July 21, 2008
The Other Oil Spill and the Limits of Accountability
By Jerome E. Roos, Breakthrough Fellow
Under immense pressure from U.S. Congress and President Obama, BP yesterday reluctantly pledged the creation of a $20 billion compensation fund for damages caused by the oil spill in the Gulf of Mexico. If the government ends up filing a criminal case against BP, which experts say is not unlikely, the total sum in fines and compensations could skyrocket to over $60 billion.
But while the Obama administration has been much criticized for its lavish response to the oil spill, Americans would do well to take a step back and count their fortunes. Despite having endured a social and environmental catastrophe on the scale of BP's oil spill every single year for the past 50 years, most Nigerians have yet to see a single dime in compensation from Royal Dutch Shell or Exxon Mobil for their negligent operations in the Niger Delta.
Although estimates wildly vary - largely as a result of government and corporate secrecy surrounding the actual number and size of the spills - the New York Times recently reported that:
As many as 546 million gallons of oil spilled into the Niger Delta over the last five decades, or nearly 11 million gallons a year ... By comparison, the Exxon Valdez spill in 1989 dumped an estimated 10.8 million gallons of oil into the waters off Alaska.
Official government figures obtained by The Guardian show that there were "more than 7,000 spills between 1970 and 2000, and there are 2,000 official major spillage sites, many going back decades, with thousands of smaller ones still waiting to be cleared up."
Local activists and international organizations estimate real numbers to be much higher and demand impartial investigation into the scale of the disaster. But according to one expert, "companies such as Shell continue to avoid independent monitoring and keep key data secret."
While Shell claims that most spills are the result of violent attacks on its pipes by rebel organizations, many of its 40-year old pipes are reported to be rusted and poorly maintained, and the company has been accused of leaving easy-to-fix spills spewing out crude oil for weeks - even months - before fixing the problem.
The sheer scale of the environmental catastrophe unfolding in the Niger Delta is almost beyond comprehension. According to one report, "this incredibly well-endowed ecosystem" used to contain "one of the highest concentrations of biodiversity of the planet, in addition to supporting abundant flora and fauna, arable terrain that can sustain a wide variety of crops, lumber or agricultural trees, and more species of freshwater flies than any ecosystem in West Africa."
Tragically, the region "could experience a loss of 40 per cent of its inhabitable terrain in the next thirty years." Photographs of the region depict a near-apocalyptic landscape of crude-infested aquatic dead zones and innumerable human beings living in abject poverty.
The environmental fall-out of the oil spills has had unfathomable social consequences. Like the Mississippi marshlands, the Niger Delta once used to be teeming with fish and shrimp. But unlike their relatively well-off Mississippi counterparts, who fish more out of tradition than out of necessity, Nigerian fishermen directly depend on these fragile ecosystems for their very subsistence.
The collapse of aquatic ecosystems and the dissipation of crude oil into the scarce sources of drinking water are directly threatening the very health and survival of the Delta's inhabitants. Partly as a result of this, the New Statesman reports that life expectancy in the Niger Delta has fallen to just over 40 years.
In addition, the oil business in the Niger Delta has led to a violent uprising and protracted civil war that only recently seems to have subsided. The Movement for the Emancipation of the Niger Delta long terrorized local communities and oil companies, kidnapping hundreds of foreign workers and instigating a civil war in which thousands lost their lives.
For its part, the Nigerian army - together with private security firms hired by the oil companies - has been accused of violently repressing peaceful citizen protests. Recently, a group of women was beaten up by army personnel protecting an Exxon Mobil installation.
According to Le Monde Diplomatique, "there are an average of 1,000 violent deaths a year on the delta," and the "poisonous mixture emitted by gas flaring ... caused 5,000 cases of respiratory diseases and some 120,000 asthma attacks."
Watching President Obama's response to the crisis in the Gulf of Mexico, Nigerians can't help but notice the double standards. A local official interviewed by the New York Times noted how "President Obama is worried about that one [but] nobody is worried about this one."
While the U.S. has - within a space of just two months - been able to extract over $20 billion in compensation funds from BP, those companies operating in the Niger Delta (most importantly Royal Dutch Shell and Exxon Mobil), have gotten away with 50 years of negligent operations and numerous critical mistakes - without providing any significant reparations at all.
The Nigerian tragedy, when posed relative to the tragedy in the Gulf of Mexico, raises serious questions about the limits of accountability and global justice. In today's globalized economy, multinational corporations are capable of operating across borders and seeking out lucrative deals in countries hardly capable of enforcing the type of complex regulation required for technologically advanced operations, such as oil extraction.
If even regulators in an advanced economy like the U.S. fall prey to sex and drugs-infested corruption scandals, how do we expect countries like Nigeria or Ecuador, in the absence of a powerful system of global governance, to deal with the risk society we are imposing on them?
While powerful national institutions have enabled the U.S. to hold a foreign conglomerate accountable for its actions in American waters, corruption and weak institutions have allowed for Shell and Exxon Mobil to freewheel through the poisoned warzone that constitutes the Niger Delta today. The price, as always, is paid by the weakest members of our global community.
This situation is unlikely to abate any time soon. The U.S. government - in an attempt to reduce its dependence on Middle Eastern oil - has recently increased its imports of Nigerian oil to 40 per cent of its total imports. A possible ban on offshore drilling in the U.S. will only further aggravate the problem, outsourcing tragedy to the Gulf of Guinea and other regions in the developing world.
So here's the other side to our oil addiction. While Americans consume most of Nigeria's oil, we hardly have to face up to the negative externalities of that consumption. When finally the crude waves of reality began to wash upon America's shores in the wake of the Deep Horizon disaster, the U.S. managed to hold a foreign company liable and American citizens will see most of their damages compensated for.
In the meantime, poor Nigerians, who hardly consume any oil at all, end up paying for the externalized costs of American and European oil consumption. Thousands of them had little money in their pockets, and instead paid with their lives.
But in what is perhaps the greatest irony of them all, one large American multinational, Exxon Mobil, has been standing quietly in the corner all along, laughing and pointing its finger at its little British brother, as it silently sneaks its profits from Nigerian oil extraction back into the United States - without having paid Nigeria's fishermen a dime in compensation.