US embassy cable - 03LAGOS1535

UNCLAS SECTION 01 OF 02 LAGOS 001535 
 
SIPDIS 
 
 
DEPT FOR DS/ICI/PII, DS/IP/AF, DS/DSS/OSAC, DS/IP/ITA, 
  DRL/MARINDA HARPOLE 
VAIHINGEN FOR J-3-DSS/LNO 
CAIRO FOR JAMES MAXSTADT 
DOE FOR CAROLYN GAY AND GEORGE PERSON 
DOL FOR ILAB/ROBERT YOUNG 
 
 
E.O. 12958: N/A 
TAGS: ASEC, EPET, ENRG, ECON, CASC, PGOV, PINR, PINS, PTER, NI, XA, XY 
SUBJECT:  NIGERIA:  DELTA KIDNAPPING THREATENS OIL 
PRODUCTION AGAIN 
 
1.  Summary:  A Nigerian white collar worker for Chevron 
Nigeria Ltd. (subsidiary of Chevron/Texaco) and member of 
the Petroleum and Natural Gas Senior Staff Association 
(PENGASSAN) was kidnapped outside his home on July 25 by a 
rogue group of armed Ijaw youths.  The kidnapping is the 
latest in a series of similar events in the years-long 
dispute between the Ijaws and the oil companies in the 
region, including Chevron, over the Ijaws' demands to share 
in revenues from oil produced on their land.  PENGASSAN 
joined the fray on July 29 by issuing an ultimatum demanding 
that Chevron effect the release of its member within the 
next seventy-two hours, or the union will call for a work 
stoppage that will shut down all of Chevron's operations in 
the area.   The deadline is midnight on Friday, August 1. 
End Summary. 
 
 
Trouble, again, in the Delta 
 
 
2.   Chevron officials confirm the July 25 kidnapping of one 
of its Nigerian Public Affairs officers, who was abducted as 
he left his home in Warri early that morning.  Chevron adds 
that a note was later sent to its Warri office by the 
kidnappers demanding a large cash ransom.  According to 
senior Chevron Security Officer Hamish MacDonald, Chevron is 
determined not to accede to ransom demands for this or any 
other kidnapped employee, local or expatriate. 
 
 
Short Term Motives 
 
 
3.   An Ijaw community leader, Doyah Tiemo, told EconOff on 
July 30 that he had been in contact with the kidnappers and 
was told that the reasons for the kidnapping were continuing 
bad relations and lack of communication between the Ijaw 
community and Chevron.  He cited two examples of unresolved 
disputes between the parties that have been going on for at 
least the past two years.  First, in December, 2002, two 
rental boats carrying Ijaws from Warri to Chevron's Escravos 
facility to meet with Chevron officials were seized by State 
Security personnel and impounded.  The boats remain at the 
Escravos facility at a loss to the Ijaws of 20,000 naira per 
day (rate 1 USD equals 128 naria) with a cumulative loss to 
date of close to 4.5 million naira.  Second, the Egbema 
faction of the Ijaws continues to demand that Chevron stop 
dealing with the former President of the faction.  The 
Egbema claim this man is no longer authorized to represent 
them, and they accuse him of collusion with Chevron staff to 
steal monies paid to the Egbema by Chevron for offshore 
slots.  The payments can be between 20,000 and 40,000 naira 
per day. 
 
 
Economic impact of continuing instability 
 
 
4. The simmering tensions between Chevron, PENGASSAN and the 
Ijaws are about much more than seized boats and tribal 
factions.  Both unions and local communities accuse oil 
companies operating in the Nigerian Delta of failing to 
ensure their safety and believe that employers can do more 
to provide greater security and stability to communities 
that support the industry.  Employers argue that oil 
companies should not be pressured into assuming a 
governmental function that extends well beyond their 
corporate responsibility or objectives.  Since the GON 
receives more than 80 percent of Nigeria's oil revenues, 
according Cyril Odu, Exxon Mobil's human resources manager, 
employers believe the GON is able to improve the quality of 
life for Nigerians living in the Delta region.  However, the 
government has failed to promote initiatives that might 
reduce the region's growing security concerns and dependency 
on the oil sector to resolve the region's social and 
economic problems. 
 
 
Long-term consequences 
 
 
5.  PENGASSAN's ultimatum to Chevron/Texaco highlights a 
trend within the Nigerian labor movement that could have 
long-term economic implications.  Individual unions, 
particularly those in the oil sector, have become more 
active in advancing a political agenda that extends outside 
of the workplace. In response to Nigeria's lack of 
influential non-governmental organizations equipped to 
respond to issues facing the general public, oil sector 
unions are increasingly assuming responsibility to serve as 
the voice of civil society.  However, the lines between 
labor disputes and social concerns are blurring and unions 
are beginning to use industrial action as a way to resolve 
issues unrelated to the workplace.  In this case, PENGASSAN 
hopes to pressure Chevron on the larger issue of worker 
safety for Nigerians as well as expats.  Responsible Ijaw 
leaders are treating this incident as a criminal matter 
(septel).  However, PENGASSAN is using it to promote a much 
larger agenda: that of the same safety concerns for Nigerian 
oil workers that expatriates are given. 
 
 
6.  Comment.  The big picture is that oil unions are using 
their size and influence to shape the GON and private 
sector's role in resolving the Delta's ongoing communal 
crisis.  As oil unions become more active in these issues, 
workplace concerns have become obscured. Prior to the recent 
gas price hike, for example, the oil unions were negotiating 
resolution of a dispute regarding safety concerns related to 
employee-provided transportation to off-shore oil rigs. 
Tensions resulted in a standoff between American-owned 
Transocean and approximately one hundred oil workers who 
held 68 expatriates hostage for several days.  However, the 
safety issue at the core of the matter remains overshaowed 
and unresolved. 
 
 
7.  Comment continued.  In addition to safe transportation 
to oil rigs, salary increases for civil servants, and the 
oil sector's use of contract labor, other labor issues 
remain unresolved and are boiling beneath the surface.  The 
ultimatum issued by PENGASSAN underscores the labor 
movement's inability to separate its civic responsibility 
from its labor interests.   As unions continue to exercise 
their right to strike in response to conflicts between the 
companies and the communities, employers will likely 
experience more frequent strikes and threats of industrial 
action.  The resulting disruptions to production and the 
increased climate of instability will diminish the nation's 
ability to attract investment and create much-needed jobs. 
HINSON-JONES