Environment

Commentary

The World Bank and the West Africa Gas Pipeline Project

5 October 2007 | Comment

The $600 million West African Gas Pipeline project (WAGP) aims to deliver gas from Nigeria via a 680 kilometre pipeline to a terminal point in Takoradi, Ghana. This pipeline cuts across and impacts communities in the states of Ogun and Lagos in southwestern Nigeria.1

WAGP is also connected to the existing Escravos-Lagos pipeline (ELP) owned by the Nigeria National Petroleum Corporation (NNPC), at Alagbado Tee north of Lagos. The project is designed to substitute natural gas from Nigeria for alternate fuels used by power, industrial, mining and commercial sectors in Ghana, Togo and Benin . It supports the World Bank’s regional integration assistance strategy and complements the proposed West African power pool project. The World Bank’s International Development Association and Multilateral Investment Guarantee Agency are providing $50 million and $75 million in loan guarantees to the government of Ghana and to the West African Pipeline Company respectively. These are financial and political risk guarantees for the project, aimed at safeguarding the investments of oil transnationals ChevronTexaco and Shell.

Local communities and civil society groups in Nigeria, Ghana, Togo and Benin had from the conceptual stages of this project in 2000 at an information consultative workshop hosted by Environmental Rights Action argued that this project would further impoverish them, intensify the degradation of the local environment and divert attention and resources from the very vital issue of gas flare reduction. Shell and ChevronTexaco have operated in the Escravos area of the Niger Delta for almost five decades where they have subjected communities to continuous gassing, on a scale unparalleled anywhere else. Nigeria loses about $2.5 billion annually from the failure of companies like ChevronTexaco and Shell to either utilize or re-inject associated gas2. This sum does not take into account the cost to the health sector, the environment and the livelihoods of local communities who live with and suffer through the roaring toxic flames of gas flares.

the communities in Nigeria were not expected to complain

There appears to be a general consensus that flaring should stop, even the World Bank promotes the global gas flaring reduction initiative but it is strange that the same Bank would support a project that would intensify gas flaring in these communities. Natural gas for the pipeline would come from existing operations of Shell, ChevronTexaco and NNPC joint venture operations in the Escravos area. These seven existing facilities were designed and constructed to utilise non-associated gas.3

There is no evidence of the construction of an associated gas gathering facility within the Escravos area or the connection to such a facility that would make it feasible for the WAGP to utilise presently flared associated gas.

Local communities and civil society groups, being dissatisfied with the response of the World Bank to their concerns filed a petition with the Inspection Panel of the World Bank requesting an investigation of the Bank’s failure to follow its established policies and procedures4. The Panel has paid three visits to Nigeria, the last of which was in July 2007. Our reading from what has transpired so far is that the World Bank is not really interested in ensuring compliance with its policy safeguards. This is evident in its spectacular failure to properly supervise the project. Property owners received on average between $40 and $80, as “full and final payment” for the large tracts of land that were acquired for the pipeline’s right of way. Communities were not aware that there was a grievance redress procedure that they could utilise but even more shocking was the fact that WAPCO staff at the Badagry compressor station in Lagos informed Professor Ted Downing, a resettlement expert on the Inspection Panel team, that they did not have a grievance log book in Nigeria. In essence the communities in Nigeria were not expected to complain.

It appears the World Bank’s interest in this project does not include poverty reduction or social and environmental safeguards. Its key interest was aptly captured in the project appraisal document as that of “harmonising the legal and policy framework of participating West African countries”. In furtherance of this objective it ensured that WAPCO was granted major fiscal, environmental and social exemption by the WAGP treaty and its enabling legislation. The WAGP treaty and the enabling legislation were railroaded through our parliaments without giving the public an opportunity to contribute to the debate on the desirability of the project. In collusion with transnational oil companies and other International Financial Institutions the World Bank is laying the foundation for a future of centralised energy projects where energy supply is firmly in the hands of a select few, providing them unfettered control over our energy sovereignty.

Footnotes

1.Project Appraisal Document (Report No: 30335-AFR) page 6

2.Strategic Gas Plan for Nigeria, joint UNDP/World Bank Energy management assistance program (Feb 2004) p13

3. Bank Management response to request for Inspection (IDA Guarantee No B-006-0-GH) Para 22, p7 (associated gas is gas mixed with some crude oil and it is usually flared as against non associated gas which does not contain crude oil)

4.Request submitted April 27, 2006 to the Inspection Panel