April 20, 2024

The oil firm Shell cannot be allowed to withdraw from the Niger delta before it takes responsibility for its toxic legacy of pollution and the safe decommissioning of abandoned oil infrastructure, a report says.

Shell plc is preparing to divest from the delta but a report warns that it must remain until it has cleaned up its legacy of pollution.

The report, by the Centre for Research on Multinational Corporations (Somo), says historical pollution remains a serious issue in the area and accuses Shell of trying to avoid responsibility despite the billions of dollars it has earned from the oil.

The allegations come as the Labour MP Clive Lewis said in the House of Commons that the departure of Shell, a British company, from the delta raised serious concerns that its environmental responsibilities and obligations could be evaded.

The report says there is a big transparency gap around the issue of funding for decommissioning. Nigeria has legal requirements for companies to set aside funds for decommissioning, but there is no means to establish how much funding companies have – or have not – set aside, the report said.

Researchers for Somo could not find any confirmation that Shell has set up a fund or funds to cover the decommissioning of the oil mining leases it has sold.

“Shell has pulled off the ultimate Houdini act,” said Audrey Gaughran, the executive director of Somo. “As the oil industry enters its final phase, whether that’s in the next five years or 25, Shell has sold its toxic assets and will not be left holding them when the music stops.

“Shell has profited from oil extraction for decades, and in doing so, has made the Niger delta one of the most oil-polluted places on Earth, leaving communities to face the dire consequences that will remain well beyond the lifetime of the industry.”

The departure of Shell, which has been the dominant operator with the largest footprint in the region for decades, affects significant areas of the delta and thousands of communities, she said.

Shell has long-maintained that theft of oil and interference with pipelines are the causes of much of the oil pollution. But the report says this has no bearing on its responsibility to clean up. “Under Nigerian law, Shell must clean up oil spills no matter the cause. It has failed to do so,” the report says.

“Shell must not be allowed to simply walk away from this most emblematic of unjust energy transition cases,” said Gaughran. “Ensuring that the historical pollution, the lack of funding for safe decommissioning and poor financial transparency are fully addressed in Nigeria will be an important litmus test for a just energy transition across the world.”

In the House of Commons this week, Lewis said Shell has proposed the sale of its Nigerian subsidiary, the Shell Petroleum Development Company (SPDC), and he wanted to know what the government was doing to make sure the British company did not leave behind an environmental catastrophe.

“This is one of the most significant business and human rights issues of our generation. Shell is responsible for some of the most brutal, violent, and repressive actions by a company, in this case against communities in the Niger delta,” Lewis said.

“Shell’s exit from the Niger delta could set a precedent for other British multinationals operating in the global south that may be seeking to evade responsibility for environmental destruction, leaving communities with little recourse to justice.”

A Shell spokesperson said: “Onshore divestments by international energy companies are part of a wider reconfiguration of the Nigerian oil and gas sector in which, after decades of capability building, domestic companies are playing an increasingly important role in helping the country to deliver its aspirations for the sector.

“As divestments occur, mandatory submissions to the federal government allow the regulators to apply scrutiny across a wide range of issues and recommend approval of these divestments, provided they meet all requirements.”

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