How do TNCs affect the
sovereignty of states?
Power and Influence of TNCs
• Stats on page 58 of textbook.
Royal Dutch Shell
Case Study: Shell in Nigeria
• Shell is a group of over 1700 companies all over
the world, the group is owned by Royal Dutch
of the Netherlands.
• Shell Nigeria is one of the largest oil producers
in the Royal Dutch Shell group.
• 80% of oil extraction in Nigeria is in the Niger
Delta, the southeast region of the country
• The Delta is home to many minority ethnic
groups, including the Ogoni.
Case Study: Shell in Nigeria
• Royal Dutch Shell accounts for more than 40%
of Nigeria’s petroleum production.
Beginnings of controversy
• In the 1990s tensions arose between the native
Ogoni people of the Niger Delta and Shell.
• Concerns were that very little of the money
being earned from oil was reaching the people
who live there.
• Environmental damage to the natural
environment caused by Shell’s practices.
The tension builds…
• In 1993 the Movement for the Survival of the
Ogoni People (MOSOP) organised large protests
against Shell and the government, often
occupying the refineries.
• Shell withdrew from the area.
• The Nigerian government raided their villages
and arrested protest leaders.
• Some of these protesters were later executed
by the government.
Kenule (Ken) Saro-Wiwa Memorial
• There have been accusations about the
conduct of the Shell group in Nigeria.
• One is that Shell provides over 50% of the
income keeping the Nigerian dictatorship in
• Source:
• 9 Activists were hung by the Nigerian
• Emanuel Nnadozie, writing of the contributions
of oil to the national economy of Nigeria,
observed "Oil is a curse which means only
poverty, hunger, disease and exploitation" for
those living in oil producing areas.
From the ‘Boycott Shell’ website:
• Ogoni villages have no clean water, little
electricity, few telephones, abysmal health
care, and no jobs for displaced farmers and
fisher persons, and adding insult to injury, face
the effects of unrestrained environmental
molestation by Shell everyday.
• When crude oil touches the leaf of a yam or cassava,
or whatever economic trees we have, it dries
immediately, it's so dangerous and somebody who
was coming from, say, Shell was arguing with me so I
told him that you're an engineer, you have been
trained, you went to the university, I did not go to the
university, but I know that what you have been saying
in the university sleeps with me here so you cannot be
more qualified in crude oil than myself who sleeps
with crude oil. -Chief GNK Gininwa of Korokoro, "The
Drilling Fields", Glenn Ellis (Director), 1994
The Issues…
• Natural-Gas Flaring
• Oil Spills
• Pipelines and Constructions
• Health Impacts
By the way… this is natural gas flaring:
Why allow this?
• Oil companies have influence on the
• 80% of Nigerian government revenue comes
from oil, of which half is from Shell.
• Bribes
What was done?
• The UN accused Nigeria and Shell of abusing
Human Rights and failing to protect the
environment in oil producing regions.
• A report, United Nations Special Rapporteur's
report on Nigeria found that; "well armed
security force is intermittently employed
against protesters.”
• The report was unusual both because of its
frankness and its focus on Shell, instead of only
on member countries.
The Commonwealth and the US
• Nigeria's membership of the Commonwealth
was suspended by Commonwealth Heads of
Government on 11 November 1995.
• It has not been expelled, however.
• The US has threatened to take action, however
it never has.
Video: ‘The Case Against Shell’
• How Shell infiltrated Nigeria
• UN Slams Shell over Nigeria Oil Pollution
Recent Developments
• In 2009 Shell agreed to pay $15.5 million in a
legal settlement.
• They have not accepted any liability.
• In 2009 Shell was the subject of an Amnesty
International report that focused on the link
between Shell’s activities in Nigeria and the
abuse of human rights in the country.
Recent Developments
• 2010 a leaked cable revealed that Shall claims
to have inserted staff into the main ministries
of the Nigerian government and to “know
everything that was being done in those
• Shell regularly made payments to the Nigerian
military to prevent protests from occurring.
• “Shell settles Nigeria Death Case”
Practice Essay Question
“The rise of TNCs in the post-Cold War
world have diluted the concept of
sovereignty.” Discuss.

Case Studies TNCs