Shell shows us how not to divest from fossil fuels
Why international oil majors cannot deliver a just transition
There have been a slew of articles and social media posts recently claiming that Shell is “divesting” from their operations in Nigeria, a country they’ve been operating in for over 70 years. Their years in Nigeria have been fraught, marked by decades of lawsuits, scandals, and documented human rights abuses.
This move is part of a broader trend of Western oil companies like Exxon Mobil divesting from on-shore oil operations in various oil-producing countries. At first glance, it might seem like decades of activism demanding change are beginning to make operations unprofitable or unattractive. Or perhaps they’re taking their emissions reduction commitments more seriously and divesting from certain oil and gas operations, as Shell claims.
As you probably guessed, that’s not the situation we’re dealing with. In reality, Shell is not “leaving Nigeria” at all–what they’ve done is sell SPDC, their on-shore subsidiary, for 1.3 billion dollars. At the same time, they’re investing more heavily in their offshore drilling operations in Nigeria–ones that are harder to track and thus subject to less accountability. There will be no reduction in fossil fuel activity; in fact, quite the opposite. Their activities will increase.
To get the full picture, we spoke to Friday Nbani Barilule, an activist with the Lekeh Development Foundation. Last year, they hosted the Niger Delta Climate Change Conference, bringing together multiple stakeholders in the area to address the environmental concerns brought forth by oil production in the region.
We’re going to take a closer look at this “divestment” trend and see what’s really going on. But before jumping into how to think about this trend of “divestment,” let’s recap Shell’s history in Nigeria.
Shell’s History of Abuse
Shell began exploring Ogoniland–a small region along the Niger Delta–for oil in the 1950s. In just ten years after they established operations there, major oil spills began. The region was characterized by rich agricultural soil, biodiversity, and abundant fishing. Most of the Ogoni people living there were farmers or fisherfolk, living in close relationship with the land.
By 1970, repeated spills began to kill off fish populations in the water and render the soil unusable for agriculture. As a result, the Ogoni people began to organize, forming the Movement for the Survival of the Ogoni People (MOSOP) to protest Shell’s impact on the region.
“The evidence shows Shell repeatedly encouraged the Nigerian military to deal with community protests, even when it knew the horrors this would lead to – unlawful killings, rape, torture and the burning of villages.”
-Amnesty International
In the 1990s, things had worsened. By 1993, over 300,000 people in Ogoniland were peacefully protesting Shell and demanding they cease their destructive operations in the region. During this time, Shell asked the Nigerian military government to provide “security protection” in the region. But this protection took the form of shooting nearly 1,000 protestors and torching homes in many villages, displacing over 30,000 people. Despite knowing about these abuses, Shell allegedly continued to invoke military support to quell the resistance in the region. As Amnesty International states, “The evidence shows Shell repeatedly encouraged the Nigerian military to deal with community protests, even when it knew the horrors this would lead to – unlawful killings, rape, torture and the burning of villages.”
This campaign against the Ogoni people culminated in the arrest of nine MOSOP leaders – including Ken Saro Wiwa, the organization’s president and a longtime activist – on false murder charges. Without any semblance of a fair trial, Saro Wiwa and the eight others arrested were publicly hanged on November 10, 1995.
They managed to get Shell to stop their operations in the region (although Shell simply transferred ownership to a Nigerian company in which they had a large stake rather than being the direct owner). But the spills didn’t stop. They have continued to occur to this day with startling regularity due to poorly maintained and corroded pipelines.
Over 400,000 tons of oil have spilled in the region so far, devastating the environment and leading to high rates of miscarriage and premature death. Shell claims that these more recent spills were caused by vandalism and oil theft, but this contradicts classified internal documents where the head of Shell Nigeria acknowledged that “the majority of incidents arise from operational failures."
Following this decades-long abuse, the Ogoni people went global in their search for justice. They have filed suits in the United States, the United Kingdom, and The Netherlands, among others. One case in the US, Wiwa v. Royal Dutch Petroleum, attempted to hold Shell accountable for its role in the execution of the nine activists. It settled out of court for US$15.5 million in 2009. A similar case made it to the US Supreme Court, which ruled that it could not be tried in the US because their laws cannot be applied to cases that occurred outside of US soil (even though it has a particular legal mechanism meant to provide recourse to victims of international crimes, including extrajudicial killing).
In the UK, 15,000 Ogoni people sued Royal Dutch Petroleum for their failure to act on two oil spills occurring in 2008 and 2009, settling for 55 million pounds. They were also ordered to begin cleaning up the area from the spills they caused (to no one’s surprise, they haven’t). [ ] In another case, over 45,000 farmers sued Shell for their role in the repeated spills that devastated their lands and ruined their livelihoods. However, this case was not successful. Because they attempted to sue the parent company (Shell) instead of its Nigerian subsidiaries, the court ruled that Shell did not have a duty of care towards the farmers. The subsidiary might have, but that court did not have jurisdiction over it, so they received no compensation. However, as Shell owns massive shares in the subsidiary, they profit massively from its operations while enjoying relative legal impunity.
A New Era of Injustice
Clearly, Shell has committed atrocities in Nigeria throughout its history. Wouldn’t it be good news that they’re at least ending their onshore operations? Not exactly. There are a couple of big problems with what Shell is doing right now.
The first problem is the fact that the infrastructure they’re selling off is in terrible condition, and it often worsens after companies like Shell leave. The new companies often respond even more slowly to oil spills than Shell, leading to even more environmental damage. Practices like gas flaring–where excess oil is burned off, releasing huge amounts of greenhouse gases–were mostly phased out by Shell. They’ve now increased under the new owners of Shell’s infrastructure. These new companies also often make even fewer climate commitments than their predecessor.
The second problem is that they have failed to consult with any of the impacted communities about their exit, despite many calls to do so. “As I’m speaking to you now, the international oil companies are making a strategy they call Oil Divestment,” explains Nbani. “But one of our demands is that they have to clean up the region, they have to remediate the process.”
A UNEP assessment has estimated that restoring the environment in Ogoniland would take 25-30 years and cost $1 billion dollars. By selling their assets, Shell has completely washed their hands of any cleanup of the environment they damaged, which will now be the responsibility of the new buyer. But the companies these assets are sold to are often private, which offers even less accountability than a large, public company like Shell. “International oil companies like Shell, they keep making profits at the cost of peoples’ lives,” says Nbani. “I’m not against development, but at every stage, there should be impact assessment.” In this case, there has been none.
The third problem concerns the misleading press around moves like this. “Divestment” is a hot word right now, and executives at companies like Shell are using it to posture themselves as taking action on climate change, when in reality, they are doing the opposite. They’re expanding their operations offshore and leaving their infrastructure for others to expand, rather than phasing it out.
This “divestment” trend stretches far beyond Shell to the majority of Western-controlled oil companies who are realizing that onshore operations are more problematic than offshore drilling. Of the 26 divestments completed between 2010 and 2021 in Nigeria, all but one represented international oil companies selling off their assets.
Why is the offshore expansion in particular a problem (aside from the expansion of fossil fuels in general)? It comes down to the fact that onshore drilling is much more visible. It pollutes farmers’ lands. They can show the tar-black oil seeping from their soil, the tell-tale rainbow shine on their ponds. They can trace the birth defects, the miscarriages, the cancer rates. And because of this, they can take companies to court and try to seek compensation or remediation.
Offshore operations avoid this. Who really owns the ocean, after all? No humans live there; there are no farms to ruin. And it’s even more profitable than their onshore operations. We might see shocking images of the ocean on fire when inevitable spills happen, triggering some headlines, but ultimately, whose face will be attached to this disaster? This move makes it infinitely harder to hold these companies accountable.
The bottom line is that there is a right way and a wrong way to divest. When we talk about divestment in an activist context, it fits under the umbrella of just transition – the way that we dismantle and scale down fossil fuel infrastructure in a way that prioritizes not only the environment but the needs of workers and communities. It’s done in an orderly way that assesses risks and impacts at every stage.
None of what we’re seeing here represents change. All this represents is a new round of abuses, covered by some careful PR. By using the word divestment, it seems like a positive thing, when in reality the actual situation is worsening. Shell and other international oil companies must pay reparations for the damage they have caused. Instead, they’ve managed to evade that responsibility while still being paid $1.5 billion dollars for that privilege. It’s outrageous.
The right way to handle this situation–if Shell cared about the transition–would have been to consult with communities, remediate the environment impacted by the spills (as they were ordered to do by a court but failed to comply) and work on safely phasing out the fossil fuel infrastructure in the area. What they’ve done is so far from that it’s an insult to call it divestment.
In a just transition, decrepit fossil fuel infrastructure must be decommissioned, not sold to another buyer to clean up for them in a few years. It’s no coincidence that Shell and the other international oil companies are selling these assets to national companies in Nigeria. They know that their profitability is in decline. At the end of the day, it’s the people of Nigeria who will continue to pay while Shell continues to profit. There is no justice in a transition like that.
A few things are important to note here. The first is that massive oil conglomerates like Shell and ExxonMobil are the enemy here. They have clearly learned nothing from the decades of protest, lawsuits, testimonies, and pleas from the communities whose livelihoods they have destroyed. They continue to act only in their own self-interest, amassing wealth at the expense of human life and the environment. We cannot “work with them” on making change–this is a facade. Their “commitments'' to sustainability are hollow. We have to work to stop them, to place limits on them that are actually enforceable. They will not change otherwise.
Another is that fossil fuels are a problem which supersede organizational boundaries. The way we currently see it, we can look at Shell’s emissions in a vacuum, looking at how many greenhouse gases they’re directly responsible for emitting. But as this case shows, they simply sell their infrastructure to another company who now accounts for those emissions. Nothing has changed, but on paper they can point to reduced emissions. This is a serious flaw.
The most important aspect here is that we must centre the voices of the communities who have direct experience with the operations of these companies. It’s hard enough to get any compensation from these companies, but on top of that, Western media often ignores their stories. Many of us probably didn’t know that there were ongoing activist movements against Shell in Nigeria, led by the third generation of activists trying to get some semblance of justice for Shell’s abuses. It’s injustice stacked on top of injustice. And that piece is something we can stop.
Our attention is one of the most valuable resources we have–it’s free, and it’s powerful. Keeping our eyes on these stories, amplifying them, and continually calling on these companies to take accountability is how we win. Corporate crimes thrive in the shadows. We can’t afford to let them stay there.
The video “Hell in the Niger Delta” gives an in-depth look at the 2023 Niger Delta Climate Change Conference, where activists talk about the current state of affairs in the region and what’s being done to make change.
This Guardian article titled “10 myths about fossil fuel divestment put to the sword” breaks down some of the common misconceptions about divestment and what the term actually means
To dive deeper into this topic, check out the books OGONI: The Struggle for Justice and Where Vultures Feast:Shell, Human Rights, and Oil.
This article was written by Thea Walmsley and edited by Gareth Gransaull.