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The Institute for Policy Studies and Friends of the Earth today denounced the World Bank’s plans to approve a $15 million loan to a financial intermediary that would provide subcontracting services to Shell Oil Corporation in the Niger Delta of Nigeria.  The loan, which would be provided by the World Bank’s private sector lending arm, the International Finance Corporation (IFC), would provide hard currency to banks in the Niger Delta who could then onlend to subcontractors providing services to the Shell Oil Corporation. It is set to be voted on on June 14, 2001. Internal IFC documents leaked to IPS and FoE reveal that the IFC recognizes this association with Shell represents a “reputational risk” to the World Bank.

“This loan sets an alarming precedent for a number of reasons,” said Daphne Wysham, an energy policy analyst with the Institute for Policy Studies.  “It is being prepared without any accountability to World Bank policies; and it will provide support to one of the wealthiest and most controversial corporations on the planet in a region where human rights abuses continue to be commonplace.”

“Rather than alleviating poverty among the people of the Delta, this project will simply continue the pattern of environmental devastation, corruption, human rights abuse and corporate subsidies that have plagued the region for decades,” Wysham continued.

“This loan is an endrun around vital environmental and human rights protections,” said Carol Welch, deputy director for international programs with Friends of the Earth. “This debacle reveals why we need serious scrutiny of all World Bank oil, gas and mining projects.”

Shell has been the target of consumer boycotts, human rights and environmental campaigns since 1993. Mass protests by the Ogoni people of the Niger Delta against environmental devastation and human rights abuses by Shell and the Nigerian government forced the transnational oil company to cease operations in the Ogoni region of the Niger Delta.   The most famous spokesperson for the Ogoni people, the writer and activist Ken Saro Wiwa, was hanged together with eight other Ogoni men, by the Nigerian government in 1995, after speaking out against Shell’s devastation of his homeland. Shell Oil made no attempt to intervene or denounce Saro Wiwa’s hanging.  Although Shell has abandoned Ogoniland, oil wells and flow-lines in Ogoniland continue to spew crude oil. The people of Ogoni, largely fishermen and farmers, have seen their livelihoods destroyed by the constant oil spills.  The most recent Shell spill occurred on May 9, 2001, in Ogoniland. The CIA recently revealed that years of oil spills in the Niger Delta, which have yet to be cleaned up, amount to the equivalent of 10 times the Alaskan Exxon Valdez oil spill.

Nonetheless, the IFC plans to approve the loan via a streamlined process wherein the project would not require an environmental impact assessment or adherence to any World Bank policies or guidelines. This is because the loan provides funding to a financial intermediary and, therefore, according to IFC policies, does not require the IFC to follow its own guidelines or policies.

The World Bank plans to launch a review of their oil, gas and mining sectors this fall. It is not clear whether projects such as this loan to a financial intermediary for an oil company would be part of the review process.

Read leaked documents (summary)

For the latest news on the Niger Delta, visit SEEN's Nigeria section
For information about Shell, visit: <http://www.essentialaction.org/shell/issues.html#Why boycott>
For further information about Friends of the Earth, visit: http://www.foe.org.

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