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In addition to taxes and royalties paid, Shell companies in Nigeria also support and finance a wide range of community development initiatives in the Niger Delta to bring benefits to local communities where they operate.
The most important contribution Shell companies in Nigeria make to society is through the monies they pay to the federal government – approximately $38 billion in taxes and royalties from 2007-2011.
These funds can be used to promote development, reduce poverty and support economic growth.
In addition to these payments, in 2011 Shell companies and their partners contributed over $164.1 million (Shell share $59.9 million) to the Niger Delta Development Commission (NDDC) as required by law.
The NDDC was established in 2000 by an act of parliament to promote the sustainable development of the Niger Delta.
In the same year, the operations run by the Shell Petroleum Development Company of Nigeria (SPDC) contributed a further $76.3 million (Shell share $23.6million) to community development projects focusing on a range of activities.
These promote and support small businesses, agriculture, skills training, education, healthcare, micro lending and capacity building.
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A new model of development
In 2006, SPDC introduced a new way of working with local people which gives communities greater control over their own development.
In the past, SPDC negotiated hundreds of individual projects village by village.
The new model is based on agreements with groups of communities called Global Memoranda of Understanding – a model that has been used successfully by other companies in the delta.
They establish elected committees that represent the interests of communities, with SPDC providing secure multi-year funding and access to development experts.
Communities identify their own needs, decide how the money is spent, and implement projects themselves.
This new model encourages greater participation – with communities, SPDC, state and local government and non-governmental organisations all playing a part.