Multinational Companies and Their Social Responsibilities (Α Case Study of Shell, Nigeria)

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  • Topic: Royal Dutch Shell, Petroleum, Shell Oil Company
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  • Published : March 17, 2012
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CHAPTER TWO
2.0AN OVERVIEW OF SHELL DEVELOPMENT COMPANY IN NIGERIA
2.1Introduction
This chapter will provide basic knowledge of Shell Nigeria Oil Company and its operation in Nigeria, in particular regarding its ethics, performance, social involvement, contribution to national income and its contribution to keeping the environment green.

Since the Rio Conference of 1992 the code of conduct for all extractive industries including crude oil mining companies has underlined the following principles that should be respected in doing business: i.Social and economic development of host communities

ii.Provision of basic social services
iii.Regard for Human Rights
iv.Good governance and civil society involvement.
There have also been some initiatives by NGOs and interest groups within the extractive industries such as: i. Publish What You Pay
ii.World Bank Extractive Industries Review
iii.Extractive Industries biodiversity initiatives
iv.Global Reporting initiatives

2.1.1How far is shell involved in these international processes?
Crude oil was first discovered in commercial quantity at Olobiri community in the Ijaw heartland of the Niger Delta region of Nigeria in the year 1956. Two years later other wells were struck in Ogoni community also in the Niger Delta by Shell. The indigenous communities of Oloibiri and Ogoni happily welcomed the Shell Petroleum Development Company to their territories over four decades ago because they believed that the company would open their area to modern development. Since 1956, the relationship between Shell and its host communities in the Niger Delta has deteriorated for various reasons: i.Shell refuses to recognize them as the landowners as it pays very little or no compensation for their land and trees destroyed as a result of oil prospecting; The 20 percent rent and royalties that should be paid to them is instead paid to the Nigerian central government, in addition to the petroleum profit tax (PPT); ii.In the process of searching for crude oil, Shell degrades their forests destroys their ancestral homes, disturbs their shrines, deities, holy places and zones of cultural heritages. In the Niger Delta today, the business of oil mining is a major contender for land, forest and water. This leads to displacements, social decline, and environmental degradation, loss of daily livelihood, community impoverishment, poverty, disease and death. Since the killing of Ken Saro-Wiwa (leader of the movement for the survival of Ogoni people), and eight other Ogoni activists, by Nigerian state agents after a show trial in 1995, the crisis has spread to other communities in the Nigeria. For most people including international conflict resolution NGOs who had wanted to intervene in resolving the Niger Delta conflicts, the matter often became complex as Shell very often absolves itself from any blame by shifting everything at the doorsteps of the central government of Nigeria: iii.Shell claims that it is in a joint business venture with the Nigerian federal government (which owns over 50 percent share) and that the government should be responsible for the provision of basic social services in the Nigeria; iv.The Nigerian government for its part does not treat the oil producing indigenous communities as stakeholders in the oil business. It rather ignores them because it believes they are few, poor and weak and therefore cannot threaten Nigerian stability.

2.1.2 Development Projects
There have been attempts by government and the oil companies to construct development programmes that will ameliorate the problems of the oil producing indigenous communities like the Niger Delta Development Commission (NDDC) and the Shell constituted Community Development Projects. The demands of indigenous communities towards Shell and the Nigerian Government can be summarized as follows: i.Indigenous communities want compensation paid for their land and economic trees; ii.They want to be...
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