Research Paper: Natural Resources and Globalization

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[. . .] International media recently have initiated efforts that shed more light on the current functions and activities of Shell in the Niger Delta and contrasted the imbalance of those activities with the operations in the developed world (Ntdtv, 2009; Monitor, 2010).

It was back in 2009 that the problem entered the legislative phase from both national and international view. The former president of Nigeria (President Musa Yar'Adua) initiated an unconditional amnesty structure that was exercised in three different phases -- Disarmament, Demobilization and Reintegration (DDR). The positive impact was immediate and definite in those times as most of the militants gave up their weapons and invested their energy in learning and re-integrating in the economic structure but the fact of the matter was that there was still a huge deficit in the creation of job opportunities for them or any of the locals (All Africa, 2011). From a global perspective, UK suit filed at the high court of Appeal has made Shell admit a few of the issues they've caused in Nigeria to date by forcing the organization to pay for $410million in compensation while further investing in better production techniques in the area (Amunwa, 2011).

However, some of the militants and of particular note may be the MEND (Movement for the emancipation of the Niger Delta) pronounced that the amnesty program was primarily a cover up and a shameful effort to make amends to a very damaged situation. MEND has promised the locals that they will make efforts to keep the disruption of crude oil production in the Niger delta region irrespective of the level of aggression they might be forced to use.

The Movement for the Emancipation of the Niger Delta ("MEND") has now grown to be one of the largest and most prominent militant groups in the Niger Delta. The group primarily works towards exposing the real culprits behind the destruction of the ecological, social and economic stature of the Nigerian people. MEND exposes the impact of the U.S.-Nigeria government alliance and continuously engages in violent clashes with the Shell Corporation to make the seriousness of their intentions known. The Economist has described MEND as an organization that 'portrays itself as political organization that wants a larger share of Nigeria's oil revenues to visit the impoverished region that sits atop the oil. Actually, it's more of an umbrella organization for many armed groups, which it sometimes pays in cash or guns to launch attacks' (The Economist, 2008). MEND has been associated with attacks on petroleum operations in Nigeria included in the Conflict in the Niger Delta, participating in various other destructive activities like kidnapping, theft, sabotage, and property trespassing/destruction (Hanson, 2007).

The federal government on another end initiated the Joint task force (JTF) structure whose primary function was to find militants and bring the "irresponsible" human rights violations and activities to light so that appropriate legal reimbursements could be provided to the relevant parties. This moved the problem to the administration stage (culture of resistance, youtube). Currently, this problem continues to be the most significant at this time and it has maybe not led to the instigation of appropriate changes or support to maneuver the movement forward to the enforcement phase.

The figure below exhibits the nonmarket issue life cycle and curve can be applied in the Nigerian region where the identification of the issue of unjust repercussions of oil drilling in the early 1960s when the letters were sent to Shell from the locals on the trampling of their needs and basic rights. The interest group formation stage was when the non-violent groups formulated to create and sustain dialogue for the fulfillment of basic human rights of the locals who live in the oil rich region. As aforementioned, the initiation of the DDR and formation of MEND were all part of the legislative phase and the involvement of the JTF took the movement into the administrative phase as the government hired an agency to counter the violent streaks of the militants. The problem though that is stopping the movement to further into the enforcement is that the government is not loyal to the cause and still protects the big corporations like Shell that are bringing in huge profits for them. Both the military and civilian governments have been compromised in this particular domain as they seem to cater to only their own needs and completely disregard the needs of the nation. Unfortunately, this movement cannot be transported further into a constructive enforcement stage with a proper and balanced accountability structure in place for not just the violence bright forth by the militants but also the injustice and disregard for human rights that is exercised by Shell as well as the government officials. Perhaps, one non-marketing strategy whereby this can be achieved is through the intervention of a global human rights organization which could be the focus for the future of the non-violent activist groups in Nigeria.

Figure 1-2 Nonmarket Issue Life Cycles

Issue Identification

Interest group formation

Impact on Firm

Time

Legislation

Administration

Enforcement

Early

19

60

Letters to Shell were sent to highlight problems faced by the locals

Mid 1960s -- nonviolent groups formed in order to create constructive dialogue for fulfilment of locals' basic rights

Formation of DDR, JFT and MEND

Formation of JFT to counter militants

Need for a justice system to counter both violence and injustice

Nigeria Oil War

This particular problem is of the most importance to Shell along with other competitors such as for example Exxon and Total operating in Nigeria for varied reasons. First, it sheds light on the operations of the gas and oil sector in general not just in Nigeria but also of all the other developing countries when compared with the developed countries. This impact has a tendency to have even increased with the international media highlighting the story of Nigeria in recent news. Also, globalization has managed to make transference of news easier for individuals from all around the globe from within their respective countries therefore any and all negative techniques employed by Shell in Nigeria can taint their international public image devastatingly as well as the hamper the image of their competitors as well. Furthermore, Shell investors particularly people who appreciate the worthiness of CSR may see this as a threat for their investment and misappropriation of the funds and may possibly take back whatever investment they were planning to make in the future with the companies. Though, it's believed Shell might shift the entire blame on the incompetency of the Nigerian government but their negative effect on the environment even prior to the reign of militants can also be quite obviously reported. Aside from that, the consumers in other areas of the planet may reduce their patronage to Shell or the others if they're conscious of such negative techniques in the developing countries like Nigeria.

Also, this awareness may also provide social activists in the developed countries protesting from the contamination of the economy via oil exploration and pollution much capacity to fight for the reason by showing different environmentally friendly types of techniques that the oil businesses can take part in the Niger Delta. One recent example may be the negative "world" effect on BP because of the oil spillage in the Gulf (The Guardian, 2011). Last but not least, it may be a chance for the oil businesses like ConocoPhillips to enter Nigeria while promising to use its natural resources and the profits made thereof in different ways entirely. Media may be able to assist in this case prevent difficulties with militants once again. However, the negative aftereffect of corruption particularly within the Nigerian government would need to be looked at in particular before such investment is feasible (Africanpressorganization, 2008).

The Varying Interests for Shell

There are many key players whose interests should be examined and comprehended to be able to fully appreciate the force of the nonmarket issue and its own impacts. First, the Nigerian government plays an enormous role from both sides-Shell and Militants as well as the economy in general. In 2006, the Nigerian government estimated earnings around $36 billion every year from the extensive petroleum industry while other estimates put current annual earnings at over $45 billion (Usuoka, 2011). This represents a lot more than 90% of the export earnings showing the high reliance on the revenue generated from the oil industry. Throughout the crisis with the militants, the national crude oil production figures dropped drastically from over two million barrels daily to significantly less than one million barrels daily causing a dramatic drop in economic activities since oil production may be the nation's mainstay (Igwe, 2010). It isn't any surprise really that the federal government has tried so frequently to prevent attacks on the operations of Shell by sending the military to protect the rigs where in fact the operations are completed and been significantly successful particularly following the amnesty program. However, the corruption amidst the Nigerian government needs to be eliminated to a sizable… [END OF PREVIEW]

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Natural Resources and Globalization.  (2011, December 12).  Retrieved June 26, 2019, from https://www.essaytown.com/subjects/paper/natural-resources-globalization/2135114

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"Natural Resources and Globalization."  12 December 2011.  Web.  26 June 2019. <https://www.essaytown.com/subjects/paper/natural-resources-globalization/2135114>.

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"Natural Resources and Globalization."  Essaytown.com.  December 12, 2011.  Accessed June 26, 2019.
https://www.essaytown.com/subjects/paper/natural-resources-globalization/2135114.