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Host Nation–Oil Transnational Corporation Partnerships for Poverty Reduction in the Niger Delta, Nigeria
of transparency and lack of accountability undermine the Commission’s accentuated by the actions and inactions of oil TNCs, and therefore
legitimacy among its stakeholders and complicate the business of aggravate the incidence of poverty in the region. This might be in
poverty reduction. the form of inadequate investment in pollution reduction, e.g. gas
flaring elimination, or the failure to actively engage with the
The third challenge relates to problems associated with the nature and negative effect of the oil industry on the agricultural or
scope of the NDDC and its ramifications for poverty reduction. By design, manufacturing sector in Nigeria.
the NDDC emphasises social investment and skill acquisition schemes as
its core strategy for poverty reduction. There is no doubt that the Consequently, if partnership initiatives between the Nigerian state
provision of social infrastructures and youth capacity building and oil TNCs are to be effective in ameliorating the incidence of
emphasised by the NDDC are necessary for poverty reduction. However, poverty in the region, partnerships for poverty reduction must go
by failing to address issues of governance deficit and accountability and beyond the current piecemeal approach adopted in the NDDC.
the effective utilisation of oil wealth, the partnership merely tinkers Rather, a comprehensive approach to poverty reduction rooted in
around the edges of the incidence of poverty as opposed to addressing social, economic and environmental sustainability must inform the
its root cause. The reality is that attention to the micro-level design, scope and initiatives of the partnership. Hence, tri-sector
manifestation of poverty in the region without a corresponding effort to partnerships between government, oil companies and civil society
address its macro-level root causes means partnership efforts to reduce that address the broad social and environmental impacts of oil
poverty in the region are not likely to realise their full potential. This is extraction will go a long way towards ensuring that both the
because events at the micro-level (i.e. incidences of poverty in local proximate and the root causes of poverty are being addressed. For
communities) are often a consequence of activities (i.e. action or inaction) example, governance failures – especially corruption – have meant
at both state and national levels. Consequently, the narrow focus of the that significant amounts of oil revenue that could have been
NDDC makes it more of a placebo than a medicine for poverty reduction. invested in poverty reduction are either mismanaged or stolen at the
different levels of government. This problem can be partially
Similarly, the NDDC as currently instituted has little or no influence addressed by fostering tri-sector partnership links between the
over how oil TNCs conduct their core business operations, and NDDC, Transparency International Nigeria and the Nigerian
therefore does not facilitate the integration of corporate social Extractive Industry Transparency Initiative (NEITI), as well as
responsibility activities that can reduce poverty into the day-to-day extending the mandate of the NEITI to include state and local
activities of oil TNCs. In addition, by nature the oil industry is capital- government levels in Nigeria. Such a partnership can be pursued by
as opposed to labour-intensive. As such, employment opportunities oil TNCs via active support for the Oil Producers Trade Section (OPTS)
are limited and therefore the impact of youth training schemes of the Lagos Chambers of Commerce to liaise with the different
designed by the NDDC to enable youths to get jobs as a means of institutions. This partnership will facilitate a shift in emphasis from
reducing poverty is inherently constrained. Furthermore, besides being just governmental income to include governmental expenditure,
an enclave economy, oil extraction takes place in a vulnerable which is crucial to poverty reduction in the Niger Delta.
environment where 70% of the population depends on farming and
fishing. Oil spills and gas flaring, with their negative repercussions Finally, to strengthen parternship initiatives between government and
on fishing and farming, mean that more people are displaced from oil TNCs for poverty reduction, oil TNCs and government must
their traditional sources of livelihood with no alternative sources prioritise addressing the social and environmental cost of oil
of livelihood being created. For instance, the Honourable Minister of production by internalising such costs through investment in
Environment, Housing and Urban Development recently stated in a environmental pollution reduction strategies and in alternative sources
local newspaper that there are an average of 52 spills per month in the of livelihood in host communities. This would allow for fewer people
Niger delta, and a total of 1,260 incidences of oil spills were recorded to be displaced from their traditional sources of livelihood and ensure
in the last two years (2006–2008). The impact of these negative that those who are displaced have alternative sources of livelihood
repercussions of oil extraction undermines the effectiveness of the that can keep them out of poverty. Addressing the social and
NDDC as a vehicle for poverty reduction. This is because as the NDDC environmental cost of oil extraction in an environment like the Niger
tries to reduce poverty in local communities through social delta can be quite challenging given that oil bunkering and deliberate
investments, at the same time more households are being pushed into sabotage of oil pipelines to get compensation are common. To reduce
poverty due to loss of livelihood. This situation is effectively being the incidence of sabotage and the negative perceptions of oil TNCs
sustained, as poor funding and the limited capacity of the NDDC and to avoid conflicts over oil spill compensation, an independent
means that the Commission is unable to create or invest significantly partnership needs to be involved in the determination of the causes of
in alternative sources of livelihood for displaced households. This circle a spill, the best remedial action to take and the appropriate
of livelihood displacement without the creation of alternatives is at the compensation payment to be made in each instance. Such a
heart of the incidence of poverty in the region and is exacerbated by partnership would add credibility and legitimacy to the process, and
governance deficit at the local, state and federal government levels. would potentially serve as an avenue for environmental conflict
resolution. This kind of partnership might involve the Clean Nigeria
Rethinking Host Nation–Oil Transnational Corporation Association (CNA), a civil society such as Environmental Rights Action
Partnerships for Poverty Reduction in the Niger Delta and the Department of Petroleum Resources (DPR). Such a partnership
Poverty in the Niger delta is rooted in the structural inadequacies of would allow oil TNCs to secure their social licence to operate, reduce
the Nigerian state and the systemic deficiencies inherent in its the negative impact of oil extraction on poverty and foster good
society. These structural and systemic anomalies are in turn stakeholder relations in the region. ■
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EXPLORATION & PRODUCTION – VOLUME 7 ISSUE 1
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