The proposed sale of Shell’s onshore oil business in the Niger Delta region of southern Nigeria risks worsening human rights abuses and should be blocked by the government unless a series of safeguards are put in place, a group of 40 civil society organizations including Amnesty International said today.
In an open letter to the Nigerian industry regulator, the groups said the sale of Shell Petroleum Development Company (SPDC) to Renaissance Africa Energy should not be allowed to proceed unless the environmental pollution caused by SPDC has been fully assessed, sufficient funds are provided by SPDC to guarantee clean-up costs can be covered, and local communities have been fully consulted.
Shell’s operations in the Niger Delta over many decades have come at the cost of grievous human rights abuses of the people living there. Frequent oil leaks from its infrastructure and inadequate maintenance and clean-up practices have left groundwater and drinking water sources contaminated, poisoned agricultural land and fisheries, and severely damaged the health and livelihoods of inhabitants,” said Olanrewaju Suraju, chairman of the Human and Environmental Development Agenda (HEDA).
Isa Sanusi, Amnesty International’s Nigeria Director, said: “There is now a substantial risk Shell will walk away with billions of dollars from the sale of this business, leaving those already harmed without remedy and facing continued abuse and harms to their health. Guarantees and financial safeguards must be in place to immediately remedy existing contamination and to protect people from future harms before this sale should be allowed to proceed. Shell must not be permitted to slip away from its responsibilities for cleaning up and remedying its widespread legacy of pollution in the area.”
There is now a substantial risk Shell will walk away with billions of dollars from the sale of this business, leaving those already harmed without remedy and facing continued abuse and harms to their health.
Isa Sanusi, Amnesty International’s Nigeria Director
The letter follows Shell’s announcement in January that it had agreed to sell SPDC to the Renaissance consortium, which comprises four exploration and production companies based in Nigeria and an international energy group, in a deal worth up to US$2.4 billion financed partly with a loan to the buyers from Shell.
The letter says the deal appears to fall far short of several regulatory and legal requirements. These include the apparent lack of an environmental study to assess clean-up requirements, and an evaluation to ensure sufficient funds are set aside for potential decommissioning of oil infrastructure – a sum that is likely to amount to several billions of US dollars. It also notes the lack of an inventory of the physical assets being sold, which is a red flag potentially indicative of the state of disrepair of pipelines and infrastructure from which many leaks have emanated. Leaks have frequently had devastating consequences on local people’s health and wellbeing. Everyone has a right to a clean, healthy and sustainable environment.
The letter notes similar previous sales in Nigeria have sometimes exposed people in polluted communities to enduring harms, as purchasers have sometimes lacked sufficient financial resources to manage the infrastructure effectively, and even just ceased operating entirely.
It points out that following a previous Shell divestment of Oil Mining Lease 26 (OML 26) to First Hydrocarbon Nigeria in 2010, the majority shareholder of the acquiring company went into liquidation and its chief executive officer and chief operating officer were convicted in the United Kingdom of fraud.
Background
Signatories of the letter to the regulator, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), include Amnesty International Nigeria, Stichting Onderzoek Multinationale Ondernemingen – the Centre for Research on Multinational Corporations (SOMO), The Corner House, Human and Environmental Development Agenda (HEDA), ReCommon, Centre for Environment, Human Rights and Development (CEHRD), Stakeholder Democracy Network (SDN), Hawkmoth, and Friends of the Earth/Environmental Rights Action. The letter with a full list of signatories is available here.
Renaissance African Energy is a consortium consisting of ND Western Limited, Aradel Holdings Plc, FIRST Exploration and Petroleum Development Company Limited, the Waltersmith Group and the Petrolin Group.
There have been hundreds of oil spills from Shell infrastructure during the decades it has been operating in Nigeria.