Nigeria: Niger Delta Contractor Revolving Credit Facility-01/Niger Delta

Date Filed
01 Jun 2001
Status
Closed
Phase
Dispute Resolution (DR)
Country
Nigeria

Case Tracker

Eligibility
Eligibility
Assessment
Closed
Assessment
Dispute Resolution
Compliance
CURRENT Status
Assessment
Closed

Complaint Overview

Complainant

Environmental Rights Action

Cross-Cutting Issues
Risk Management Labor Access to Information Policy

Project Information

Region
Sub-Saharan Africa
Institution
IFC
Name & Number
Niger Delta Contractor Revolving Credit Facility 10683
Company
Niger Delta Contractor Revolving Credit Facility
Sector
Financial Markets
Department
Other
Category
FI
Commitment

$10 million (Loan)

Synopsis

Complaint

The Niger Delta Contractor Revolving Credit Facility (the Facility) was created by IFC, Royal Dutch Shell and a local bank to enable the oil services sector in Nigeria to provide competitively priced term funding to small and medium sized local contractors. This facility was offered to those contractors who delivered services to Shell Petroleum Development Company (Shell) given that access to term funding was essentially non-existent for these contractors in 2001. In June 2001, Environmental Rights Action, the Nigerian chapter of Friends of the Earth, lodged a complaint with CAO raising the following concerns:

1. Lack of public consultation and transparency during the preparation of the Facility;

2. The election of Shell as a partner despite its past and present environmental and social record;

3. Both the employment practices and environmental/social performance of Shell contractors;

4. Lack of pre-existing regulatory and enforcement conditions supportive of procedural compliance by any oil economy facility operating in the region.

CAO Action

The oil industry has been operating in the Niger Delta for almost 50 years. By far the biggest operator is Shell, which is a joint venture between Shell and the Nigerian National Petroleum Corporation in Nigeria. Prior to 2001, between 80 to 90 percent of the gross revenue derived from oil went to the Federal Government, yet as a result of pressure from the Delta states, the government later increased the revenue percentage. CAO conducted an appraisal and accepted the complaint in June 2001.

Status

The Assessment Report, completed in August 2001, made the following recommendations in order to increase operational relevance and development impact:

• Consider criteria to ensure that the Facility benefits contractors who are local and/or indigenous to the Delta;

• Develop a participatory monitoring and evaluation program;

• Improve awareness of local contractors to the availability of low-interest loans;

• Examine the complementary facilities to cater to the express needs of small scale entrepreneurs for micro-credit and to ensure access to credit in the Delta.

CAO’s assessment was rejected by the complainants and CAO closed the case in January 2005.

Case Documents

  • Dispute Resolution

    Assessment Report(s)
    Assessment Report
    Aug 01, 2001
    English
    Assessment Report