How exploration by Shell is devastating the lives of Martha and her community

September 19, 2023

Martha Onisuru is a fisherwoman living in Nigeria’s Niger Delta. At one time there was a great supply of fish, and Martha was able to feed her family. However, since oil company Shell started exploring in the area life for Martha, and her community, has changed for the worse. And Martha is angry.

“Before the arrival of Shell, when we cast our nets there was always a surplus of fish, and we would have problems taking all the fish home. Now that Shell has arrived, and they started burning their fire and spilling oil everywhere, since they came here, we cannot catch fish.”

“We are dying of hunger.”

Martha told us Shell’s exploration in the area has contaminated the local water supply.

“Even the water in our taps now has oil in it since Shell came. Water that is meant for consumption is now contaminated. Whenever we drink from the water, we always come down with stomach ache. The oil has damaged everything.”

How Ireland is contributing to the fossil fuel industry in the Global South

In the face of catastrophic levels of chaos, death and destruction caused by climate change there are uncomfortable truths we need to examine in Ireland.

ActionAid Ireland’s new research How the Finance Flows shows that international institutional investors with subsidiaries registered in Ireland held a mind-blowing US$ 6.2 billion in bonds and shares in fossil fuels and agribusiness in the Global South over a five-year period.

In effect, this means that Ireland functions as a channel for global institutional investors to make maximum profits from their fossil fuel investments in the Global South.

Our research shows that the highest value of investments attributable to fossil fuels in the Global South through Ireland was in large international oil and gas companies. Highest on the list was Exxon Mobil (US$ 1.1 billion), followed by Shell (US$ 550 million) and Chevron (US$ 468 million). Four of the top fifteen investments are in Chinese companies.

Shell’s legacy in the Niger Delta

Ireland’s role in facilitating this investment in fossil fuel has a real and harrowing impact.

Shell is one of the world’s largest privately owned oil companies. Its operations in the Global South have received an estimated US$37.6 billion in financing since 2016. US$ 550 million of this is channeled through Ireland. This ensures that Shell makes the largest profit on its activities through Ireland’s tax regime.

For decades, the oil extraction operations of Shell have been devastating communities in Nigeria’s Niger Delta.

Oil spills and gas flaring have decimated fish populations. This has resulted in the loss of countless fishing livelihoods and a sharp rise in hunger for local people.

Protestors at COP 28 in Dubai. Photo: Konrad Skotnicki.

Belfast Climate Change March, 2019. Photo: Trócaire.

The Profit Driving the Crisis

Despite their overwhelming contribution to global emissions, fossil fuel companies continue to attract significant financial backing—driven by their enduring profitability. This is starkly illustrated by the case of ExxonMobil, the top fossil fuel investment held by asset managers based in Ireland. In 2023, ExxonMobil reported €33.63 billion ($36 billion) in profit. That is almost twice the GDP of Botswana (€18.1 billion) and nearly three times Namibia’s GDP (€11.5 billion).

Ireland plays a hugely disproportionate role in facilitating investments into fossil fuel companies like ExxonMobil. In 2023, the investments made into fossil fuel companies by investment managers based in Ireland generated an estimated 72.5 million tons of CO2e. This is more than the CO2e emissions for the entire country of Ireland—and more than ten times that generated by Sierra Leone.

The Global Human Impact

The climate crisis is here, now, and it is causing disproportionate harm in the Global South. In Bangladesh, rising sea levels and increasingly severe cyclones are displacing coastal communities, with projections indicating that 17% of the entire country could be underwater by 2050. The legally binding Paris Agreement on climate change explicitly acknowledges the importance of tackling private finance. Its three overarching goals are: keeping below 1.5C of warming; increasing adaptation and making finance flows consistent with low emissions and resilience.

This gives a clear mandate for action: both tax reform and corporate regulation are needed to tackle financial flows, and both nationally in Ireland and at EU level, ‘polluter pays’ taxes are lacking and regulation of the financial sector remains weak and fragmented. While EU regulation exists, it is designed more to nudge investors toward more sustainable investment practices by increasing transparency and reporting levels than to enforce strict standards. And it is moving in the wrong direction: the recently passed EU Corporate Sustainability Due Diligence Directive excluded investments; and now the EU Commission’s Omnibus legislative proposal threatens to undo the limited gains made on climate plans, as well as blocking future attempts for stronger action at national level.

The Risk of Inaction

Fossil fuel investment is too profitable to remain weakly regulated. If Ireland continues with its current strategy of encouraging FDI at all costs, and relying on weak EU regulation, we are headed for catastrophe. The Inter-governmental Panel on Climate Change has repeatedly warned that every fraction of a degree beyond 1.5°C brings irreversible consequences: collapsed ice sheets, vanishing coral reefs, and extreme weather events that will make vast regions of the planet uninhabitable. And yet, companies are developing oil and gas fields that could push global warming beyond 2°C.

Our research found that 91% of the investments made into fossil fuel companies by investment managers based in Ireland were to companies that have plans for fossil fuel expansion like these. Ireland cannot afford inaction on this issue.

About This Research

The figures in this report regarding investment from Ireland are based on new research commissioned by ActionAid Ireland and Trócaire. In the paper, we uncover the scale of fossil fuel investment through Ireland, who the investors are, and in which fossil fuel companies they are investing. We analyse the current regulatory framework and explain why it is inadequate—and moving in the wrong direction. And we make specific recommendations for change, which are summarised below.

Summary of Recommendations

Regulate the private financial sector
Ireland must end its outsized role as an enabler of destructive fossil fuel investment. Ireland should introduce a strong gender-responsive national human rights and environmental due diligence framework which includes the regulation of investors with respect to human rights and the environment and climate. The transposition of the EU Corporate Sustainability Due Diligence Directive could achieve this if downstream activities are included and the Omnibus proposal is rejected. Ireland should prohibit investments in fossil fuel expansion and require investors to implement climate transition plans consistent with a 1.5°C climate limit.

Endorse the Fossil Fuel Non-Proliferation Treaty
Ireland should endorse developing a Fossil Fuel Non-Proliferation Treaty to curb fossil fuel expansion and commit to a fair and funded phase out of fossil fuels.

Support tax justice
Ireland should support bold and fair new global tax rules through the UN Framework Convention on Tax, should adopt all OECD BEPS measures, and should conduct an updated and comprehensive spillover analysis of its tax policy. Ireland should take coordinated action globally, at the EU level and domestically to introduce a range of new taxes to mobilise finance needed for climate justice, based on ‘polluter pays’ and social equity principles such as wealth taxes for the highest earners, climate damages tax on investors, fossil fuel production taxes and levies on aviation and shipping.

Finance a just transition
Ireland must also meet its fair share climate finance obligations under Article 9.1 of the Paris Agreement, and pay our ecological debt to the Global South. Ireland should support conditionality-free debt cancellation for countries on the front lines of the climate crisis, commit to a new UN Framework Convention on Sovereign Debt, moving debt negotiations from the IMF to the UN, and to a debt workout mechanism that is fully representative and fair.