In a momentous verdict last week, BP was ordered to pay the largest criminal penalty in U.S. history for its role in the Deepwater Horizon oil spill. However, while polluters are increasingly being held accountable for their crimes in the developed world, many global companies continue to enjoy relative impunity for environmental damage caused in poorer countries: as exhibited by the lack of reparation in the Niger Delta.
NEW YORK – When BP and its drilling partners caused the Deepwater Horizon oil spill in the Gulf of Mexico in 2010, the United States government demanded that BP finance the cleanup, compensate those who suffered damages, and pay criminal penalties for the violations that led to the disaster. BP has already committed more than $20 billion in remediation and penalties. Based on a settlement last week, BP will now pay the largest criminal penalty in US history – $4.5 billion.
The same standards for environmental cleanup need to be applied to global companies operating in poorer countries, where their power has typically been so great relative to that of governments that many act with impunity, wreaking havoc on the environment with little or no accountability. As we enter a new era of sustainable development, impunity must turn to responsibility. Polluters must pay, whether in rich or poor countries. Major companies need to accept responsibility for their actions.
The Niger Delta Crisis
Nigeria has been Exhibit A of corporate environmental impunity. For decades, major oil companies, including Shell, ExxonMobil, and Chevron, have been producing oil in the Niger Delta, an ecologically fragile environment of freshwater swamp forests, mangroves, lowland rainforests, and coastal barrier islands. This rich habitat supports remarkable biodiversity – or did before the oil companies got there – and more than 30 million local inhabitants, who depend on the local ecosystems for their health and livelihoods.
Twenty years ago, the International Union for Conservation of Nature and Natural Resources classified the Niger Delta as a region of high biodiversity of marine and coastal flora and fauna – tree species, fish, birds, and mammals, among other forms of life – and therefore rated it as a very high priority for conservation. Yet it also noted that the region’s biodiversity was under massive threat, with little or no protection.
The global companies operating in the delta have spilled oil and flared natural gas for decades, without regard for the natural environment and the communities impoverished and poisoned by their actions. One estimate puts the cumulative spills over the past 50 years at approximately 10 million barrels – twice the size of the BP spill.
The data are uncertain: there have been many thousands of spills during this period – often poorly documented and their magnitude hidden or simply unmeasured by either the companies or the government. Indeed, just as BP was being hit with new criminal penalties, ExxonMobil announced yet another pipeline leak in the Niger Delta.
The environmental destruction of the delta is part of a larger saga: corrupt companies operating hand in hand with corrupt government officials.
The companies routinely bribe officials to gain oil leases, lie about output, evade taxes, and dodge responsibility for the environmental damage that they cause. Nigerian officials have become fabulously wealthy, owing to decades of payoffs by international companies that have plundered the delta’s natural wealth. Shell, the largest foreign operator in the Niger Delta, has been criticized repeatedly for its egregious practices and its unwillingness to be held to account.
Meanwhile, the local population has remained impoverished and beset by diseases caused by unsafe air, poisoned drinking water, and pollution in the food chain. Local lawlessness has led to gang warfare and persistent illegal tapping into the pipelines to steal oil, leading to further massive oil spills and frequent explosions that kill dozens, including innocent bystanders.
In the colonial era, it was the official purpose of imperial power to extract wealth from the administered territories. In the post-colonial period, the methods are better disguised. When oil companies misbehave in Nigeria or elsewhere, they are protected by the power of their home countries. Don’t mess with the companies, they are told by the United States and Europe. Indeed, one of the largest bribes (a reputed $180 million) paid in recent times in Nigeria was by Halliburton, a company tightly intertwined with US political power. (Dick Cheney went from being Halliburton’s CEO to the US vice presidency.)
Last year, the United Nations Environment Program (UNEP) issued a remarkable report on Ogoniland, a major ethnic homeland in the Niger Delta that has been at the epicenter of conflict between local communities and international oil. The report was as scathing as it was scientifically clear. Despite many past promises of a cleanup, Ogoniland remains in environmental agony, impoverished and sickened by the oil industry.
A New Era Of Responsibility
UNEP also offered clear and detailed recommendations, including emergency measures to ensure safe drinking water; cleanup activities targeting the mangroves and soils; public-health studies to identify and counteract the consequences of pollution; and a new regulatory framework.
The world’s governments have recently agreed to move to a new framework for sustainable development, declaring their intention to adopt Sustainable Development Goals at the Rio+20 Summit in June. The SDGs offer a critical opportunity for the world to set clear, compelling standards for government and corporate behavior. Many major companies, including in the oil industry, have expressed their readiness to support sustainable development goals.
Cleaning up the Niger Delta would provide the strongest possible example of a new age of accountability. Shell, Chevron, ExxonMobil, and other major oil companies should step forward and help to fund the necessary cleanup, ushering in a new era of responsibility.
The Nigerian government’s own accountability is on the line as well. It is heartening that several Nigerian senators have recently been in the forefront of efforts to strengthen the rule of law in the oil sector.
The cleanup of the Niger Delta provides an ideal opportunity for Nigeria, the oil industry, and the international community to show convincingly that a new age has dawned. From now on, sustainable development must not be a mere slogan, but rather an operational approach to global governance and well-being on a strained and crowded planet.
By Jeffrey D. Sachs
Copyright: Project-Syndicate, 2012
Jeffrey D. Sachs is a Professor of Economics and the Director of the Earth Institute at Columbia University. He is also a Special Adviser to the United Nations Secretary-General on the Millennium Development Goals, as well as being the founder and co-President of the Millennium Promise Alliance, a nonprofit organization dedicated to ending extreme poverty and hunger. Sachs has authored numerous books, including The End of Poverty and Common Wealth. In 2004 and 2005, He was named among Time Magazine's "100 Most Influential People in the World”.
Get more special features Get more special features from the world's top economists in your inbox. Subscribe to our newsletter for alerts and daily updates.