Dealing with the damage
Shell’s soured relations with local communities in Nigeria’s oil-rich Niger Delta continues to impose a heavy cost in the form of sabotage, kidnappings and large-scale theft from pipelines. Disturbances have led to shutdowns that have shaved up to 40 per cent off the company’s Nigerian production. Shell has nevertheless led efforts to introduce greater transparency of tax and bonus payments to the Nigerian government, helping ensure that the billions it and fellow oil and gas companies pay are funneled toward development rather than being mismanaged or stolen.
Health and safety
Mining and accidents have long been two sides of the same coin. But regulatory authorities and labor leaders have now raised the bar on the industry, forcing emergency shutdowns and costly production cutbacks when tough new safety standards are not met. Anglo American has taken an uncompromising line in the name of raising safety performance, in the process leaving cash in the ground at the height of the commodities boom.
Insurance and reinsurance companies suffered record claims in 2005 following a string of weather-related disasters (including the notorious Katrina). These proved both more severe and more frequent than past weather patterns had predicted. Munich Re and others have led efforts to recast climate models so as to take into account changing climate in the pricing of risk, as well as to press governments worldwide to invest in adaptation programs that protect vulnerable populations.
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