Part 4 of the Resource War series. See Part 1 for the Introduction and Parts 2 and 3 for previous case studies.

Background

Another very complex globalized conflict continues in the Niger Delta, between local militants and oil corporations – Shell, for example – backed by the central Nigerian government. In the 1990s, there were many human rights abuses by government against anti-oil protesters, notoriously including the execution of peaceful activist Ken Saro-Wiwa in 1995. The question left unanswered is, to what extent were oil companies involved?

Corruption, corporations and PMCs

The conflict is a case study in perverse incentives, but the local people have legitimate grievances about the destruction of agricultural land by oil spills . The rise of oil as a primary commodity export in the 1970s allowed Nigerian officials to centralize power, using the federal government to hijack oil revenues. Compensation for oil developments is typically offered as a bribe or extorted by rebels or criminals – in another characteristic of a new war, there is no obvious distinction between them. State security forces receive bribes, payments and illegal arms imports from oil companies, which employ highly trained private contractors as guards – the distinction between mercenaries and soldiers is also blurry. The behavior of Shell in this situation is questionable: “According to Shell’s own figures, the company had 340 oil spills in Nigeria in 2000 alone… Shell is still essentially trying to buy off the local people with gifts rather than trying to offer them genuine development.”

Oil prices, profit and perverse incentives

A new rebel group, Movement for the Emancipation of the Niger Delta (MEND) appeared early this year. In sophisticated attacks they have kidnapped and ransomed oil workers, killed security forces and bombed infrastructure. The escalation is both a cause and a consequence of high oil prices. Some locals tap pipelines and “bunker” oil, transporting it offshore by barge, in another counterexample to Michael Ross – his analysis did not consider oil lootable. Because the attacks cause noticeable spikes in world oil prices, knowing about them in advance could be very profitable. With all sides profiting from high oil prices except civilians, there are few incentives to resolve the conflict.

Links

• International Crisis Group: “The Swamps of Insurgency: Nigeria’s Delta Unrest,” Africa Report N°115, 3 August 2006.
• International Crisis Group: “Fuelling the Niger Delta Crisis,” Africa Report N°118, 28 September 2006.
• Global Guerrillas: “Thriving in Nigeria”
• Global Guerrillas: “Burning Down the House in Nigeria”
• Also on Global Guerrillas, anything about the bazaar of violence, systems disruption, attacking corporate psychology, etc. John Robb’s paradigm applies perfectly to this conflict…

References

• International Crisis Group. “The Swamps of Insurgency: Nigeria’s Delta Unrest”, Africa Report N°115, 3 August 2006.
• Jedrzej George Frynas. “The Oil Industry in Nigeria: Conflict between Oil Companies and Local People,” in Transnational Corporations and Human Rights, ed., Jedrzej George Frynas and Scott Pegg, (Hampshire: Palgrave Macmillan, 2003). pp. 99-114.

Posted by Phil on Wednesday, October 11th, 2006 at 11:42 pm.