesis that economic growth causes resource depletion.
(39) Our policy challenge therefore, as an analyst put it, is
to construct "a nationally consistent environmental policy" which implies
"the integration and coordination of economic growth and stability with
specific decisions on pollution." (40)
Not only is this a critical element in the understanding of sustainable
development, it is the cornerstone around which any national perspective
on the concept can be successfully constructed.
This brings us to a vital recurring theme in the thesis of sustainable
development as enunciated by the WCED: the environment-economy integration
in the decision making process. A clarification of this concept is crucial
in our pursuit of sustainable development so that no sector of the business
community will conduct "business as usual" simply because of the agreed
notion of economic growth. This is especially true in Nigeria's Niger Delta,
where the multinational oil corporations and their local allies may be
tempted to recklessly pursue economic growth at the expense of environmentally
sound policies. Profit may still be an important factor in all business
considerations, but it is no longer going to be the overriding element
in setting up a business. Where a doubt exists on the implications of a
proposed industrial project vis-à-vis the enhancement of ecological
stability, the issue should be resolved in favour of the environment and
the proposed projects be abandoned irrespective of the projected margins
of profits. Thus, the concept of integration in this case is not one of
a 50-50 ratio between the environment and the
economy, but
one in which the former retains a recognized primacy. The concept of environment-economy
integration is not to "balance" the scale between the environment
and the
economy, but rather to ensure that the scale is significantly
tilted in favour of the environment. Therefore, the challenge for Nigerian
governments (federal and state) and industries is to construct and implement
enduring policies that recognize the imperative of enhancing the quality
of the environment. It is only within this confinement that the pursuit
of economic growth should be considered by the regime regulators. Governments
must intervene "to reduce the negative environmental externalities from
the exploitation of natural resources." The concept of
environment-economy
integration
must recognize the primacy of the social dimension of sustainable
development. Thus, it is imperative for governments to ensure that the
social
benefit of natural resources exploitation is not compromised. This
explains why, "in most OECD countries, mining and oil production are subject
to strict controls relating to environmental discharge and land disturbance,
and companies are usually required to post bonds to ensure that funds will
be available to restore production sites." (41)
As we consider the merits of economic growth, it is vitally important
that we pay attention to the macroeconomic questions raised by the OECD
which are relevant to sustainable development and the natural resource
sectors:
We have already encountered the concepts of sustainable development
and corporate social responsibility. The task of this section is two-fold.
First, it will review the policies of Shell vis-a-vis those concepts. Second,
it will assess the impact of those policies on the people and environment
of the Niger Delta.
The choice of Shell as a case study for this paper is informed by the
vastness of its operations in the Niger Delta. Shell
(43) began its exploration for oil in Nigeria in 1937, but was
granted a licence on November 4, 1939. It discovered Nigeria's first commercial
oil field in 1956, at Oloibiri, Rivers State. From a modest production
level of 6,000 barrels of crude oil per day (bpd) in 1958 to its current
level of more than 1 million bpd, Shell is responsible for almost 50% of
Nigeria's production. The company employs over 10,000 staff, including
about 4,000 permanent staff. The Niger Delta is the main operating centre
of Shell, where the company manages an oil mining lease area of "about
31,000 square kilometres; 6,000 kilometres of pipelines and flowlines,
87 flowstations, eight gas plants and more than 1,000 producing wells."
(44)
Our interest is in human
rights, employee rights, environmental protection, community
development, and stakeholder rights. These are the core values
that define the responsibilities of corporations (and governments) to the
society: corporate social responsibility. Thus, what benefit or harm would
a company's project bring or does to the human rights of the society,
the
employee rights of its workers, the environmental protection
of the community, the
development of the community, and the
rights of the community as legitimate stakeholders?
Though the OECD Guidelines are addressed to multinational
enterprises, they also apply to domestic companies as well.
Sustainability Principles
Components
Technology
The creation, production
and delivery of products and services...based on innovative technology
and organization that use financial, natural and social resources in an
efficient, effective and economic manner over the long-term
Governance
Corporate sustainability...based
on the highest standards of corporate governance including management responsibility,
organizational capacity, corporate culture and stakeholder relations
Shareholders
Shareholders' demands should
be met by sound financial returns, long-term economic growth, long-term
productivity increases, sharpened global competitiveness and contributions
to intellectual capital.
Industry
Sustainability companies
should lead their industry's shift towards sustainability by demonstrating
their commitment and publicizing their superior performance
Society
Sustainability companies
should encourage lasting social well being by their appropriate and timely
responses to rapid social change, evolving demographics, migratory flows.
Shifting cultural patterns and the need for life-long learning and continuing
education
North Americans consume around 1 500 kilogramme of oil equivalent
(kgoe) per year just for their transportation needs, total per capita energy
consumption in India is less than 25 kgoe per year. Similarly, the average
OECD person in 1994 consumed 30 times the electricity than the average
Indonesian consumed, despite the fact that Indonesian electricity consumption
increased by more than 20 times since 1971!
(27)
A review of the forecast by the International Energy Agency (IEA) on global
energy consumption up to 2010 and beyond reveals a major policy challenge
for governments and industries. According to the IEA:
The above vividly illustrates the severity of the environmental challenge
from the perspective of energy consumption. It also demonstrates that,
in order for us to achieve the goals of sustainable development we will
have to introduce and apply environmentally friendly technologies. According
to Lee Solsbery, the challenge for policy in this regard "is to combine
a favourable context for research, development and deployment with market-based
evaluation and implementation mechanisms." (29)
Whether it is growth itself, or its particular forms,
that lead to environmental trouble (and if the latter, how production and
technology can be redirected into environmentally more tolerable channels).
What social costs the nation would incur in giving up growth. Whether the
war on pollution could, as a practical matter, be pressed and won without
growth.... The shift to a no-growth state of being might even throw
the...economic system so out of kilter as to threaten its breakdown.
(32)
The proponents of "limits to growth" or "zero growth" argue otherwise.
They maintain that economic growth is responsible for much of the damage
done to the environment. Donella H. Meadows et. al. represent
this group with their apocalyptic view of the world of economic growth:
What economic growth rates are acceptable and possible over
the long term, at national, regional and worldwide levels, under a sustainable
development model? How efficiently are various types of natural resources
(renewable and non-renewable) currently being exploited, and how can this
be improved to ensure the desired rate of economic growth and sustainable
resource development? (42)
SPDC in the Niger Delta
But more fundamentally, the
choice is informed by the following reasons. Shell is the only oil company
engaged in Nigeria that is a member of the WBCSD. Furthermore, the company's
former Chief Executive in Nigeria (1991-1994) and current Managing Director
of Royal Dutch/Shell Group, Mr. Phil Watts, is an executive member of the
WBCSD and co-chair of the Working Group that produced the Corporate Social
Responsibility Report for the WBCSD. (45)
It is against this background that the activities of SPDC are situated
within sustainable development and corporate social responsibility in the
Niger Delta. Though Shell controls only 30% of the shares of SPDC, the
company's principles of sustainable development and its corporate membership
in the WBCSD determine SPDC's strategies on sustainable development and
corporate social responsibility. The other shareholders of SPDC are the
Nigerian National Petroleum Company (NNPC) 55%; Elf 10%; and Agip 5%.
Oil exploration is an energy
intensive activity with severe implications on people and the environment.
Shell, like most other corporations, has adopted the "three pillars of
sustainable development" because it makes good business sense to do so.
Shell recognizes the interrelatedness of the three dimensions of sustainable
development - corporate financial responsibility, corporate environmental
responsibility, and corporate social responsibility.
On the environmental front, available evidence suggests that, Shell has satisfied the operating guidelines established and supervised by the Nigerian federal government's Department of Petroleum Resources (DPR) and the Federal Environmental Protection Agency (FEPA). These include the execution of Environmental Impact Assessments (EIA) for new projects as well as Environmental Evaluation Reports (EER) for ongoing operations. While the regulations and standards of Nigeria's DPR and FEPA may compare favourably with those of advanced western countries, for example, Canada and the United States, the gap is obviously in the enforcement and controls of those regulations and standards. How thorough were the alleged EIAs and EERs? How do we explain the appalling state of Shell's pipelines in the face of Nigeria's environmental regulations and standards? While Shell has invested a substantial amount in its scientific research and development, and the company has produced a standard declaration adhering to the principles of sustainable development, as well as contributing to the building of hospitals and awarding of scholarships to Niger Deltans (46), it is noteworthy that its annual rate of oil spills and the extent of its corrosive pipelines continues to define its activities in the Niger Delta. Let us review the table below. According to its data, Shell admitted that there were 815 oil spills between 1997 and 1999, out of which 170, an alarming 20.85%, were caused by its corrosive pipelines. It should be stressed that, Shell did not include the volume spilled at Ekakprmre, Delta State, in its calculation of the 1999 volume. It blamed that oil spill on "sabotage", just as it has always done in cases of massive oil spills caused by its corrosive pipelines.
SHELL OIL SPILLS (47)
| Year | Number of Spills | Volume | Caused by Corrosion | Volume |
| 1997 | 254 | 76,000 barrels | 63 | 11,533 |
| 1998 | 242 | 50,200 | 59 | 21,548 |
| 1999 | 319 | 23,377(*) | 48 | NA |
In an independent assessment of Shell's oil spill at Ogbodo, Rivers State, in June-July 2001, Terisa Turner, a world renowned authority on the political economy of oil corporations, exposed the falsity of Shell's "sabotage" thesis. She declared: " The claim of sabotage is patently false...The oil companies have been claiming that the oil spills, the pipeline explosions were all caused by sabotage. But there is no evidence to this so far. These are just lies, distractions, shirking of responsibility on the part of the oil companies - and Shell here is the most serious culprit." (48)
Even if we accept the figures provided by Shell as "correct", we wonder if the company could justify any of the spills as contributing to the principles of sustainable development and corporate social responsibility. The amount spent by Shell to promote its commitment to corporate social responsibility in the Niger Delta is grossly insignificant when compared to the huge environmental risks its operations continue to cause to the people and ecosystem of the Niger Delta. As the largest oil company engaged in the Niger Delta, Shell is responsible for more than 60% of the gas flaring, a practice which destroys the ozone layer and cause irreparable damage to the ecosystem. According to Terisa Turner, "it is criminally negligent of Shell, Texaco, Agip, Elf, and the other oil companies...hand in hand with NNPC, to be flaring natural gas and on this massive scale." (49) The involvement of the federal government in this environmentally destructive practice, through its crown corporation, the Nigerian National Petroleum Company (NNPC), is a testimony of its policy on the safety and security of Niger Deltans in particular and of Nigerians in general.
Since the WCED gave global currency to the concept of sustainable development, the international business sector has systematically courted sustainable development. The first round of this incongruous courtship manifested itself in the business sector's preference for sustainable economic development as the primary determinant of sustainable development, by relating to environmental development as an afterthought. By enunciating corporate social responsibility, the international business sector aspires "to demonstrate the human face of business" as its stratagem to mollify the citizens in countries' of its operations. Notwithstanding its "human face" of business policy, Shell has not been able to meaningfully address the environmental challenges of sustainable development. Like other corporations, Shell has appropriated sustainable development without being able to avoid a collision with environmentalists and environmental imperatives.
Policy Implications
In a 1999 study, the OECD
succinctly situated the issues of economic growth and sustainable development
when it asked if the earth's ecosystem can "sustain the high pressure on
natural resources that would result if all countries were to adopt lifestyles
similar to those prevailing in most OECD countries." According to the OECD,
the response to this question "depends in part on the resource management
decisions in OECD countries...." (50) As
is well known, most OECD countries have been very reckless and wasteful
in their consumptive patterns of natural resources. This vital question
was the central thesis of a seminal work by Paul Hawken, Amory Lovins,
and L. Hunter Lovins. In their Natural Capitalism they
challenge the current concept of industrial capitalism which they
describe as wasteful and non-sustainable. For example, the United States,
they argue, "still gets three-fifths of its aluminum from virgin ore, at
twenty times the energy intensity of recycled aluminum, and throws away
enough aluminum to replace its entire commercial aircraft fleet every three
months." (51) To further illustrate this
point of negative use of our natural capitalism, they argued: "For
all the world to live as an American or Canadian, we would need two more
earths to satisfy everyone, three more still if population should double,
and twelve earths altogether if worldwide standards of living should double
over the next fifty years." (52)
This is a fundamental policy challenge for Nigeria's Niger Delta, as
it is for the Nigerian federal government. It requires both policy reorientation
and strategic thinking to construct a consensual basis that will ensure
that citizens and corporations fully understand the concept and implications
of sustainable development, while grappling with the dynamics of economic
growth. Growth will have to be measured and deliberate, and not arbitrary
as is the current policy of governments and (oil) corporations in the Niger
Delta. The value of economic growth in the context of sustainable development
will depend on our capability to produce, for example, an environmentally
friendly alternative source of energy to petroleum. While "there is considerable
scope for substitution among resources" the main issue "is not whether
a particular natural resource will be available indefinitely, but whether
human ingenuity can keep combining man-made, natural and human capital
in ways that enable" us to meet the needs of society.
(53)
In crafting a response to the challenges of sustainable development,
policy analysts and decision makers are increasingly confronted with the
imperative of environmental justice. The approach of Niger Delta
governments needs to address the fundamental question of how to balance
the inequities of sustainability. The inherent linkage between a government's
environmental agenda and its economic agenda should define the content
and strategic approach of its policy on sustainable development. While
the objective of such a policy will be to enhance the development
of the society, without compromising the integrity of the environment,
it must demonstrate an inbuilt and well defined mechanism on how to balance
social,
economic
and environmental considerations. The success of such a policy depends
on the significant considerations given to the social elements
of sustainable development. Therefore, how do we resolve the "distributional
inequities in the exposure to environmental risks"
(54), in an integrative approach to sustainable development?
This is a vital question which begs for government's intervention. To do
so would require concrete policy actions to correspond with government's
declaratory principles on sustainable development. It is dangerous for
government policy to lay more emphasis on the
economic dimension,
and less on the social dimension of sustainable development. What
is required is for Niger Delta governments to formulate and adopt a more
robust and balanced approach to sustainable development.
(55)
Conclusion
It is quite obvious to any observer that Niger Deltans residing
in the areas of oil exploration bear a significantly higher exposure to
environmental risks than, say, residents of Kaduna who enjoy much higher
benefit from the exploits of oil exploration without incurring any environmental
risks arising from such exploration. Furthermore, the entire Niger Delta
region has become an environmental disaster, a "dead land", to borrow a
phrase from Terisa Turner, due to the activities of oil companies, led
by Shell, while other states of the federation enjoy the benefits of those
activities without an understanding and/or appreciation of the impacts
of oil spillages and environmental degradation caused by improper exploitation.
Fishery and agriculture have been rendered obsolete as a result of environmental
degradation caused by oil exploration in the Niger Delta. If we accept
the premise that, the fundamental function of a government is to provide
for the safety and security of its citizens, we are baffled as to the whereabouts
of Nigeria's federal government on this issue. Every other functions -
economic prosperity, etc. - derive from this fundamental function. Thus,
any activity of government that fails the test of enhancing the safety
and security of its citizens is inimical to the principles of good
governance. Not only have oil exploration and exploitation ruined the economic
base (fishery and agriculture) of Niger Deltans, it has grossly endangered
their safety and security in such a way that, any future
recovery becomes a matter of doubtful conjecture.
The bottom line for any corporation, including Shell, is economic
gain. Driven by this imperative, the Nigerian federal government, which
is a majority shareholder in SPDC, has neglected the
safety and
security
of Niger Deltans while milking the region to finance its economic, industrial
and political programmes. By its actions, it would appear that the only
concern of the Nigerian federal government is to ensure the continued flow
of oil which accounts for more than 90% of its revenue. Therefore, it has
adopted positions injurious to Niger Delta, but supportive to Shell and
the other oil companies in the Niger Delta. Witness the federal government's
military invasion and wanton destruction of Odi Town, Bayelsa State, in
November 1999, (56) and its attitude to
the series of petroleum oil disasters that have engulfed the Niger Delta
since 1998. (57) The government's sanctioned
execution by hanging of Ken Saro-Wiwa and eight of his Ogoni colleagues
on November 10, 1995, was designed to silent the opposition of the Ogoni
people and other Niger Deltans to the atrocities of the oil companies to
which the Nigerian federal government is allied. Thousands of poor peasants
and innocent Niger Deltans have been killed in a series of oil fire disasters
in Idjerhe, Ekakpamre, Amukpe, Egborode, and Elume caused by the corrosive
pipelines of Shell and the other oil companies. Where is justice? Where
is environmental justice?
Let us revisit the 7 fundamentals of sustainable development enunciated
by the WCED. These are:
Successive Nigerian governments have neglected their fundamental
function of providing for the safety and security of Niger Deltans, and
of Nigerians in general. This has increased the crisis in the Niger Delta,
and gave credence to the demand for a restructured federalism. A restructured
federalism where each federating unit will decide on which power to concede
to the federal government. The states of the Niger Delta, and the other
states in southern Nigeria, are demanding for states' exclusive jurisdiction
over natural resources (oil, gas, mining, coal, agriculture, and forestry).
If the federal government and the northern states fail to adhere to this
minimalist demand, the continued existence of the Nigerian federation becomes
highly questionable. While it is conceded that, a restructured federalism
per se will not lead to any significant improvement of the environment,
however, the push for restructured federalism could be framed as a component
of a pro environmental policy. Thus, an alliance between the proponents
of restructured federalism and environmentalists in the Niger Delta could
be constructed as a viable alternative to the present anti-environmental
posture of government and the business sector in the region.
The citizens of Alaska, U.S.A., are still experiencing the negative
effects of the Exxon Valdez oil spillage that occurred on March
24, 1989. More than 25 species were destroyed by the accident, which also
severely affected the livelihood of the residents who depend on the fish,
and animals. About 11 million gallons of crude oil were spilled by the
Exxon
Valdez, and it is estimated that
Exxon has paid "anything from
US$4 billion to over US$9 billion" (59)
in clean up and liability fees.
What is the corporate liability for Shell, or any other oil company
for their oil spills and corrosive pipelines in the Niger Delta? What is
the corporate liability for the NNPC as the majority shareholder in the
SPDC? What is the corporate liability for the Nigerian federal government
that owns the NNPC? These are some key questions that must be addressed.
The outcome of the
Exxon Valdez oil spill should serve as an example
for Niger Deltans in dealing with Shell and the SPDC. The continued use
of corrosive pipelines by Shell suggests a criminal act for which the company
should be held liable. While the company is quick to accuse "sabotage"
in its vast oil spills, it has failed to address the technological defects
of its equipment exemplified by its corrosive pipelines. This leads observers
to question the role of the Nigerian federal government in ensuring the
compliance by Shell, and the other oil companies, of its environmental
standards and regulations.
The Niger Delta has one of the largest known reserves of oil in
the world. This vast treasure of wealth could be destroyed forever if the
current practice of oil exploration and exploitation is allowed to continue.
It is therefore essential that, the governments of the Niger Delta construct
a coordinated policy framework on sustainable development with recognized
primacy to the protection of the environment. They must seize the initiative,
and not wait for the federal government. A starting point would be the
enactment of environmental regulations to which all companies exploring
for oil in the Niger Delta must comply. Niger Deltans must be prepared
to test and exercise their jurisdictions in the field.
NOTES 1. The World Commission on Environment and
Development. Our Common Future ,
London, 1987.
6. Franklyn Griffiths and Oran R. Young, Sustainable
Development and the Arctic: Impressions of the Co-Chairs, Working Group
on Arctic International Relations, Second Session, Ilulissat and Nuuk,
Greenland, 20-24 April l989, p.9.
7. William E. Rees, "Sustainable Development: Myths
and Realities", The Proceedings of A Conference on Sustainable
Development. Environment and Economy: Partners for the Future,
Winnipeg, Manitoba, May 17-19, 1989, p.126. See also Colin F. W. Isaacs,
"Sustainable Development: The Public's Perspective", ibid
.,
pp. 21-25.
11. See World Business Council for Sustainable Development,
Meeting
Changing Expectations: Corporate Social Responsibility, Geneva, Switzerland,
March 1999; Corporate Social Responsibility: Making Good Business
Sense, Geneva, Switzerland, January 2000.
12. See WBCSD, Corporate Social Responsibility:
Making Good Business Sense .
14. See Harm van der Wal and Klass Jan Moning, "Environmental
Policy and the Social Dimensions of Sustainable Development", in OECD
Seminar Social and Environmental Interface. Proceedings. 22-24 September
1999, Paris, 1999, p.19; Barry E. Hill, "Environmental Justice in the
United States". In ibid ., pp. 27-34. Note p.29 for a definition
of environmental justice. The United States established an Office
of Environmental Justice in November 1992 to ensure that "low income
populations receive protection under environmental laws." (P.33).
15. Wal and Moning, loc,cit ., p.20.
16. See, The OECD Guidelines for Multinational
Enterprises, Paris, June 27, 2000.
19. See, Sustainable Development: A Renewed
Effort by the OECD , OECD Policy Brief no 8, 1998, Paris, 1998, pp.1-8.
20. See Press Release, Dow Jones Sustainability
Group Index, Zurich, September 8, 1999, p.1.
22. Ferdinand E. Banks, Scarcity, Energy,
and Economic Progress, Lexington, Mass.; 1973, p.7.
23. Griffiths and Young, op.cit .,
p. 9.
24. Our Common Future , pp. 45-46.
25. Ansley J. Coale, "Man and His Environment",
in Alain C. Enthoven and A. Myrick Freeman III, ed., Pollution,
Resources, and the Environment, New York, 1973, pp. 155-156.
26. See, Lee Solsbery, "Energy Challenges And Opportunities
For Action", in Sustainable Development: OECD Policy Approaches
for the 21st Centur, OECD, Paris, 1997, pp.89-99.
31. Walter W. Heller, "Coming to Terms with Growth
and the Environment", in Enthoven and Freeman III, op. cit
., p. 187.
33. Donella H. Meadows, Dennis Meadows, et.
al ., "The Limits to Growth", in Enthoven and Freeman III, op.
cit., p. 218.
36. Griffiths and Young, op. cit .
37. Peter Passell, Marc J. Roberts and Leonard Ross,
"The Limits to Growth: A Review", in Enthoven and Freeman III,
op. cit ., pp. 230 and 232.
38. William D.Nordhaus and James Tobin, "Is Growth
Obsolete?", in Enthoven and Freeman III, p. 210.
39. Charles Maurice and Charles W. Smithson, The
Doomsday Myth: 10,000 Years of Economic Crises, Stanford, CA., 1984,
passim.
40. Ralph C. D'Arge, "Essay on Economic Growth and
Environmental Quality", in Peter Bohm and Allen V. Kneese, ed., The
Economics of Environment: Papers From Four Nations, London, 1971, p.
38.
41. The Interim Report on the OECD Three-Year
Project on Sustainable Development, Paris, May 1999, p.61.
42. OECD, The Economics of Sustainable Development:
A Progress Report, Paris, May 1990, p. 19.
43. Originally known as Shell D'Arcy, later
Shell-BP,
jointly
financed by the Royal Dutch/Shell Group of Companies and the British
Petroleum.
44. SPDC, 2000 HIGHLIGHTS, npd, p.5.
See also, SPDC: Factfile, http//www.shellnigeria.com/shell/factfile_rhs.asp
45. See, Phil Watts, Big Issues For Business
- a personal perspective, ICC Sweden AGM, Stockholm, March 31, 2000.
46. See, How do we stand? People, Planet
& Profits: THE SHELL REPORT 2000 , and 2000 Highlights.
47. Extracted from http://www.shellnigeria.com/1info/env_1998envreport_t.htm;
and http://www.shellnigeria.com/frame.asp?Page=1999EnvRep
48. Terisa E. Turner,'Oil Companies Lie, Deceive,
Play Ethnic Card to Divide Host Communities,' http://waado.org/Environment/OilCompanies/States/Rivers/OgbuduSpill/TerisaTurner_Interview.html
50. The Interim Report on the OECD Three-Year
Project on sustainable Development , 1999, p.53.
51. Paul Hawken, Amory Lovins, and L. Hunter Lovins,
Natural
Capitalism: Creating the Next Industrial Revolution , New York, 1999,
p.50.
54. Harm van der Wal and Klaas Jan Moning, "Environmental
Policy and the Social Dimension of Sustainable Development", p. 19.
55. See Sustainable Development: A Renewed
Effort by the OECD, OECD Policy Brief no. 8, 1998, Paris, 1998, pp.
1-8.
56. See, http://www.waado.org/Environment/FedGovt_NigerDelta/BayelsaInvasion/EntryToDocumentation/Entry.html
57. See, http://www.waado.org/UrhoboHistory/FireDisasters/FireDisasters.html
59. See, http://www.marisec.org/ics/issues/exonvald.htm
The Nigerian government has proved very inept at providing an effective
political leadership for the successful implementation of any of these
fundamentals. Encouraged by this ineptitude, Shell and the entire business
sector have disregarded the imperatives of fundamentals 4 and 5. While
the Nigerian government and the business sector embraced sustainable development,
they had reduced the key elements of the concept to economic gains, thus
caring less for the viability of the environment and the well-being of
the population.