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Cablegate: Nigeria: Delta Kidnapping Threatens Oil

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 LAGOS 001535

SIPDIS


DEPT FOR DS/ICI/PII, DS/IP/AF, DS/DSS/OSAC, DS/IP/ITA,
DRL/MARINDA HARPOLE
VAIHINGEN FOR J-3-DSS/LNO
CAIRO FOR JAMES MAXSTADT
DOE FOR CAROLYN GAY AND GEORGE PERSON
DOL FOR ILAB/ROBERT YOUNG


E.O. 12958: N/A
TAGS: ASEC EPET ENRG ECON CASC PGOV PINR PINS PTER NI XA XY
SUBJECT: NIGERIA: DELTA KIDNAPPING THREATENS OIL
PRODUCTION AGAIN

1. Summary: A Nigerian white collar worker for Chevron
Nigeria Ltd. (subsidiary of Chevron/Texaco) and member of
the Petroleum and Natural Gas Senior Staff Association
(PENGASSAN) was kidnapped outside his home on July 25 by a
rogue group of armed Ijaw youths. The kidnapping is the
latest in a series of similar events in the years-long
dispute between the Ijaws and the oil companies in the
region, including Chevron, over the Ijaws' demands to share
in revenues from oil produced on their land. PENGASSAN
joined the fray on July 29 by issuing an ultimatum demanding
that Chevron effect the release of its member within the
next seventy-two hours, or the union will call for a work
stoppage that will shut down all of Chevron's operations in
the area. The deadline is midnight on Friday, August 1.
End Summary.


Trouble, again, in the Delta


2. Chevron officials confirm the July 25 kidnapping of one
of its Nigerian Public Affairs officers, who was abducted as
he left his home in Warri early that morning. Chevron adds
that a note was later sent to its Warri office by the
kidnappers demanding a large cash ransom. According to
senior Chevron Security Officer Hamish MacDonald, Chevron is
determined not to accede to ransom demands for this or any
other kidnapped employee, local or expatriate.


Short Term Motives


3. An Ijaw community leader, Doyah Tiemo, told EconOff on
July 30 that he had been in contact with the kidnappers and
was told that the reasons for the kidnapping were continuing
bad relations and lack of communication between the Ijaw
community and Chevron. He cited two examples of unresolved
disputes between the parties that have been going on for at
least the past two years. First, in December, 2002, two
rental boats carrying Ijaws from Warri to Chevron's Escravos
facility to meet with Chevron officials were seized by State
Security personnel and impounded. The boats remain at the
Escravos facility at a loss to the Ijaws of 20,000 naira per
day (rate 1 USD equals 128 naria) with a cumulative loss to
date of close to 4.5 million naira. Second, the Egbema
faction of the Ijaws continues to demand that Chevron stop
dealing with the former President of the faction. The
Egbema claim this man is no longer authorized to represent
them, and they accuse him of collusion with Chevron staff to
steal monies paid to the Egbema by Chevron for offshore
slots. The payments can be between 20,000 and 40,000 naira
per day.


Economic impact of continuing instability


4. The simmering tensions between Chevron, PENGASSAN and the
Ijaws are about much more than seized boats and tribal
factions. Both unions and local communities accuse oil
companies operating in the Nigerian Delta of failing to
ensure their safety and believe that employers can do more
to provide greater security and stability to communities
that support the industry. Employers argue that oil
companies should not be pressured into assuming a
governmental function that extends well beyond their
corporate responsibility or objectives. Since the GON
receives more than 80 percent of Nigeria's oil revenues,
according Cyril Odu, Exxon Mobil's human resources manager,
employers believe the GON is able to improve the quality of
life for Nigerians living in the Delta region. However, the
government has failed to promote initiatives that might
reduce the region's growing security concerns and dependency
on the oil sector to resolve the region's social and
economic problems.


Long-term consequences


5. PENGASSAN's ultimatum to Chevron/Texaco highlights a
trend within the Nigerian labor movement that could have
long-term economic implications. Individual unions,
particularly those in the oil sector, have become more
active in advancing a political agenda that extends outside
of the workplace. In response to Nigeria's lack of
influential non-governmental organizations equipped to
respond to issues facing the general public, oil sector
unions are increasingly assuming responsibility to serve as
the voice of civil society. However, the lines between
labor disputes and social concerns are blurring and unions
are beginning to use industrial action as a way to resolve
issues unrelated to the workplace. In this case, PENGASSAN
hopes to pressure Chevron on the larger issue of worker
safety for Nigerians as well as expats. Responsible Ijaw
leaders are treating this incident as a criminal matter
(septel). However, PENGASSAN is using it to promote a much
larger agenda: that of the same safety concerns for Nigerian
oil workers that expatriates are given.


6. Comment. The big picture is that oil unions are using
their size and influence to shape the GON and private
sector's role in resolving the Delta's ongoing communal
crisis. As oil unions become more active in these issues,
workplace concerns have become obscured. Prior to the recent
gas price hike, for example, the oil unions were negotiating
resolution of a dispute regarding safety concerns related to
employee-provided transportation to off-shore oil rigs.
Tensions resulted in a standoff between American-owned
Transocean and approximately one hundred oil workers who
held 68 expatriates hostage for several days. However, the
safety issue at the core of the matter remains overshaowed
and unresolved.


7. Comment continued. In addition to safe transportation
to oil rigs, salary increases for civil servants, and the
oil sector's use of contract labor, other labor issues
remain unresolved and are boiling beneath the surface. The
ultimatum issued by PENGASSAN underscores the labor
movement's inability to separate its civic responsibility
from its labor interests. As unions continue to exercise
their right to strike in response to conflicts between the
companies and the communities, employers will likely
experience more frequent strikes and threats of industrial
action. The resulting disruptions to production and the
increased climate of instability will diminish the nation's
ability to attract investment and create much-needed jobs.
HINSON-JONES

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