US embassy cable - 04LAGOS2588

C O N F I D E N T I A L SECTION 01 OF 05 LAGOS 002588 
 
SIPDIS 
 
STATE FOR AF/W 
STATE FOR CA/OCS/FROBINSON 
STATE FO EB/ESC/IEC/ENR/BLEVINE 
STATE FOR DS/IP/AF 
STATE FOR INR/AA 
STATE PASS DOE FOR DAS JBRODMAN AND CGAY 
STATE PASS TREASURY FOR ASEVERENS AND SRENENDER 
STATE PASS DOC FOR PHUPER 
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STATE PASS USAID FOR GWEYNAND AND SLAWAETZ 
 
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 
-------------------------------------- 
 
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 
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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