from oppression to development: chevron’s policy rethink in nigeria’s bayelsa state


Conflict over the oil resource in Nigeria is not an issue that can be simplified into a single driving cause. The issue is complex and cuts across the topics of violence, environmental degradation, and democratic representation in the Niger Delta. These topics within the issue of conflict over oil encompass political, economic, and social histories where effects can be seen at the local, state national, and international levels. The conflict over oil is largely fueled by the financial interest of western Multinational Oil Corporations. With over 80% of the Nigerian federal revenue being supplied by oil exports to foreign countries, the US in the lead, it is not difficult to identify one of the driving factors of Nigeria’s oil conflict. The Chevron Oil Company has established itself as a formidable force within Nigeria’s oil fields, particularly in the Bayelsa State. Chevron and its partners have held a presence in Nigerian oil discovery and production since the Gulf Oil Company’s first off-shore mining in Okan conducted in 1963. In Bayelsa State there have been frequent kidnapping and attacks carried out by youth, citizens and militias unhappy with the environmental degradation and distribution of the oil wealth. Chevron, among other oil corporations, has been accused of exploiting local rivalries and ethnic differences as well as assisting the government in carrying out raids on communities hostile to Chevron’s presence. More recently Chevron has changed its position from one of suppressing local communities’ concerns to increasing development assistance and community investment. The effectiveness of these new programs will help to determine the stability of Niger Delta region in the future as other Multinational Oil Corporations recognize the importance of engaging local communities instead of forcibly suppressing their growing concerns.

Tripartite Troubles: An Introduction

The quotations from the previous page refer to the some of the most horrific events related to access to the oil resource of the Bayelsa State of Nigeria. As with many conflict regions, the facts and statistics are far from absolutely accurate, but what can be deduced from these accounts is the terrible violence being committed against the Nigerian people by their own government forces backed by multinational oil corporations (MNOCs). Women are raped, children are murdered, and communities are leveled all in the name of the Chevron Corporation’s continued benefit and that of the Nigerian federal state.

The oil resource has developed into an issue that is deeply rooted historically, politically and socially. MNOCs have been operating in Nigeria as far back as 1908. They have established themselves in communities and have become a driving force for the continued poverty, conflict and environmental degradation. Chevron’s relationship with local and national governments perpetuates conflict over the oil resource in Nigeria and destroys communities.

Price at the Pump: Death

The most well covered aspect of the Nigerian oil resource conflict is the ever-present violence. Since violence is what makes the story for most media outlets that is all the majority of the world thinks when they hear about oil in Nigeria. Since 1999, large-scale conflicts in the Niger Delta have been between ethnic groups, government soldiers and security forces. A recent World Bank report even goes so far to say that protests in the Niger Delta are being, “transformed into something more akin to American gangland fights for control of the drug trade.”

In Bayelsa, a state of emergency was called from December 1999 through January 2000 where 240 people were killed in clashes between Ijaw youth and Nigerian government forces. Four days before the state of emergency was called in response to the killing of six police officers, federal troops entered the town of Odi. The destruction that followed was comprehensive and severe. Many civil rights groups contend that the Odi ‘massacre’ represented the Nigerian government’s determination to control the three oil wells and be, “a signal to other restive oil communities of the wrath that awaited them should they fail to ‘make things smooth and easy for the oil companies’.” The invasion ‘was for oil and oil alone.’ In May 1999, a group of Nigerians filed a lawsuit against Chevron claiming that the corporation had used government military and police to fire on peaceful protestors as well as kill four villagers. Twenty-four Chevron workers repairing an oil pipeline on the Benin River were kidnapped in 2000 by heavily armed youths. A cycle has developed with the increase of violent suppression by MNOCs and the responses of communities and militias to remove Chevron’s influence.

As a response to the increased violence the Joint Task Force (JTF) was created to stabilize the Niger Delta region. Because of the Niger Delta’s importance, producing nearly 80% of the federal government’s revenue, the JTF was created as a direct national interest to protect the MNOCs from further attacks. However, the armed government soldiers of the JTF are often accused of using “heavy-handed” tactics that result in unnecessary death and destruction. An Amnesty International (AI) report stated, “[…] security forces are still allowed to kill people and raze communities with impunity.” This has caused people to start advocacy and activist organizations to combat the abuses. One such group, the Niger Delta Women for Justice (NDWJ) has organized over 1000 multi-ethnic women and the Ijaw Youth Council in a protest march to deliver a letter to a military leader. The letter was a protest against the ‘military occupation,’ human rights abuses, and rape and assault of women in Bayelsa State. Human Rights Watch (HRW) reported in 1999 that, “no fewer than 34 women were apprehended by the soldiers, stripped and beaten in the open.”

The protests and actions by community groups as well as local militias have been many and are a direct result of Chevron’s disregard for local communities. Unfortunately these actions bring brutal repercussions. The year 2002 marked what seemed to be a second major upswing in community actions as a group of women took over the Escravos tank farm in July, effectively making Chevron’s operations impossible followed by the takeover of 4 swamp flow stations. In May of 2007, protestors took over an oil field in Bayelsa State and the Movement for Emancipation of the Niger Delta (MEND) bombed three oil pipelines, disrupting the flow of 100,000 barrels. Just in 2007 there was a long list of kidnappings. An American, Four Italians and a Croat were kidnapped for a month in May from an off-shore Chevron facility in Bayelsa, four US oil workers were kidnapped from a barge near the Chevron Escravos export terminal, twelve people are freed after a month in captivity in Bayelsa State, and more recently the son of a Bayelsa State government official was kidnapped this year from the Bayelsa State-owned Niger Delta University. As a result of these kidnappings and community actions ChevronTexaco froze nearly all of its assets as increased violence left over 100 dead and up to two dozen villages destroyed.

Chevron, like many MNOCs, plays on the local ethnic rivalries. In the case of Bayelsa State Chevron has lent development support to the Itseriki people and not the rival Ijaw.

“Not too long ago, Chevron was accused by the Ijaws of supplying weapons to the Itsekiri and by the Itsekiri of giving money to the Ijaws to buy weapons. […] In the Ilaje community of Ondo state, the American oil giant Chevron procured and flew in armed soldiers who came down very heavily on defenceless peaceful demonstrators who had occupied their Parabe oil facility. Two youths were shot dead and several others injured in that operation that was supervised and directed by Chevron. The Chevron public affairs manager admitted to American journalists that they called in the soldiers and that the protesters were peaceful.”

Chevron has a history of supporting violent intervention by government forces that will quell civil unrest in response to their corporate irresponsibility. Chevron’s relationship with the JTF and other Nigerian military units comes as no surprise since Chevron has long been involved with the numerous military regimes to gain access to the oil. At a meeting that was supposed to include community members and oil corporations Carwil James, Oil Campaigner with Project Underground, a Berkeley-based human rights organization which has supported Niger Delta communities in their struggle for environmental justice, spoke on Chevron’s absence, “Chevron is clearly much more comfortable behind military guns than face to face with the communities it affects.” A communiqué issued by the meeting’s participants called Chevron’s absence “a continuation of the established tradition of transnational corporations treating local people and groups with disdain.” In 2003, after military security reorganization, a team of government troops (army & navy) intervening in the two week Ijaw-Itsekiri ethnic war that crippled oil production in much of Chevron’s Western Niger Delta base were reportedly using Chevron’s Escravos oil export terminal as a base for launching attacks.

“The oil companies, which hire private security firms to protect their facilities, often support such attacks. Chevron Nigeria (a subsidiary of Chevron Texaco), the leading US exporter of Nigerian crude, lent the federal government its terminal at Escravos and its helicopters, so that government forces could raid communities hostile to the company. The oil firms play on local rivalries. Chevron made the Itsekris, who have been vying with the Ijaws since the days of the slave trade, the main beneficiary of its development programme.”

So far the relationship between Chevron and local communities in Bayelsa State has been oppressive, abusive, and dismissive. Development funding has become a weapon in the Niger Delta to ensure conflict between communities, but that violence has increasingly affected the operations of Chevron.

The Military Had to Make One More

The name of Bayelsa State is taken from the acronyms of BALGA for Brass Local Government, YELGA for Yengoa Local Government, and SALGA for Sagbama Local Government. In 1979, the three local governments, formerly of the Rivers State, were combined into a Senatorial District for the purpose of the federal Senate elections. Because of the arbitrary creation of the name, Bayelsa is most often used by politicians and activists. On October 1st, 1996 General Sani Abacha publicly announced the creation of the State and helped to include more people in its usage. The name gained national and worldwide attention after “disturbances following the youth protests against the exploitation of oil resources, political marginalization, and neglect of the Niger Delta region by Nigerian governments and the multinational corporations extracting its oil wealth.” Located in the heart of the Niger Delta, Bayelsa State is comprised by a majority of Ijo people, who make up the predominant ethnicity in the Niger Delta. Bayelsa is now said to be, “a melting pot of Ijo communities, and a highway of contact among communities of Eastern and Western Delta, as well as up the Niger.”

Historically Bayelsa State, initially a region of Rivers State, was demanded as a way of acting on the fear that majority ethnic groups would dominate. The demand for a Rivers State was granted as a way to weaken the political power of the next Nigerian leader. With its creation, it was hoped that Rivers State would appease all regions, but it soon became evident that regions up-river benefited the most form social and economic policies. After a number of regime changes and subsequent demands for a new state on the basis of creating a region for Ijaw people, the Mbanefo Committee of Abacha’s regime approved the creation of Bayelsa State. The Committee recognized that the region of the Niger Delta had been much neglected by past and present state and federal governments and yet produced 40% of the nation’s wealth. It is important and interesting to note that the evolution and creation of Bayelsa State was strongly supported by high-ranking members of the Nigerian military. All of the current 36 States have been created under military regimes as a way to reward or appease various ethnic groups.

With a history of neglect and a founding based on ethnic and military power, it is no wonder that Bayelsa State has become a region of great conflict in regards to the oil resource. The ethnic difference and power structures have been exploited by MNOCs and now the greatest difficulty is bringing communities back together in order to foster development.

Germany, Gulf Oil, and Growth

Beginning of Oil / Development of Chevron in Nigeria
1895 – Oil seepages discovered by German expedition
1908 – Nigerian Bitumen Company of Germany began to drill boreholes
1937 – Shell Petroleum Development Company (SPDC) arrives as first MNC
1947 – First serious oil exploration
1956 – Commercial quantities discovered in Oloibiri
1964 – Gulf Oil Corporation oil discovery in Okan
1960s-70s – Chevron Nigeria Limited (CNL) oil successes
1985 – Chevron buys up Gulf Oil Corporation in Nigeria and Angola
1992 – CNL conducts updates on the Gulf Oil platforms
1996 – Increased oil production across Nigeria by CNL
1997 – CNL begins operating Escravos oil fields including export platform
2000 – Chevron merges with Texaco taking over all Texaco operations in Nigeria

In 1895 a German expedition reported oil seepages along the beaches of the western Nigeria coast. Later in 1908, the Nigerian Bitumen Company of Germany began to drill boreholes to assess the existence of petroleum deposits. The German oil exploration attempts were interrupted by the start of the First World War. The Shell Petroleum Development Company (SPDC) arrived in 1937 only to be stalled by the onset of the Second World War. The beginning of serious oil exploration was able to begin in 1947 and the first successful discovery of commercial quantities of oil came in 1956 in Oloibiri, which is in present day Ogbia Local Government of Bayelsa State. The Gulf Oil Corporation (now owned by Chevron) began oil operations in Nigeria in 1964 with its first discovery in Okan and became one of the top oil exporters in Nigeria. “Further ‘successes’ were recorded by a number of oil companies, including Chevron Nigeria Limited,” (CNL) in the 1960s and 70s. In 1985 Chevron bought up the Gulf Oil Corporation taking over all operations in Angola and Nigeria. In 1992, Chevron conducted updates for all Gulf Oil platforms and significantly increased production by 1996. In 1997, Chevron began operating the Escravos oilfields and began using the Escravos oil export platform. October of 2000 brought yet another bold move by Chevron as it announced the merger of the Texaco Corporation. With these expanded operations Chevron current has 40% interest in 13 oil concessions covering 2.2 million acres across Nigeria. The company holds 32 oil fields, 380 Texaco service stations, and employs 1800 Nigerians.

Chevron has become one of the top three stakeholders in the resource conflict of Nigeria’s petro-state. The only other corporations that control more oil production in Nigeria than Chevron are ExxonMobile and Shell.

Nationalization, Where Does the Money Go?

In 1971, Nigeria nationalized control over its oil reserves in an attempt to deal with the misconduct of MNOCs. In that same year Nigeria joined OPEC putting the MNOCs on the defensive. The lead up to a nationalized oil resource was prefaced by the 1969 Petroleum Decree which placed petroleum ownership completely in the hands of the state. The Nigerian government took over control of equity stakes in joint ventures with the NNPC’s (Nigerian National Petroleum Corporation) creation. The NNPC creates Joint Venture Agreements (JOA) with oil operators. The MNOCs are called operators, but the NNPC reserves the right to become an operator. The Joint Venture between the NNPC (60%) and Chevron Nigeria Limited (40%) is considered the second largest oil producer with roughly 400,000 barrels per day (bpd). CNL plans to increase production to 600,000 bpd.

The revenue collected by the Nigerian government through the NNPC is supposed to trickle down from the federal level to the states and therefore to the people, but this trickle is evident nowhere. “Political disputes over the allocation of oil money in Nigeria have led to sabotage of oil company equipment and attacks on their workers.” The distribution of oil revenue has fueled much of the recent conflicts. The amount of oil revenue has significantly risen from $250 million a year to well over $60 billion a year in 2005. During this increase in revenue and production Nigeria changed from a military dictatorship to a democracy, but those benefiting from oil revenues did not change. Military elites in the government have remained the primary benefactors of the oil industry. The International Security Group reports that a “cancer of corruption” has continued since the first attempt at federal government in 1999. The government, as the NNPC, lost its bargaining power with Chevron and other MNOCs because of its fiscal instability and its inability to cover its share of joint oil ventures. Because of the Nigerian government’s failure to meet the agreement, the oil companies’ disregard for local communities has been reinforced.

At the local government level oil revenues are highly contested. Often times this contest ends with local government’s not receiving revenue from the federal government, or local communities not seeing the results of those revenues as communities leaders sit on large sums of oil wealth.

Some ethnic nationality leaders argue that oil producing state governments should directly appropriate the hard currency generated by sale of crude extracted from their territories, and then allocate up to 20% to the Federal Government. Others contend that local, not state, governments should receive revenues from oil extracted in ‘their’ territory and then share it out among all villages under their authority.

In Nigeria at present, some 13 percent of monthly federal oil revenue goes to producer states through local government or through the Niger Delta Development Commission […]. Revenue sharing between local and national governments is problematic at the fiscal and the political levels. At the political level there are so many layers of government that tax collection and accountability are near impossible to uphold and regulate. As such, this makes the local government revenues highly volatile and uncertain.

From the perspective of most Niger Delta people, the MNOCs are the supreme authority and it does not matter as much what control a local government has or what revenue they collect. MNOCs are able to indirectly intervene in communities by way of vigilante groups, private militias, police, federal military, national and international NGOs. This has helped to create a type of ‘military/ war industrial complex’ in Nigeria’s oil producing states. One community stake-holder claimed, “I can easily mobilise youths I know to stir up trouble and put pressure” on MNOCs.

Descendents of ethno-social pressure groups, leaders assembling a followership around the identity of marginalised youth, development brokers, the staff of oil companies, ‘community development’ departments, and state officials strengthened their bargaining power vis-a` -vis the oil companies and the federal government between 1998 and 2003. They succeeded in challenging the authority of the petro-military alliance and its fragmented offspring.

Observers have noted that the business practices and indirect private governance in Nigeria has created a, “lucrative political economy of war.” While there is contention between states and local governments about oil revenue, the MNOCs have the last word.

Since there is no accountability at almost every level, corruption is found at every level in the Nigerian political system. “The head of Nigeria’s anticorruption agency estimated that in 2003, 70 percent of oil revenues, more than 14 billion dollars, was stolen or wasted.” Interestingly a Western diplomat referred to the issue of oil revenue distribution as, “institutionalized looting of national wealth.” In the oldest oil town of Oloibiri, the population has dropped from 10,000 to 1,000 in the past 30 years. There are many signs of abuse and neglect in Oloibiri and the town now stands more as a forgotten memorial with its signpost reading, “This is Oloibiri, the Goose that lays the Golden Egg.” “There are no roads, no hospital, no potable water and not a single modern industry.” Pollution has turned the surrounding creeks into oily and turbid dead seas. The town consists of thatch houses, shanties, dirt tracks and angry men and women (Akpan, 2004:5) Tom O’Neill of National Geographic reported from Oloibiri:

“[…] a dirt road passes between rough-hewn houses, some roofed with thatch, others with sheets of corroding metal. A small shop offers a few bananas and yams. Inside the only freshly painted structure, a lemon yellow, two-story house, Chief Osobere Inengite of the Ijaw tribe apologizes for the appearance of his town: “Oloibiri is supposed to be compared to Texas,” he said. “I ask you, in Texas have the people in 50 years seen one second of darkness? But look here, we have no light, no water, no food, no jobs.”

The chief looked prosperous. He was wearing an ornate black-and-purple robe, a chunky coral necklace, and a black derby, his outfit for a neighboring chief’s coronation downriver in Nembe later that day. Like most chiefs, Inengite has a business—dredging sand from the river for roadbuilding. He always keeps an eye out for visitors to Nigeria’s historic Well No. 1. He wants them to leave Oloibiri with a message for Shell, which owns the local oil fields. “Tell them to help us. Tell them to train 50 boys and girls from here for jobs,” the chief pleaded. Then he sighed, “If we had never seen oil, we would have been better off.”

Oloibiri remains with no electricity, no jobs, and no more oil from the 28 holes drilled in the area. The chief seems to be doing well possibly from past oil successes, but the town is far from prosperous. How has Nigeria’s oldest oil well, that produced so much oil revenue, fallen into a place that is devoid of any constructive development for the people of the area? Where does all the money go? This question echoes across the lips the communities of the Niger Delta. As the MNOCs begin to recognize that leaving communities in the dark leads to violent conflict and jeopardizes their oil revenues, the question remains where does the money go? Are the community development programs initiated in response to increased violence really focused on constructive engagement or just an appeasing handout?

Community Development: Appeasement or Engagement?

The idea of Corporate Social Responsibility (CSR) has taken a strong hold in many MNOCs. This idea has taken such a strong hold that the Chevron Oil Corporation uses the tagline: “Chevron: Human Energy,” attempting to focus on the responsible side of their business and moving away from their focus on revenue production.

“Chevron takes its role as a member of the community in Nigeria seriously and is active in many projects promoting health, economic and educational programs.

Many projects focusing on infrastructure, health, education, power and clean water have been completed while work has continued on ongoing capacity-building programs to promote economic development. These projects include construction of teachers’ quarters, science classrooms and laboratories, classroom blocks, water boreholes, footbridges, and jetties. Other infrastructure development projects include the provision of drainages, dining halls, kitchens, covered walkways and power in some communities’ schools and hospitals to make them functional.

Chevron Nigeria Ltd. provides communities near its operations with power and drinking water, in many cases directly from company facilities. These are either stand-alone projects or are tied to existing Chevron facilities. In many communities, the company has also purchased and installed electricity generators, which the company also fueled and serviced.”

Chevron has had a policy of dashing (giving free) gifts to communities: a school building, a generator, a new road – but more often than not these projects are started and are left unfinished while the oil is pumped out of the community. Creating this ‘host’ community relationship was the first major response to local youth threatening oil platforms. As well as dashing projects, MNOCs handed out cash payments on demand to militant youths, which were later not spent on community development projects. Local leaders often sing the praises of these ‘development’ projects in order to look good for the federal government when the people of the community are the ones impacted the most by these uncompleted projects and invasion by oil MNOCs. Local leaders have become the proctors for development and this role has been formalized with regular stipends and other privileges making their flowery reports all the more necessary for their continued benefit from oil revenues. The youth have spoken out against this control by village elders and chiefs. Keeping the secrets of community benefits in contracts with MNOCs drives distrust among community members, especially between village elders and youth, who have become more militant.

In 2005, Chevron Nigeria said that it had, “adopted a new approach to our community engagement in the Niger Delta that was designed to create participatory development processes to better address the needs of the communities in our areas of operation. The new model is said, “to give communities greater roles in the management of their own development.” This notion is a quick reversal for MNOCs operating in Nigeria. A Shell official in the 1990s reported that more was spent on bribes than on community development projects. Until 2000, there was sufficient evidence to allege that the Chevron oil corporation had ‘wasted’ [given away corruptly] US$28 million for community development projects between 1990 and 1997.

With their history of supporting militias and supplying federal military groups to keep favor in various communities, a ‘decisive’ shift was taken from 2002 to 2004 in relation to the relationship between local communities and MNOCs. In that time period MNOCs exponentially raised their spending on ‘community development’ projects in order to gain ‘license to operate’ in the Niger Delta.

“Thousands of secondary and university students receive scholarships from oil companies each year. A row of national and international NGOs are engaged by the companies in order to implement programmes, conduct workshops and realise infrastructural projects. In a range of villages and towns, official and inofficial ‘development finances ’ from oil companies and the command over these resources are today one of the most important material foundations of power.”

This represented a radical shift, but one that may not be the most effective. Those involved in this exponential development investment were paid per diem in ‘substantial cash payments.’ Support for university scholarships was part of the major push in the community development. However, of the sixteen federal and state-owned universities in the Niger Delta, ‘none are properly funded.’ The primary and secondary educational infrastructure is ‘deplorable.’ So as community development is pushed by way of university scholarships, who is to benefit from these scholarships when those who may benefit do not have even an adequate secondary education? The Niger Delta Development Commission (NDDC) had said, after its creation in 2000, that its main focus was to build schools and other educational infrastructure. Akpan, who completed extensive research in the Niger Delta and Bayelsa State in 2005, saw no such development.

Local observers have actually called for an end to development aid in the Niger Delta because it ‘aggravates the struggle’ for government jobs and those that hand out payment for ‘facilitating’ development projects. Observers say there are no checks and balances, all the money goes to government agencies, and there is absolutely no accountability. In 2007, as part of its corporate social responsibility to host communities, CNL along with the NNPC, committed Naira 53 million to support human capacity building and micro credit schemes. These were said to support 15-month training programs to help communities in poverty alleviation programs. The idea is that people will be able to, “generate gainful self- employment or secure employment with established firms.” This is yet again a paradox of CSR and development in the Niger Delta because the MNOCs are leaving many of the communities as oil wells dry up and do not hire people from the communities where they operate. Unless there is a shift in the employment of community members this will be another wasteful program that will fail. Chevron and the NNPC also announced that 1300 students were benefiting from their universities scholarship scheme and from 2001 to 2006 over 5000 successful awardees had gone through university education. This is hard to believe with the current education system in the Niger Delta and the access to education of Niger Delta communities.

The models for community engagement are varied, but all have an ineffectual impact. Chevron has so far followed the standard model of Western development groups – throw money at a problem without really look into the best practices for community development or evaluating the effectiveness of that community engagement. Chevron’s varied programs include a notable riverboat ambulance clinic, but all other programs have not shown any real effects in the communities of Bayelsa State and the Niger Delta. MNOCs are working diligently to appear that they have CSR, but that CSR does not translate to anything worth noting at the community level, beyond the perpetuation of violence and more advanced exploitation of communities with oil by creating the notion of responsible development.

Conclude to Exclude

What would be the best relationship for the communities of the Bayelsa State in the Niger Delta of Nigeria with the Chevron oil corporation? If the MNOCs operating in the Niger Delta do not move away from an exclusionary policy in community development programs then conflict will continue. With the new shift in policies there have been good intentions, but ineffectual outcomes. The best option for local communities is if MNOCs are out of Nigeria, but that is not about to happen any time soon because the extraction and production of the oil resource requires such large and sophisticated operations. As a response there needs to be constructive engagement models.

The good intentions of MNOCs by way of micro-credit, scholarship, and health service programs need to do more than just be programs for Nigerians. CSR programs need to address the root causes of conflict in the Niger Delta and give Nigerians agency in their own community development. These programs need to have more than a mediating role between communities and MNOCs as a way to appease. In that same sense, multi-ethnic and multi-state community advocacy groups need to be strengthened to act as a watchdog for the Nigerian federal government as well as MNOCs. These groups need to be dedicated to community development that is beyond simple handout programs.

Ultimately there will need to be a strong tri-sector partnership between local communities, MNOCs, and the federal government. To promote positive community development, the federal government will need to firmly support democratic governance and accountability. Stronger democratic governance will allow the Nigerian government to check MNOCs and ensure the non-exploitation of local communities. Community groups need to demand this accountability from both its government and the MNOCs operating in their areas. With these tripartite checks in place the negative effects of the oil industry can be reversed and constructive community development models can be implemented.

Nigerians living in the Niger Delta, and specifically the Bayelsa State, have absolutely no agency in the development of their own communities. MNOCs come in and start programs and then leave them to fail. They create programs that do not address the underlying issues surrounding an exploited oil resource. The underlying issue is the disregard for people. Constructive development models would include a respect for the environment to ensure the health of the local community. Creating jobs for Nigerians that centered around the environment of their community by containing the harmful effects of the oil industry could employ a great number of people, cut violent conflict, allow people to make their own income, and give people ownership of a commodity extracted from their own community. In this same regard, a model based in the technology of the oil industry would give an even greater agency in community development. Growing the educational infrastructure of the Niger Delta, continuing to provide university scholarships, and teaching Nigerians to work in oil extraction and production fields at all levels (worker to administrator) can guarantee oil wealth owned and operated by Nigerians for Nigerians. This model will work especially well if there is a stronger democratic governance at the federal level.

Having Nigerians involved in the production of oil and environmental protection from oil will solidify the tripartite relationship and mandate constructive community engagements based on a model of accountability at every level. What most may see is a failure and conflict surrounding the oil resource in Nigeria, even a curse. However, while there may continue to be terrible consequences with the discovery of oil, there is also great potential for a reversal of negative effects when root causes are address and people are given agency in their own social, political, and economic development.

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“US judge lets Chevron Nigeria lawsuit continue.” Reuters. 16 August 2007. .

the growth of rwanda by way of multinational corporations

Multinational corporations would benefit from an international agreement on foreign direct investment, but not all people and states would benefit from such an agreement. There are many preconceived notions about Multinational Corporations (MNC), which Balaam and Veseth work tirelessly to argue against. These notions are shared by many and in some ways cannot be overlooked in the grand scheme of MNC sot Transnational Corporations (TNC) as Balaam and Veseth define. MNCs bring a lot in the way of foreign direct investment and this brings up the age old question of exploitation and domination of a less economically developed country (LEDC). MNCs and TNCs are seen as huge companies originating in the economically developed countries that are very influential and hold sway in the international Political economy (IPE).

Do MNCs exploit and actually harm countries with foreign direct investment (FDI)? We first have to look at the positive side. FDI from MNCs in economically developed countries brings in much needed cash flow, jobs, and they create economic development. Many countries seek to draw in MNCs for this very purpose. This is all well and good until Balaam and Veseth turn their argument to include the Washington Consensus. In the 1990s the world saw an increase in FDI flows and these reflected the growing transnational markets, regional and global. Balaam and Veseth note that many ‘less developed countries’ (LDC) have adopted the Washington Consensus policies. They say that these policies create an environment more conducive to TNCs investment, but is that what is best for a LEDC? The effectiveness of the Washington Consensus is underscored by its failure to understand the many conditions of a LEDC and its governance. When a LEDC adopts the Washington Consensus it opens its, often, unstable economy and government to the world. There is very often a problem of foreign debt and the policies of the Washington Consensus require LEDC to focus capital on building pointless infrastructures while its people are dying because of lack of healthcare or are in need of an education system. Among the many policies outlined in the Washington Consensus one is the liberalization of FDI. Beyond the controversy of FDI many countries now actively seek it to grow their economic situations.

Earlier this month the Foreign Policy magazine claimed that the “next great place for multinational corporations to invest” may be Rwanda. The landlocked African country just might be the place as Rwandan President, Kagame, seeks to create a new view of the country as a business friendly venue. This is an instance where FDI by MNC very well may be benefiting both the state and the people. Kagame recently visited the US and met with the CEO of Starbucks and Costco to discuss specialty coffees. Other Rwandan officials have met with executives from Alltel, Bechtel, and Columbia Sportswear. Google has also been a part of Rwanda’s development by providing ad-free and free-of-charge web-based software to government ministries, each ministry gets its own domain name. This is an instance where the development of government may also lead to the advancement of the Rwandan people. However we need to be sure to look at the potential impact of FDI. Specialty coffees may increase the workforce, new corporations invested will also grow the workforce, but Rwanda needs to be sure that its people are not exploited for their labor. MNCs/ TNCs are often toted as companies that exploit LEDCs for cheap labor. This is most likely not the case.

Another great example of FDI by MNCs in Rwanda is the work of an American millionaire, Greg Wyler. Wyler and his company want to make Rwanda completely wireless to make Rwanda the most modern wireless, developing country. The Rwandan government hopes this project will make the country a rival to the high-tech Indian city of Bangalore. Wyler believes that with making the country wireless it will create so many opportunities for economic development and unrestricted entrepreneurship. This is an FDI by MNCs that I have to argee with skeptics in that if you have an economically developing country that has a starving population, then what good will free internet access provide? Nevertheless this increase in FDI in Rwanda is a prime example of how FDI by MNCs has the potential to change peoples lives and benefit both the state and those it serves.

Today MNCs/ TNCs are motivated not from monopoly power , but by investment abroad in the new competitive environment that is found in transnational markets. This environment where MNCs work best is brought about by a liberalization of trade and investment policy. The Washington Consensus pushes these changes and many countries are now working to adopt them to increase their FDI. This is where countries should take a warning and remember that they cannot forget the people that they serve. Economic advancement is important if a country is to grow in standard of living, but it has to be done where people are not left behind. Change in policy to facilitate MNCs investment has the great potential to bring positives for LEDCs.

Balaam and Veseth. Introduction to International Political Economy. Upper Saddle River, New Jersey: Pearson Education Inc, 2005.

‘Web Access for All Rwandans.’ Spiegel Online International. . (date accessed 17 April 2007)

‘We wish to inform you that Rwanda is open for business.’ Foreign Policy Passport Blog. . (date accessed 17 April 2007)