4 BUSINESS DAY C002D5556 Thursday <strong>05</strong> <strong>Apr</strong>il <strong>2018</strong> NEWS Environmental group’s lawsuit threat puts Shell’s global business at risk ... Could boost lawsuits against company in Nigeria ISAAC ANYAOGU Environmental rights activists, Friends of the Earth Netherlands has said it will take oil giant, Shell to court if it does not act on demands to stop its destruction of the climate. The landmark case is supported by Friends of the Earth International, which campaigns for climate justice for people across the world impacted by dirty energy and climate change. Friends of the Earth International has 75 member groups globally, many of them working to stop Shell extracting fossil fuels in their country. “Shell is among the ten biggest climate polluters worldwide. It has known for over 30 years that it is causing dangerous climate change, but continues to extract oil and gas and invests billions in the search and development of new fossil fuels,” said Donald Pols, director of Friends of the Earth Netherlands. This case could set a powerful legal precedent and if successful may force one of the worlds biggest energy producers to take rethink its business model. It would significantly limit Shell’s investments in oil and gas globally by requiring it to comply with climate-targets. MPC eyes inflation... Continued from page 1 Wednesday. “Committee was of the view that further tightening would strengthen the impact of monetary policy on inflation with complementary positive effect on capital flows and exchange rate stability,” Emefiele said. “The committee believes that loosening would strengthen the outlook for growth by stimulating aggregate demand through reduced cost of borrowing; however, this may lead to rise in consumer prices, generating exchange rate pressures on the currency in the process. “The committee views as satisfactory, policy associated in the economic recovery and growth plans in respect to stimulating growth in the economy,” Emefiele concluded. The decision to raise key interest rate to 14 percent was first made in July 2016, and has been kept at the same level since then. At 14 percent, Nigeria’s Monetary Policy Rate (MPR) is currently at its highest in at least 12 years. “This is the first meeting of the year and inflation is 14.33 percent; so once inflation starts to near the current MPR that will justify them to ease it up a bit but right now they are still watching especially as we draw nearer to elections,” said Dolapo Ashiru CEO of Mega Capital Financial Services Limited. Ashiru added, “For foreign investor, it could affect the quantum of money they push towards fixed Dutch citizens too can join the lawsuit as co-claimants. Last year, a UK court ruled that over 40,000 Nigerians affected by oil pollution cannot proceed with a legal challenge in the UK against Shell and its Nigerian subsidiary citing lack of jurisdiction. The claimants had hoped that the case would set a precedent on jurisdiction, allowing for other cases to be brought against UK-based corporations for their actions abroad. This lawsuit by Friends of the Earth Netherlands may yet make this possible. It is also unique because it is the first climate lawsuit demanding that a fossil fuel company act on climate change, rather than seeking compensation. ‘If we win this case, it has major consequences for other fossil companies, and opens the door for further legal action against other climate polluters. Friends of the Earth International wants to see binding rules for corporations like Shell who so often regard themselves as being above the law, including when it comes to climate goals,” Karin Nansen, chair of Friends of the Earth International said. The group alleges that Shell has long known about the severity of climate change and the impacts of oil and gas drilling for decades, but has instruments however for Nigeria it still shows the economy has the potential to grow.” Reacting to the development Razia Khan, the Chief Africa Economist at Standard Chartered Bank, London said, “It may be that the MPC will wait until for confirmation of the fall in CPI (which we expect over the coming months), before it cuts its policy rate. For now, the MPC remains concerned about the relative stickiness of food price inflation in Nigeria, notwithstanding weak demand, weak economic performance and weak credit growth.” “While we continue to anticipate further MPR easing over the course of the year, it is clear not only misled the public on the issue, it continues drilling for fossil fuels. “Across the world Shell’s climate wrecking activities are leaving a trail of devastation, from Nigeria to the Netherlands. We cannot save the climate if large corporations continue to pollute the planet. This is why Friends of the Earth Netherlands is taking Shell to court,” the group said in a release. Karin Nansen further said, “This case matters for people everywhere. Shell is doing enormous damage worldwide – climate change and dirty energy have devastating impacts around the world, but especially in the global South. With this lawsuit we have a chance to hold Shell to account. ‘ Speaking at CERAWeek in Houston, USA, Ben van Beurden Shell CEO said his company would need to change. “If society is to meet the aims of Paris, we believe it will have to stop adding greenhouse gases to the atmosphere by 2070. That path is likely to require society to roughly halve the amount of greenhouse gases produced for each unit of energy used by 2<strong>05</strong>0. Shell’s net carbon footprint ambition is aimed at keeping the company in step with society’s progress towards Paris,” he said. In November Shell announced L-R: Sadique Abubakar, Chief of Air Staff; Ibok Ekwe-Ibas, Chief of Naval Staff; Tukur Buratai, Chief of Army Staff; Abayomi Olonisakin, Chief of Defence Staff, and Mansur Dan-Ali, minister of defence, during the National Security Council meeting at the Presidential Villa, in Abuja, yesterday. NAN that maintaining FX stability is paramount. The CBN will not do anything that is perceived to endanger this,” Khan said in an emailed response to <strong>BusinessDay</strong>. Following the first MPC meeting of the year, Emefiele assured of Governments resolve to provide liquidity to deal with contractors arrears to the tune of N2.7 trillion, which will help to reduce the huge Non Performing Loans (NPLs) in the banking sector. “The CBN stands ready to accord some form of liquidity status to some of these debt and through that mechanism we believe that NPLs will recede and the banks can now continue to play their role which is to catalyse growth an emissions ambition to cut the net carbon footprint of its energy products by around half by 2<strong>05</strong>0. As an interim step, by 2035 it will aim for a reduction of 20 percent. It says it will measure its progress by disclosing the net carbon footprint from its operations and energy use and from the use of its energy products, expressed in grams of CO2 per megajoule consumed and taking United States Ambassador to Nigeria Stuart account of any emissions offset. This measure will be tracked over time, with reviews every five Symington and his UK years, to ensure Shell is progressing in line with societal progress have paid separate visits to the counterpart Amb Paul Arkwright towards the carbon footprint reduction required to meet the Paris goals. Otedola, during which the par- Chairman of Forte Oil Plc Femi But the group wants action now. ties held discussions on the The Friends of the Earth Netherlands’ case is part of a growing of businesses in the country Nigerian economy and the role global movement to hold companies to account for their contribu- in exploring partnerships with international businesses to create more job opportunities for tion to climate change. In January, the city of New York went to court to claim compensation from the Nigerian youths. five largest oil companies, including Shell, for the consequences of with Otedola at his Ikoyi, At the breakfast meeting climate change. The cities of San Lagos residence, the U.S. ambassador commended the Ni- Francisco and Oakland as well as several other counties in California gerian energy magnate for his are doing the same. continuing investments in the A Peruvian farmer is suing the country and for being a role German energy company RWE for its model for other indigenous contribution to glaciers melting above his village caused by climate change. Continues on page 34 and support credit delivery to the Nigerian economy,” Emefiele, said while responding to questions after the meeting. The NPL of deposit money banks stood at 15.18 percent in September 2017, up from 10.13 percent in December 2016, while their loans and advances declined by 1.3 percent to N15.9 trillion in September 2017 from N16.1 trillion in December 2016, data made available by the Nigeria Deposit Insurance Corporation (NDIC) indicated. Bayo Omogoroye, chief dealer at Guaranty Trust bank said in a statement that investors are going to be deliberating or consulting if yields at 14 percent interest rate are profitable or breakeven for US, UK envoys visit Otedola, hold talks on economy DIPO OLADEHINDE them. The MPC members decided unanimously by a vote of all members present to retain at 14 percent alongside all other policy parameters which includes Cash Reserve Ratio (CRR) at 22.5 percent, liquidity ratio at 30 percent, and asymmetric corridor at +200 basis points and -500 basis points around the MPR. Johnson Chukwu Managing Director of Cowry Asset Management Limited said what the new MPC committee did was to thread consciously because they are taking time to settle in and understand the macro situation appropriately before making any major calls. “The new MPC decision implies, there is no fresh injection of liquidity from the monetary side into the economy, so if there is going to be any stimulus it’s going to come from the fiscal side but unfortunately the budget has not been passed yet,” Chukwu told <strong>BusinessDay</strong> by Phone. The inability of the MPC to form a quorum was the barrier to holding the first meeting of the year, scheduled for January 22 and 23, <strong>2018</strong>. The next MPC meeting is scheduled for 21- 22 May <strong>2018</strong>, according to a meeting calendar available on the CBN’s website. Also, the CBN governor said the new members did not decide to go with the previously-held decisions of the CBN because they are new, but because they are “a strong set of people, who understand their responsibilities and have decided Continues on page 34
Thursday <strong>05</strong> <strong>Apr</strong>il <strong>2018</strong> BUSINESS DAY 5
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