Oil and Gas Mean Misery and Forced Labor—Not Jobs—in Developing Countries

The seminar, The Human Impacts of Energy Exploration and Development, was sponsored by the Colorado Journal of International Environmental Law and Policy.

Kew — also director of the Center for Peace, Democracy and Development at the University of Massachusetts, Boston — described the mind-boggling wealth that oil has meant for Nigeria and specifically the Niger Delta region. He said the country’s GDP is growing at 7 percent per year, it is the sixth-largest oil exporter to the U.S., the fastest growing market for cell phones and probably the fastest-growing nation in terms of number of Facebook users.

But that has not meant wealth or a vibrant local economy in the Niger Delta.

Rather, the government’s interest in keeping the oil flowing and keeping the money flowing into its own coffers has meant a dysfunctional highly corrupt political system and the existence of heavily armed, powerful paramilitary forces working largely in the service of the government or other politicians. Kew said that in this situation the multinational oil companies are actually the most vulnerable actors and the ​“weak link” in the triumvirate of company, government and paramilitaries.

Showing a slide of two sullen-faced young men holding large guns, Kew said paramilitary membership is ​“the best and only job in town.” ​“There’s very little development in the region,” he added, so young men are flocking to join militias.

Though in many developing countries transnational companies are accused of taking out valuable resources and sharing little of the profit with the national government, in Nigeria the government actually gets the lion’s share of oil revenue. The government gets 57 percent up front, Kew said, and also heavily taxes the 43 percent revenue that the companies take. But the influx of funds does not mean there is a strong social safety net or thriving diverse economy. Kew explained:

(Oil industries) pump a tremendous amount of money into the governing structures of the country…that allows government actors a large amount of autonomy and breaks the social contract…the government doesn’t need the people…when you bring so much money into weak governing structures (the potential for corruption is huge).

Kew explained that the paramilitary militias originally formed with the patronage of different politicians, and wreaked havoc stealing oil from pipelines, sabotaging pipelines, kidnapping oil company workers and other activities.

Several years ago the government instituted an amnesty program meant to ​“rehabilitate” militia members and train them for other jobs, but instead he said they have largely continued their same activities but now under the mantle of the government. He described it all as a vicious circle of impunity and abuses that makes daily life grueling and dangerous for regular working people in the Niger Delta:

So much money is flowing, politicians find it tremendously easy to co-opt civil society actors – so NGOs that should be doing this (watchdog) work have to turn to politicians to get the contracts they need to survive. Once you’re on the government payroll, it makes it a lot harder to criticize it.

In a 2011 piece for a Nigerian website, Ifeatu Agbu described youth unemployment in the Niger Delta as a ​“time bomb”:

The militants in the Niger Delta have relied on the tactic of guerrilla warfare to register their grievances against the Nigerian state. The strategy may change as the army of unemployed youths continues to swell by the day. The country cannot afford to wait to be overrun by these increasingly restive and angry youths ​“Job-creation is the need of the hour.”

That is the view of experts like Dr. Ismail Radwan, a senior economist with the World Bank. According to him, 50 million youths were underemployed and three million new job seekers join the unemployment queue each year. The World Bank official wondered if there would not be social unrest eventually if the situation was not urgently addressed and canvassed a vibrant industrial sector as a way forward.

Meanwhile, attorney Anne Richardson described the effects of the Unocal pipeline in Burma near the Thai border, home to the ethnic Karen people. She described one woman who was attacked by the military because they had not left the area to make way for the pipeline as instructed, and also because her husband had disobeyed a conscription order into the military.

Soldiers knocked the woman and her small baby into a fire, where she lost consciousness, and then proceeded to beat and threaten other locals. The baby later died. Richardson’s Pasadena firm brought suit under the Alien Tort Claims Act, the 1789 law originally related to piracy now frequently invoked against injustices related to multinational corporations’ operations in developing countries – including the lawsuit regarding vicious attacks on unionists at Coca Cola bottling plants in Colombia.

In its 1995 country report, the U.S. State Department noted that forced labor was a common practice in Burma:

The Burmese military forced hundreds of thousands of ordinary Burmese (including women and children) to ​“contribute” their labor, often under harsh working conditions, to construction projects throughout the country. The forced resettlement of civilians also continued.

As Santa Clara business ethics professor Manuel Velasquez wrote in a 1995 article:

Throughout the period human rights groups — including Human Rights Watch and Amnesty International — issued reports claiming that the Burmese army was using forced labor and brutalizing the Karen population to provide ​“security” for Unocal workers and equipment. Roads, buildings, and other structures, they claimed, were being built with forced labor recruited from local Karen groups by the Burmese military, and hundreds of Karen were forced to clear the way for the pipeline and to provide labor for the project.

After complaints from human rights groups, Unocal investigated and confirmed forced labor and other human rights violations. But in later legal actions the company argued it did not know the atrocities were occurring and should not be held responsible.

Ultimately the case did not progress in federal court, but Richardson’s firm was able to help plaintiffs obtain a settlement in California state court under state laws – a tactic she said could be an inspiration for other lawyers representing people suffering labor and human rights abuses related to multinational companies’ work abroad.

The Ecuadorians Kimerling works with have been mired in high-profile seemingly endless litigation. A case brought by local Ecuadorians under the Alien Tort Claims Act in U.S. federal court was dropped by a judge.

A group called the Amazon Defense Front filed a similar case in Ecuadorian court on behalf of local indigenous people and others, though Kimerling said the group never contacted the Huaorani people she worked with though it named them as plaintiffs; and some questioned who the suit was really for. The Ecuadorian court ordered Chevron – which had taken over Texaco – to pay $18 billion, and upheld the judgment on an appeal. But Chevron has refused to pay and is now suing the plaintiffs, their attorneys and others in New York federal court for a host of serious charges including racketeering and fraud related to the Ecuadorian lawsuit.

Kimerling described how Texaco reportedly conducted business over past decades at its oil facilities in the Amazon, which closed two decades ago though contamination remains:

Under Texaco there was virtually no environmental protection. Workers trained by Texaco were so unaware of the hazards of crude oil, they put it on their heads to prevent balding, they left it on overnight and in the hot sun, then washed their hair with diesel to remove it.

Summing up the legal situation, she said:

After more than 18 years of litigation, the impact of the case remains to be seen…Sadly, the political and legal focus is shifting from allegations about Texaco’s misconduct to allegations against lawyers and activists who pushed the case.