**Abstract**

The distribution and privatization channels of the wealth from Niger Delta's oil and gas resources are multiple. The main channels excessively favor mainly office holders, international entrepreneurs and their contractors. The rest of the population, or the less favored majority will have to cut their share of the wealth via the alternative channels which may include violent insurgencies. This work focuses on one of these alternative channels, where an Igbo community creatively sustain their access to the oil wealth. An ethnographic study of Egbema, shows that the local population modify their traditional practices to sustain the flow of the oil wealth. This modifying capacity was manifest when they creatively transformed a fishing festival that was traditionally celebrated exclusively, into a public fish bazaar. This was done to keep hold of the money received as compensation for the land expropriated for oil extraction by Shell Petroleum Development Company (SPDC). This has implications for corporate governance, especially with regard to the relationship between companies and other stakeholders.

**Keywords:** compensation, shell petroleum, igbo town union, corporate-stakeholder relationship

### **1. Introduction**

The oilfields of Nigeria's Niger Delta number up to three hundred, a little less than one percent of the forty thousand oil fields littered across different parts of the globe [1, 2]. Like in playing, 'Bop the peňata'<sup>1</sup> , a Mexican game played by birthday attendants, [3] the scramble for rents or wealth in general accruing from these oilfields involves both the highly privileged dominant minority and the less privileged marginalized majority. The dominant minority consolidates and strengthens their advantage by establishing oil wealth distribution channels that are accessible mainly to them. The disgruntled majority aim to either wrestle the dominant

<sup>1</sup> This is a game played by kids attending a birthday. A cardboard donkey filled with candies is hung and kids stand underneath it with plastic sticks. The idea is to bop this cardboard donkey open with the plastic sticks to release the candies, which the kids now scramble to pick up in numbers. In the process of doing so, kids bump into, strike, or shove each other. Reyna and Behrends [3] offer this as a 'useful metaphor for what happens where domination occurs' in the same manner it occurs in developing oil producing states. This, according to them, can be investigated in terms of 'struggles to regulate domination'.

minority for a fair share of the rents or engage the available channels creatively for some share of the rents.

This chapter is about an instance of this creative engagement with a distribution channel of Niger Delta's oil wealth. The channel that is engaged with in this case is the compensation for land expropriated or oil extraction business. A nine-month ethnographic study of Obufia, a town in the Egbema/Ohaji Local Government Area (LGA) of Imo State, revealed that the money paid by Shell Petroleum Development Company (SPDC) as compensation for an expropriated land earned the oil company a social operational license in Obufia. At the same time, it generated a dispute capable of consuming hundreds of lives and properties worth of millions, were it not managed with extra care and prudence.

As it happened, this compensation money was not paid once but as a rent, which came in periodically. As a result, with an eye on a sizable piece of the oil largess, several communities stepped forward to stake their claim on the expropriated land. A dispute ensued and dragged on for years. Moso, one of the communities involved in the dispute opted to transform a traditional fishing festival from an exclusive tri-annual event to an open annual fish bazaar. This was intended for fundraising to finance the protracted and expensive court case. Although SPDC suspended the payment while the court settled the case, Moso community continued to sustain the new version of their festival. The money raised thereof continues to serve the community in court and in other aspects.

Nevertheless, what if Moso community was not creative enough to opt for a modification of an age-long traditional festival in their bid to sustain their access to the compensation? What if there was no traditional event celebrated commonly? What if some of the community members were strongly opposed to the idea of modifying a traditional festival? An alternative option would have been to coercively demand for the compensation money either directly by kidnapping oil company personnel, or indirectly by other means. This alternative option could not have been far-fetched. Insurgent groups springing up to kidnap for ransom, occupy oil infrastructure and wreck havoc across different parts of the Niger Delta are a good reference point for anyone or group who prefers violence. But for some creative ingenuity, Obufia could easily have become one of the violent ridden parts of the Niger Delta.

Having said that, an approach to negotiating compensation which places a greater share of the burden of determining the most preferable form of compensation on the local community would have changed the entire story. At least, it would have reduced the culpability of the corporation for the turn events took after the compensation. Unfortunately, this was not the case. The oil company's management board threw its weight behind any process that was to determine the form any compensation for expropriated land was going to take. Codes of corporate governance emanating from different parts of the world are reviewed from time to time to incorporate the latest developments in the corporate world. Such reviews have seen codes emerging at the turn of the millennium emphasize stronger relationships between companies, shareholders and other stakeholders [4].

It is outside the scope of the discussion to specify details of what the extant regulations for corporate operations in Nigeria recommended at the time SPDC paid its first compensation to the Obufia. It suffices to note that extant company acts recommended compensation for expropriated land. Assuming the company acted in accordance with the existing regulations, are there sufficient grounds to defend the silence or lack of clarity of these regulations on the inclusion of the local communities in the decision of what constitutes adequate compensation? Is such an infraction not a serious deficiency? As grave as such a deficiency might appear, any hope of its obliteration by the constant review of corporate governance

#### *Creative Living off the Margins of the Niger Delta: Implications for Corporate Governance DOI: http://dx.doi.org/10.5772/intechopen.100134*

codes, is profoundly dimmed by a couple of challenges. There is first, the challenge of settling what constitutes value and right behavior in the relationship between companies and other stakeholders [4]. A second challenge involves the high level of corruption coupled with a profound inability to implement statutory recommendations due to ineffective corporate monitoring outfits associated with developing economies [5].

The rest of the discussion in this chapter will proceed as follows. I will begin by introducing the Niger Delta as a resource rich zone, specifying the different distribution channels by which the wealth generated from the exploitation of the Delta's oil resources is appropriated. Thereafter, I will shift my focus to one of the distribution channels, compensation paid for expropriated land. This is where I will detail the proceedings that gave rise to the transformation of the fishing festival in what I termed creative engagement with oil wealth distribution channel. I will then discuss the implications of this whole episode for corporate governance, where I will lend my voice to echoes of demands for more flexibility in the recommendations of codes of corporate governance. These codes need to condition companies to recognize the difference in values and behaviors expected of key participants in the relationship between corporate entities, individuals and states. This difference calls for more elasticity in terms of values and behavior on each of the participants. In conclusion, this chapter recommends that corporations need not impose changes on communities. The story of how the local community receives the changes imposed, which may include stiff rejection or creative engagement need not be told if only corporate codes are designed to be more accommodating.
