Shell pays Nigerian security forces tens of millions of
dollars every year to guard their installations and staff in the Niger Delta,
according to leaked internal financial data.

The oil giant also maintains a 1,200-strong internal police
force in Nigeria, plus a network of plainclothes informants.

According to the data, the world’s largest company by
revenue spent nearly $1billion on worldwide security between 2007 and 2009: if
it were a country, Shell would have the third highest security budget in
Africa, after South Africa and Nigeria itself.

The documents show that nearly 40 per cent of Shell’s total
security expenditure over the three year period – $383million (£244million) –
was spent on protecting its staff and installations in Nigeria’s volatile Niger
Delta region. In 2009, $65million was spent on Nigerian government forces and
$75million on “other” security costs – believed to be a mixture of private
security firms and payments to individuals.

Activists expressed concern that the escalating cost of
Shell’s security operation in the Niger Delta was further destabilising the oil
rich region and helping to fuel rampant corruption and criminality. “The scale
of Shell’s global security expenditure is colossal,” said Ben Amunwa of
London-based oil watchdog, Platform. “It is staggering that Shell transferred
$65million of company funds and resources into the hands of soldiers and police
known for routine human rights abuses,” he said.

The financial documents, passed to Platform, suggest Shell’s
worldwide security costs almost doubled between 2007-2009, coinciding with the
rise of armed insurgency in the Niger Delta.

In 2008, 62 Shell employees or contractors were kidnapped
and three killed, many Shell-operated pipelines, well heads and offshore oil
platforms were attacked and the company was forced to halt oil exports for
several weeks after attacks by groups including the Movement for the
Emancipation of the Niger Delta (MEND).

Nearly a third of Shell’s global security budget in 2008, or
$99million, was spent on “third parties”. This was double what the company
spent on its own security staff and is believed to include the services of 600
Nigerian government police and 700 members of the controversial “Joint Task
Force” (JTF) comprised of army, navy and police.

Shell denies having any direct control over JTF forces, amid
numerous accusations of human rights abuses, including a large-scale military
attack in 2009 which the US State Department said led to the displacement and
loss of livelihood of tens of thousands of residents.

But in the past, Shell has supplied government forces with
gunboats, helicopters, vehicles and satellite phones to better patrol the
myriad creeks and waterways of the delta.

“This proves what we in the Niger Delta have known for years
– that the air force, the army, the police, they are paid for with Shell money
and they are all at the disposal of the company for it to use it any how it
likes,” said Celestine Nkabari at the Niger Delta Campaign Group for Social
Action.

According to Platform, a significant amount of Shell funding
is channelled via senior military officials which provides “ample opportunities
for corruption”. US cables, released by WikiLeaks in 2010, alleged that the
company paid hundreds of thousands of pounds towards the deployment of 350
soldiers in the delta in 2003.

Platform also says the $383 million Shell spent in Nigeria
is an underestimate. “It does not include expenditure on the Shell operated
Liquefied Natural Gas (LNG) plant in Bonny. Nor does it include an estimated
annual $200 million of ‘community development’ funds, which are frequently
distributed to groups that threaten Shell’s operations, sparking serious
violent conflicts. The leaked data covers all four Shell companies in Nigeria,”
it says.

The Niger Delta in Nigeria where Shell and other oil
companies operate has been plagued by tension and violence as local people
demand a fair share of money made from exploiting oil from their land. The area
is heavily polluted and the people are poor with very little or no
infrastructure and jobs.

But Shell International said that any allegations of
corruption should be addressed to the Nigerian authorities, and that its
spending is necessary to protect its staff and operations.

Although armed insurgency in the oil producing regions of
the delta has declined since a 2009 amnesty, the company says it faces
widespread criminality, organised crime and massive oil theft. It has stated
that 15-20 per cent of its output is stolen by international gangs.

“Protecting our people and our assets is Shell’s highest
priority,” it said. “Our spending on security is carefully judged to meet this
objective, wherever we operate in the world. We have always acknowledged the
difficulties of working in countries like Nigeria. In the period that this
report refers to, the armed militancy in the Niger delta was at its height,
requiring a relatively high level of security spending there.

“All our staff and contractors are expected to adhere to the
highest levels of personal and corporate ethics, as set out in our code of
conduct. We support the Voluntary Principles on Security and Human Rights
(VPSHR), and we recognise that these principles help maintain the safety and
security of our operations in a manner consistent with upholding human rights.
We also investigate grievances under the VPSHR.”

The company declined to comment on whether worldwide costs
for security were increasing because of the Arab spring.

But the scale of Shell’s spending, revealed by the data for
the first time, raises questions about the effectiveness of its security
policies.

“What is striking about the amount being spent in Nigeria is
its ineffectiveness,” said Amunwa.