But the scale of Shell’s spending, revealed by the data for the first time, raises questions about the effectiveness of its security policies. “What is striking about the amount being spent in Nigeria is its ineffectiveness,” said Amunwa. “Shell spent many millions of dollars each year on government forces who failed to provide the company with adequate security.”
Nkabari said: “Shell cannot call this spending ‘security’. If it was really providing security, then why do we continue to have vandalisation, why do we have bunkering [theft of oil], why do we have the security mess that we have in the Niger delta? They give protection to the oil workers but they are not providing the region with ‘security’.”
It does raise the question as to how effective this has been in actually creating security? Either way, this is a stunning amount of money that Shell has dished out for security, and especially in Nigeria.
One thing about Nigeria is that it is filled with corrupt leaders in the military and government. Leaders that played both sides in the conflict there for economic gain. Meaning, they can get money by attacking the pipelines and stealing oil, and they can make money by protecting the pipelines. So they can just keep the money machine going by attacking through proxies, and protecting with the military. And meanwhile, Shell throws millions of dollars into that machine.
On the other hand, Shell is doing the numbers and doing the cost benefit analysis of all actions. So even if they are feeding this corrupt machine, at the end of the day, they are able to make a profit. Not only that, but the people have a say in this stuff too, and if they do not support the effort because of whatever reason, then they will lend their support to forces like MEND (or ideas like MEND, because everyone acted under it’s banner to steal from Shell)
This stuff is extremely interesting to me because companies like Shell or Exxon Mobil are going into war zones or non-permissive environments throughout the world, and setting up operations. And in one year, they could go from working with a somewhat stable government to being in the middle of political turmoil, rebellion (arab spring), war, or some insurgency. They have to make incredibly tough decisions at all levels of involvement, and they have to be good at predicting what’s next.
So like a small country, they need a security/defense apparatus, and they need an intelligence apparatus in order to create and implement strategies wherever they are at. When Shell had the ‘third highest security budget in Africa‘, that is pretty significant. I wonder how the other companies compare?
Interesting stuff, and our industry and it’s lessons learned over the last ten years of war will be absolutely crucial to the resource extraction world–now and into the future… –Matt
Wearing an orange vest with camouflage?…
Shell spending millions of dollars on security in Nigeria, leaked data shows
Internal documents reveal oil company spent $383m over three years protecting staff and installations in Niger delta region
By Afua Hirsch and John Vidal
Sunday 19 August 2012
If it were a country Shell would have the third highest security budget in Africa.
Shell is paying Nigerian security forces tens of millions of dollars a year to guard their installations and staff in the Niger delta, according to leaked internal financial data seen by the Guardian. The oil giant also maintains a 1,200-strong internal police force in Nigeria, plus a network of plainclothes informants.
According to the data, the world’s largest company by revenue spent nearly $1bn on worldwide security between 2007-09: if it were a country Shell would have the third highest security budget in Africa, after South Africa and Nigeria itself.
The documents show that nearly 40% of Shell’s total security expenditure over the three year period – $383m (£244m) – was spent on protecting its staff and installations in Nigeria’s volatile Niger delta region. In 2009, $65m was spent on Nigerian government forces and $75m on “other” security costs – believed to be a mixture of private security firms and payments to individuals.
Activists expressed concern that the escalating cost of Shell’s security operation in the delta was further destabilising the oil rich region and helping to fuel rampant corruption and criminality. “The scale of Shell’s global security expenditure is colossal,” said Ben Amunwa of London-based oil watchdog Platform. “It is staggering that Shell transferred $65m of company funds and resources into the hands of soldiers and police known for routine human rights abuses.”
The financial documents, passed to Platform, suggest Shell’s worldwide security costs almost doubled between 2007-2009, coinciding with the rise of armed insurgency in the Niger delta.
In 2008, 62 Shell employees or contractors were kidnapped and three killed, many Shell-operated pipelines, well heads and offshore oil platforms were attacked and the company was forced to halt oil exports for several weeks after attacks by groups including the Movement for the emancipation of the Niger delta.
Nearly a third of Shell’s global security budget in 2008, or $99m, was spent on “third parties”. This was double what the company spent on its own security staff and is believed to include the services of 600 Nigerian government police and 700 members of the controversial state “joint task force” (JTF) comprised of army, navy and police.
Shell denies having any direct control over JTF forces, amid numerous accusations of human rights abuses, including a large-scale military attack in 2009 which the US state department said led to the displacement and loss of livelihood of tens of thousands of residents.
But in the past Shell has supplied government forces with gunboats, helicopters, vehicles and satellite phones to better patrol the myriad creeks and waterways of the delta.
“This proves what we in the Niger delta have known for years – that the air force, the army, the police, they are paid for with Shell money and they are all at the disposal of the company for it to use it any how it likes,” said Celestine Nkabari at the Niger delta campaign group Social Action.
According to Platform, a significant amount of Shell funding is channelled via senior military officials which provides “ample opportunities for corruption”. US cables, released by WikiLeaks in 2010, alleged that the company paid hundreds of thousands of pounds towards the deployment of 350 soldiers in the delta in 2003.
But Shell International said that any allegations of corruption should be addressed to the Nigerian authorities, and that its spending is necessary to protect its staff and operations.
Although armed insurgency in the oil producing regions of the delta has declined since a 2009 amnesty, the company says it faces widespread criminality, organised crime and massive oil theft. It has stated that 15-20% of its output is stolen by international gangs.
“Protecting our people and our assets is Shell’s highest priority,” it said. “Our spending on security is carefully judged to meet this objective, wherever we operate in the world. We have always acknowledged the difficulties of working in countries like Nigeria. In the period that this report refers to, the armed militancy in the Niger delta was at its height, requiring a relatively high level of security spending there.
“All our staff and contractors are expected to adhere to the highest levels of personal and corporate ethics, as set out in our code of conduct. We support the Voluntary principles on security and human rights (VPSHR), and we recognise that these principles help maintain the safety and security of our operations in a manner consistent with upholding human rights. We also investigate grievances under the VPSHR.”
The company declined to comment on whether worldwide costs for security were increasing because of the Arab spring. The company has recently left Syria and has interests throughout the Middle East.
But the scale of Shell’s spending, revealed by the data for the first time, raises questions about the effectiveness of its security policies. “What is striking about the amount being spent in Nigeria is its ineffectiveness,” said Amunwa. “Shell spent many millions of dollars each year on government forces who failed to provide the company with adequate security.”
Nkabari said: “Shell cannot call this spending ‘security’. If it was really providing security, then why do we continue to have vandalisation, why do we have bunkering [theft of oil], why do we have the security mess that we have in the Niger delta? They give protection to the oil workers but they are not providing the region with ‘security’.”
“These figures are alarming – it is a scandal that so much money is spent on security instead of on the local communities whose livelihoods are destroyed as a result of the oil exploitation,” said Jaff Napoleon Bamenjo of Relufa, which campaigns for environmental justice in west Africa.
“Across Africa oil, mining and agro-industry companies regularly pay for the services of local security forces that have deplorable human rights records; sometimes as a contractual obligation,” said Bamenjo. “This is an extremely unethical practice held over from the colonial era which must end immediately. Not only is it bad for local communities who are the primary victims of police and military predation, but as Shell well knows, it exposes foreign companies to lawsuits in multiple jurisdictions.”
Story here.