THE PARADOX OF POVERTY AND CORPORATE GLOBALIZATION
By Owens Wiwa
I wish to thank the
Prime Minister and President of the EU for giving me this opportunity to
discuss globalization and poverty with this very august assembly.
Globalization is fraught
with paradoxes. While economic globalization increases the prosperity of
the West and shareholders of majority of the world's transnational corporations
(TNCs), it may, paradoxically, increase the poverty of the some of the
world's poorest people and those that live in rural areas. Similarly, communicative
globalization may improve the lives of many rural populations, yet the
access to this technology often makes these very people more acutely aware
of the inequalities associated with economic globalization.
The Ogoni people of
the Niger delta and their famous struggle against the predatory practices
of the Shell Oil Corporation are a prime example of the paradoxes of globalization
in action. Today, I would like to examine Shell's impact on the Ogoni community
and economy - from the destruction of Ogoni farmlands and houses for the
construction of oil wells and pipelines, the pollution of the delta through
oil spillage and gas flaring, to the active role Shell played in the physical
violence and human rights abuses unleashed upon the local population. Similar
scenarios have since been played out between TNCs and indigenous people
all across the continents of Africa, Asia, South America and North America.
Several examples come
to mind. There is the conflict between the Ijaw people in the Niger delta
and Shell, the problems of the Umlazi community in South Africa with Shell
and BP, or the situation between the Sudanese peasants and Talisman. Indeed,
these conflicts are not unique to Africa. The conflicts between the Acehnese
of West Indonesia and Exxon Mobile, the Western Shoshone of Nevada and
the Newmont Corporation, the Uwaa people of Columbia with Occidental oil
the plight of the Eyak people of Alaska who are still awaiting recompense
from Exxon after 12 years of battling in court are painful reminders of
how TNC practices have globalised suffering.
Images of these impoverished
communities, played out occasionally on television by environmental and
activist organizations, by World Vision, and on the Internet by citizen
groups representing these communities, contrast sharply with the wealth
that the TNCs extract from their homeland. This gap is what regularly brings
people to the streets, to teach-ins and to conferences of this nature,
to find peaceful solution to the challenges posed by globalization.
On January 4, 1993,
three hundred thousand Ogoni people held a peaceful protest against Shell
on the paths and oil fields of Ogoni. Not one stone was thrown. It was
a peaceful protest and we continue to use and advocate non-violent methods
of civil disobedience to attract attention. WE condemn terrorism in all
forms, including eco-terrorism.
You might ask why a
poor rural community in Africa would come out massively to hold a march
against the presence of a TNC and what this has to do with globalization.
To answer these questions, I take few moments to describe Ogoni and its
relationship with global trading systems over time, from my own perspective.
We, the Ogoni people
live in 404 Square miles on the north east corner of the Niger delta of
Nigeria. We fish and farm for our existence and have a well-organized egalitarian
social system. In order to survive, we Ogonis have developed a symbiotic
relationship with the environment. Like many sub-Saharan African communities,
we survived the transatlantic slave trade and refused to sign treaties
with the British colonialists when they arrived. After a brief battle,
the Ogonis were conscripted to join Nigeria.
Royal Dutch Shell's
discovered petroleum in Ogoni in 1958 ushered in the era of neocolonialism.
By 1990, hundreds of millions of barrels of crude oil worth billions of
dollars were extracted from oil fields in Ogoni. The extraction process
damaged the Ogoni ecosystem and adversely affected the lives and livelihood
of the Ogoni people. Lands, streams and creeks were polluted by oil spills
and well-blowouts; the air was poisoned by nitrous oxide, sulfur dioxide,
carbon monoxide, hydrocarbons and soot emitted by incompletely combusted
gas flared horizontally from four flow stations close to human habitation.
High-pressure oil and gas pipelines were laid haphazardly on the surface
of Ogoni villages and farmlands without any regard to safety. The underground
water was also polluted with crude oil, and the rain was black with soot.
By 1993, there were
100 oil wells in eight oil fields, one petrochemical complex, two oil refineries,
a fertilizer complex, an ocean terminal and an export-processing zone in
Ogoni. In terms of trade and liberalization, Ogoni, with an export free
zone, manufacturing and extractive industries could be classified as one
of the areas with the freest trade.
Instead of enjoying
the economic prosperity of the oil production, the Ogonis were deprived
of their livelihood by the destruction of their environment and wallowed
in poverty. Youth unemployment rose to over 70%. Despite the immense wealth
our land was generating, the Ogoni people had no electricity, pipe borne
water, accessible preventive or secondary health infrastructure (with one
doctor for every 50,000 patient), and the few schools available had no
chairs, desks or regularly paid teachers.
I was one of the handful of physicians working in Ogoniland. In my surgery there would be old ladies whose hips were broken while trying to jump over pipelines to get to their farms, children whose lungs wheezed with asthma and bronchitis from breathing the poisoned air, and many more suffering from tuberculosis, malaria, and cholera. Most of these patients were too poor to buy medicines.
The life expectancy
of the Ogoni people dropped to 48 years -- six years less than the Nigerian
average. And this was before the
increase in the incidence of HIV/AIDS.
Now, with poverty, one can only imagine how their condition predisposes
them to the spread of HIV/AIDS.
These changes, in my
homeland, were happening in the context of other changes associated with
globalization taking place in Nigeria. The Nigerian government owed the
World Bank and IMF an external debt of over US 30 billion dollars. Keen
to have their loans paid, these organizations encouraged the exploitation
of oil and gas, imposed a set structural adjustment programs (SAP) on the
government in the hope that they would get their debt back with interest.
They advocated privatization, cuts in government social spending, and the
imposition of user fees and currency devaluation. The GNP per capita in
Ogoni dropped is now 250 US dollars, compared to 1963 when it was about
As Prime Minister Guy
Verhofstadt has noted, not every aspect of globalization is bad. Many citizens
who want economic trade that is ethical and fair use the new information
technology associated with globalization for greater communication, for
effective mobilization, and for cultural exchanges. This is exactly what
the Ogonis did. We used the modern tools of communication to educate ourselves
about our basic rights. The International Covenants on Economic, Social
and Cultural Rights and on Civil and Political Rights common articles 1
(2) states that "All peoples may, for their own ends, freely dispose of
their natural wealth and resources without prejudice to any obligations
arising out of international economic cooperation, based upon the principle
of mutual benefit, and international law. In no case may a people be deprived
of its means of subsistence".
The Ogonis mobilized,
created a Bill of Rights and presented it to the Nigerian Government and
Shell. The government acknowledged receipt of our petition, but Shell ignored
us. We networked with Government departments and organizations in Europe
and the United States. Organizations like Greenpeace, The Sierra Club,
UNPO, Amnesty International and several others gave us audience. We later
presented our case to UN agencies concerned with issues of indigenous rights.
There was still no
answer to the poverty in Ogoni so we decided to take to the streets to
demand a cleanup of our environment, a stop to the flaring of gas and payment
for destruction of our natural resources. The protests were for an end
to a trade era that actually started with the transatlantic slave trade,
colonialism and neocolonialism, and now with new technology and new trade
order, we noticed a faster process of dehumanization, where profit comes
first before people. We respectfully asked the TNC Shell to leave our land
and our lives.
Response of Shell and Nigerian Government
On Oct 30 1995, exactly
six years to this day, a military appointed tribunal in Nigeria sentenced
my brother, Ken Saro-Wiwa and eight of my colleagues in MOSOP -- The Movement
for the Survival of the Ogoni People -- to death by hanging. Eleven days
later, they were executed. Their murder was a culmination of the human
rights violations that Nigerian security agents have inflicted on the Ogoni
people since we started to demand for our economic, environmental and political
rights. Before these executions, hundreds of unarmed Ogoni children, women
and men were killed in government manufactured ethnic clashes. Thirty out
of a total of 120 villages in Ogoni have been destroyed. Properties have
been looted. Thousands of people have been arrested, tortured and detained
and over 200,000 people internally displaced. About eight thousand Ogonis
became refugees in the Republic of Benin, of which about 2,000 have been
resettled in the United States (many more are still stranded in the Republic
of Benin). For the first time in our history, we became a migrant population
as a direct result of the effect of transnational trade. We have documented
evidence that Shell gave financial support to the Nigerian security agents
who perpetrated these human right violations upon us.
The need for fundamental changes to TNCs
Some would argue that
it is the failed state of Nigeria that should bear the blame. This is partly
true, but for those of us in Ogoni, we have long realized that Shell, as
a TNC, has become more powerful than many nation states. The power of countries
such as Nigeria to shape its own destiny by formulating national policies
is limited and diminished in the currently global environment. As Vincente
Navarro states, "The only choice is to join in and facilitate the process,
to open up countries to Globalisation, since any resistance to do so will
be penalized and risk being marginalized in the world community and in
the world economy." (Navarro, 1998: AJPH Vol88 No.5)
through mergers, acquisitions and alliances, control over 33 percent of
private global productive assets and 70 percent of products in international
trade (The Corporate Examiner 1995, and United Nations Center on Transnational
Corporations, 1991), yet they employ only 3 to 5% of the world's workforce.
This increased leverage of TNCs allows them to play nations and communities
off against one another in an effort to get a downward harmonization of
domestic labour, consumer and environmental standard. International trade
agreements, as currently written by the WTO, seek to enhance this trend
by its rules that undermine international health, environmental and safety
standards. This is being done in the name of free market, so that these
TNCs will maximize profit.
Over the last two decades,
the world has witnessed an enormous growth in the number of transnational
corporations and in their share of global wealth. Approximately 7,000 TNCs
were in operation worldwide in 1970, by 1996 this number had grown to over
40,000. Today, the largest of these TNCs are very big, their size is difficult
to conceptualize. One often cited way of illustrating their magnitude explains,
"of the world's 100 largest economies, only 49 of them are countries, the
remaining 51 are transnational corporations" (World Bank World Development
Report 1996 and Fortune's Global 500 of 1994, Fortune, August 7, 1995).
Moreover, the combined revenue of the top 200 corporations which now exceeds
$7.1 trillion dwarfs the combined economic activity of the poorest four-fifths
of humanity, $3.9 trillion for over 4.5 billion people (The Rise of Global
Corporate Power. Institute for Policy Studies. 1996 ). Given this rapid
growth in TNC numbers and wealth, it is not surprising that the owners
and managers of these corporations are among the greatest supporters, shapers
and beneficiaries of the current global expansion of neoliberal-style capitalism
and its concomitant deregulation of goods, services and labor markets.
With the increased
influence this growth in size and power accords them, TNCs have come to
challenge and undermine the authority nation-states previously had to coordinate,
regulate, and control the operations of foreign corporations within their
borders. A reporter from Business Week described the phenomenon: "As cross-border
trade and investment flows reach new heights, big global companies are
effectively making decisions with little regard to national boundaries.
Though few companies are totally untethered from their home countries,
the trend toward a form of "stateless" [unregulated] corporation is unmistakable"(
. Business Week, May 14, 1990, p. 98. As quoted in Danaher 1996). Moreover,
the influence of TNCs extends beyond the national boundaries in which they
operate and increasingly into the very institutions that create and enforce
the rules of global trade and investment, such as regional trade agreements,
the World Trade Organization, World Bank, and International Monetary Fund.
TNCs also exert increasing influence in many of the global institutions
that are charged with protecting the health and well being of member states,
such as the Food and Agriculture Organization, the World Food Programme,
the World Health Organization, and the United Nation's children and development
programs. With the extraordinary amount of money they control, and through
their capacity to sway or circumvent national and global policies, the
growth of TNCs has had a decisive affect on much of what unfolds daily
in the world.( Korten, Tony Clarke et al)
The Prime Minister,
in his letter, claims that 'experience has shown that the per capita income
of a country's population rises by 1% for every 1% that it opens up its
economy' but he cites only one example. One might want to look at the income
distribution between the rich and the poor in these countries that have
these experiences. Using the imperfect measure of per capita income, the
Center for Economic and Policy Research illuminated globalization's effect
on economic growth. In the period between 1960 and 1980, per capita income
in Latin America grew by 73 percent. From 1980 to 2000, the growth was
only 6%. In Africa, incomes rose between 1960 and 1980 and fell 23% between
1980 and 2000. The year 1980 is significant because in that year, the IMF
and the World Bank began the policy of conditioning assistance on structural
adjustments and greater privatisation. Rapid trade liberalization in Africa
has not been reciprocated in terms of better access to markets for African
producers. Massive subsidies afforded to agricultural producers in advanced
countries and other forms of protection have hindered Africa's efforts
to upgrade capacities and alleviate poverty.
**Net result of Globalization on People
uses Transnational Corporations as its instrument. The outcome is a world
in which 2 billion people each earn less than $2 a day. UNDP reports inform
us of unparalleled growth in inequalities in the world today. Income gaps
have widened. The average per capita income in the most advanced country
is now 58 times that of the least developed country. Over half of the world's
population lives on 5.6 per cent of the world's income (Turk, 1993 pp17-18;
Khor, 1996). The inequalities continue: in the health sector. Mortality
tables show an 18.1 greater chance of dying before the age of 5 in poor
countries, and a life expectancy of 54 years compared with 80 years (Stephen
Castles and Alastair Davidson, 2000).
While an estimated
93% of the world's burden of preventable mortality occurs in the developing
world, only about 5% of the $30 billion in global investment in health
research was devoted specifically to the health problems of developing
countries (Figures are for 1986. Commission on Health Research on Development,
Health Research: Essential Link to Equity in Development (Oxford University
Press, Oxford, 1990).. Even for those drugs that are produced to treat
diseases that afflict poor people, such as the new AIDs medicines, the
benefits of these new therapies are quite unevenly distributed, and the
vast majority of those living today who are in need of these life saving
treatments will never have access to them.
These gaps can, and
must be reduced so that the rich do not have to build higher walls to defend
themselves from the poor. An alternative is a development strategy that
is both equitable and beneficial to the poorest sectors of the global economy
that takes the full spectrum of human rights, including health, environment
and labor rights into consideration.
development and ethical business practices, globalization can bring prosperity
to both the corporation and the community. The time has come to explore
the initiatives that will a) level the field; b) make TNCs more accountable
and thus promote competition, to reverse the paradox of globalization and
poverty. These initiatives briefly discussed below are not original. Many
groups have suggested them.
Correcting the Paradox
Level the Playing Field
1. Debt Cancellation.
During a conference
in Nigeria, a Nigerian economist, Mr. Charles Soluda calculated that, "by
2020, for every one dollar Nigeria has borrowed, it will have paid back
five dollars". The President of Nigeria, in his own remark, said "Original
borrowing from the Paris Club was about $13 billion. So far, about $17
billion has been repaid, and yet we are assumed to still owe about $22
billion." With this information, I am tempted to agree with the position
of Jubilee South that holds these debts to be illegitimate and should not
be paid. However, I will suggest that both the IMF and the World Bank should
cancel these debts and the debt of all the countries in Africa. The only
conditions that may be placed on such countries are changes in corruption
and human rights reform, which should be monitored by a coalition of civil
society in that debtor country in conjunction with an equivalent international
civil society network.
2. Marshall Plan for Africa (Support for the New African Initiative by Obasanjo, Mbeki etc)
A health and economic
recovery plan for Africa, similar to the Marshall Plan that was implemented
for Europe needs to be developed for Africa. It should be well funded.
Funds for this plan could be provided by: 7 A levy on Foreign exchange
transactions by transnational corporations; 7 Direct contribution from
countries that have benefited from the transatlantic slave trade, colonialism,
and who have received tax dollars from transnational corporations over
the years. Concerned countries in the West should contribute at least 1.5%
of their GNP to this fund yearly for the next 20 years. 7 The billions
of Africa money in Western bank that was deposited by kleptomaniac African
dictators; the tragic events of 9/11 and its outcomes have shown that funds
that we thought were inaccessible, and lost in vault of European Banks,
can be traced.
For equitable utilization
of such a fund, a coalition of development NGOs, Foundations, Governments
and the UN should manage it. Populations most at risk from poverty, including
communities infested with transnational corporations should receive very
3. Changing Corporate Practice
While the suggestions
above can go a long way to bridge the gap, changes in corporate practice
and the monitoring of this practice to prevent further poverty is paramount.
All the stakeholders will need to act decisively. With TNC'S growth and
influence and their greed for profit, consumers' actions will be as vital
as the actions of local communities where the TNCs get their raw materials,
acting with or without any global monitoring organ.
7 Local Community Actions:
All communities must have shares in corporations that operate on their
land. For communities who determine that the presence of a corporation
is a health or social hazard, that community should be supported should
they decide that the company must leave. In this way, control of natural
resource and the local environment will be left to the community. This
approach can foster a symbiotic relationship between all the stakeholders
and create a climate where a corporation will try to avoid a situation
where they can be kicked out for falling to be clean, as the Ogonis kicked
out Shell. 7 Consumer Actions: Consumers have enormous power to change
corporate behavior and we should use it. Consumers have enormous power
to change corporate behavior and we should use it. While it will be not
be possible to boycott the entire bad transnational corporation at the
same time, it is essential that all the civil society groups who are interested
in changing corporate practice should come together and act collectively
to monitor, and respond appropriately. I strongly believe that should all
consumer groups call for the boycott of the products of a particular TNC
for six months, that TNC will listen and change its practices and this
will serve as an example to others who also depend on our choices as consumers
to be profitable.
As the Prime Minister
alluded in his letter, it is true that the forces of change in Europe react
with different intensity to events that happen to populations in Africa
compared to events that may affect interests in Europe. An example is the
reaction to the Brent Spar incidence and the reaction to the Ogoni struggle.
This is in some way expected, but if we all agree to the words of Gandhi,
that there is enough in the world for every one's need and not every one's
greed, then there is enough resources and energy for all of us to pay more
attention to the inhuman practices of transnational corporations in Africa.
The Ogoni struggle, Ken Saro-Wiwa's battle against Shell that continues over the oil fields Ogoni, between the mangroves of Ijaw, in New York's courtrooms and on the streets of Vancouver, is still a test case that may define the future of corporate accountability.