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Nigeria Set Up a Fund to Clean Up the Niger Delta — but There's Not Much Cash in It

Oil and natural gas production provides roughly 75 percent of the nation's revenue — but the environmental costs have been high.
Photo by George Esiri/EPA

Four years after a scathing UN report on oil pollution in the Niger Delta, the Nigerian government has finally put in place a fund from which to finance clean up efforts in what is among the world's most contaminated areas. Trouble is: There's not much money in the account and the companies responsible for the spills aren't required to cough up very much cash.

The delta, where the Niger River meets the Gulf of Guinea, is home to 30 million people and comprised of coastal islands, mangroves, freshwater swamps, and lowland rainforests.

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Nigeria's vast oil reserves, estimated at 37 billion barrels, with much of that in the Niger Delta, has helped to make it Africa's largest oil producer.

Related: Royal Dutch Shell Agrees to $83 Million Payout for Nigerian Oil Spills

But spills are a common occurrence, according to an analysis by Amnesty International. Royal Dutch Shell and the Italian company Eni were responsible for more than 550 oil spills in the Niger delta last year, the report found. In contrast, there were only about 10 spills a year across the whole of Europe between 1971 and 2011.

"It is an endemic problem," Joe Westby, a campaigner for business and human rights with Amnesty International, told VICE News. "The roots of it lie in the complete lack of proper government regulation. So when the spills occur, the government relies on the companies to investigate and assess the cause and damage. In many cases, oil companies get away with not cleaning up properly or paying fair compensation."

In 2006, the Nigerian Government asked the United Nations Environment Programme to study the extent of delta oil pollution. In its report, published in 2011, the agency recommended that the government establish a fund with an initial investment of $1 billion. The Nigerian government and the oil industry should finance the fund, the agency said.

But the Nigerian government has set aside only $10 million and Shell, a leading contributor to the region's contamination, is required to finance as little as 30 percent of the fund.

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Rachael Power, a Shell spokeswoman told VICE News the amount was commensurate with the stake held by Shell in a joint venture with some other oil companies, including the Nigerian National Oil Company, Nigerian Agip Oil Company, and Total. All together, the companies in the joint venture are expected to contribute 90 percent of the fund.

Related: How Big Oil Became the Perfect Fuel for Corruption

Oil exploration in Nigeria began in earnest in the 1950s and the West African nation joined the Organization of Petroleum Exporting Countries, the oil cartel, in 1971. Oil and natural gas revenues provide about 75 percent of Nigeria's national income, according to the US Energy Information Administration.

That revenue is offset, however, by the costs of environmental contamination. Frequent oil spills, whether accidental or brought about by negligence or criminal activity is contaminating the air, soil, and water of the Niger Delta. And it compromises the health of the region's inhabitants.

But Shell denies it's responsible, instead blaming local dynamics internal to Nigeria.

"As the UN report stated, treating the problem of environmental contamination … merely as a technical clean up exercise will ultimately lead to failure," Shell's Power said."This must include putting an end to the widespread pipeline sabotage, crude oil theft, and illegal refining that are the main causes of environmental damage in … the wider Niger Delta today."

Amnesty International, though, has long maintained that Shell should at least match the government's commitment to the fund.

"The UN found pollution in sites that Shell had claimed it had cleaned up," Amnesty's Westby said. "We recently visited Nigeria to carry out new research and visited some of the same sites, and we found there is still visible pollution — standing oil and a heavy smell of petroleum in the air."

Related: Shell Executive Says the Company Might Drop the Word 'Oil' From Its Name

Follow Esha Dey on Twitter: @deyesha