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Shell’s hidden shame - Contract workers on the poverty line in Nigeria

05.12.2018

Oscar Tamuno*, a driver for major Shell contractor, Plantgeria, has not had a wage increase in eight years. After paying taxes, pension contributions and union dues, he takes home 94,000 naira a month (US$258) working a 12-hour day, six days a week. And yet, Oscar is better off than many of his co-workers.

* Not his real name.

Poverty wages are typical for thousands of contract workers in the oil and gas industry in Nigeria. In September 2018, IndustriALL Global Union carried out a mission to Port Harcourt to meet contract workers as part of its global campaign to stop precarious work at Shell. 

Despite 28 years of service as a contract worker at Shell, Oscar Tamuno, has little to show for it. He, his wife and four children live in a tiny two-room, one-storey dwelling in the Nigerian city of Port Harcourt. Out the back is a small courtyard where he and four other families share basic toilet and washing facilities. Cooking is done outside on an open stove. 

Precarious work has become the focus of IndustriALL’s campaign, which also urges Shell to engage in global dialogue with IndustriALL and its affiliates. Contract workers outnumber permanent workers two to one at Shell and do the most dangerous jobs. 

In May 2018, IndustriALL’s affiliates from five countries, including Nigeria, raised their grievances to the Shell at the company’s annual general meeting in the Hague. Further, IndustriALL highlighted issues of union busting and violations of freedom of association of contract workers at Shell in Nigeria at the International Labour Conference of the ILO in Geneva in June. Shell has however repeatedly refused to enter into meaningful dialogue with IndustriALL to address these concerns.

IndustriALL affiliates in the oil and gas sector in Nigeria: 

The National Union of Petroleum & Natural Gas Workers (NUPENG), which represents blue collar workers, and the Petroleum & Natural Gas Senior Staff Association of Nigeria (PENGASSAN) representing white collar workers.

Shell in Nigeria 

Shell’s history in Nigeria is blighted by corruption, environmental destruction and human rights atrocities. It is the biggest multinational oil company in the country and pioneered oil exploration in Nigeria in 1936, producing its first shipment of oil in 1958. Nigeria has since become Africa’s largest producer of crude oil with the world’s biggest oil companies including Total, Eni and Chevron operating there. 

Thirteen years after Nigerian independence from British colonial rule in 1960, the Nigerian government took a stake in Shell’s operations in the country. In 1979, the Shell Petroleum Development Company (SPDC) was established, which is now owned by the Nigerian National Petroleum Corporation, which has a 55 per cent stake; Shell with 30 per cent; Total with 10 per cent, and Eni with 5 per cent. Shell, however, remains the operator. 

In 1990, frustrated by oil companies’ exploitation of natural resources and environmental damage, the Movement for the Survival of the Ogoni People (MOSOP) led by activist and playwright, Ken Saro-Wiwa, demanded an end to oil pollution and a fairer share of profits. 

Shell businesses in Nigeria 

  •                   Shell Petroleum Development Company of Nigeria (SPDC) 
  •                   Shell Nigeria Exploration and Production Company (SNEPCo) 
  •                   Shell Nigeria Gas (SNG) 
  •                   Nigeria Liquefied Natural Gas (NLNG) 

Despite oil being extracted from their lands in the Niger Delta since 1958, they had seen nothing in return.

In January 1993, MOSOP mobilized around 300,000 people to protest against pollution and Shell, which was the largest operator in Ogoniland. It prompted the Nigerian military to move in. Saro-Wiwa and eight other MOSOP activists were hanged in 1995 by Sani-Abacha’s military government causing international outrage. Shell Royal Dutch Petroleum was sued by the US Center for Constitutional Rights for complicity in the repression of the Ogoni people and the executions of the Ogoni Nine. In 2006, on the eve of the trial, Shell settled out of court, resulting in payouts of US$15.5 million to the Ogoni people.

Although Shell moved out of Ogoniland in 1993, its myriad network of pipelines in the Niger Delta remained. In 2008 and 2009 two massive oil spills from its pipelines struck the Bodo community in Ogoniland. They caused catastrophic damage to the environment and devastated the community’s livelihood, which had been heavily dependent on fishing and agriculture. 

In 2015, Shell admitted liability for the Bodo spills, which the UN described as an ‘ecological disaster’, and agreed to pay US$83 million for the clean-up that is expected to take decades to fix.

Today, high levels of poverty, unemployment and the abject failure of oil revenues to benefit local people, has led to increased insurgency and Shell is plagued by militant attacks, oil spills and sabotage. In 2017, SPDC reported oil losses of 9,000 barrels per day (bpd) through theft, costing around US$180 million a year. This was up from 6,000 bpd in 2016. 

US$4 billion – amount earned by Shell from oil and gas production in Nigeria in 2017. Source: Reuters

As the company seeks to move away from dependence on crude oil, it is focusing on Nigeria’s vast untapped reserves of gas, which is regarded by Shell as a cleaner alternative to oil as it seeks to meet greenhouse gas emissions targets. 

Precarious work

NUPENG president, Williams Akporeha, calls Nigeria the “headquarters of precarious work”. Shell has, over time, contracted out almost its entire production workforce, who have low pay, minimal benefits and no job security. The predominance of contract workers is not unique to Shell, but indicative of the situation at most, if not all, of the international oil companies in Nigeria. 

Meeting contract workers at Shell

NUPENG guided the IndustriALL mission on a visit to Shell’s Umuebulu Flow Station at Etche in the outskirts of Port Harcourt. Contract workers in Shell uniforms were eager to tell their stories. Many said they worked under a community contract, which is a contract organized between an oil company and the local community leader, in this case, the local king or chief. Workers under this contract seemed to have the worse deal. Following the death of the king, and then of his son, workers said they weren’t paid for several months. While Shell did intervene to cover some of the wage losses, many workers said they were still owed salaries. 

A community contract worker at the plant told the mission:

“My contractor doesn’t pay when due. I haven’t been paid for six months. My salary is just 50,000 naira (US$137) a month. I will go home and beg my neighbour for food. For six months my children can’t go to school. I’ve been working for eleven years at Shell but I don’t have carpet in my house. I don’t have a radio in my house. 

“If you open your mouth and you want to say something, they will sack you. The next day they (Shell) will call that contractor and they will sack you and they will bring in another person. That’s what we’re facing at this particular Shell (operation).”

“Our salary at Plantgeria is about 95,000 naira (US$260),” said another worker contracted to Shell. “In Nigeria today you can’t do anything on that. You can’t pay your children’s school fees. You can’t eat well. You can’t do anything better for yourself. We do the dirty jobs. We work like an elephant and eat like an ant.” 

All the workers referred to the contractors as their ‘paymasters’ and considered they worked at Shell, as they report directly to Shell management. They said Shell determines what they get paid by contractors. However, their appeals to Shell for better wages are ignored:

“If you ask for a pay rise, you will be escorted out by police. And then your job is finished. No more access to the yard until you sign something saying you will not join a union and you will not ask for a pay rise,” said one worker. 

Shell maintains it is not financially viable to give contract workers permanent jobs, as they are not needed all the time. But this belies what workers told IndustriALL:

“They keep on classing us as ad-hoc workers but we have been working continuously for as long as 20 years, while being paid less than US$150 a month,” a worker lamented. “I have a letter that says I am not entitled to any benefits at all. In the last two months, we gathered ourselves to join NUPENG. Now, if they threaten us, we will just say ‘sack us’.” 

Workers said they are initially given a contract for two years, but after that the contractor will keep adding an extension for three or six months, for years at a time. “That’s why we have stagnant wages. There is no variation in the extension of the contract. Sometimes they even reduce the salary,” said one worker.

Prospects for contract workers at Shell are zero: “We have no promotion. We have been on the same salary scale for the past ten years. We have agitated for a pay increment but it has not been forthcoming.”

Vassey Lartson who works as a lab technician for Shell in Houston, USA, joined the mission to Nigeria as a member of IndustriALL’s affiliate the United Steelworkers. He was shocked by the workers’ living conditions. 

“I am ashamed that we work with the same Shell sign on our back. No way should there be that level of disparity between me and those workers. I take it personally that my brothers and sisters are being exploited in the way that they are. If a company is global, then why can’t behave global and pay global?”

There is a stark contrast to expatriate workers at Shell, who can earn up to US$20,000 a month. Nigerian white-collar workers at Shell are paid around US$2,000 a month. Shell has a 224 hectare high-security compound in Port Harcourt where Shell’s local and expatriate staff dependents live and socialize. 

Inadequate healthcare

Many contract workers complained that their healthcare insurance provider (HMO) was inadequate:

“We are exposed to all the hazards. We work in the field. Even with our HMO we are not doing well. We are just working to die. When we are sick and go to the clinic, they don’t treat you well because the money they (the contractor) give to the HMOs is too meagre, so we don’t get the right treatment. They just give you some tablets. Then the doctor will say we can’t go further than that with the level you’re on. So, you use your meagre money to pay again.” 

One worker, who has four children, said he could only claim up to 40,000 naira (US$100) a year for his family. Some workers said they didn’t have any health insurance at all, depending on the contract they had.

The mission visited the bereaved children of Mr Kalu Ngozi, a contract electrician who had worked at Shell for over 20 years. Mr Ngozi had died three days previously leaving his four sons as orphans. Their mother died two years ago, and another brother passed away two months before. His children, aged between 12 and 22, are now alone living in a one room place in a Port Harcourt slum. Mr Ngozi who suffered from a stomach ulcer could not afford the medical attention he needed, and the hospital said that typhoid was a contributor to his death. 

Dangers

Port Harcourt and the Niger Delta have seen increasing levels of violence over the years with kidnapping and armed robbery not unusual. “One of our colleagues, a driver, was recently shot dead in the field. In the end Shell didn’t do anything. The most they will do is one minute’s silence. No one cares about you and your family. If anything was to happen to you today, (Shell) don’t know you, it’s up to the contractor.”

Workers also revealed they faced hazards such as chemicals, carbon pollution, militancy and snakes in the field.

The workers also said they felt ill equipped to handle dangerous situations: “Shell is good at the health and safety paperwork but it’s different when it comes to implementation. They will send you to training, saying ‘this is what you need to do’, but sometimes when you get to the field (the equipment) is not there.” 

A Shell contract driver was recently shot dead during an attempted kidnapping of an expatriate in the Umuebulu area, resulting in immense suffering for his family.

IndustriALL’s director for energy, Diana Junquera Curiel, said:

“Our mission to Nigeria has allowed us to see and hear first-hand how contract workers are suffering at Shell. We will confront Shell with our findings. We will hold them to account. Shell says it wants to take responsibility for workers in its supply chain. It can start right here, in Nigeria.”

Using global framework agreements to raise standards 

While Shell refuses to engage in global dialogue with unions, French energy giant Total has signed a global framework agreement with IndustriALL since 2015. The agreement has helped to resolve health and safety issues in Nigeria by connecting workers on the ground to global management in Paris. As a result of the agreement, Total is also demanding that all its contractors meet international standards on labour rights. In addition, IndustriALL also has a global framework agreement with Italian company Eni, which also operates in Nigeria.

Gas flaring and effects on workers

Gas flaring is caused by burning of natural gas that comes to the surface during the extraction of crude oil. According to the Global Gas Flaring Reduction Partnership, not enough is being done by oil companies in Nigeria, particularly the Niger Delta, to capture the leaking gas, which is one of the biggest contributors to greenhouse gas emissions in the world. It is cheaper to burn the gas off rather than find expensive ways of capturing it. 

Most recent figures from the government show that while gas flaring has dropped from two billion cubic feet per day ten years ago, it still stands at 700 million cubic feet per day – enough to generate 3,000 megawatts of power. But this reduction does not help workers and communities who remain badly affected by the flaring. 

Reports in Nigerian media say villagers at a Polaku community in Bayelsa State, who are living near the SPDC’s Gbaran Ubie Integrated Oil and Gas plant, say they can’t sleep at night and their homes are coming apart due to the vibrations caused by gas flaring. The flaring causes acid rain which contaminates crops and water, and villagers say their children are getting ill. They say the flaring takes place at night to avoid public outcry. 

Workers IndustriALL spoke to at Etche had similar experiences: 

“There is a lot of gas flaring. If you park a white vehicle overnight the yellow crude oil and soot will cover it by morning. You wake up and your nose is blocked with soot. It affects your eyes too.” 

The Etche facility IndustriALL visited is just a stone’s throw away from many schools in the area. “What is happening here affects the world. Shell asks us to not steam our motors for so long, but they are polluting the whole planet!” says one worker.