Foreign Affairs CommitteeWritten evidence from PLATFORM

Summary

1. British business interests promoted by the FCO often contradict democracy and human rights concerns.

2. Fossil fuel extraction frequently leads to increased human rights abuses, escalating conflict and repression.

3. When the FCO lobbies on behalf of British energy companies, it is often undermining and weakening human rights and democracy abroad.

4. The case studies of Nigeria, Egypt and the Arctic highlight the negative impact that FCO support for British oil interests can have on local human rights.

5. The cross government strategy on business and human rights should address this contradiction by implementing enforcement mechanisms that uphold best practice or international standards on business and human rights.

Background

1. Platform is a London-based research organisation that has monitored the social, economic, environmental and human rights impacts of the British oil and gas industry for over fifteen years. Our work is regularly published and cited by governments, academia, media and corporations. We are consulted for expertise by human rights defenders, parliamentarians and journalists. We have in-depth knowledge on British oil companies operating in Nigeria, Iraq, the Caspian and North Africa.

Factual Information

1. The FCO Human Rights Report 2011 states that the government sees “trade promotion and human rights work as mutually supportive”.1

2. However, in May 2011 the Minister of State for Foreign and Commonwealth affairs, Jeremy Browne, acknowledged potential “short term tensions” between commercial and human rights objectives.2

3. In addition, when requested by the Foreign Affairs Committee to set out examples of “a significant UK international commercial relationship or presence being associated with improved human rights standards in recent years” the FCO did not do so, stating they did not “consider it appropriate for the Government to comment on the performance of specific companies”.3

4. Platform’s research shows how, in reality, commercial and human rights interests are frequently opposed. For example in Nigeria, the Arctic and the Middle East and North Africa.

5. Conflicts between British business and human rights interests are common in the fossil fuel industry.

6. Oil extraction in countries where the potential for repression exists tends to contribute to increased human rights abuses because (a) such strategically important resources are closely controlled by and linked to the regime; (b) sites of extraction are then militarised by forces already connected with human rights violations; (c) oil extraction provides vast revenues, which are comparatively easy to siphon off and steal; (d) even when used “legitimately” in the budget, revenues are directed towards entrenching regimes, through arming militaries, police forces and short-term patronage.

7. Paul Stevens, former BP Professor of Petroleum Policy at the Centre for Energy, Petroleum and Mineral Law and Policy in Dundee described how “The revenues support existing regimes simply because they allow low tax rates and large patronage. They also allow large spending on internal security further entrenching regimes.”4

8. Commercial interests in oil and gas not only weakened the UK’s willingness to raise human rights concerns but have also seen the FCO actively promoting and protecting companies whose activities violate human rights (see below).

9. British external energy policy prioritises the guaranteed supplies of energy resources and access to profitable contracts and oil fields, over international human rights issues. This happened in Libya after 2005, in Algeria, in Nigeria. It is currently the case in Azerbaijan, Turkmenistan, Congo (DRC), Oman and elsewhere.

The UK Strategy on Business and Human Rights

1. The FCO Human Rights Report 2011 claims: “The UK played a leading role in supporting development of the UN Guiding Principles on Business and Human Rights, which were endorsed by the UN Human Rights Council in June. The Government is committed to working with business and civil society to implement these principles and to promote them overseas.”5

2. In June 2011 Arvind Ganesan of Human Rights Watch commented that in endorsing the principles, the UN Human Rights Council “endorsed the status quo: a world where companies are encouraged, but not obliged, to respect human rights. Guidance isn’t enough—we need a mechanism to scrutinise how companies and governments apply these principles”.6The UK government encourages companies to respect human rights but does not adequately regulate or monitor companies operating abroad to ensure they are not violating human rights.

3. This is demonstrated by the Government’s support for extractive companies operating in Nigeria, the Arctic, Egypt and elsewhere.

4. The UK strategy on business and human rights, to be launched in mid-2012, proposes to create guidelines for British businesses about the Government’s expectations of their behaviour overseas in respect of the human rights of people who contribute to or are affected by their operations.

5. However, without adequate regulatory enforcement and monitoring, such guidelines are an insufficient means of compelling corporations to respect human rights. The UK should play a more constructive role in enabling access to justice for victims of violations linked to the overseas activities of our companies.

NIGERIA

1. On 28 February 2012, the US Supreme Court heard arguments in Kiobel v Shell. The case alleges that Shell aided and abetted human rights violations and crimes against humanity committed by the Nigerian military against the minority Ogoni people of the Niger Delta from 1992 onwards.

2. The UK and the Netherlands, Shell’s two home governments, submitted a joint amicus brief to the Supreme Court urging the rejection of the Kiobel lawsuit. In short, they argued that corporations should not be held liable for violations of international law.7 In contrast, the Obama government submitted a brief in support of the claimants.

3. If the UK’s arguments in Kiobel were accepted, this would remove one of the few judicial remedies available to the victims of corporate human rights abuses and grant global impunity to companies who commit such wrongs. Global campaign groups are calling on the UK to retract its Kiobel brief.

4. The UK’s intervention is made more inappropriate as Shell continues to rely heavily on government forces in Nigeria who have perpetrated systematic human rights abuses and extrajudicial killing. Shell has made routine payments to armed youth groups responsible for inter-communal conflict, as documented in Platform’s report, “Counting the Cost” (2011).8 The FCO should be seeking to curb these practices rather than defending business interests at the expense of human rights.

The UNEP report on Ogoniland

5. In August 2011, the UN Environment Programme (UNEP) published an assessment of oil spills in the Ogoni region of the Niger Delta. The report provides over 256-pages of scientific evidence on the impact of oil pollution in Ogoni. The environmental damage has severe implications for the basic human rights, livelihoods and health of half a million local residents.

6. The UN found that oil companies such as Shell and the Nigerian state oil company (NNPC) have fallen below industry standards and have not followed remediation procedures.9 UNEP estimates that it will take 25 to 30 years to clean up the pollution in Ogoni and recommends an initial fund of $1 billion to kick-start the process.

7. Government and corporate responses have failed to reflect the urgency and scale of the problem. There is a lack of clarity on how and when the UNEP recommendations will be implemented and by whom. The process lacks independent monitoring.

8. It is unclear what the FCO has done to aid the implementation of the UNEP’s urgent recommendations. The UK government, in line with its stated commitment to responsible business practices, could play a key role by compelling stakeholders to address the problem.

UK military aid to Nigeria

1. In 2010 to 2011, the UK increased its level of military aid to the Nigerian government, with the stated intention of addressing insecurity in the oil region of the Niger Delta.10 In 2011, UKTI, hosted in Nigeria by the FCO, published a briefing to promote opportunities to UK businesses that included “re-equipping the police force in the Niger-Delta region”.11 In Platform’s view, military aid and security trade are inadequate means of addressing the complex political, environmental and human rights issues in the Delta and have instead exacerbated conflict in the past.

2. Strategic energy interests have made the UK government reluctant to criticise the excessive use of force by the Nigerian government.12 The extrajudicial killing of several protestors at a demonstration against Shell in November 2011 in Uzere occurred without any international public condemnation.13

3. As the Nigerian government increases military spending and deploys more forces in the Delta and across Nigeria,14 Western military aid combined with a lack of criticism from international actors effectively endorses Nigeria’s heavy-handed tactics. This policy is counter-productive, since Nigerian forces have failed to bring security to the region and cannot adequately protect UK energy interests.

Egypt

1. Since assuming power in Egypt, the Supreme Council of the Armed Forces (SCAF) has not only failed to address serious human rights problems in the country but in many cases has exacerbated them.15

2. To defend its power, the Supreme Council of the Armed Forces (SCAF) is using political repression against its critics. Twelve thousand civilians have faced military tribunals with few due process protections, including bloggers, journalists and activists charged with defaming or insulting the military. This totals more than the number of civilians tried by military courts during Mubarak’s 30 year presidency.16The torture of prisoners remains normalised, alongside impunity for the police and military forces.17

3. High profile attacks such as the Maspero massacre, where 28 civilians were killed in Cairo in October 2011, have weakened civil society. The military prosecutor charged some of the victims of the massacre—including one of those killed by the army—for causing the violence.18

4. The FCO states that “In our values-based approach to the Arab Spring, human rights are indivisible from our foreign policy. Our ministers and officials have consistently raised human rights issues with their counterparts.”19

5. In February 2011, only weeks into the Egyptian Revolution and in the middle of ongoing crackdowns, the UK Prime Minister made a high-profile visit to Egypt during a tour of the Middle East. The stated aim of the tour was to encourage political reform and push UK commercial interests, in particular the sale of arms. David Cameron was accompanied by eight of Britain’s defence manufacturers, including BAE systems and Rolls Royce.20

6. Moreover, during this visit, Cameron made a point to meet with both the SCAF military junta leader Hussein Tantawi and Prime Minister Ahmed Shafik. The last premier appointed by Mubarak and a military insider, Shafik was regularly tipped to be the military elite’s preferred successor to Hosni Mubarak even before the revolution.

7. At a critical moment during the Arab Spring the UK was promoting the sales of weapons in undemocratic countries and putting commercial interests over human rights concerns. This generated controversy in Britain,21 while many of those involved in the Egyptian revolution considered Cameron’s visit wholly inappropriate, and as a result continue to doubt British’s intentions towards Egypt.

BP In Egypt

1. BP is the largest foreign investor in Egypt and responsible for almost half of Egypt’s entire oil production.22

2. During its forty years in Egypt BP worked closely with the Mubarak regime. In January 2011as Egyptian protesters were being violently repressed, Hesham Mekawi, Chairman of BP Egypt, spoke of “the stability of the country” and insisted that British oil investors would have sustainable business in Egypt for years to come.

3. Prior to that in September 2010, the US Congress drafted a resolution demanding that Mubarak “hold fair elections, allow international monitoring of elections, and respect democracy and human rights”. BP allowed the American Chamber of Commerce in Egypt, in which it is a primary player, to successfully lobby the US Congress to drop the resolution.23

4. BP’s past relationship with the Egyptian regime reveals that the company was repeatedly willing to ignore human rights concerns to push its commercial interests. This continues with BP contracting to companies belonging to the Egyptian military.

5. Since the revolution, BP has repeatedly pushed for a change in the contractual regime governing its licenses from the current joint venture “production sharing agreement” structure to a tax/royalties structure.24 In a political context where Egyptian governmental structures remain marked by a clear lack of accountable decision-making, public oversight, or democratic process, this pressure from BP by-passes democracy and the rights of Egyptians.

6. British Foreign Policy currently prioritises the needs and demands of BP and Shell in Egypt, recognising BP’s importance as Egypt’s largest foreign investor, including through high-profile meetings with British political leaders. For example, in October 2011, Deputy Prime Minister Nick Clegg met with BP and Shell in Cairo only days after the Maspero massacre.25

The Arctic

1. Platform’s report “Arctic anxiety” shows that imminent exploration for oil and gas in Arctic waters poses enormous risks both to the natural environment and the rights and livelihoods of some of the region’s one million-strong Indigenous population.

2. Extracting oil in the Arctic is extremely risky. Existing spill containment methods are ineffective in icy waters, while darkness and storms make drilling sites inaccessible for months on end. Adequate safety infrastructure and oversight is non-existent. These environmental and technical concerns (but not their human rights implications) have been discussed at length in the recent Environmental Audit Committee inquiry “Protecting the Arctic”.26

3. “Free, prior, and informed consent” of local communities to industrial development is the cornerstone of the UN Declaration of the Rights of Indigenous Peoples. This is threatened by Arctic oil extraction.

4. On the Kola Peninsula attempts to institute an Indigenous representative institution are being ignored by the local administration. Land used by a reindeer collective was reclassified by the local administration, making it available for pipeline construction for gas extracting consortium Shtokman Development AG without consultation with the Saami community. Lukoil (the country’s second largest oil company) is accused of denying multiple oil pipeline leaks occurring around River Pechora, and attempting to “hide” them from the regulators and the Indigenous population.27

5. Six Indigenous People’s organisations are Permanent Observers on the Arctic Council, however this representation does not give these organisations voting power in this international forum, or ensure consent of particular Indigenous communities to extraction projects that will affect their environment and livelihoods.

UK Support for Arctic Oil

1. In January 2011 BP attempted to sign a deal with Russian oil company Rosneft to explore for oil in the Russian Arctic. The deal collapsed in a legal dispute with TNK-BP.28Documents obtained by Platform under FOI reveal eighteen months of close interaction between BP and the UK embassy in Moscow.29 BP first briefed Downing Street about its Rosneft deal on Tuesday 11 January, expecting that either Deputy Prime Minister Nick Clegg or then Energy and Climate Change Minister Chris Huhne would attend a signing ceremony three days later. Chris Huhne put aside four hours of his time for the event.

2. Ministers including Lord Howell (Foreign Office), Chris Huhne (Energy & Climate Change), Charles Hendry (Energy), as well as senior civil servants and dedicated FCO Energy Teams in Arctic countries have all been enrolled in supporting UK extractive business interests in the region.

3. Energy Minister Hendry stated the support for BP was a “purely commercial matter”.30 This is a tacit admission that human rights and environmental impacts of Arctic oil extraction were not considered, and that the decision to support was commercially driven, not a balance of business and human rights interests.

Recommendations

The UK strategy on business and human rights should:

Set out effective enforcement mechanisms to put an end to corporate human rights abuses.

1.Include a clear commitment that human rights will not be deprioritised or overridden by business interests. Increase the oversight and accountability of the FCO’s work by ensuring specific embassies report on their websites as to the work they are conducting that relates to business and human rights.

2.Introduce mandatory corporate human rights reporting, accompanied by independent monitoring. Proper consultation and engagement with local communities should be key.

3.Recognise that oil and gas projects pose a particular risk to human rights by a) commissioning an independent human rights impact assessment before the FCO commits itself to supporting particular companies or major projects. This should lay out the current human rights context, and likely changes resulting from the project and mitigation measures. The human rights impact assessment should be made available both in Britain and the partner country. And b) not supporting fossil fuel projects that will contribute to human rights abuses, increased repression or conflict.

4.Require that any British company seeking government support operate with clear standards, procedures and track-records on human rights. Transparency on these issues should also be an essential requirement.

5.Improve access to justice by increasing the range of judicial mechanisms through which British companies can be held legally responsible in Britain for their role in human rights violations abroad. Ensure that the legal responsibility covers the use of contractors who abuse human rights.

24 May 2012