"Nigeria: Tainted Sale?"

Since Shell first discovered oil near the village of Oloibiri in 1956, the Niger Delta has become Africa’s most valuable oil-producing region and the Anglo-Dutch giant has earned billions of dollars.

Now the company is seeking to sell its onshore oil business in the Niger Delta.

Speaking at Shell’s 2021 annual general meeting, its then CEO, Ben Van Beurden, explained the decision in the context of attacks on the company’s infrastructure by oil thieves, which he described as “community problems”.

“That’s for the Nigerian government perhaps to solve. We can do our best, but at some point in time, we also have to conclude that this is an exposure that doesn’t fit with our risk appetite anymore,” he said. According to media reports, several Nigerian companies have been preparing bids for Shell’s onshore business in Nigeria, worth up to $3 billion, although the sales process has been delayed due to a legal dispute. When the sale does go ahead, Shell must make sure that its eventual withdrawal will not have negative human rights and environmental impacts.

This briefing outlines why Shell has a responsibility, under international human rights standards, to conduct responsible divestment. It draws on over 20 years of research by Amnesty International and partner organisations working to defend human rights in the Niger Delta.

This research has demonstrated that Shell’s Nigeria operations have come at the cost of the human rights of people living there. Hundreds of oil spills a year from poorly-maintained pipelines and wells, along with inadequate clean-up practices, have damaged the health and livelihoods of the Niger Delta’s many inhabitants.

Shell cannot now just wash its hands of these problems and leave. [...]

In response to this briefing Shell pointed to the role that the government needs to play. However, it is also the case that, as the UN Guiding Principles explain, Shell has an independent responsibility to take action to avoid causing or contributing to the human rights harms linked to pollution. Accordingly, Shell must take its own steps to ensure that its divestment plan does not worsen the plight of the inhabitants of the Niger Delta.

There are lessons here too for the global oil and gas industry. The climate crisis requires an urgent shift away from fossil fuels. The Intergovernmental Panel on Climate Change has stated that global greenhouse gases emissions need to be reduced by 43% by 2030 and by 60% by 2035 compared to 2019 levels to limit the increase of the global average temperature to 1.5°C. This means that there should be no expansion of fossil fuel exploration or extraction, and existing projects phased out. Wealthy industrialized countries must completely end their production and use of these fuels as soon as possible and no later than 2030; all others must phase them out by 2040 at the latest.

As multinational companies such as Shell divest themselves of assets and operations as part of this phase out, they must do so in a way that respects human rights and the environment.

Recommendations

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For Shell

• Before selling its onshore oil business in the Niger Delta, Shell should conduct a thorough human rights due diligence process in order to identify, prevent, mitigate and account for how it addresses potential human impacts linked to the sale;
• As part of this due diligence, Shell should conduct meaningful consultations with affected communities about its plans, and provide up to date information, including measures to mitigate potential risks, and lessons from previous divestments in the Niger Delta;
• Shell should provide a full remediation plan, with details of all completed and ongoing clean ups across its area of operation before divestment, and ensure that this is completed before the transfer. Shell should also allow independent testing to be conducted to assess whether its purported clean up of previous oil spills has been done properly;
• Before selling its assets, Shell should publish details of the condition of pipelines and other assets and disclose the age of infrastructure and all repairs and replacements;
• Shell should provide details about measures to increase the safety and security of its infrastructure;
• Shell should assess whether companies bidding for its assets have weaker policies and public commitments than its own, and use its influence to ensure they publish all relevant information on their operations, including on spills, including JIV reports, photographs, video and remediation reports;
• Shell must assess the capacity of companies to maintain its infrastructure to international standards. If it has not already done so, Shell should assess the record of companies that have previously taken on its assets and publish the findings. If necessary, it should assess steps it can take to improve the capacity acquiring companies, and then carry these out;
• Shell must assess whether its transfer of assets risks increasing emissions and take steps to mitigate this risk.

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Ahead of publication, Amnesty International shared its concerns with Shell and received a detailed reply from the company. Amnesty International has incorporated the reply in the briefing as and where appropriate.