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Cablegate: Nigeria: Chevron Considers Gmou Model Successful

VZCZCXRO7251
RR RUEHMA RUEHPA
DE RUEHOS #0057/01 0441605
ZNR UUUUU ZZH
R 131605Z FEB 08
FM AMCONSUL LAGOS
TO RUEHC/SECSTATE WASHDC 9744
INFO RUEHZK/ECOWAS COLLECTIVE
RUEHUJA/AMEMBASSY ABUJA 9476
RUEHNY/AMEMBASSY OSLO 0177
RUFOADA/JAC MOLESWORTH AFB UK
RUEKJCS/SECDEF WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHDC
RHMCSUU/DEPT OF ENERGY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHINGTON DC
RHEFDIA/DIA WASHINGTON DC

UNCLAS SECTION 01 OF 03 LAGOS 000057

SIPDIS

SENSITIVE BUT UNCLASSIFIED - HANDLE ACCORDINGLY
SIPDIS

STATE FOR AF/W, INR/AA, DS/IP/AF, DS/ICI/PII, DS/DSS/OSAC
OSLO FOR HELENA SCHRADER
DOE FOR GPERSON, CAROLYN GAY
TREASURY FOR ASEVERENS, SRENENDER, DFIELDS
COMMERCE FOR KBURRESS
STATE PASS USTR FOR ASST USTR FLISER
STATE PASS TRANSPORTATION FOR MARAD
STATE PASS OPIC FOR ZHAN AND MSTUCKART
STATE PASS TDA FOR NCABOT
STATE PASS EXIM FOR JRICHTER
STATE PASS USAID FOR GWEYNAND AND SLAWAETZ

E.O. 12958: N/A
TAGS: PGOV PREL SENV NI
SUBJECT: NIGERIA: CHEVRON CONSIDERS GMOU MODEL SUCCESSFUL

REF: 07 LAGOS 628

SENSITIVE BUT UNCLASSIFIED--HANDLE ACCORDINGLY

1. (SBU) Summary: Chevron has deemed its global memoranda of
understanding (GMOUs) "largely successful" in building a
sustainable community-driven approach to development,
according to Femi Odumabo, Executive Director and General
Manager of Chevron's Policy, Government and Public Affairs
office. Chevron hopes communities will be able to lobby
state governments, international oil companies and other
donors with a list of projects needed in their communities.
While the GMOUs set up a community structure for identifying,
approving and funding projects, Odumabo said this is
complementary, not parallel to, government structures. End
Summary.

---------------------------------------
Government Rep: Chevron is a "Nice Guy"
---------------------------------------

2. (SBU) Compared to other international oil companies
(IOCs), Chevron is a "nice guy," Femi Odumabo, Executive
Director and General Manager of Chevron's Policy, Government
and Public Affairs office told PolCouns on January 31.
Chevron's Corporate Engagement (CE) office directs and
manages assistance to oil producing communities in which the
company operates; two thirds of the office's budget goes to
communities through global memoranda of understanding
(GMOUs). One third of the CE budget goes toward Corporate
Responsibility (CR) projects which are national in scope,
including health (such as Rollback Malaria in Kano, Kaduna,
and Zaria), education, water, and power projects.

3. (SBU) After the 2003 Warri conflict in Delta State, which
damaged half a billion USD of Chevron's holdings, the CE
office spent two years developing a GMOU approach to foster
community-driven development. Each GMOU is signed with a
community (ethnic) group and creates the following:

--Regional Development Council (RDC) composed of community
members, NDDC, state government, Nigeria National Petroleum
Corporation (NNPC), NGOs, donors and Chevron
--Project Review Committee (introduces many projects)
--Conflict Resolution Committee
--Accounts Audit Committee (community, Chevron and government
representatives are account signatories)
--Community Engagement Management Board (CEMB)

4. (SBU) Each community, primarily through the Project
Review Committee, develops a list of desired projects. After
receiving and reviewing bids, the community can fund a bid
from its community account, which receives a percentage of
Chevron's revenue from that area. While Chevron reportedly
gives USD 10.8 million a year to the Regional Development
Councils, Odumabo noted Chevron never intended to be the sole
financer and hopes the NDDC, state governments, and Oil
Producing Area Development Commissions (OPADECs) of each
state will also fund projects.

-------------------------------------------
GMOU "Largely Successful", Not Parallel but
Complementary to Government
-------------------------------------------

5. (SBU) Odumabo deemed the GMOU model "largely successful"
based on the Sustainable Livelihood Assessment (SLA) reports,
which Chevron teaches communities to conduct on their own.
The SLA is a five day teaching workshop which offers skills
training in project assessment, critical thinking, and how to

LAGOS 00000057 002 OF 003


systematically approach government with a list of projects in
need of funding. According to SLA results, the Itsekiri and
Ijaw have been most successful at identifying, funding, and
completing projects. In addition to successes recorded
through SLAs, Shell wrote Chevron a letter recognizing the
strengths of this program and said it would borrow the model.

6. (SBU) Odumabo said Regional Development Councils are not
parallel, but complementary, to government efforts; there
have been no local government challenges to RDCs to date.
Chevron hopes RDCs will use their three year development
plans to express to government their needs, Odumabo suggested
this could serve as a government accountability mechanism.
He said Governor Olusegun Agagu of Ondo State was the first
to offer 40 percent of the state's derivation revenue to the
Ondo Oil Producing Areas Development Commission. Odumabo
estimated approximately 750,000 Niger Delta inhabitants have
been positively affected by RDCs.

7. (SBU) Odumabo commented USAID is probably reticent to
partner on IOC-driven development schemes, especially ones
that could be seen as parallel government structures.
However, he requested the USG support positive and successful
efforts in the Niger Delta, rather than frequently focusing
on the negative.

--------------------------------------
River Boat Clinic; Nationwide Projects
--------------------------------------

8. (SBU) While Chevron corporate spends USD 30 million
annually in Africa on malaria, HIV/AIDS and tuberculosis
prevention, Chevron Nigeria provides approximately USD 35
million a year to the Niger Delta Development Commission
(NDDC).

9. (SBU) Chevron spent approximately USD 1 million in 2006
to operate and maintain a river boat clinic in Delta state.
This mobile hospital operates in swamps near Escravos;
Chevron estimates 23,000 people were treated in 2007. The
river boat clinic was created after a Chevron medical
facility near Escravos was twice burned, once in 1999, once
in 2003. Odumabo believed the clinic was burnt by a
neighboring ethnic group in the area. Odumabo was surprised
the Delta State government has not replicated the successful
river boat clinic, despite Chevron's work with the state in
operating the boat.

10. (SBU) Comment: The GMOU structure adopted by Chevron is,
in principle, similar to one devised by the NGO Pro-Natura
International (Ref A), which has recorded successes in
community-driven development efforts. Notably different in
Chevron's model is that it deals with an entire ethnic group
(either the widespread Ijaw or geographically close Itsekiri)
as one community; given previous ethnic strife and community
access issues, it remains to be seen whether this will prove
a successful and sustainable model. Chevron's GMOUs offer
IOCs a new approach to working with communities, and these
efforts appear to gain companies favor as many Niger Delta
interlocutors have commented positively on Chevron's
community relations.

11. (SBU) However, from a broader development perspective,
regional development has not markedly improved, nor do GMOUs
appear to have decreased regional conflict. Despite its good
intentions, Chevron's GMOU may not help communities hold
local and state governments responsible for development. End
Comment.

12. (U) This cable was cleared by Embassy Abuja.

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BLAIR

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