Sustainability Assignment

Countries all over the world, regardless of theirbecause oil moguls do not want to risk their
economic development, are striving to achievemulti-billion profits for the sake of human rights
and maintain successful operation of theand call these issues "highly political" underlying
economic, socio-cultural and political stability andtheir inability to be involved in such matters. At
integrity within its boundaries. This goal isthe same time oil producers must be responsible
undoubtedly the mail prospect of countries’for such problems as human rights, especially if
officials and its people in most developed andworking together with the domestic governments.
prosperous countries. An entirely different pictureInstability in the community, such as protests of
can be observed when looking at the Africanits certain layers causes both players:
continent or at almost any South Americangovernments and oil companies lose profits.
country. Why is that so? This report will attemptTherefore both have to cooperate producing
to discover the answers to this question.good for the community and country in general.
AimsHowever the real situation in many countries and
This paper will consider one developing country inparticularly in Nigeria is drastically different. The
the context of its history, political situation, sociallevel of secrecy that surrounds all agreements of
background and ethnical issues that it is currentlyNigerian government with foreign oil companies is
facing. Analyzing the facts and historical data,absolutely absurd. There is only one publicized
certain conclusions as to why Nigeria’sdocument that was issued by Shell regarding the
economy is in such a horrible state is one of the"internal guidelines on security and international
major goals of this reports. Another importanthuman rights standards" (Journal of International
aim is to attempt the presentation of possibleAffairs, 1999,pp. 281). At the same time none of
solutions for the situation that is currently takingthe companies operating in Nigeria publish reports
place in Nigeria’s Delta region.that include claims of environmental damage,
Executive Summarycompensation declarations, protest actions or any
Nigeria is one of the largest oil producers in themilitary actions occurring in the vicinity of their
world and the first biggest one on the Africanfacilities. It seems that these companies are
continent. Being a country with rich naturalcompletely unaware of the political situation in the
resources it has not yet enjoyed even a decadecountry and accusations of the communities they
of political or economic stability due to theoperate their business in. Clearly such position is a
particularities of its government’s rule.mere convenient shield of producers from
Corrupted politicians and non-transparent lawsunnecessary trouble.
have made oil production process into a constantConclusions
struggle of nationals with foreign companies. TheSustainability of Nigeria as a developing country will
debates over who is right and whose profitsgreatly depend on what decisions its government
should oil production benefit are not helping theand its entire nation will make concerning their
county’s economy. At the same time Nigeriamain wealth-oil. Right now the only smart solution
is suffering from continuous ethnic rivalries andfor the central government seems to be the
undergoing dangerous environmental changes. Thisassignment of a fixed proportion of oil revenues
paper is going to view these issues in moreto the development across the entire onshore
details.production region (Ford, 2003). It appears to be
Resultslogical that the more oil is extracted from their
Taking into consideration current situation in Nigerialand- the more local people will benefit from it and
and particularly in the Niger Delta, certain laws andthus will not sabotage work of oil installations. It is
regulations must be implemented for thevital for the inhabitants of these regions to make
preservation and proper maintenance of itstheir desires and requests to the companies, as
natural resources. Clearly oil is country’s bestwell as the governments, well known in order to
natural resource that could be traded for thereceive what they can based on their rights. Only
wealth of its people and stable economic growth.in this case of community’s joint forces the
On the other hand it can only happen in a countrycounty will be on the way to the economic
with established political structure, ethnical identity,stability and more or less balanced social structure.
developed infrastructure and lawful approaches toIt is important to note that the mere absence of
business decisions. It is a known fact that Nigerianthe fully outlined legal regime is not essentially an
government usually "entrusts the oil companiesobstacle to the successful development of
almost entirely to provide the information on suchcountry’s natural resources. There are
matters as land claims and its valuation,instances where oil industry has developed greatly
environmental impact assessments, terms ofin places where there were no laws and written
compensation for property and labor usage,regulations on ownership of resources and their
damage claims, etc." (Journal of Internationaldevelopment. On the other hand the presence of
Affairs, 1999,pp. 281). This data proves that all ofinconsistent claims of ownership can be a big
the vitally important processes associated with oilproblem, especially in countries like Nigeria where it
production are in the hands of the company and acan easily lead to military confrontations. One of
few politicians who are interested in it for personalthe most successful business practices in terms
financial reasons. At the same time theof cooperation between two countries is joint
county’s poorest find themselves receivingdevelopment arrangements. Most of such
whatever compensation they are offered withoutarrangements fall under one of the three major
a right to protest. Also such companies are oftencategories: 1) each state has the authority to
giving away compensations without making surelicense its own nationals to operate within the join
of its legal and correct distribution, thus a bigzone, with condition for compulsory joint ventures
portion of the funds end up in the wrong handsbetween these licensees; 2)a joint authority with
never reaching those who need it the most. It islicensing and regulatory powers manages
worthy to state that there are autonomous lawdevelopment of the resources on behalf of both
bodies that are trying to monitor processstates; 3) one of the states controls development
described above however previous years’of the resources on behalf of both with the other
practice proves that security force harassmentsstate’s participation limited only to revenue
and office raids have badly impacted theirsharing and monitoring (Journal of International
initiatives.Affairs, 2005, pp. 81)
FindingsUnder the conditions provided above Nigeria and
In countries like Nigeria- with a clearly distinctiveother developing countries with the similar situation
problem of human rights violation and politicalhas a chance to become a real economic power.
corruption, corporations come into play andFinding a balance between government’s
proclaim their aims as noble and in the long runregulations, human rights, ethnic differences and oil
able to change the current situation. In realityindustry’s interests along with clear
though instead of providing needed help forspecifications as to resources’ ownerships will
environmental preservation and sustained oil usagelead to regeneration of the economic strength
and production, companies adapt to the local rulesand stability in the country.
and do little to change the situation. This happens