18 December 2008
Meanwhile, people displaced by the project finally receive monetary compensation, nearly four years after being impoverished through a resettlement process that denied them the option of the land compensation they were entitled to.
Reuters reports that the World Bank-supported West African Gas Pipeline (WAGP) at last delivered its first gas to Ghana on December 11. The 680 km pipeline stretches from Nigeria, where the natural gas is sourced from the oil- and gas- rich Niger Delta, across Benin and Togo to Ghana. Benin and Togo will each take relatively small amounts of the fuel, with the bulk going to the industrial centers of Tema and Takoradi in Ghana. The initial 30 million cubic feet of gas per day is expected to help address recent power shortages in Ghana, which have forced some companies to suspend operations.
Since construction began in 2005, the project has suffered repeated delays due to political instability in the Niger Delta, damage to the pipeline and, most recently, high levels of moisture in the gas. Many observers also attribute recent delays to political sensitivities surrounding the project, as many Nigerians have objected to the export of gas to its neighbors when less than 40 percent of Nigerians have access to the country’s notoriously unreliable supply of electricity.
Chevron and Shell together own over 50 percent of WAPCo, the project operator. Both the World Bank and its private insurance arm backed the project with guarantees, and the European Investment Bank provided a €75 million loan.
Meanwhile, the communities that were affected by the project have had their long-standing concerns validated by an independent investigation into the project. In April 2006, representatives of communities displaced by the pipeline in Nigeria submitted a complaint to the World Bank’s Inspection Panel, an independent complaint mechanism for project-affected people, over inadequate compensation, and the failure to consider impacts upstream of the pipeline where the gas is sourced and to demonstrate how it would reduce gas flaring as promised.
During its investigation, the Inspection Panel confirmed all of these key claims, documenting a number of policy violations that the Bank and WAPCo committed during project preparation and implementation. While the Bank’s management agreed with most of the Panel’s analysis, it flatly disagreed on one key point – whether impacts in the Niger Delta area where the gas is sourced should be considered part of the project despite the fact that a pre-existing pipeline delivers the gas from that area to western Nigeria. At a meeting to discuss the Inspection Panel case in August, this issue was not resolved, but the World Bank Board did approve an action plan to address other issues raised in the Panel’s report, including compensation due to resettled people who received a mere 10 percent of the value of their assets. A number of key policy violations remain unaddressed, however, including the continued lack of a land-for-land compensation option and viable livelihood restoration program.
The Panel also criticized the Bank for promoting the pipeline as a way to reduce gas flaring in the Niger Delta. Since at least the early 1990s, a pipeline had been held out as the solution to the constant flaring of huge amounts of gas near Delta communities. Because of the costs of converting the “associated gas” that is usually flared, the WAGP in the end will contribute only “modestly” to reductions in flaring. While the Panel found there were no formal commitments that the Bank could be held to, it also found inconsistencies in the way the Bank presented the project’s prospective impact on flaring, and attributed these to a desire to make the project more politically popular.
At the same time, unconfirmed reports of Chevron building a new, separate pipeline to provide gas to the WAGP have surfaced, for which WAPCo is reportedly actively acquiring new land around Badagry. Project observers have demanded that plans for any additional construction be developed in an open, transparent manner, and that it be done in accordance with the World Bank’s safeguard policies with a public environmental impact assessment.
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