Will Blog for Experience: Emily

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Tuesday, December 26, 2006

"Nigeria Pipeline Explosion Kills 200"

This afternoon, the Wall St. Journal reported that a petroleum pipeline in Nigeria exploded and killed 200 people. I wasn’t planning to post a discussion on this topic but this news development provided the appropriate context.

Whether referred to as the “paradox of plenty”, “dutch disease”, “oil curse”, “the devil’s excrement”, or “governance curse”, the association of oil and corruption in underdeveloped countries is undeniable.

Both Nigeria and Ecuador have become victims of environmental and human rights problems as a result of oil cultivation. Large oil companies have erected headquarters in these underdeveloped areas and have divided the local communities as a result. Sentiments among the locals in both regions are somewhat divided. It seems Nigerians (especially in the Ugborodo region) covet the modern technologies they’ve caught glimpses of within Chevron’s headquarters. Ecuadorians are slightly more protective of their primitive, Amazonian lifestyles yet some locals aspire to develop/Americanize their schools and other systems. These divisions in opinion regarding local development have fueled tensions between the local inhabitants of these regions. Disparities among those who work for (i.e. are lucky enough to secure labor contracts from) the oil companies versus those who attempt to maintain non-oil related jobs further the problem.

The “intrusion” of western culture in these areas has also led to violent riots. These riots not only threaten and devastate the oil infrastructure but they also harm local businesses and homes. Abuse and questionable ties between the state authorities and oil companies represent another form of human rights violations. Oil companies rely on the local military for protection but the military is often guilty of mistreating its own local citizens.

Aside from the impact on human rights, oil production is responsible for negatively effecting the environment. Pollution and waste-dumping directly contaminate major water supplies, which facilitate the spread of disease and illness. In Nigeria, Chevron artificially expanded an existing river to encircle their headquarters, which caused major flooding in surrounding neighborhoods and is expected to completely destroy some areas in the next few years.

Though the oil companies have made large-scale, million-dollar efforts to rectify existing damage and prevent further destruction, many believe more can be done. The oil companies do split their oil revenues with the local governments but corrupt officials prevent these proceeds from benefiting the state and their local inhabitants. The companies are responsible in so much as they can influence the governments to enforce human rights standards and proper economic development. The ultimate power lies with the local governments but the companies do play a role; and play a large role given how influential their examples and financial contributions are.

I would think it is in the best interest of the companies to establish favorable relations between themselves and the local inhabitants. Aside from doing what’s morally right, companies will decrease their exposure to harmful publicity and subsequent financial penalties. Dissolving tensions between themselves and surrounding locals will also decrease the financial impact of riots and attacks on machinery. For example, today’s explosion in Nigeria was reportedly caused by locals trying to capture leaking oil from the pipeline.

I do think local governments are ultimately responsible for their citizens, military, and economic conditions and thus it is up to them to establish and enforce a proper socio-economic system. However, the oil companies are providing them with huge amounts of capital and with the potential for modern development thus they hold some responsibility to properly influence the existing authorities. Oil companies need to provide an incentive to change since these governments are seemingly indifferent to the plights of their people. I do believe that instituting a government that cares about its citizens will have the greatest effect on reversing “the paradox of plenty”, “the oil curse”, or whatever you wish to call it.

6 Comments:

  • At 10:11 AM, Anonymous Anonymous said…

    lawrence, you're a blogging machine! i feel like i don't even know you any more.

    you should really just drop the whole econ thing and become a writer -- it'd be a shame to lose your articulate wit to the dark side. who said art couldn't save the world anyway?

    but keep up the good work. and maybe call me once in a while.

    your favorite wannabe writer,
    dave

     
  • At 3:24 AM, Anonymous Laurence Willborn said…

    Yes, It's A Shame,

    That America's best and brightest, exemplified by such as yourselves, should seek and need to consider careers in the ever-larger government offices. One person changes a light bulb--nine others report, supervise, insure, debrief, regulate and counsel. Douglas Adams writes about telephone sanitizers.
    I don't know "blog" system protocols; hope this reaches you and helps. Do I need a registered user name?

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    mwillborn@aol.com

     
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