Press Release: SDN urges Shell and the Federal Government of Nigeria to follow a responsible divestment process in the Niger Delta

Stakeholder Democracy Network (SDN) today calls on Shell and the Federal Government of Nigeria to adhere to a responsible divestment process that will effectively address the legacy of oil pollution left by Shell’s oil and gas operations in the Niger Delta, spanning the past seventy years.

Shell Plc recently announced that it has agreed a deal to sell its Nigerian onshore subsidiary SPDC to a group of five Nigerian domestic oil companies, and focus on offshore production. 

According to the National Oil Spill Detection Agency (NOSDRA), more than 2,200 oil spills are attributable to Shell over the past decade alone. A previous Nigerian court ruling had blocked the sale of assets until a major oil spill court case is concluded.  

SDN is concerned that the company will leave before impacted communities get justice for the damage done to the environment, their livelihoods, and human health. Shell is just one of many international oil companies currently divesting from the Niger Delta – with Chevron, ExxonMobil, Total, and Eni all considering further asset sales. 

This is alarming given the potential liabilities that new owners will inherit. In addition to the vast environmental damage, the infrastructure being sold often needs extensive repairs and replacements to bring it in line with industry standards. Divesting companies must allocate sufficient funds to ensure infrastructure can also be safely decommissioned in future. 

Concerned civil society organisations have been raising the alarm over the accelerating trend of divestment for years. To galvanise action by the Federal Government, SDN convened civil society to draft ‘national principles for responsible oil industry divestment’, which were published last year. 

The principles include a checklist that must be satisfied before any divestment can be approved by the government – including environmental remediation, decommissioning of abandoned infrastructure, compensation to communities for damage, and more transparency and participation in due diligence decisions. 

SDN reiterates this message – IOCs should not be free to escape their toxic legacies, and the Federal Government must institute a rigorous process for approving deals, which ensures liabilities are addressed first. The draft National Principles offer a framework for responsible divestments.

Florence IbokAbasi, Country Director of SDN stated: The sale of SPDC to a group of domestic oil companies raises critical questions about the divestment process in Nigeria, where companies can leave without addressing the damage to the environment from which they have reaped enormous profit. We therefore call upon the government not to proceed with the sale of SPDC until the proposed National Principles for Responsible Oil Industry Divestment are fully adopted and these issues resolved.”