Halliburton and the 'Resource Curse'

By Elizabeth Palmberg 12-11-2009

Part I of an interview with David Ugolor, head of the African Network for Environment and Economic Justice.

Sojourners: Nigeria is sometimes cited as an example of the "resource curse," where a country's natural resources -- oil, in the case of Nigeria -- bring in a lot of money, but that money doesn't go to sustainable development or to reducing poverty. But of course, that "curse" isn't cast by magicians someplace, but by human interactions, including huge, huge amounts of money from wealthy corporations. Could you talk about your battle against that?

David: Well, in the first place Nigeria was an agriculturally based economy -- agriculture was responsible for greater percentage of the Gross Domestic Product (GDP). The oil was discovered in 1958 in Oloibiri community in Niger Delta Region, [and] the agricultural sector started to decline as a result of the discovery of the oil.

Today, over 95 percent of the country's income from exports is derived from oil -- while about 70 percent of the total population of 140 million live below one dollar per day.

As multinational companies started investing in the country, the level of corruption started increasing. Most major government contracts in oil sector were taken by multinational oil companies through compromising government officials -- to the extent that, after 30 years of oil exploitation in Nigeria, what you've seen is that Nigeria became a debtor country, to the tune of 32 billion dollars. (The debt owed to the Paris Club of rich nations was settled -- after the Obasanjo administration used the country's oil windfall to meet the demand of the creditors at the expense of immediate development challenges.)

In spite of the huge resources in the region and the oil companies' affluence, you have widespread poverty and high unemployment, along with oil pollution, gas flaring, and polluted streams and rivers. The multinational oil companies' staff live in affluence, side by side with the poor Niger Delta people, who live with the pipeline that runs across their backyard. The high level of poverty in the Niger Delta region contributed to the new resistance movement started by Adaka Boro before Ken Saro-Wiwa, the founder and president of the Movement for the Survival of the Ogoni People, which further spread to other parts of the region.

People began to ask questions: why should the resources that were supposed to be a blessing turn into a curse to the people?

Most multinational companies operating in the country, including Halliburton, which was involved in the bribe scandal on liquefied natural gas project in Nigeria --

And that's just the top of the list. There's a huge long list.

Yes. A number of oil companies involved in the oil sector are involved in fraud in Nigeria. Siemens also was involved in fraud in Nigeria. The OECD anti-bribery convention -- these oil companies come from [the OECD, a group of mostly high-income countries] -- forbids them to engage in these kinds of practices, but they continue to bribe government officials in Nigeria.

The most special case is the Halliburton case. Halliburton [has] distributed over 180 million dollars to government officials, politicians in Nigeria, to win the [liquefied natural gas] contract, so government officials compromised the rules and regulations --

To build the Bonny Island liquefied natural gas plant.

It's against this background that my organization, the Africa Network for Environment and Economic Justice (ANEEJ), joined other international organizations, such as Corner House UK and Both Ends in the Netherlands, to initiate international action to monitor the Halliburton bribery scandal around the Bonny Island project.

We also launched the Publish What You Pay Campaign in Nigeria to promote transparency and accountability in the extractive industry. PWYP Nigeria, a coalition of over two hundred NGOs, is part of the PWYP global movement that is promoting the Extractive Industries Transparency Initiative (EITI), of which Nigeria is a signatory. EITI is multi-stakeholder initiative currently hosted by Norwegian government to promote good governance in the oil-rich countries like Nigeria.

ANEEJ also facilitated the international campaign for the repatriation of the stolen assets of Nigeria stashed in western banks. Some of the stolen assets, like those the late General Abacha stashed in a Swiss bank, were repatriated back, which was monitored by coalition of Nigeria NGOs, World Bank, and Nigerian government.

[To be continued

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