CONSUL GENERAL VISITS PORT HARCOURT AND YENAGOA

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E.O. 12958: DECL: 12/27/2004
TAGS: EPET EINV PGOV ASEC NI
SUBJECT: CONSUL GENERAL VISITS PORT HARCOURT AND YENAGOA


Classified By: Consul General Brian L. Browne. Reasons 1.4(b) and (d).



1. (SBU) SUMMARY: The Consul General visited Rivers and
Bayelsa States December 8-10. He met the Deputy Governors of
both states (the Governors were out of Nigeria),Rivers State
Assembly leadership, environmental and human rights
activists, opposition leaders and researchers at Port
Harcourt's leading socio-economic think tank. The visit came
on the heels of the December 5 occupation of Chevron and
Shell oil companies' facilities by agitated local
communities. While Port Harcourt and Yenogoa were free of
violence, interlocutors in both capitals cited escalating
tension in the Delta. In their totality, the Consul
General's conversations revealed the chasms separating key
players in the Delta, and showed the distance needed to be
traversed before these actors can reach a modus vivendi that
minimizes disruption of oil company activity and offers hope
of sustained economic improvement to the local communities.
End Summary

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RIVERS DEPUTY GOVERNOR--COMPANIES AT FAULT
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2. (U) During their December 8 meeting, Rivers State Deputy
Governor Gabriel Toby told the Consul General that progress
was being made between Chevron Texaco officials and local
community representatives to resolve the disagreements
between the company and local area that precipitated the
occupation of the Robert-Kiri flow station on December 5th.
Toby stated that several state officials, including the State
Assembly's Deputy Speaker, were acting as mediators between
the company and the local residents. He mentioned that the
active interposition of the state had lowered tensions in
that local community, paving the way for the current
negotiations. He was optimistic that the talks would lead to
a Memorandum of Understanding between Chevron and the local
community.


3. (C) However, Toby chastised Chevron for having ignored
warning signs of growing tension in the local community.
Evidently, the local Chevron staff had failed to respond to
several missives sent by the local community to Chevron's
Port Harcourt office. Toby's criticism of Shell, which
suffered a contemporaneous occupation of a facility, was
harsher. He accused local Shell management of being
disingenuous with local residents. Shell management
dissembled, making commitments they had little intention of
honoring, Toby asserted. Shell had been warned repeatedly by
State officials about their record of broken promises on
employment and community projects; but the company's
officials thought they could continue to finesse the local
leaders. On the other hand, Chevron's local manager had not
lied. His omission was that he failed to take the
community's agitation seriously. Perhaps inured to local
agitation because he has heard so much angry rhetoric in the
recent past, he neglected to inform the Lagos headquarters of
the rising temperature and to make any serious attempt
himself to defuse the tension before it erupted.


4. (C) At the crux of the matter were jobs and money. Toby
accused the oil companies of neglecting to hire sufficient
indigenes of the area. Most of the companies' Nigerian
workers came from other parts of the country, although many
were employed in jobs such as boat operators or in unskilled
positions that could have been staffed via the local
employment pool, maintained the Deputy Governor. However,
mid-level management in the companies were mainly Nigerians
from other parts of the country; they used their position in
the company to hire their ethnic kith, to the detriment of
the unemployed local residents. Toby also cited the
companies for failing to fashion the right kinds of economic
development projects and then for inadequately funding those
projects they did author.


5. (C) The companies were their own worst enemy, Toby
continued. They only dealt with the local communities after
situations boiled over. Only after a disturbance did they
seek state government intercession, Toby groused. The
companies traditionally ignored the concerns of local
residents. Only when the residents take matters or oil
facilities literally into their own hands do they get the
companies' attention. Even then, the attention span is
brief, he spoke. The companies will be attentive only as
long as it takes to sign an Memorandum of Understanding; but
the minute the Memorandum of Understanding is signed it
becomes a dead letter, Toby asserted. With the crisis
averted and local agitators seemingly placated, the companies
revert to the mode of operation that existed prior to the
Memorandum of Understanding. Toby stressed that the
companies not only failed to liaise regularly with
appropriate state government agencies, i.e., Economic
Development, Environmental Affairs and local government
affairs, the companies often rebuffed state government
attempts to establish communications outside of crisis
situations.


6. (C) Toby said the companies' attitude caused significant
disappointment and some rancor within the state government.
Nevertheless, River state would always help to extricate the
companies from these hot situations. The State Government
believes it has an obligation to the local communities'
welfare, but also it recognizes the economic importance of
the oil companies. The River State government's role in
mediating between the companies and the communities is an
attempt to strike a balance between conflicting positions of
economic populism held by the local communities, and that of
business realism which drives the companies' behavior.

7 (C) Replying to a question from the Consul General, Toby
opined that both the Federal Government and the Niger Delta
Development Commission (NDDC) have fallen woefully short of
carrying their fair share of the developmental burden in the
Delta. The Deputy Governor stated the NDDC had just
finalized its master plan for development in the Delta;
however, the plan was almost dead on birth. President
Obasanjo bristled when he discovered the plan estimated that
most Delta inhabitants lived below the world poverty line.
Obasanjo threatened to veto the plan. The presidential
threat was not lifted until the language on poverty was
softened. Toby pointed to this wordsmithing as an example of
the legerdemain that Abuja seems to relish to the prejudice
of actual progress on local development issues.

8 (C) Consul General thanked Toby and the Rivers Government
for their swift intercession in the Robert-Kiri occupation,
stressing the importance of bringing the parties to the table
and of resolving these types of incidents without casualty or
property damage.

9 (C) However, the Consul General noted that, in the long
run, settling the community disputes via ad-hoc, individual
MOU's risked creating a patchwork of localized settlements
that could cause nearly as many problems as they solved. A
community will compare its compact with those reached by
other communities and other oil companies. This could raise
invidious comparisons and spark jealousies that degenerate
into something worse. Moreover the frequency of these
disruptions and take-overs seemed to beg for a more
comprehensive, strategic approach to the relationship between
the local communities and the oil companies. Toby, echoed by
the State Commission for Information and Secretary of the
State Government, said they would endorse such a
comprehensive approach and hoped the NDDC would play a
leading role in orchestrating all of the local, state,
national and international stakeholders.

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TALKING TO THE LAW MAKERS--BLAME ABUJA
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10 (C) In a separate December 8 meeting, Speaker of the
Rivers State Assembly, Rotimi Amaechi, labeled the federal
government as the main cause of turmoil in the State.
Amaechi stated that Nigeria was nominally a federal system
but was highly centralized de facto. Abuja siphoned off
resources and revenues from the Delta but failed to re-invest
in local people or communities. The federal government was
mostly absent from the lives of people. Moreover, the state
government could only offer limited resources which he
claimed had been put to good use in power generation and some
road construction. But the state did not have sufficient
funds to go around. In this milieu, local communities come
to see the oil companies--the only physical presence of the
modern and monied outside world they see--as a surrogate
government. Thus, poverty-driven frustration among the local
population is directed at the oil companies because the
companies are the only entity with which the people have
immediate contact.

11 (C) Amaechi predicted disruption in the Delta would
continue until GON's policies changed to reflect true
federalism i.e., greater distribution of resources to Rivers
State. This, according to him, will ensure that
oil-producing areas derived adequate compensation from their
resources. Amaechi added that the local communities now feel
empowered by the fact that taking over a facility may send
ripples throughout the international oil market. Because of
this realization, more communities will be more apt to occupy
facilities.

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LOCAL NGO'S BLAST GOVERNMENT AND COMPANIES
--------------


12. (SBU) Representatives of several Port Harcourt-based NGOs
offered Consul General their unique perspective on the Niger
Delta. The majority of the NGO official participants accused
all stakeholders (including the international community) of
lack of genuine concern for social deterioration in the Niger
Delta. According to them, chronic poverty and unemployment
remain the most significant causes of tension in the region.
Port Harcourt remained one of Nigeria's fastest growing
cities despite high unemployment there. People from many
parts of Southern Nigeria flocked to the city, believing the
oil industry abounded in jobs and wealth. The reality is
that jobs in the industry are few. Thus, Port Harcourt was
now the home of pools of unemployed migrants. Women often
experienced the brunt of this poverty. Forced to be family
breadwinners, many women were compelled into prostitution,
with their clients being the relatively small number of
employees in the oil sector. The NGO officials stated that
long-standing poverty and unemployment has strained
traditional social structures and mores.


13. (SBU) The social order had become inverted. Youth no
longer listened to traditional elders. Now, armed-toting
young men held more sway within the communities than the old
chiefs. This shift in leadership also meant that violence,
not negotiation, is progressively becoming the preferred mode
of dispute resolution in the area, the activists warned.
Spreading their analysis wider than the Delta, the activists
deplored the existing money-dominated, violence-prone
political process in Nigeria, alleging that it alienated the
vast majority of their countrymen. They identified the
politicians' propensity to hire and arm local youths as
responsible for conflict in many parts of the Niger Delta.
To achieve lasting peace, the NGO leaders urged the
international community to support reform in Nigeria. In
particular, they demanded electoral reform that will allow
political candidates and parties more representation of the
average person to emerge. In their opinion, the current
political leadership in Nigeria did not represent the true
aspirations of the people, nor did it command widespread
legitimacy.

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OIL COMPANY REPRESENTATIVES FEEL PICKED UPON
--------------

14 (C) The Consul General hosted an evening dinner for Port
Harcourt-based Chevron-Texaco and Halliburton officers
December 8th. Both officials stated that security in Port
Harcourt was adequate but tensions were on the rise in the
outlying areas. Notwithstanding the on-going disarment
exercise for local militias, the officials noted a marked
increase in armed young men in these outlying areas. The
company officials described a security situation where the
militias are so influential in the creeks and rural areas
that the writ of the Governor of River State is being reduced
to that being the mayor of Port Harcourt: the State
Government's presence does not extend very far beyond the
capital. The Halliburton official lamented that company
vehicles are plastered with dozens of decals--each sticker
evidence of payment to a score of villages and hamlets that
impose their own road and transportation fees and taxes.

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Bayelsa--Ijaws Are Angry
--------------


15. (SBU ) In Yenegoa, the Consul General met Deputy Governor
Jonathan and the majority of the State Cabinet. The Bayelsa
officials treated the Consul General to a litany of
complaints about overcentralization of governmental power in
Abuja, which resulted in an inequitable distribution of
resources between Bayelsa and Abuja. Their expostulations
had an decided ethnic timbre. State officials claimed
Bayelsa was the heartland of the Ijaws, purportedly Nigeria's
fourth largest ethnic group. However, the Ijaws have been
historically marginalized as a player in national politics.
The Bayelsa officials called for greater Ijaw influence in
national politics and more political and economic autonomy
for Bayelsa. Unless these issues were addressed, unrest in
the area would continue, sang the chorus of government
officials.

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Comment
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16 (C) Port Harcourt is a teeming city, in many ways a
smaller, equally active version of Lagos with its legendary
traffic snarls and ominous pools of loitering, unemployed
youth. Port Harcourt is also the political hub of the drama
that has become the Niger Delta. On the one level it is
bustling; dig deeper, it exemplifies much of what is wrong in
Nigeria. Port Harcourt's economy is one-dimensional--it
lives off oil. The sector produces both great wealth and
activity. The infrastructure and presence of the oil majors
and the related oil services companies is all around.
Meanwhile, state and federal governments are largely
dysfunctional. In the functions of government, the laws of
graft overrule the laws of gravity. Funds do not trickle
down to the modest segments of the population. Among those
in the latter category, the perception is that both
government and the oil sector have encroached into their
ancestral land to siphon oil without giving due compensation
to the local population.
17 (C) Comment cont. One key problem is the stakeholders
mistrust each other. Each actor clearly sees the dilemma
from their own self-centered vantage point and is basically
insensitive to the concerns of the others. Consequently,
there is a great gulf in perception. The state government
blames the federal government and the oil companies. The oil
companies blame the local communities and federal
government. The local communities blame the companies. The
NGO's blame everyone, including the international community.
The solutions the Consul General heard were simplistic and
one-sided--"get the other guy to do what I want."

18 (C) Comment cont. Against this stark background, the
current tack of establishing individual Memorandum of
Understandings with each agitated community is of dwindling
effectiveness. What is emerging is a patchwork of temporary
truces. These arrangements are fragile and tend not to
withstand the test of time. The situation begs for a more
comprehensive approach that will begin to better define the
permanent relationships among the oil companies, local
communities and the different tiers of government. More
governmental resources need to be brought to bear as the oil
companies cannot be forced into the position of becoming
quasi-development agencies. Yet recent history demands that
the companies must play an active, visible role in the
communities. Last, the objective of all parties must be
economic growth, economic diversification and employment in
the Delta. Non-oil private sector investment is a
fundamental but largely missing ingredient in the Delta.
Unless there is a paradigm shift in strategy along the lines
summarized above, conditions in the Delta will worsen, and
more incidents that interrupt the operations of the oil
companies will likely occur in the future. End comment.
BROWNE