4. Impacts of TNCs on countries at either end of the development continuum

Question 1

Benefits of Shell in Nigeria;

Whata are the economic benefits of Shell in Nigeria?

Answer 1

• Oil is the largest source of revenue in Nigeria (95% of earnings & 20% of GDP)
• Over 4000 people are employed (95% Nigerian/ 66% from the Niger Delta)
• 20,000 people indirectly employed

Question 2

Benefits of Shell in Nigeria;

Whata are the social benefits of Shell in Nigeria?

Answer 2

• Nigerians hold the majority of senior executive roles (meaning the highest earning jobs are given to locals) à cumulative causation
• Two schools (1 at Ewupe) have been provided with new classrooms, football fields, toilets and water facilities
• In 2013 1795 scholarships were given to secondary school students, and 850 to university undergraduates

Question 3

Benefits of Shell in Nigeria;

Whata are the enviromental benefits of Shell in Nigeria?

Answer 3

Reduction in gas flaring due to shells venture in gas gathering. Flaring levels reduced by half between 2002 and 2010

Question 4

Benefits of Shell in Nigeria;

Whata are the political benefits of Shell in Nigeria?

Answer 4

• Publish corporation taxes that were paid to the government to reduce corruption
• Work with the IMF and government to reduce corruption

Question 5

Problems caused by Shell in Nigeria;

What are the economic problems of Shell in Nigeria?

Answer 5

• 7000 oil spills between 1970 and 2000 – enters water bodies. Has caused waterborne diseases (cholera) and depleted fish stocks (fishing no longer economically viable)
• Oil is the largest source of revenue in Nigeria but due to corruption the money is never available for singular villages

Question 6

Problems caused by Shell in Nigeria;

What are the social problems of Shell in Nigeria?

Answer 6

• Gas flares cause respiratory problems (harmful particles)
• Tensions between ethnic groups (Ogani people felt Shell as exploiting their area so should employ them, however, many employed from Igbo ethnic group)
• 13% of Shell’s profits meant to be spent on community projects (e.g. hospitals) but very few have been built

Question 7

Problems caused by Shell in Nigeria;

What are the enviromental problems of Shell in Nigeria?

Answer 7

• 1986-2003: 50,000 acres of mangrove forest cleared to mainly oil exploration/ infrastructure related to oil
• No Environmental Impact Assessments performed within the area
• Construction on the coast and increased shipping has caused coastal erosion and disturbance of fish species
• 7000 oil spills between 1970 and 2000

Question 8

Problems caused by Shell in Nigeria;

What are the political problems of Shell in Nigeria?

Answer 8

• Shell linked to contributing money to the Nigerian Military to use as a private army to enforce Shell’s demands
• 9 locals, including 8 Ogoni people of the delta, were all hanged by the Nigerian Military following a campaign against Shell
• Suspicion over bribing government officials and encouraging corruption (70% of oil revenue siphoned off through corruption)

Question 9

Economic benefits of Toyota in the UK;

What are the economic benefits of Toyota in the UK?

Answer 9

• Total investment of £1.3 billion in Burnaston and £0.7 billion in Deeside
• Toyota buys a large proportion of components from British suppliers
• Positive multiplier effect à area is more attractive for investment & more people are employed

Question 10

Problems of Toyota in the UK;

What are the economic problems of Toyota in the UK?

Answer 10

• $380 billion assets per yea – however, large amount is leaked to Japan (= little FDI)
• Instability/ uncertainty à Toyota could shut down the factory in a recession (branch plants are affected first)
• Research and development is carried out in Japan = suppression of technological development/ highly-skilled jobs in the UK

Question 11

Problems of Toyota in the UK;

What are the social problems of Toyota in the UK?

Answer 11

• 750 jobs were cut from the UK (10% of workforce) = deindustrialisation
• Competition with existing car makers will result in potential job losses elsewhere

Question 12

Benefits of Toyota in the UK;

What are the environmental benefits of Toyota in the UK?

Answer 12

• First company to achieve zero landfill waste in the UK in 2002
• Zero waste sent to incinerators in 2002
• Reduced water consumption by 69% over the past decade
• 70% reduction in vehicle emissions over the last decade

Question 13

Benefits of Toyota in the UK;

What are the social benefits of Toyota in the UK?

Answer 13

• 3500 jobs created (Burnaston & Deeside) (high manufacturing wages of £30,000 plus)
• Multiplier effect – more than 2000 jobs at Burnaston = greater spending power of workers. Periphery regions (Derby) benefit
• Infrastructure improvements (M1 to M5 link with the A50)

Question 14

Benefits of Toyota in the UK;

What are the political benefits of Toyota in the UK?

Answer 14

• Pays corporation tax
• Supported the declining car industry and reduced high levels of unemployment
• Workers pay tax

Question 15

Problems of Toyota in the UK;

What are the political problems of Toyota in the UK?

Answer 15

• Burnaston was previously a greenfield site
• Urbanisation of the surrounding area (Burnaston)
• Increase in traffic and noise pollution

Question 16

Problems of Toyota in the UK;

What are the environmental problems of Toyota in the UK?

Answer 16

• Burnaston was previously a greenfield site
• Urbanisation of the surrounding area (Burnaston)
• Increase in traffic and noise pollution