Global Policy Forum

Ecological harm, corruption hit hard

By John Donnelly

Under the vast swamps of Nigeria's coastal delta sit some of the world's most productive oil reserves, a treasure coveted by the energy-hungry United States and other nations. Nigeria produces 10 percent of the oil consumed in the United States, and the Bush administration hopes for a greater bounty soon: US energy officials forecast that oil from Nigeria and the rest of the Gulf of Guinea region will provide one-quarter of America's oil in the next decade, equal to that of the Gulf of Mexico today. Already, 30 percent of the world's newly discovered oil reserves in the past five years have come from this stretch of Africa's west coast.

But here in the serpentine creeks and boggy coastal land lie daunting obstacles to those hopes -- pirates, corruption, violent youth militias, and environmental catastrophes. Tens of thousands of ordinary villagers try to scrape a life out of the marshes, amid the oil rigs and pipelines. Among them is a man named Endurance Godbless, who is brokenhearted and angry at what he calls oil's curse. Godbless, 18, waded through a tributary of Kolo Creek on a recent day, parting translucent orange-red waters polluted by an oil spill. He lifted a fishing net, revealing a dead fish caught in the webbing. ''Poison," he said, tossing the fish into the weeds. This summer, two unrelated spills entering the tributaries of the Kolo from the north and south converged in the waters surrounding this village of 1,000 people, killing life in the creek. ''I feel like crying," Godbless said, walking out of the water, his pants shiny from the oil residue. ''I can only fish. But there are no fish anymore."

The story is similar from Nigeria to Angola, along Africa's restive west coast: Oil and natural gas reserves are drawing the developed world's interest and raising expectations for the region's poor of a better future through investment and growth. But environmental damage and often-violent jockeying for the spoils are fueling instability and popular resentment into a combustible anger. This web of conflicts in oil- producing Africa is causing great concern in Washington. With oil supplies struggling to keep up with demands for energy, even a short-term disruption of African oil would trigger spikes in prices at gas stations across America.

Global Ramifications

Nigeria, despite its president's aggressive fight against corruption, presents the most daunting problems on the continent and has the greatest potential to inflict havoc on global oil markets. Nigeria also accounts for about half of the Gulf of Guinea's oil. In the southeastern part of the country, where much of the oil lies under marshland, the recent arrest of two prominent leaders of the Ijaw tribe, including the governor of one state on corruption charges and militia leader Alhaji Mujahid Dokubo-Asari on charges of sedition, has exacerbated tensions among Ijaw militant young people, oil companies, and the federal government.

Last month, Asari's followers seized two oil flow stations and sent an e-mail to news organizations threatening to ''kill every iota of oil operations in the Niger Delta" unless he was released. Authorities recaptured the stations, but the situation remains tense. Such conflict has boiled over before, shaking world oil markets. A year ago, two rival militant groups, one of them Asari's, battled each other for greater shares of oil revenues, leaving several hundred people dead, shutting down much of the oil operations in the Niger Delta, and causing oil prices to rise worldwide. President Olusegun Obasanjo entered the fray, and after talks with Asari, reached a truce.

''It is so dangerous now," said Aryakwee Nsirimovu, 44, executive director of the Institute of Human Rights and Humanitarian Law in Port Harcourt. ''For the last five years, you've had a buildup of weapons among the militia, and you have a weak military. So if things blow up, they will be incredibly difficult to control." For many peasants, Nsirimovu said, oil is a curse. ''We have poverty in the midst of plenty, and everyone sees that wealth every day."

After oil was discovered in the delta in 1957, Nigeria began transforming from an agriculture-based society to an oil-dependent economy. The country now has to import food, and its troubles have become so numerous and so intertwined that resolving them could take years. Obasanjo's government has initiated ambitious changes aimed at curbing endemic corruption that analysts say reaches from the highest levels of government to low-ranking officials in the field. Without such theft, Nigerian officials said, tens of billions of dollars in spending for education, healthcare, and infrastructure could reach the poor. Large-scale theft takes place in the open, carried out by low-level operatives who work for sophisticated crime syndicates with ties to senior government, military, and police officials.

Nigeria's crude oil is pumped to the surface in the marshlands and then to flow stations, where machines remove water and add gas. The gas helps propel the oil along pipelines to coastal farms of giant tanks. At Bonny, one of Shell Oil Co.'s two large coastal terminals, operators in a control room flick switches, which allows oil in the tanks to flow in pipelines heading out to sea and then to be pumped into waiting oil tankers. The thefts take place in the marshlands, before the oil reaches the huge coastal terminals. Thieves use high-tech equipment to tap into the lines and divert the oil into waiting barges. The barges then bring the stolen oil to other tankers waiting offshore. Those tankers are believed to bring the oil to other West African countries. Unmarked barges anchor in coastal creeks for days and, as local armed men stand guard, thieves tap into pipelines and take vast amounts of oil. From the air, the barges can be spotted near Port Harcourt, the commercial and traffic-choked regional hub 390 miles southeast of Lagos, Nigeria's commercial capital.

One day last month, helicopter pilot Captain Joseph McGlynn, a New Jersey native, headed over intensely green marshes that were interlaced with creeks and rivers. ''I don't want to get too low because we'll get shot at," McGlynn said. ''A year or two ago, they were out in the open; now they are much more sneaky," he added, referring to the thieves. He and his copilot, Jacob Oommen, easily found two likely spots where oil was being stolen. At one point, three barges were anchored end-to-end in a narrow creek, partly camouflaged by trees. ''Look," McGlynn said. ''They're less than a mile from the Shell facility! They'll tap into the lines at night. After 6 p.m., the ants come out to play." Shell officials and the Nigerian government said the Nigerian Navy has become more aggressive in stopping the thefts, called ''bunkering," a nautical term for supplying a ship with fuel.

In the delta, stolen oil is loaded into the barges, which then are towed out to a waiting tanker offshore. Shell officials say that an average of 100,000 barrels of oil per day were stolen from their pipelines in 2003, but that so far this year the pilferage dropped to 20,000 barrels a day. Shell produces half of Nigeria's oil. However, US military officials who travel to the Niger Delta think the total national theft is much greater -- 200,000 barrels a day, which at $65 a barrel is a $13 million daily heist. ''Oil bunkering is extensive, pervasive -- it's part of the culture," said a senior US Department of Defense official with oversight of the region, speaking on condition of anonymity.

He said he asked his counterparts in the Nigerian Navy why they have not done more to crack down on the theft, and the Nigerians told him: ''We don't have the right boats." Nigerian Navy officials in the Port Harcourt region did not return phone calls seeking comment. ''They don't have the will to do it," the US official said of the Nigerian Navy. ''Some of the very senior members of the Navy are profiting from oil bunkering. . . . It's a Wild West atmosphere with lots of money to be made." Two Nigerian Navy admirals were convicted this year of facilitating the theft of an oil tanker, and the former police inspector general, Tafa Balogun, is accused of stealing $98 million, some of which is allegedly related to oil profiteering.

Fighting Corruption

Nigeria's new anti-graft watchdog, the Economic and Financial Crimes Commission, estimates that 45 percent of the nation's oil revenues are stolen, wasted, or siphoned away in the marshes. That means few delta residents realize any oil benefits. A World Bank report last year estimated that as much as 80 percent of Nigeria's oil revenues benefited 1 percent of the country's population. Last year, Nigeria received $27 billion in oil revenues; this year, with the price of oil skyrocketing, the revenue could double, analysts say. Much of the burden of fighting corruption falls on several crusaders in Abuja, the capital, including Obiageli Ezekwesili, a Harvard-educated member of Obasanjo's Cabinet and an evangelical Christian. She chairs the National Extractive Industries Transparency Initiative, a government program that audits and publishes data on oil revenues and spending. Still, the anti-corruption process is in its infancy.

''What do you expect? A silver bullet?" Ezekwesili said. ''We are making progress at every level of our initiative to fight corruption." But some communities are so disillusioned that they want oil companies to cap their wells and leave. One is the community of Bille, about 20 miles south of Port Harcourt, where the first oil flow station was installed in the 1950s. ''We have no electricity, no running water, no hospital," said Socrates Dokubo, 37, a fashion designer. ''For more than 48 years, they have been fooling us with promises. No more. We want them to leave." Most, though, hold out hope they can reap an oil windfall.

In August, members of five communities near Port Harcourt seized Shell's Agbada I station. The protesters said they knew of no other way to get fair compensation for a spill that polluted their land in December 2003. The protesters, who carried no weapons, occupied and shut down the Shell Petroleum Development Co. station for six days, blocking about 267,000 barrels of oil from reaching Shell's terminals -- a loss of almost $17.4 million at today's oil prices. Villagers remain angry. The 2003 spill, which was found to be accidental, polluted about 615 acres. Shell said it spent $1.4 million on cleanup efforts. It offered the five communities about $500 each for the damage to the land. Shell spokesman Donald S. Boham defended the amount, saying that communal land covered a tiny portion of the land and Shell planned to negotiate with individual landowners later. But local leaders contended that much of the land was communal agricultural land and fisheries.

''Our fish, our land for vegetables, our major source of living, has been devastated," said Azunda Aaron, 40, chairman of Reukpokwu's community development council, standing on the polluted land, which still smells strongly of oil. ''We will not be violent. We shut down the flow stations because what we heard from Shell was so distressing, that they would pay us so little in compensation." But another villager, Tike Wopara, 25, whispered that many residents planned to sabotage Shell's pipes because of the low compensation offer. ''That's why I'm here, day and night," said Wopara, who is being paid by Shell to oversee part of the cleanup. ''The place needs to be secured. The anger against Shell is so great."

Even greater anger flowed from the recent arrest of Asari, the Ijaw tribal militia leader who has attracted several thousand followers with his populist rhetoric and his willingness to distribute weapons and small amounts of cash. Last year, he declared he would wage ''all-out war" on the state from his hide-out in the bush. He eventually reached a truce with the government, but his arrest has reignited the conflict. In an interview with the Globe a month before his arrest, Asari, 41, seemed more agitated at the lack of contracts for his numerous start-up companies than the plight of poor villagers. Sitting in his Port Harcourt mansion, Asari said he has at least two construction companies, a consulting firm, and a telecommunications company. ''Government promised me six contracts!" he said. ''But only two contracts are moving. If government cannot kill me outright, they will try to kill me economically." Asari denied that he was involved in stealing oil from the pipelines, as many have asserted. But he said the practice was not illegal. ''People have the right to take what belongs to them. But who is doing the bunkering? Who pays for the vessels that take the oil away? Villagers? People doing it sit in Abuja," he said.

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