Tag Archives: Nigeria

The black gold and its curse

In recent years, gas and oil discoveries have been made on the African continent in countries such as Mozambique,(2) Ghana, Tanzania and Uganda and on prospected fields in Kenya, Mali and Sierra Leone. Today, 19 African countries are important oil and/or gas producers, with six of these, namely Nigeria, Libya, Algeria, Angola (oil), Sudan (oil) and Egypt (gas), accounting for the majority of the production.(3) However, for many countries the resource discoveries have been a curse rather than a blessing.

On the African continent there are numerous cases of the infamous resource curse and the so-called Dutch disease. Companies getting involved in resource-rich areas of Africa, many of which are ravaged by conflicts and poverty, face a series of obstacles. Some of these obstacles are connected to companies’ responsibilities under the Universal Declaration of Human Rights, which states that all individuals and organs of society, including companies and business enterprises, must protect and promote human rights.(4) Oil companies are often accused of hampering developing countries’ progress and violating human rights. Such accusations beg the questions: what can be expected from oil companies and what problems are they facing?

This paper discusses the human cost of oil by grouping human rights into two categories: direct and indirect human rights atrocities. The direct human rights atrocities are defined in this paper as those caused by oil companies because of their presence and activities in a country. The indirect human rights abuses are the ones in which revenues from oil and gas do not reach the people to whom the natural resources belong. Instead, the revenues encourage authoritarian Governments, or simply reach a small elite, hampering development and thus, indirectly violating peoples’ rights.
The black gold and its curse

A high number of human rights abuses related to fossil fuel operations have been perpetrated by Governments and corporations around the world. These include, for example, forced relocation and deadly suppression of critics.(5) In addition to human rights violations, the relationship among corruption, authoritarian governments, governance, conflicts and extractive industries tends to have a ‘repression effect’ in which resource wealth hinders democratisation by making it possible for governments to fund tools of repression.

Furthermore, World Bank analyst, Paul Collier, has declared that countries relying on revenues from resource exports run a 40 times higher risk of civil war, thus demonstrating a link between dependency on oil and serious armed conflict.(6) The two most recent African examples where tensions have increased and may continue to escalate due to disagreements surrounding oil are the border conflict between South Sudan and Sudan and the recent dispute between Kenya and Somalia. The latter is a result of newly identified oil exploration blocks in an area of the Indian Ocean being claimed by both countries.(7)

Simultaneously clashes between the global oil industry and a transnational human rights advocacy network are becoming increasingly evident.(8) So, what is it that makes natural resources, the oil business in particular, so prone to human rights abuses?
The direct effects of hydrocarbon industries on human rights

Direct effects, as defined above, include the mistreatment and forced relocation of indigenous peoples and unfair treatment of company employees.

As indicated in an ‘Economies of Violence’ report by Michael Watts,(9) the most common human rights violation by oil companies is connected to the fact that their activities are often located within the areas where indigenous peoples live or work. The governments in most petro-states have set up constitutional monopolies over national resources such as oil, while the indigenous or ethnic minorities in many countries have incorporated, within constitutions or customary law, essential rights to their land. Thus controversy is frequently caused by claims over access to and control over oil revenues and access to the oil companies as stakeholders. The companies often simply pay lip-service to local communities and submit unequal and minimal payments for use of their land and the resources removed from this land. Frequently, there is no rigorous and accountable set of governance structures that connect capital and community.(10) The displacement of indigenous people’s also constitutes a violation of the rights of people in oil-rich regions. Former Sudan is one example where the Government, since 1999, has been involved in human rights violations by moving people from the oil producing areas, causing displacement of 175,000 people.(11)

Direct implications on human rights also include the unequal treatment of locally employed people and international employees. Other issues evolve in the areas of the oil compounds where boomtowns have grown and with them prostitution and sex trade. The oil industry has made no efforts to regulate these developments.(12)

One of the most notorious and high profile examples of gross human rights abuses comes from Nigeria where Ken Saro-Wiwa and eight other men experienced the price of oil in 1995. The men were hanged in Nigeria’s Port Harcourt prison after launching a non-violent movement for social and ecological justice for the Ogoni people in the Niger Delta, challenging the conduct of the oil companies and the Nigerian Government.(13) The oil company, Royal Dutch Shell, had their reputation severely damaged. Global campaigns of disinvestment were launched by many different organisations.(14) In the end Shell was forced to pay US$ 15.5 million in a court settlement due to their atrocities against the Ogoni people in the 1990s.(15) The event triggered the social investment movement and led to Shell’s launch of the Statement of General Business Principles, which included the company actively seeking out non-governmental organisations (NGOs) for policy “dialogue”, as well as BP’s “What we stand for…” statement in 1998.(16)

By the late 1990s most of the oil companies had implemented codes of conduct, as an emerging movement on cooperate social responsibility led to a number of voluntary codes of conduct, including their approach towards community development, labour and payment and environmental accountability. However, these codes of conduct are most often weak on the important issues, such as monitoring, disclosure and enforcement.(17)

Welcomed by many advocacy groups, the United Nations (UN) Draft Norms, launched in 2003, address the importance of protecting civilians, worker rights, non-discrimination, security and war laws, social and economic cultural rights and indigenous people’s rights. They also include enforcement and compliance instruments.(18) The framework was released due to the assumption that self-regulation or civic regulation cannot provide a sufficient framework for regulating global businesses.(19) Mandatory regulation is necessary where states are key players. The regulatory effort also includes the transparency and monitoring efforts of multilateral agencies such as the International Bank for Reconstruction and Development (IBRD) and the International Monetary Fund (IMF), such as the IMF’s oil diagnostics programme in Angola. The Norms also imply that the World Bank will take a more critical approach towards the market of oil and gas.(20)

In addition to the steps taken by bodies such as the UN, there are society groups, watchdog agencies and NGOs which engage in monitoring corporate activities. New forms of global regulations are thus, continuously being developed.(21)
The indirect effects of hydrocarbon industries on human rights

The indirect human rights abuses include the encouragement of the development of Dutch disease, as well as patronage and rent seeking and keeping oppressive African leaders in government.

The Dutch disease is the most well known economic mechanism for anti-developmental outcomes. Dutch disease is a macroeconomic dynamic where a boom in the resource sector harms the non-resource sectors of the economy.(22) Countries tend to become dependent on their resource sector and do not diversify their economies. While oil prices remain high, Governments spend money through credit expansion and augmentation of the public sector. Thereafter, when the prices fall as a result of the volatility of the international oil market, these economies fall into debt.(23) The resource curse has therefore become widely used to describe the risk petro-states face. The oil industry is also, to a large extent, a closed society with limited employment effects, which creates few non-state multiplier effects.(24)

Oil has a tendency to encourage patronage and rent seeking instead of statecraft, transparency and state-institutional capacity. However, it is the level of corruption, fraud and total pillage of the public cashier that represent the core of the rights violations perpetrated by both companies and governments.(25)

It must be noted that as these effects are indirect, oil companies cannot be held directly responsible for them. Indeed, the presence of oil companies may also have beneficial outcomes for the countries in which they operate. China’s involvement in the oil business in African countries has been widely criticised from a human rights perspective. However, on the other hand, China is simultaneously investing in Africa’s governmental sectors, particularly infrastructure sectors in many countries, evident in China’s investment in Angola.(26)

Despite the investments in countries made by oil companies, if citizen’s rights are to be respected, it remains essential to address the economic and political issues described. In this effort, the World Bank, for example, started a Chad-Cameroon Oil Pipeline project, which finished in September 2008 after a fourteen-year engagement with the Government of Chad. The effort was aimed at setting a new standard for engagement of international donors in resource-rich but democracy-poor nations. The ambition was to establish institutions that would keep Chad from facing the typical political and economic issues related to oil booms in poor nations. The institutions were to direct oil revenues towards reducing poverty and certify fiscally sound and transparent Government spending. However, according to ‘Betting on oil: the World Bank’s attempt to promote accountability in Chad produced results that were far from positive. Moreover, the oil revenues might even have fuelled the consolidation of authoritarian power by, for example, arming rebellions.(27)

Oil revenues have also contributed to keeping oppressive African leaders in government, which makes transparency in oil deals of significant importance. Increasing transparency has been identified as the main factor in the struggle against the resource curse, for example, through the Extractive Industries Transparency Initiative (EITI), which is a global organisation of governments, companies, civil society groups and investors. Its aim is to strengthen governance by improving transparency in the sector of natural resources. The promotion of public reporting of revenue flows is reinforced through legislation such as Section 1504 of the United States Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), which requires companies to report on tax payments from each country. Similar sets of rules have also been proposed by the European Commission. This development is one step towards breaking the pattern of the resource curse and exploitation as oil, gas and mining companies pay what they should and governments manage revenues in a socially beneficial way.(28)

However, whether these control measures will be observed and have their desired effect, remains to be seen. Kenya recently discovered the country’s first oil deposit in its northwest territory of Turkana. Kenya’s oil findings are being compared to the ones made in Uganda in 2006. The oil is considered high-quality. Tullow oil, an oil exploration company in the territory, declared the site Ngamia-1 in Kenya’s Turkana County.(29) However, the discovery raises both hope, due to the investment that may enter the impoverished region, but also fear for the exploitation and abuse of Turkana province’s indigenous peoples.(30) Kenya has relatively stable democratic institutions, but struggles with corrupt elite. With this said, the oil discovery in Kenya is yet to be determined as a curse or a blessing.(31)
Concluding remarks

This paper concludes that it is only the direct human rights atrocities for which an oil company can be solely accountable. It also shows that the increasing global social movements of society groups, NGOs and watchdog agencies, as well as legislation and the monitoring efforts of multilateral agencies, play an essential role in preventing these atrocities. Their presence increases the price for human rights violations, which in turn increases the company’s incentives to remain lawful.

The issue of the indirect human rights abuses are more complex. These atrocities are usually a result of corruption, lack of transparency and authoritarian governments. The oil companies can not be given full blame for these situations which may incite a blame game between the companies and the state. However, with a legal framework of transparency these abuses could be regulated more efficiently. This would be beneficial for the oil companies operating in countries with a weak democratic apparatus since that would keep them from bad publicity. This paper encourages this development as an increasing number of African countries are being subject to natural resources discoveries and international attention.

NOTES:

(1) Contact Christine Petré through Consultancy Africa Intelligence’s Rights in Focus unit ( rights.focus@consultancyafrica.com).
(2) ‘Statoil says finds partner for Mozambican blocks’, Reuters, 25 April 2012, http://www.reuters.com.
(3) ‘Africa oil and gas: a continent on the move’. Ernst & Young Oil and Gas Center report, 2011, http://www.ey.com.
(4) ‘The Universal Declaration of Human Rights’, United Nations, http://www.un.org.
(5) ‘Human Rights’ Oil Change International website, http://priceofoil.org.
(6) Ibid.
(7) Gillblom, K., ‘Kenya, Somalia border row threatens oil exploration’, Reuters, 20 April 2012, http://www.reuters.com.
(8) Watts, M., ‘Human rights violence and the oil complex’, Niger Delta: Economies of violence, working paper no. 2, 2004, http://oldweb.geog.berkeley.edu.
(9) Ibid.
(10) Ibid.
(11) Ibid.
(12) Ibid.
(13) Wheeler, D., Fabig, H. and Boele, R., 2002. Paradoxes and dilemmas for stakeholder responsive firms in the extractive sector: lessons from the case of Shell and the Ogoni. Journal of Business Ethics, 39(3), pp. 297-318.
(14) Ibid.
(15) ‘Human Rights’ Oil Change International website, http://priceofoil.org.
(16) Watts, M., ‘Human rights violence and the oil complex’, Niger Delta: Economies of violence, working paper no. 2, 2004, http://oldweb.geog.berkeley.edu.
(17) Human rights & oil in Nigeria’ Amnesty International, August 2004, http://www.amnesty.org.
(18) Watts, M., ‘Human rights violence and the oil complex’, Niger Delta: Economies of violence, working paper no. 2, 2004, http://oldweb.geog.berkeley.edu.
(19) Ibid.
(20) Ibid.
(21) Ibid.
(22) Gould, A. and Winters, M., 2011. Betting on oil: the World Bank’s attempt to promote accountability in Chad. Global Governance 17(2), pp. 229-245.
(23) Bantekas, I., 2005. Natural resource revenue sharing schemes (trust funds) in international law. Netherlands International Law Review, 52, pp. 31-56.
(24) Ross, M., 2001. Does oil hinder democracy?’ World Politics, 53, pp. 325-61.
(25) Watts, M., ‘Human rights violence and the oil complex’, Niger Delta: Economies of violence, working paper no. 2, 2004, http://oldweb.geog.berkeley.edu.
(26) Taylor, I., 2006. China’s oil diplomacy in Africa. International Affairs, 82, p. 937-959.
(27) Gould, A. and Winters, M., Betting on oil: the World Bank’s attempt to promote accountability in Chad. Global Governance, 17, pp. 229-245.
(28) ‘Rigged? The scramble for Africa’s oil, gas and minerals,’ Global Witness report, January 2012, http://www.globalwitness.org.
(29) ‘Kenya discovers first ‘major’ oil deposit’ Al Jazeera, 26 March 2012, http://www.aljazeera.com.
(30) Alpert, E., ‘Newly discovered oil fuels hope and fear in Kenya’. Los Angeles Times, 27 March 2012 http://latimesblogs.latimes.com.
(31) Wanyonyi, T., ‘Will it be a curse or blessing for Kenya?’ Daily Nation, 26 March 2012, http://www.nation.co.ke.


Iyabo’s firm benefits in secret oil block deals

A company owned by a daughter of former President Olusegun Obasanjo is among the beneficiaries of the Federal Government’s recent secret allocations of prize oil blocks, Daily Trust investigations show.
Findings reveal that All Grace Energy, in which Senator Iyabo Obasanjo-Bello has majority stake, got the oil block Ubima Creek field OML 17 in a discretional process without competitive bidding.

Some oil companies and industry experts said the secret allocations are against international best practices.

Daily Trust learnt that the secret allocations were done over the past one year, even though government had said the process of awarding oil licences were to be executed publicly through competitive bidding.

A newspaper report recently said All Grace Energy is among companies that benefitted from the deals.

Records made available to Daily Trust by the Corporate Affairs Commission (CAC) revealed that Iyabo Obasanjo-Bello is the major shareholder of All Grace Energy, which was registered on July 12, 2006 with N30 million share capital.

Mrs Obasanjo-Bello has six million shares, followed by other directors/shareholders: Abe Magnus Ngei (2 million), Mrs Abiri Dorcas (3 million), Dr. Adenikinju Adeola (3 million), Ugbeya Donatus (1 million), Alabi Yekini (1 million) and Alhaji Abubakar Abdullahi (1 million).

The company was registered “to operate marginal fields for the purpose of producing petroleum, natural gas, liquefied petroleum gas etc,” and has filed annual returns only up to 2007, according to CAC records.

Apparently reacting to the recent report that oil blocks were awarded illegally, Director of the Department of Petroleum Resources, Mr. Osten Olorunsola, said at a conference in Houston, United States, that the president is empowered by law to make such allocations.

This development flies in the face of the Federal Government’s consistent pledges to conduct fresh oil bid round. The last public oil bid was conducted during President Olusegun Obasanjo’s regime.

In 2010, for instance, Petroleum Minister Diezani Alison-Madueke said government was trying to “sort out some issues” surrounding the previous bid rounds before it starts fresh ones.

Instead, the government apparently resorted to secret allocation of choice oil blocks to companies belonging to cronies, family members and associates, industry analysts say.

A player in the oil industry, who craved for anonymity, told Daily Trust the government’s action would discourage competition among indigenous oil operators and also send wrong signals to international investors.

A source at DPR said that the process of awarding the oil blocks to Iyabo actually started during Obasanjo’s administration but “a disagreement between Shell and DPR over the area to farm-out couldn’t be reached until recently when the Malabu oil block deal was sealed between the Federal Government and the multinationals.”

Oil block deal conditions not met

When our reporter contacted the spokesperson for the DPR, Mrs Belema Osibodu, she did not confirm or deny that Iyabo’s company was given the oil block but said the marginal fields were awarded based on some conditions.

She said the conditions included the development/execution of a public private partnership (PPP) model for three pilot projects under the small scale gas utilisation scheme.

Under this arrangement, Osibodu said, a gas-fired power plant of not less than 5mw shall be dedicated to supply electricity to Ubima community of Rivers State; an LPG extraction plant shall be installed as part of gas processing facility; and a part of the produced liquefied petroleum gas shall be designated for domestic use and support of small scale industry in the community.

But when a Daily Trust reporter visited Ubima community in Ikwerre local government area, there was no indication that such project was being executed. The community happens to be the country home of Governor Rotimi Amaechi.

The chairman of Ubima community, Elder Daniel Anwuzurike, told Daily Trust that the community has been living without electricity supply for the past three months.

Anwuzurike said he was not aware of any power project going on in the Ubima community.

‘Secret oil block deals going on for long’

The controversial oil field is considered under “marginal oil fields” which the Petroleum Act (Amended) 1996 defines as “such field as the President may, from time to time, identify as a marginal field.”

The law provides that the holder of an OML can farm out (lease out) any marginal field which lies within the Oil Mining Lease (OML).

Also, the president may cause the farm-out of a marginal field which has been left unattended for a period of not less than 10 years from the date of the first discovery of the marginal field.

Reverend David Ugolor, Executive Director, African Network for Environment and Economic Justice (ANEEJ), said this was not the first time such secret allocation of oil blocks was done by a president.

“In any case, the development contravenes global best practice of open competitive bidding and as such should be discouraged,” Ugolor said. “Nigerians are also kept in the dark as to how much accrued to the country from the exercise. The unresolved regulatory issues has not allowed potential investors, both local and international, to make huge financial commitment in the sector. Nigeria is losing huge resources from the dwindling investment in the sector and there is also loss of potential revenue from royalties,” he added.

Ifeayi Izeze, an Abuja-based consultant on strategy and communication, said the controversies surrounding the delay in passage of the Petroleum Industry Reform Bill (PIB) could be blamed for the delay/shifting date for the 2012 oil bloc bid round.

When Daily Trust contacted the spokesman for the Nigerian Extractive Industry Transparency Initiative (NEITI), Mr Orji Ogbonnaya Orji, he said it is not the responsibility of NEITI to decide how oil bid rounds will be conducted.

He however added that NEITI expects to be invited to observe the process in line with provisions of the law.Source


Torture and Abuse in the Niger Delta

Big Oil companies have been notorious for trends of destruction and devastation for decades. Children have been left to bathe in water reeking of hazardous chemicals, animals have had their homes destroyed and disease runs rampant as factories continue to taint the air that people breathe.

Most would agree that these acts are criminal to say the least, but where is the line drawn? When is enough enough? The lasting effects of oil pollution seem to have finally become all too much for natives of Ogoniland, the name of the region surrounding the Niger Delta. In addition to admittedly being involved in “the world’s most wide-ranging and long-term oil clean-up,” Shell has also being accused of corruption and human rights abuse.

Shell has inhabited Ogoniland for more than 50 years. Countless oil spills have left the area heavily contaminated and unsanitary, leaving behind trails of disease and illness. The drinking water has been found to contain high concentrations of benzene, as well as other harmful chemicals. The soil contamination is more than five meters deep in some areas, leaving the soil infertile.

The total damage covers 1,000 sq kilometers of Ogoniland, and will cost $1 billion to fix over a 30 year time span. “The oil industry has been a key sector of the Nigerian economy for over 50 years but many Nigerians have paid a high price,” said Achim Steiner, a UN under-secretary general. Shell has never denied their role in polluting this once lush and fruitful land, however, evidence of abuse, torture and murder of the inhabitants of Ogoniland has hit the surface, bringing Shell’s alleged “compliance” into question.

Recently released confidential documents allude to a “reign of terror” of sorts in Ogoniland during the 1990s, funded by Shell. Many people, fed up with the numerous oil spills Shell claimed were due to “sabotage,” decided that indeed, enough was enough. During this time, people banded together to organize peaceful protests, contesting the fatal trend of pollution in their community. But Shell seemed to have a no-tolerance policy when it came to defacing their company name.

In response to this outbreak of social unrest, the Nigerian military reportedly tortured and killed thousands of people in attempts to silence those opposed to the company’s presence in Ogoniland. Citizens of Ogoniland claim that the company relied on the Nigerian military to do their dirty work, dedicating funds towards these militant efforts and even giving the soldiers spending money, free food and free transportation.

Shell has denied all accusations of human rights abuse, only admitting to paying the military once, “as a show of gratitude and motivation for a sustained favourable disposition in future assignments.” However, Shell may have bit off more than they can chew. Even though Shell paid $15.5 million in 2009 to the families of eight murdered Ogoni tribe leaders in a settlement, natives of Ogoniland do not feel justice has been served and are pursuing a criminal trial.

The U.S. Supreme Court will use the case of the Ogoni people and Shell in order to determine whether corporations will be held liable in U.S. courts for human rights abuse and torture overseas. The court will also hear a second case that will determine whether the Torture Victims Protection Act of 1992 can be used against organizations or solely individuals. If the courts vote in favor of people, corporations will be subject to civil suits for torture and killings of people all around the world.

Shell isn’t the only major corporation under review. Chiquita Brands International is in trouble for its relationship with paramilitary groups in Colombia, Exxon for abuses in Indonesia, Chevron for its abuses in Nigeria, and several other companies for their role in apartheid in South Africa. The cases are set to be heard early next year.The thoughtless actions of one corporation has left thousands of people living in less than sanitary conditions; subjected to torture and murder because of it.

Read more: http://www.care2.com/causes/torture-and-abuse-in-the-niger-delta.html#ixzz1zvZtzFFf

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Nigeria: the Tsunami called Neo-Colonialism-who's next?

By NAIWU OSAHON

Take what the G8 policies have done to Nigeria, for example. Gowon’s military regime in the early 70s structured corruption into governance by importing junk of every conceivable nature; sand, broken bottles, toothpicks and (because European shit is superior to ours), European excrement as fertilizers with the active systematic nudging of the IMF, World Bank and WTO (tagged globalization), to usurp our sudden oil windfall of the era, and get the chance to divert the crumbs received from foreign exporters as agents into their (Gowon and his cronies in power) individual private accounts in Europe. With our foreign earnings from oil exports all returning to Europe to buy rubbish or to idle away in private foreign accounts, more and more of the Nigerian currency, the Naira, began to chase after fewer and fewer US dollars and so began to loose value.

Obasanjo as military Head of state 1976-1979, gallantly resisted IMF and World Bank interference (called SAP, Structural Adjustment Programme), in our economic affairs, although without putting a viable alternative economic programme in place. Shehu Shagari as President between 1979 and 1983 robustly expanded without qualms, on the Gowon’s regime culture of day light looting of the treasury and squandermania, by overwhelming us with more importation of rubbish and the cement and rice deluge, to divert staggering wealth into their individual private accounts abroad and punish us with a debilitating national debt load of over US$18 billion.

We were already a failed state when Buhari (the military leader who ousted Shagari’s regime in December 1983) provided a home-grown alternative to the IMF’s SAP. It was to maintain a strong Naira at approximately one to the US$1.50. Stop all further borrowing from abroad and institute counter trade for essential or desperately needed commodities. Buhari put an upper limit on our foreign exchange earnings used in servicing foreign debts. Rejected all the dubious and unverifiable debts and in less than three years in power, reduced our debt burden by nearly 50%.

Even Britain was already scheming to enter into counter trade agreement with Nigeria when Babangida was sponsored in 1986 by the West to sack Buhari in a military coup and reverse our gains. America, Britain and the other leading western nations hailed Babangida’s coup and immediately sent emissaries to strategize with him. President Reagan went out of his way to send him gifts including books such as Niccolo Machiavelli’s: the Prince, advocating the destruction of civil freedom to strengthen despotism.

Babangida, who promptly crowned himself the Prince of the Niger, pretended to allow a debate on SAP. The masses rejected the IMF programme but Babangida went along with the IMF all the same and instituted what he described as his version of SAP. Babangida’s SAP re-launched our re-colonization in earnest. His leading architects of SAP were two World Bank and IMF trained experts. Chief Idika Kalu and Chief Olu Falae who argued that our economy would collapse without SAP. Our economy promptly collapsed despite SAP.

Babangida entrenched corruption as a way of life on a massive scale and fostered the previously unheard of illegal drug trade and the notorious 419 (the legal code for financial fraud), culture. Babangida compounded our foreign debt crisis by recalling and accepting the Buhari regime’s rejected and cancelled dubious debts and between 1986 and 1991 piled up over US$30 billion foreign debt through dubious contracts, over invoicing and the importation of non-essential services and commodities including toxic waste. He did not bother to service the debt and between him, Abacha and their cronies in office diverted over USA $200 billion, including our USA12.2 billion oil windfall during Babangida’s regime, into their foreign accounts by 1996, buying up posh estates all over Europe.

Babangida alone allegedly garnered over USA $35 billion with which he now cows our politics. He owns estates all over Europe and one of the grandest estates in the world, in Egypt. Babangida’s SAP protagonists told us that we needed to increase our foreign currency earnings to be able to pay our strangulating foreign debts, import more goods and, of course, technology that use foreign raw materials and spare parts to stay in operation. SAP, we were told ensures increased foreign exchange earnings by liberalizing trade and (scandalously) marginalizing the naira to enhance our export capabilities. Sheer jargon because, the liberalizing business turned out to be a one-way trap. A vicious circle in effect, encouraging us to export more at low prices to import more at high prices because foreigners dictate the prices and no matter what we do, we always end up the debtors.

Our IMF African gurus argued further that after all, the Japanese yen is 120 or so to the dollar. What they concealed from us is that Japan is an export dependent country. They have no raw material. Their export is totally based on what they manufacture. They sell cheap to compete. They fixed the yen deliberately that way from inception, with local values in mind; same way as a hundred British shillings was fixed to produce one pound. In other words, the yen was worth about a shilling relatively from start. The yen didn’t just jump overnight from 1 to 120 to the dollar as African economies were forced to do by the IMF? When the yen wobbles a fraction or two downward in strength, the Japanese government panics and moves close to declaring a national emergency. In general, the yen gets stronger against the dollar yearly and the current projection is that it would exchange 115 to the dollar two years from now.

It would be a miracle if the naira has not jumped from its current 150 to a new rate of 1,000 to the dollar by then because it volts abnormally downward only.

That is how the Ghanaian cedi catapulted to 9, 060 to the dollar in thirty years. The government could hardly pay teachers salaries. They collateralized their gold mines to the West to keep afloat. Without regular foreign aids and donors support, budgets would not balance yearly. Although the current civilian government has tried significantly to tackle the economic problems they inherited, the people are still so poor and helpless they are, like other Africans in Africa, dying out gradually from starvation.

The foreigners we are trying to pacify are not investing in our economies. Of course, they are grabbing our forced privatized parastatals like the airways, power and steel, oil, mines, communications to consolidate their control mechanisms and our total emasculation. Why should they invest in the other sectors to earn our worthless currencies?

No one needs to bring money from abroad to do business in Nigeria; rather Indian and Lebanese traders are operating illegal private banks from several bases around the country. Some of the bases in Apapa, a suburb of Lagos, Nigeria, for instance, are well known to the security personnel who even patronize them. The foreigners have no respect for our laws because they are fronts for our leaders and retired generals and where that fails, they can buy off law enforcement agents. Indians and the Lebanese are printing the local currency (naira) illegally to buy up privatized industries and our hard earned dollars to send home.

During the week-ending 24th June 2001, a senior government official (Chief Bode George) who was the Chairperson of our ports announced (and as expected quickly denied it the following day) that five container loads of Nigeria’s new N500 notes were impounded at the Apapa ports by the Nigerian customs. That kind of money (obviously in trillions of naira) would be enough to wipe out Nigeria’s hundred years oil sales revenue in one swoop and oil is the mainstay of the Nigerian economy. The illegal currencies were reported to be as good as our genuine ones and the owners would have been in a position to pay a thousand, two thousand or even a million naira of it to buy a dollar. Even if they spent one million dollars to print it, they could buy millions of dollars with it to take out.

The only group of people making it, apart from the foreign manufacturers exporting obsolete products to us and the Indian and Lebanese crooks in our midst; are our banks round tripping on the exchange rate scheme; retired rogue leaders living off their loot; senior government officials siphoning our resources into their private accounts abroad; their relations favoured with plum government contracts that are paid for without performance; drug barons and the 419 (con-men) kingpins. Nothing productive is going on right now in our society. We still import everything from sand, toxic waste, European excrement as fertilizers, toothpicks and broken bottles just to earn the opportunity to export dollars. The middle class has been completely wiped out. All we are left with are the rogues and the very poor.

The people determining the exchange rate are, of course, the rogues from the unproductive sector of the economy. They are the ones with access to bank’s bidding facilities for foreign exchange allocations. These are armchair opportunists working off their briefcases. They don’t employ staff, need office accommodation or pay taxes. Every naira they corner, they convert into dollars immediately and transfer abroad.

These are the people determining the fate of the exchange rate courtesy of the IMF and the World Bank. The ordinary everyday Nigerian worker, doctor, lawyer, teacher, secretary, market woman, taxi driver, roadside mechanic etc do not make any contribution to the determination of the value of the naira. And yet, they work very hard, so hard that they are the most stressed people in the world, just to earn N100 a day to buy less than a dollar’s worth of value.

It takes less than five seconds for the average worker to earn a dollar in the USA but the Nigerian needs to work a day or two for it because the West wants him to remain ever dependent on them. Today, you need to work 150 times as hard in Nigeria as you would in the USA to earn a lousy dollar. It is the dollar that determines the value of local products. Every one is calculating prices by it, traders, contractors, prostitutes, since the government trades with it and values it more than the naira, thanks to the IMF and the World Bank. A whole day’s wage (which is five seconds wage in the USA) can only buy two jerricans of garri now or four ripe plantains. How can that be value for labour and for exchanging the naira? No one can feed himself and his family that way. Not all of us have jobs so, a day’s work for a lousy meal a day per person is sending all of us to our early graves.

Economic experts from around the world often paraphrase their economic theories with: “all things being equal.” Our IMF and World Bank trained African financial wizards interpret this with their heads buried in the sand because it is obvious even to the most illiterate person that all things are not equal in African economies. We are often one-export product economies. The buyer insists we drastically devalue our currencies because that is the only way we can compete. Compete to do what? We do not manufacture anything. They would not allow us and when they do, they say ours are substandard and put all sorts of regulations to bar our entry into their markets. They have cartels like the EU. They insist we throw our markets open, the world trade trick, and flood us with so much of their junk and rejects, we don’t have time to think of competing anyway.

All we have to sell of our own are raw materials and they fix prices and pay in their currencies. They force us to trade in their currencies. Our governments, banks everybody trades in the foreign currencies. The local currencies respond by continually falling in value (like a discarded bride) to catch the scarce “real” money coming from abroad.

Nigeria, for example, after paying over US $40 billion (N54 trillion) over the years, was still owing $34 billion (N46 trillion) in 2005 for a debt of $19 billion (N11.7 billion) made up largely of interests and penalty charges in 1985, so who is the fool, the IMF and the World Bank or Nigeria? The latest we hear is that the Paris Club and the IMF have tricked Nigeria into parting with US$12.4 billion in virtually one swoop from her recent oil windfall to close the books on the US$19 billion debt that had already consumed over US$40 billion in payments to the Paris Club. At the rate they are manipulating us, we would continue to be indebted to our colonial masters for another one million years even if we never borrowed a dime from them again.

Because of the gross marginalization of the naira, our economy is comatose. Most factories have closed down. The few still in business are operating at below 20% of installed capacity, resulting in massive unemployment. Warehouses are full of unsold goods. All our infrastructural facilities have broken down. It is too expensive to replace them or buy spare parts. Hospitals have no drugs and no new hospitals are being built. Nurses are not being paid on time and receive pittance when paid. Doctors have become government contractors to survive, neglecting their professional callings.

Our educational system is in shambles. When not closed down, there are no books or teaching aids. They are too expensive to procure. No one can afford to buy books and no one is reading except the Bible and the Koran, which are dumped in millions of copies on us free of charge to keep us ever illiterate and subservient to them. Most teachers have even migrated abroad to more lucrative jobs. Thousands of our youths are unemployed and thousands more waste away at home because schools are closed for a year for every month they open. The most actively pursued business by Nigerians right now is the visa to jump out of the Nigerian sinking ship.

Social services are nothing to write home about. Roads are impassable for potholes and floods. We queue for days on end to buy petrol wasting otherwise valuable man-hours in the process. We have no drinking and cooking water in most homes, no electricity generally for months at a time and yet the authorities are threatening to increase their tariffs.

Telephones are a luxury, they are not for the poor, remarked David Mark when he was Minister of Communications in Babangida’s regime and yet telephones are unreliable. The rogue elite minister, with one of the world’s best gulf courses in the US, wakes up one morning as communications boss and jerks up telephone tariffs by some 700%. Why should our leadership hijackers care if the poor are eating from the dustbin? It is our fate. We are eating something anyway, so telephone companies bleed us dry over epileptic, low quality services.

The typical Nigerian family on a monthly salary of N5,000 spends upward of N3, 000 a month on GSM tariffs (which currently are the highest tariffs in the world) and that is only by perfecting the flash, call me back, and SMS text cultures. People unable to feed themselves or their immediate families, or pay school fees or house rents are going about begging for loans for GSM credit vouchers. It costs a day’s average wage to post an ordinary letter by air abroad and still the letter gets stolen or tampered with before destination.

We are under severe siege as a people thanks to the IMF and the World Bank’s marginalization of the naira. Fear now rules our daily lives. Ugly, harrowing fear of the known and unknown. When we go out in the mornings, we are not sure we would return home safely and with our cars, bikes and other properties, including even the shoes on our feet or the earrings in our ears. If we are lucky to arrive to find our homes unraided in our absence, we sleep with one eye open expecting the worst any moment of the night. In other words, we do not sleep any more, and psychologists must have a thing or two to say about the consequences of lack of sleep on our ability to perform daily chores. The orchins controlling our lives are no longer the illiterate, no-good, lay-abouts of yester-years but generally smart looking, well educated and spoken people who could pass any day for bank executives. They are graduates of our higher educational institutions unable to find employment for as many as 8 to 20 years.

Societal values have completely broken down. Marriages are dissolving as soon as they are contracted. Children have lost respect for their hapless parents who can neither protect them nor provide their basic needs. Hard won earnings can no longer buy simple everyday necessities of life, not even garri, our staple food, let alone encourage us to aspire to own a car or a home in a lifetime. Many wives are prostituting to help families make do with the one measly meal a day now available to only a few in society. Many of our daughters leave their university dormitories at night to hawk their bodies to pay school fees and feed. The boys hold up banks, petrol stations during daylight and whole communities at night in convoys and formations reminiscent of military operations, all to make ends meets.

Armed robbers kill just for the fun of it and to watch us agonize in pains. Dead bodies are everywhere. On the streets and in open graves, deliberately piled in sadistic heaps to poison the atmosphere. Lying, cheating, pulling tricks have become virtues and friends and neighbours are usually the first casualties. No one and nothing is spared in the new culture of destruction instigated by the World Bank and the IMF. Suicides have become common place and obituaries are largely about people in their 30s to 50s. The supposed productive age in society.

Our present worthless, nasty, violent life has infested our kids and will infest theirs also like a virus without cure because no one has the courage and vision to put a stop to our rot and gradual disintegration. Recently, thousands of Africans, including Nigerians, died from Meningitis. A few months earlier, a strange Ebola disease ravished lives in Zaire and Cote d’ Ivore.

After the Russian (Chernobyl) nuclear disaster of April 26, 1986, farm products, including cow milk contaminated with nuclear debris and radioactivity, earmarked for destruction were secretly repackaged and dumped in Africa for profit. Nuclear contaminated Russian liquid milk surfaced in Africa as powdered milk under a variety of labels causing strange ailments, suffering, pains and deaths since. For the Group of 8, it is business as usual. Generally, foreign based institutions and NGO’s rushing to our aid from abroad are not in the know about the secret strategy behind the strange and deadly diseases. Often the aid is no more than medicine after death anyway.

NAIWU OSAHON, Hon. Khu Mkuu (Leader) World Pan-African Movement); Ameer Spiritual (Spiritual Prince) of the African race; MSc. (Salford); Dip.M.S; G.I.P.M; Dip.I.A (Liv.); D. Inst. M; G. Inst. M; G.I.W.M; A.M.N.I.M. Poet, Author of the magnum opus: ‘The end of knowledge’. One of the world’s leading authors of children’s books; Awarded; key to the city of Memphis, Tennessee, USA; Honourary Councilmanship, Memphis City Council; Honourary Citizenship, County of Shelby; Honourary Commissionership, County of Shelby, Tennessee; and a silver shield trophy by Morehouse College, USA, for activities to unite and uplift the African race.

Naiwu Osahon, renowned author, philosopher of science, mystique, leader of the world Pan-African Movement.


The IMF,the Oil and Nigeria

Nigeria, Africa’s most populous nation and its largest oil producer, is from all evidence being systematically thrown into chaos and a state of civil war. The recent surprise decision by the government of Goodluck Jonathan to abruptly lift subsidies on imported gasoline and other fuel has a far more sinister background than mere corruption and the Washington-based International Monetary Fund (IMF) is playing a key role. China appears to be the likely loser along with Nigeria’s population.

The recent strikes protesting the government’s abrupt elimination of gasoline and other fuel subsidies, that brought Nigeria briefly to a standstill, came as a surprise to most in the country. Months earlier President Jonathan had promised the major trade union organizations that he would conduct a gradual four-stage lifting of the subsidy to ease the economic burden. Instead, without warning he announced an immediate full removal of subsidies effective January 1, 2012. It was “shock therapy” to put it mildly.

Nigeria today is one of the world’s most important producers of light, sweet crude oil—the same high quality crude oil that Libya and the British North Sea produce. The country is showing every indication of spiraling downward into deep disorder. Nigeria is the fifth largest supplier of oil to the United States and twelfth largest oil producer in the world on a par with Kuwait and just behind Venezuela with production exceeding two million barrels a day. 1

The curious timing of IMF subsidy demand

Despite its oil riches, Nigeria remains one of Africa’s poorest countries. The known oilfields are concentrated around the vast Niger Delta roughly between Port Harcourt and extending in the direction of the capital Lagos, with large new finds being developed all along the oil-rich Gulf of Guinea. Nigeria’s oil is exploited and largely exported by the Anglo-American giants—Shell, Mobil, Chevron, Texaco. Italy’s Agip also has a presence and most recently, to no one’s surprise, the Chinese state oil companies began seeking major exploration and oil infrastructure agreements with the Lagos government.

Ironically, despite the fact that Nigeria has abundant oil to earn dollar export revenue to build its domestic infrastructure, government policy has deliberately let its domestic oil refining capacity fall into ruin. The consequence has been that most of the gasoline and other refined petroleum products used to drive transportation and industry, has to be imported, despite the country’s abundant oil. In order to shield the population from the high import costs of gasoline and other refined fuels, the central government has subsidized prices.

Until January 1, 2012, that is. That was the day when, without advance warning President Goodluck Ebele Azikiwe Jonathan announced immediate removal of all fuel subsidies. Prices for gasoline shot up almost threefold in hours from 65 naira (35 cents of a dollar) a liter to 150 naira (93 cents). The impact rippled across the economy to everything including prices of grains and vegetables.2

In justifying the move, Central Bank Governor Lamido Sanusi insisted that “The monies will be used in provision of social amenities and infrastructural development that will benefit Nigerians more and save the country from economic rift.”3 President Goodluck Jonathan says he is phasing out the subsidy as a part of a move to “clean up the Nigerian government.” If so how he plans to proceed is anything but apparent.

The huge unexpected price hike for domestic fuel triggered nationwide protests that threatened to bring the economy to a halt by mid-January. The president deftly took the wind out of protester sails by announcing a partial rollback in prices, still leaving prices effectively double that of December. The trade union federation immediately called off the protests. Then, revealingly, Goodluck Jonathan’s government ordered the military to take to the streets to “keep order” and de facto prevent new protests. All that took place during one of the bloodiest waves of bombings and murder rampages by the terrorist Boko Haram sect creating a climate of extreme chaos.4

The smoking gun of the IMF

What has been buried from international accounts of the unrest is the explicit role the US-dominated International Monetary Fund (IMF) played in the situation. With suspicious timing IMF Managing Director Christine Lagarde was in Nigeria days before the abrupt subsidy decision of President Jonathan.5 By all accounts, the IMF and the Nigerian government have been careful this time not to be blatant about openly announcing demands to ends subsidies as they were in Tunisia before food protests became the trigger for that country’s Twitter putsch in 2011.

During her visit to Nigeria Lagarde said President Jonathan’s ‘Transformation Agenda’ for deregulation “is an agenda for Nigeria, driven by Nigerians. The IMF is here to support you and be a better partner for you.” 6 Few Nigerians were convinced. On December 29 Reuters wrote, “The IMF has urged countries across West and Central Africa to cut fuel subsidies, which they say are not effective in directly aiding the poor, but do promote corruption and smuggling. The past months have seen governments in Nigeria, Guinea, Cameroon and Chad moving to cut state subsidies on fuel.” 7

Further confirming the role US and IMF pressure on the Nigerian government played, Jeffery Sachs, Special Adviser to the United Nations (UN) Secretary General, during a meeting with President Jonathan in Nigeria in early January days after the subsidy decision, Sachs declared Jonathan’s decision to withdraw petroleum subsidy “a bold and correct policy.” 8

Sachs, a former Harvard economics professor became notorious during the early 1990’s for prescribing IMF “shock therapy” for Poland, Russia, Ukraine and other former communist states which opened invaluable state assets for de facto plundering by dollar-rich western multinationals. 9

Making the sudden decision to end the domestic fuel subsidy even more suspicious is the manner in which Washington and the IMF are putting pressure on only select countries to end subsidies. Nigeria, whose oil today sells for the equivalent of $1 a liter or roughly $3.78 a US gallon, is far from cheap. Brunei, Oman, Kuwait, Bahrain, Qatar, Saudi Arabia all offer their petrol very cheap to their people. The Saudis sell their oil at 17 cents, Kuwait at 22 cents.10 In the US gasoline averages 89 cents a liter.11

That means the IMF and Washington have forced one of the poorest economies in Africa to impose a huge tax on its citizens on the implausible argument it will help eliminate corruption in the state petroleum sector. The IMF knows well that the elimination of subsidies will do nothing about corruption in high places.

Were the IMF and World Bank genuinely concerned with the health of the domestic Nigerian economy, they would have provided support for rebuilding and expanding a domestic oil refinery industry that has been let to rot so that the country need no longer import refined fuels using precious state budget resources to do so. The easiest way to do that would be to expedite a two-year-old deal between China and the Nigerian government to invest some $28 billion in massive expansion of the oil refinery sector to eliminate need for importing foreign gasoline and other refined products.

Quite the opposite—the criminal cabal inside NNPC and the Government making huge profits on the old subsidy system are suddenly making double and potentially triple more to maintain the old corrupt import system, and, of course, to sabotage Chinese refinery construction that could put an end to their gravy train.

Cutting their nose to spite the face…

Rather than benefit ordinary Nigerians as the IMF proclaims to want, the elimination of the subsidies has further pauperized the 90 per cent living on less than $2 a day, according to Mallam Sanusi Lamido Sanusi, the Nigerian Central Bank governor.12 An estimated 40 million Nigerians are unemployed in the country of 148 million.

Because transport costs are a significant factor in delivery of food to the cities, food price inflation has soared along with costs of public transportation for the majority of poorer Nigerians. According to the Nigerian Leadership Sunday, “prices of commodities which shot up as a fallout of the fuel pump price increase have refused to come down.” Everything from street vegetable sellers to carwashes to roadside photographers are feeling the shock of the rise in fuel prices. Unemployment is rising as small businesses fold. 13

The argument of the IMF and the Jonathan Administration is that by freeing fuel prices, funds would be available to more social services and rebuild Nigeria’s “infrastructure.” Both the IMF and the Government know it would have been far more economically viable to replace the current corrupt system of importing refined gasoline and fuels with investing in rebuilding Nigeria’s domestic refining capacity.

Son Gyoh of the Nigerian Awareness for Development organization stated, “Would it not be more expedient to pressure government to service the refineries to full production capacity given the implications on overhead and competitiveness for local industries?” 14

Gyoh pointed to the source of the problem: “Why have successive governments left the refineries in a state of disrepair while spending huge on subsidy? Is there any chance that the savings from subsidy withdrawal will go directly into rehabilitating the refineries? Does deregulation imply NNPC will no longer operate a monopoly in importation of refined petroleum product or is this lobby a self-serving lifeline to continue its monopoly? ” He concludes, “In any case, there is good reason to doubt subsidy removal will solve the fuel scarcity problem as the cabal will only regroup to change tactics, a fact Nigerians are only too aware of.” 15

After Nigeria partly nationalized its oil sector in the late 1970’s they also took control of Shell Oil’s Port Harcourt I refinery. In 1989 Port Harcourt II refinery was built. Both refineries fell into serious disrepair after 1994 when the Abacha military dictatorship cut the “take” of the Nigerian National Petroleum Company (NNPC) from domestic sale of refined oil products such as gasoline from 84% to 22%. That caused a cash crisis for NNPC and a halt to refinery maintenance. Today only one of four refineries operates at all.16

What developed since was a system of NNPC importing foreign gasoline and other refined products for Nigeria’s domestic needs, naturally at a far more expensive cost. The price subsidies were to relieve that higher import cost, hardly a sensible solution but a very lucrative one for those corrupt elements in the state and private sector making a killing, literally, off the import process.

NNPC criminal enterprise

The IMF is well aware of the real cause of Nigeria’s fuel industry problems. A Nigerian legislative committee examining the sources of the industry’s problems recently released a report documenting that at least $4 billion annually is taken from taxpayers in fuel industry corruption with the state Nigerian National Petroleum Company (NNPC) at the center. According to the commission, “every day, fuel importers drop off 59 million liters of fuel. The country consumes 35 million liters daily. That leaves 24 million liters of oil available for smugglers to export, paid for by government fuel subsidies. This costs the Nigerian people roughly $4 billion yearly, according to Reuters.” 17

The Nigerian government has said that the 7.5 billion dollars spent yearly on fuel subsidies could be used to provide desperately needed infrastructure. But they omit any mention of the rampant siphoning off of $4 billion of oil by black market smugglers, reportedly with connivance of high NNPC government officials, to sell to neighboring countries at a hefty profit. The refined imported fuel is reportedly smuggled into neighboring countries like Cameroon, Chad and Niger where petrol prices are far higher, according to Abdullahi Umar Ganduje, Deputy Governor of Kano State.18

China as IMF target?

One major geopolitical factor that is generally ignored in recent discussion of Nigerian oil politics is the growing role of China in the country. In May 2010 only days after President Jonathan was sworn in, China signed an impressive $28.5 billion deal with his government to build three new refineries, something that in no way fit into the plans of either the IMF or of Washington or of the Anglo-American oil majors.19

China State Construction Engineering Corporation Limited (CSCEC) signed the deal to build three oil refineries with Nigerian National Petroleum Corporation (NNPC), in the biggest deal China has made with Africa. Shehu Ladan, head of NNPC, said at the signing ceremony that the added refineries would reduce the $10 billion spent annually on imported refined products. As of January 2012 the three Chinese refnery projects were still in the planning stage, reportedly blocked by the powerful vested interests gaining from the existing corrupt import system.20

A report in China Daily last November quoted Nigeria’s Olusegun Olutoyin Aganga, the minister of trade and investment that Nigeria was seeking added Chinese investors for its energy, mining and agribusiness industries. Last September on a visit to Beijing, Nigeria central bank governor Lamido Sanusi announced his country planned to invest 5 percent to 10 percent of its foreign exchange reserves in China’s currency, the renminbi (RMB) or yuan, noting that he sees the yuan becoming reserve currency. In 2010 China’s loans and exports to Nigeria exceeded $7 billion, while Nigeria exported $1 billion of crude oil, Sanusi stated.21

Until now Nigeria has held some 79% of her foreign currency reserves in dollars, the rest in Euro or Sterling, all of which look dicey given their financial and debt problems. The move of a major oil producer away from dollars, added to similar moves recently by India, Japan, Russia, Iran and others, augurs bad news for the continued role of the dollar as dominant world reserve currency. 22 Clearly some in Washington would not be happy with that.

The Chinese are also bidding to get a direct stake in Nigeria’s rich oil reserves, until now an Anglo-American domain. In July 2010, China’s CNPC (China National Petroleum Corporation) won four prospective oil blocks -two in the Niger Delta and two in the frontier Chad Basin, with plans to become core investor in the Kaduna refinery, and construction of a double track Lagos-Kano railway.23 As well China’s oil company, CNOOC Ltd has a major offshore production area in Nigeria.

The IMF and Washington pressure to lift subsidies on imported fuels is at this point in question as is the future of China in Nigeria’s energy industry. Clear is that lifting subsidies in no way will benefit Nigerians. More alarming in this context is the orchestration of a major new wave of terror killings and bombings by the mysterious and suspiciously well-armed Boko Haram. This we will look at next in the context of Nigeria’s recent transformation into a major narcotics hub. Source

As western oil companies loot some $140 billion a year of Nigeria’s black gold, two thirds of the country’s 100 million people live on less than $2 a day.

Nigeria’s “official” oil production figures show about 3 million barrels a day being pumped from their oil fields into the holds of western tankers, though for decades now informed observers have estimated up to one third of all Nigerian oil is actually “stolen”, secretly loaded onto oil tankers after bribes are paid to corrupt government officials.

If 4 million barrels of oil are being shipped out of Nigeria daily at $100 a barrel, times 30 days a month, times 12 months, you arrive at almost $150 billion a year in potential oil revenues for Nigeria.

The problem is not just theft but the fact that the western oil companies are literally looting Nigeria’s oil, paying as little as a 9% royalty.

Do the math, 9% of $150 billion minus the one third oil that is stolen and the Nigerian government only receives about $10 billion a year of this amount.

Simply put, at $100 a barrel, the western oil companies get $91 and Nigeria only gets $9. Or more shockingly, Big Oil makes $140 billion a year vs. Nigeria’s $10 billion.

The Big Oil robber barons famously promote themselves as “investors” in Nigeria, though when looking at the loot they are making from what should be Africa’s richest country it is doubtful that they have invested $140 billion in Nigeria in total over the last decades (Big Oil is notorious for sticking the host countries with a major share of infrastructure expenses, deducted from their royalty checks).

In other words, Big Oil has made its investment back almost exponentially. And all the while Nigerians are hungry, sick, and increasingly fed up.

What have the people of Nigeria gotten from all this wealth being looted from their country?

Malnutrition and disease are rampant across the country. Many if not most of Nigeria’s children have never seen the inside of a school room. Many if not most of Nigeria’s people simply cannot afford even primary medical care. Malaria, water borne diseases, TB, HIV/AIDS, the list of sicknesses killing Nigerians in the thousands every day is criminal.

Nigeria’s environment has been a victim with a large swath of the coast lying under a toxic blanket of oil, mainly as a result of the criminal failure of Big Oil to do even basic maintenance on its pipelines.

Yet Nigeria has the largest, best equipped army in west Africa, the better to enforce Pax Americana. As I write, Nigerian troops are pouring into Guinea Bissau, there to restore “democracy”—something they have done many times in the past.

Nigeria should be wealthy, its people the envy of Africa, if not the entire developing world. Instead its cities are filled with homeless children begging for their daily bread.

Nigeria imports almost all of its fuel needs, selling its oil for $9 a barrel and buying back the gasoline, diesel and kerosene made from its oil for hundreds a barrel.

Nigeria is in constant need of IMF bailouts and pays the price for such predatory loans. Earlier this year after Queen of the IMF, Christine Lagarde, paid a visit, Nigerian President “Badluck” Jonathan was forced to kneel down and kiss her feet, promising to more than double the price desperate Nigerians are forced to pay for their fuel.

The kleptocrats that rule Nigeria under the banner of “democracy”, for they stole the elections fair and square, cannot even provide electricity to their people, with most Nigerians receiving only a few hours a day of electric supply, if any at all.

Nigeria’s other infrastructure, what little there is, decays by the day with even its once functional railroads now barely operational.

Yet this is all applauded by the west, with Nigeria’s President a permanent member of the so called G-20 council of world leaders.

One of the leading candidates for the title of “Queen of African Kleptocracy”, the Nigerian Finance Minister, complained bitterly after she was rejected by Pax Americana to head the USA majority owned World Bank. Talk about the fox wanting to rule the chicken coop.

All this looting and theft has left a once proud and self-sufficient people on the brink of a major explosion with government repression barely containing a cauldron of ethnic/religious violence that continues to erupt in murder and mayhem. Muslims killing Christians, Christians killing Muslims, and the army killing ethnic rebels taking up arms over the looting and destruction of their homelands by the western oil companies.

These days the western media have begun carrying alarming reports of a dramatic decline in Nigerian oil production, down according to some reports by as much as 25% in the last few months. As bad as matters are already for Nigeria’s suffering millions, what is to come may be far worse, for without even the small morsels that their western masters allow to fall from their oil burdened tables the Nigerian economy is headed for a collapse, being almost completely dependent on their oil exports.

What is going to happen if Nigeria’s oil fields begin to run dry? Only time will tell, though thanks to the looting of Nigeria one might be forgiven for holding little hope for what should be one of the jewels of Africa.Source


Oil Drilling in Africa: corruption deepening

More transparency is needed in the oil, gas and mining industries to prevent the international scramble for Africa’s natural resources from fuelling still deeper corruption and instability, according to a new report from Global Witness published today.

Based on investigations in Angola and Nigeria, Rigged? highlights a risk that complex corporate deals for accessing natural resources could be used corruptly to benefit vested interests in these countries. The report also points to major concerns over opaque sales of mining assets in the Democratic Republic of Congo to offshore companies.

“Many resource-rich countries in Africa have suffered deeply from corruption, conflict and unfair foreign exploitation,” said Gavin Hayman, Director of Campaigns at Global Witness. “Their citizens have a right to know how oil and mineral deals are being done, who is taking part in these deals and where the money is going.”

Recent years have seen a big increase in public disclosure of revenue payments to governments from the extractive industries. But that positive trend has been cast into doubt as international oil companies threaten legal action in the U.S to stop the Securities Exchange Commission implementing strong transparency rules. Oil companies are also lobbying to water down plans for similar rules in the European Union. Despite ‘big oil’ calling for a global ‘level playing field’, it appears to be fervently undermining efforts to create just that – a new global standard for transparency of revenue payments.

The new report points to a corruption risk that small and obscure companies in Angola and Nigeria could act as fronts for government officials or their allies, in resource deals that often involve investments from major international companies. The report finds that:

In Angola, several small companies which have won access to the oil sector – sometimes as partners of Western oil firms – do not identify their ultimate owners or are owned by people with the same names as government officials.
In Nigeria, valuable stakes in oil blocks ended up with obscure companies, one apparently controlled by a senator and another by a businessman close to the country’s then-head of state.
Additionally, in the DRC:
The state mining company Gecamines sold stakes in four major mines to opaque offshore companies, at what appears to be a fraction of their value, according to most reported commercial estimates.

Global Witness is calling for:

The commissioners of the SEC in the United States to pass final rules that meet the intent of the Dodd Frank law, requiring companies to publish what they pay to governments for each project that they operate in the oil, gas and mining industries without exemptions.
Europe, China and other jurisdictions to pass strong laws requiring companies to publish what they pay to governments for each project that they operate in the oil, gas and mining industries.
International oil and mining companies to stop lobbying to undermine transparency laws while claiming to be in favor of transparency.
Full disclosure of the beneficial ownership of companies bidding for extractive rights to become an international norm via such mechanisms as the Extractive Industries Transparency Initiative and the domestic laws of resource-rich countries in Africa.
A new report by Global Witness, an international non-governmental organisation, has warned of a high risk of corruption in natural resource contracts in Nigeria and Angola.

The report, titled ‘Rigged: The Scramble for Africa’s Oil, Gas and Minerals,’ calls for more transparency in the oil, gas and mining industries to prevent deepening corruption.

According to the report, released midweek, small and obscure companies involved in resource deals in Nigeria and Angola could be acting as fronts for government officials or their proxies.

Global Witness stated that in Angola, several small companies that have won access to the oil sector, sometimes partnered with multinationals, do not identify the beneficial owners of the companies and are owned by people with the same names as government officials.

In Nigeria, several obscure companies, one of which appeared to be controlled by a senator and another by an ally of a president, who was still in office, won lucrative oil contracts.

A handful of companies have resolved cases based on alleged violations of the U.S. Foreign Corrupt Practices Act in Angola and Nigeria.

Obviously on this basis, the group called on the U.S. Securities and Exchange Commission to release long-awaited rules governing a new disclosure requirement covering oil, gas and mining company payments to foreign governments.

The report also raises concerns about opaque sales of mining assets in the Democratic Republic of Congo to offshore companies.

The U.S. disclosure rule, mandated by the Dodd-Frank financial reform package, has been a source of controversy, and the oil industry has fought hard to weaken the proposed rules, much to the concern of NGOs.

Global Witness warned that blunting the rules could undo years of increased transparency.

The group noted in a recent statement, ‘that positive trend has been cast into doubt as international oil companies threaten legal action in the U.S to stop the Securities and Exchange Commission implementing strong transparency rules.

‘Oil companies are also lobbying to water down plans for similar rules in the European Union. Despite “big oil” calling for a global “level playing field,” it appears to be fervently undermining efforts to create just that: a new global standard for transparency of revenue payments.’

Source


Texaco ,Chevron,Lago Agrio, Ecuador and a crusader Lawyer

Texaco managed oil extraction in the Oriente region of Ecuador for twenty-three years. When Chevron acquired the company, in 2001, it inherited a lawsuit over environmental damage.

The jungle outpost of Lago Agrio is in northeastern Ecuador, where the elevation plummets from the serrated ridge of the Andes to the swampy lowlands of the Amazon Basin. Ecuadorans call the region the Oriente. For centuries, the rain forest was inhabited only by indigenous tribes. But, in 1967, American drillers working for Texaco discovered that two miles beneath the jungle floor lay abundant reserves of crude oil. For twenty-three years, a consortium of companies, led by Texaco, drilled wells throughout the Ecuadoran Amazon. Initially, the jungle was so impenetrable that the consortium had to fly in equipment by helicopter. But laborers hacked paths with machetes, and, eventually, Texaco paved roads and built an airport.

Today, Lago Agrio feels squalid. The buildings look thrown together, as if no one had believed that the boom might last. Stray dogs prowl the dusty streets, and a slender oil pipeline snakes alongside each major road, elevated on stilts, waist high, like an endless bannister. The Colombian border is ten miles to the north, and drug traffickers and paramilitaries have infested the Oriente, as have sicarios—paid assassins—who post ads online and charge as little as twenty dollars. In 2010, in a single month, the bodies of thirty murder victims were found along a stretch of road near the border.

One day last February, a judge in Lago Agrio, presiding over a spare, concrete courtroom in a shopping mall on the edge of town, issued an opinion that reverberated far beyond the Amazon. Since 1993, a group of Ecuadorans had been pursuing an apparently fruitless legal struggle to hold Texaco responsible for environmental destruction in the Oriente. During the decades when Texaco operated there, the lawsuit maintained, it dumped eighteen billion gallons of toxic waste. When the company ceased operations in Ecuador, in 1992, it allegedly left behind hundreds of open pits full of malignant black sludge. The harm done by Texaco, the plaintiffs contended, could be measured in cancer deaths, miscarriages, birth defects, dead livestock, sick fish, and the near-extinction of several tribes; Texaco’s legacy in the region amounted to a “rain-forest Chernobyl.”

By the time the judge, Nicolás Zambrano, issued his decision, the case had been going on for eighteen years. It had outlasted jurists on two continents. Zambrano was the sixth judge to preside in Ecuador; one federal judge in New York had died before he could rule on the case. The litigation even outlasted Texaco: in 2001, the company was subsumed by Chevron, which inherited the lawsuit. The dispute is now considered one of the nastiest legal contests in memory, a spectacle almost as ugly as the pollution that prompted it.

Chevron, which operates in more than a hundred countries, is America’s third-largest corporation. Its annual revenue, which often tops two hundred billion dollars, is nearly four times as much as Ecuador’s economic output. The plaintiffs, who named themselves the afectados—the affected ones—included indigenous people and uneducated settlers in the Oriente; some of them initially signed documents in the case with a fingerprint. They were represented by a fractious coalition of American and Ecuadoran lawyers, most of whom were working for contingency fees. An environmental lawsuit against a major corporation can resemble a war of attrition, and in 1993 few observers would have predicted that the plaintiffs could endure as long as they did. But, on February 14, 2011, their persistence was rewarded. Judge Zambrano ruled that Chevron was responsible for vast contamination, and ordered it to pay eighteen billion dollars in damages—the largest judgment ever awarded in an environmental lawsuit.

It was an extraordinary triumph, particularly for one of the plaintiffs’ lead lawyers, a tenacious American named Steven Donziger, who had been a key figure in the case since its inception. Donziger speaks Spanish, and for years has shuttled between Ecuador and New York. “This trial is historic,” he has said. “This is the first time that a small developing country has had power over a multinational American company.”

Chevron categorically denies the charges made in the lawsuit, insisting that it bears no responsibility for pollution in the Amazon and that Texaco’s operations were “completely in line with the standards of the day.” A Chevron spokesman told me that “there is no corroborating evidence” of adverse health effects related to oil development in the Oriente, and blamed “trial lawyers” for “perpetuating false information.”

In recent years, Chevron has invested millions of dollars in remolding its public image. Elegant television commercials, narrated by the actor Campbell Scott, emphasize that the company aims to “practice and espouse conservation.” A print advertisement features a photograph of two smiling African women, and the caption “Oil Companies Should Support the Communities They’re a Part Of.” This fall, at a breakfast discussion on “Business and Human Rights,” in New York, Chevron’s manager for global issues, Silvia Garrigo, said that the company makes “social investments” wherever it operates, noting, “We’re in countries for the long haul.”

In the courtroom, however, Chevron has been far less conciliatory. Not long ago, after the company successfully defeated a lawsuit seeking to hold it responsible for the shooting deaths of protesters on an offshore oil platform in Nigeria, it tried to compel the impoverished Nigerian plaintiffs, some of whom were widows or children, to reimburse its attorneys’ fees. (No fees were awarded, and a judge admonished Chevron for trying.) “That’s how they litigate,” Bert Voorhees, one of the Nigerians’ lawyers, told me. “The point is to scare off the next community that might try to assert its human rights.”

Chevron has been especially defiant in the face of the Lago Agrio accusations, which its lawyers have labelled “a shakedown.” In addition to defending itself in Ecuador, it has fought the case in more than a dozen U.S. federal courts, hiring hundreds of lawyers and producing what its own attorneys have called “an avalanche of paper.” Donziger has maintained that Chevron is motivated not merely by fear of an adverse judgment but by a desire “to destroy the very idea that indigenous people can bring an environmental lawsuit against an oil company.” In 2008, a Chevron lobbyist in Washington told Newsweek, “We can’t let little countries screw around with big companies like this.” One Chevron spokesman has said, “We’re going to fight this until Hell freezes over—and then we’ll fight it out on the ice.”

Read more http://www.newyorker.com/reporting/2012/01/09/120109fa_fact_keefe#ixzz1zamOKOQZ

Press Kit on the Lago Agrio Ruling and Chevron’s Retaliatory Attacks
Amazon Defense Coalition
March 2011

On February 14th, a court in Lago Agrio, Ecuador ruled in favor of the residents of the Amazonian rainforest who have spent the last 18 years trying to force Chevron executives to clean up their deadly mess.

Finally, Chevron’s guilt is official, and it’s time for Chevron’s Board of Directors and high-level officials to take responsibility for their company’s unethical and illegal misconduct.

Instead, Chevron is fighting the plaintiffs in U.S. Courts across the country and has filed criminal charges against the Ecuadorian plaintiffs.

Below are some essential documents for understanding this decision and the current status of the case.

Download
in PDF format
Summary of the Aguinda v. ChevronTexaco Judgment

Executive summary of the $8.6 billion judgment against Chevron issued by the Provincial Court of Justice of Sucumbíos in Lago Agrio, Ecuador.

Download
in PDF format
Full Text of the Aguinda v. ChevronTexaco Judgment

Complete English translation of the $8.6 billion judgment against Chevron issued by the Provincial Court of Justice of Sucumbíos in Lago Agrio, Ecuador (the original version in Spanish is available here).

Download
in PDF format
Summary Memo and Plaintiffs Final Argument, Part One

Summary Memo and part one of the final written argument submitted to the Ecuador court by lawyers for the Amazonian communities suing Chevron, outlining the evidence demonstrating Chevron’s liability and the fraud behind the company’s primary defense of remediation.

Download
in PDF format
Final Argument on Damages, Part Two

Part two of the final written argument submitted to the Ecuador court by lawyers for the Amazonian communities suing Chevron, outlining the evidence demonstrating Chevron’s liability and the fraud behind the company’s primary defense of remediation.

Download
in PDF format
Motion to Oppose Preliminary Injunction Against Plaintiffs to Enforce the Judgment

In response to Chevron’s charges against the plaintiffs and the company’s efforts to prevent enforcement of the judgment, the plaintiffs filed this motion to oppose Chevron’s efforts to once again delay justice to the Ecuadorians.

Download
in PDF format
Affidavit of Juan Pablo Saenz on Chevron’s “Bad Acts” During Ecuador Trial

Saenz argues that Chevron’s charges against the plaintiffs rest on company executives’ “jaundiced worldview” that the oil giant cannot be held liable by a group of indigenous groups whose power and influence pale in comparison to Chevron’s. Read a press release on this affidavit here.

Download
in PDF format
Motion to Reassign Case Due to Bias of Judge Lewis Kaplan

The Ecuadorian plaintiffs argue the charges leveled against them should be heard in the chambers of the judge who first sent their lawsuit against Chevron to Ecuador in 2002, not Judge Lewis Kaplan.


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