Oil giant faces fresh criticism over Nigeria

Shell should link relevant executives' pay to progress on environmental issues in the Niger Delta, a highly critical report published yesterday recommends.

The benefits of the oil industry's operations in the region are outweighed by the environmental and social costs, the Ecumenical Council for Corporate Responsibility (ECCR) says. "Shell, as the largest international oil and gas company operating in Nigeria, is central to these outcomes."

The report – made up of five case studies put together by non-government organisations on the ground in Nigeria – condemns Shell for the "environmental insecurity" of too-frequent oil spills with poorly executed clean-ups and unfair compensation. Gas flaring comes in for specific criticism, branded as "a daily reminder to communities of Shell's apparent valuing of production above environmental and public health concerns".

The ECCR recommends the company address communities' need for clean drinking water, improve community relations, and transform the Nigerian SPDC subsidiary's operating culture – with a clear link to executive pay to make sure of progress.

Shell says that any issues affecting SPDC's production capacity – such as halting gas flaring – must be cleared with the Nigerian government, which owns 55 per cent of the joint venture.

"A number of the recommendations are already part of existing policies or are part of a regular review of our practices in Nigeria," Shell said. "However, SPDC acknowledges that it can always do better and is always willing to work with third parties who can help in this."

Shell is already under the cosh over Nigeria. In December, four local farmers launched a groundbreaking claim in a Dutch court, claiming oil spills from Shell operations contaminated fields and fishing ponds, destroying the claimants' livelihoods.