DRL DAS KRILLA DISCUSSES VOLUNTARY PRINCIPLES WITH GON

UNCLAS SECTION 01 OF 02 ABUJA 002049

SENSITIVE
SIPDIS

DEPT FOR DRL TDANG
DEPT PASS TO USTR FOR AGAMA
LABOR FOR SHALEY

E.O. 12598: N/A
TAGS: ELAB PHUM EPET PGOV EINV PREL NI
SUBJECT: DRL DAS KRILLA DISCUSSES VOLUNTARY PRINCIPLES WITH GON
OFFICIALS AND IOC'S

SENSITIVE BUT UNCLASSIFIED - NOT FOR DISTRO OUTSIDE USG


1. (SBU) Summary: DRL DAS Krilla met in Abuja with representatives
of the offices of the President and Vice President and separately
with international oil company (IOC) representatives to discuss the
Voluntary Principles on Security and Human Rights and the potential
for their wider implementation in Nigeria's oil and gas sector. GON
engagement on the voluntary principles is still in the early stages.
IOC representatives discussed challenges to doing business in
Nigeria, but stated they want to work more closely with the GON and
state governments to further voluntary principles. End Summary.


2. (SBU) DAS Krilla met with the Vice President's desk officer for
the Niger Delta Oranto Douglas and Presidential advisor Ken
Saro-Wiwa Jr. in Abuja on September 8, 2008. Krilla briefed on his
experience with and interest in the voluntary principles and asked
Douglas and Sara-Wiwa Jr their thoughts on the subject. They
explained that they had been deeply engaged for decades in voluntary
principle concepts along with human rights and championed
environmental rights. They lamented that under military rule, prior
to 1999, civil society suffered harassment, beatings, rape,
executions, and arrest without charges or bail, especially in the
southern Nigerian area known as the Delta. Their history of human
and environmental rights advocacy convinced President Yar'Adua and
Vice President Jonathan to request their becoming personal staff
with the intent to advise and engage to strike a balance with local,
state, and national levels on human rights, security, voluntary
principles and corporate responsibility. Douglas underscored that
Nigeria is an evolving state, and needed Western influence and
continued support.


3. (SBU) DAS Krilla encouraged Douglas and Saro-Wiwa to further
engage the GON on voluntary principles and asked what U.S.
assistance is needed to build capacity. Saro- Wiwa Jr noted that he
and Douglas had just left the State House, where they participated
in the inaugural meeting of the Niger Delta Technical Advisory
Committee. This committee is charged with developing a peaceful and
economic way forward for the Niger Delta to provide sustainable
solutions to the decade's old Niger Delta crisis and its miserable
legacy of human rights woes, environmental disasters, and other
wrongful deeds. Both men were hopeful and optimistic toward the
success of the committee. They strongly encouraged the U.S. to
support community empowerment in the Delta.


4. (SBU) Saro-Wiwa continued by noting the need to support the
Rivers State First Lady in her program that teaches small children
empowerment and social responsibility from as early as preschool
age. This program seeks to teach non-violence and discourage young
people from joining "militant" groups. The effort is in direct
response to what is known as the "Lost Generation," those teens and
young twenty-somethings huddled in gangs in the deep Delta, living
well off bunkering and other unlawfulness. People want a better
life and demand good roads, electricity, potable water, jobs, good
schools, functional health care facilities, and a safe and secure
environment.


5. (SBU) On September 9, DAS Krilla chaired an IOC roundtable
discussion on the voluntary principles. Attending with Krilla were
A/S Kramer and Pol Counselor. The IOC guests were Abubakar Amed,
Shell Abuja Office Director; Noble Pepple ,Shell External Affairs
Manager, Vincent Olaiya ExxonMobil, Manager of Government and
Business Relations, and his colleague Tauhida Zayyad, Advisor for
Government and Business Relations, and Senator Aluku, Chevron
Director of Government Affairs and Policy.


6. (SBU) The IOC representatives reported on their companies'
voluntary principle efforts and noted specifically that these
efforts included active and long term community programs. They said
that there is currently negative incentive toward further gas
exploration and that taxation of proceeds is among the highest in
the world. Nigerian businesses are allowed to hide profit and duck
taxation, where IOCs are paying tax on profit calculated on gross
sales without normal and expected expenses, including money
channeled back to the Government of Nigeria, which in most cases
owns up to 60 percent of joint venture.


7. (SBU) The IOCs see the Nigerian National Petroleum Committee
(NNPC) as a non-performing entity. They welcome a breakup and
reorganization, but lament that traditionally the same old players
become reappointed to leadership roles, netting no gain. The IOCs
believe that USG direction in carrying out this reorganization would

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be a huge plus going forward. To give a perspective on the rich oil
companies vs. poor Nigeria, the IOCs give 95 percent of their
profits to the GON after expenses. Each joint venture entity has an
MOU that determines sharing percentages. Many are 60/40, Shell
stated that theirs was 55/30/10/5. Also as a perspective on state
government wealth, the budget of Rivers State in the Delta Region is
25 percent of the national budget of Ghana. The IOCs welcome
helpful dialogue, particularly on local content legislation, NNPC
reorganization, and gas pricing. Qualified technical experts (not
IOC related) would help to open dialogue. Also, a champion in the
government for better relations between the GON and the IOCs and for
joint contributions to the voluntary principles would be ideal. The
IOCs remain committed to voluntary principles and to mentoring
Nigerian businesses.


8. (U) This cable was coordinated with Consulate Lagos. DAS Krilla
did not have an opportunity to clear this message.

PIASCIK