Environmental management complex issue for Shell Nigeria
Businesses need to adopt recognised environmental standards to stay competitive, aside from the need for greater environmental protection. This was the premise from which Environmental Sciences student Chris Ogbu conducted his MSc research on multinational corporation Shell, comparing its environmental management systems in the Netherlands with those in his home country Nigeria
Environmental certification of all its major installations by the end of 2000 was the plan that Shell announced in 1998, partly in response to mounting international pressure. While Shell operates 1700 enterprises in 120 countries, Ogbu's research on the contrasts between only two countries shows that achieving such standardisation will be a long and complicated process. Ogbu: Obvious contrasts come up because of different geographical features. For instance, operations in the Netherlands must keep the high water table and dense population in mind. But standardisation is also problematic because of socio-economic, political and cultural differences.
While the enforcement of environmental standards in Holland is high, the opposite is the case for Nigeria. Interviews with staff at the Shell Petroleum Development Company (SPDC), Nigeria's biggest oil venture between Shell, the governmental corporation NNPC, the subsidiaries Elf (French) and Agip (Italian) indicated that staff were not aware of regulations and that enforcement was slack
Besides this, standards at the Dutch natural gas operations of NAM (Netherlands Petroleum Company) are maintained through community pressure. In contrast, Shell has had to create whole other policy areas as a result of conflicts with the local communities in which they operate. Their operations have been hampered by sabotage, occupation of bore-hole installations and hostage-taking of personnel. Besides Health, Safety and Environment, Shell policy has had to add on Community Affairs and Security to deal with this situation, Ogbu explains
Although Ogbu concentrated his research on the environmental management systems, the impact of these other factors on Shell's operations cannot be ignored. This became most evident when Shell had to shut down its operations in the Southern delta region of Ogoniland in 1995 because of conflicts with the community living there. At that time, international attention focused on Shell's activities there when internationally renowned author Ken Saro-Wiwa and eight other leaders were executed by the Nigerian military government. Since then, new tensions have arisen in the surrounding area where oil operations are most concentrated (see shaded area of map)
These conflicts stem from community complaints on environmental effects and insufficient financial compensation for the oil operations. High rates of deforestation as well as pollution of rivers, agricultural lands and forests from spills and waste discharge are cited by local groups. Also, in spite of being a major oil producer (oil contributes 90% of its foreign exchange), Nigeria has a GDP of only US260 per person. Although Ogbu disagrees with the violence of local disputes, he explains the sentiment expressed by many people in the region: Imagine, hearing the sound of over 2 million barrels of oil at an US17 average per barrel being pumped through pipelines right behind your house each day and not being able to afford regular meals.
Nevertheless, Ogbu finds that Shell has become a media scapegoat: SPDC only owns 30% of the joint venture's shares, while the NNPC owns 55%, not to mention the 15% owned by other multinationals. SPDC is also only responsible for the crude oil operations, and many spillages have come from sabotage efforts. Ogbu adds that Shell must continue along the road towards environmental certification to deal with international pressure. The European Eco-Management and Audit Scheme (EMAS) is to be adopted by Shell for the certification of the environmental management systems of two pilot sites. About 75 million has already been set aside to upgrade two pilot sites. But because of the division of activities under SPDC, this will remain limited. Ogbu: Shell plans to certify all of its major installations sites, but this will not include pipelines or post-crude oil activities of the NNPC.
In the final analysis Ogbu believes that mutinationals cannot help but operate to multiple standards, but they must find ways to minimise the differences while continuing to upgrade the overall standard. Ogbu: Shell's initiative is a step in the right direction. But whether other companies comply rests on consumer pressure for recognised certification systems. Am.S