How SMEs can develop business ethically in a lawless society

Port Harcourt is not Weston-super-Mare. It is raucous, vibrant, noisy, colourful city, with big smiles and car journeys that makes Italian traffic seem like a driving instructor’s paradise.

The Nigerian Delta is also one of the most lawless and corrupt places on earth, with the deepest and most systematic oil pollution devastation of anywhere. As specialists in oil spill control, do we turn up our noses or do we engage? If we do business how should we deal with the different ethical standards to those in the UK?

Nathaniel Ondo (1) is a devout Christian and typically Nigerian in his cheerfulness and big smile. He operates the dangerous game of oil spill remediation in the Nigerian delta.  With Nathaniel and his company we supply spill control equipment and technical advice to his remediation projects. I have visited Port Harcourt and the Delta on several occasions. The first thing that hits you is the stench of oil – crude oil – that pervades the air. The land and brackish delta waters are sodden with oil. 

The Nigerian Delta itself encompasses vast oil resources. Shell alone operated ninety oilfields, with 1,000 wells and 3,750 miles of flow lines and pipelines. A huge part of the oil produced is illegally tapped and stolen and the Delta is heavily polluted by oil spills.Tapping into oil pipelines by local people continues unabated and results in continued oil spill contamination.

The Deltan Ijaw people have been marginalised. In 1978, the then President Olusegun Obasanjo gave the federal government ownership of all of the region’s oil.  The consequential violence of the rebels can be interpreted as an attempt to share in the oil wealth.

In 2012, we set up a joint venture manufacturing venture with Nathaniel’s company in Port Harcourt where we supplied part manufactured equipment to him which gave him preferred supply status to Shell, Exxon and Total in Nigeria. We also set up a training school in Port Harcourt for qualifying Nigerians in oil spill response.

But in 2017 I was contacted by the Exxon serious fraud investigation squad. They asked me to confirm extraordinary charges for our products supplied to Exxon. Initially I told them that business between me and my distributor was confidential but when they produced paperwork on our headed paper fraudulently pricing products at extraordinary prices, I had to cooperate. The Exxon fraud squad were deep into their investigations into Nathaniel’s company. When they interviewed Nathaniel, he stuck to his story. Exxon fired Nathaniel’s collaborator in Exxon. They ceased trading with Nathaniel but pressed no charges. Their aim was to catch the people within their own company – not their suppliers.

Corruption is endemic at all levels. I knew Nathaniel had fixers within the oil companies.  I knew that Nathaniel paid protection money to community leaders. The local commander in turn gave donations to those in need. However, it is often hard to tell with Deltan local leaders where their ambitions for their communities end and where their personal desires begin. For example, one local leader described to me the damage that oil had done to the community, but in the same breath grumbled that Shell had not even given him a mobile phone for Christmas.

But the pollution in the Nigerian Delta is extensive and Shell and the United Nations Environment Programme and putting huge resources into cleaning it up. We have a business and moral imperative to provide our expertise as well as an ethical dilemma. 

They should deal honestly and on trust with their agents. They should allow them freedom to suit their culture.

There are three things SMEs should consider in such situations:

  1. Do you have an effective agent with expertise, knowledge and credible contacts?
  2. In a lawless society, personal relations are crucial. Time, effort and personal support in the country are needed to build trust. Trust is not unconditional. For example you can supply on payment upfront, but extending substantial credit, albeit with some credit insurance, underlines your confidence. We supply on credit with all our established customers.

  3. Sell to your distributor, not the end user. Give them the freedom to suit their own culture.

I hold the Pandora’s box hope for Nigeria. It is a vast, messy country with no polish or veneer of order. In oil-driven Nigeria, the exploitation, injustices and abuses of power are more open, blatant and in a strange way, more honest than in a country such as Britain where wrongs have been entrenched and subtly concealed over many centuries.

[1] Nathaniel Ondo is a penname for my distributor to protect his identity.

 

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