CONTROL AND OWNERSHIP OF NATURAL RESOURCES IN NIGERIA AND RESOLUTION OF THE NIGER DELTA CRISIS

Originally wrote this on MONDAY, JANUARY 12, 2009, in my former blog https://probonoadvocate.blogspot.com/2009/01/control-and-ownership-of-natural.html

1. INTRODUCTION

“Whose land?” this is the question that underpins much of the conflict associated with the exploitation of “strategic” natural resources such as petroleum, diamond, gold, timber, and coltan in Sub-Saharan Africa. It is an issue on which the state (and extractive business corporations) and grassroots groups often substantially differ. It is also the one issue that defines what communities and landholding groups receive through compensation for land expropriated for extractive industrial activities. The differing stances between the state and stakeholder communities regarding who has a legitimate claim to the land and the minerals can become quite complicated. While the state believes it “owns” the “strategic” natural resources and must determine how best the exploitation of such resources can bolster national development objectives, indigenous communities often attach more than economic definitions to land. They regard the land as their “sacred possession.”

Nigeria’s oil-producing region, the Niger Delta, epitomizes this clash of perspectives and represents a powerful example of how conflict around land use occurs.

Since 1956 when oil was first discovered in commercial quantities in Oloibiri in the present Bayelsa state, the relationship between the multinational oil companies and the host communities where they operate has been far from cordial. There has been a gradual deterioration from uneasy tolerance to the present spate of youth militancy and clamour for resource control largely premised on the abject poverty in the host communities and the widespread degradation of the environment. There has equally been a large amount of buck-passing and horse-trading between the Federal and State governments over responsibility for the present state of affairs.

However, the host communities caught in the throes of biting economic deprivation and rampaging ecological degradation are resorting to unmitigated violence and intimidation to press home their demands for rapid development of their communities and economic empowerment. The Federal Government insists that the revenue allocation of 13% of oil revenue to the oil-producing states is adequate to implement community development projects in the affected areas. The oil-producing states far from being content with any patronizing derivation formula insist on total resource control.

The deepening crisis of confidence between transnational oil corporations and oil-producing communities in Nigeria’s Niger Delta Region highlights an important development predicament. Fundamentally, the crisis is about whether the state can utilise petroleum resources as if the oil-producing communities did not matter since the state “owns” both the land and the minerals underneath it. In practice, however, the conflict is about what constitutes adequate and equitable compensation to affected communities (and/or the oil-producing province as a whole) when land is expropriated from communities and corporate groups for petroleum operations. It is a crisis that strikes at the heart of the state-land-society discourse.

The resource problem is at its most acute in the oil-rich but desperately poor Niger Delta. Since January 2006, the Movement for the Emancipation of the Niger Delta (MEND) and other armed groups have waged an increasingly violent campaign against the federal government and foreign oil companies. It demands local resource control of the Delta’s oil wealth and rejects the “Marshall Plan” President Olusegun Obasanjo has proposed for the region.

The Federal Government had presented in July 2006 the Niger Delta Human Development Report, also known as the “Marshall Plan,” which was to be commissioned by UNDP. The report proposed a seven-point human development agenda for the region, which include:

? Promote peace as the foundation for the development

? Make local governance effective and responsive to the needs of the people

? Improve and diversify the economy

? Promote social inclusion and improved access to social services

? Promote environmental sustainability to preserve the means of people’s sustainable livelihood

? Take an integrated approach to HIV & AIDS

? Build sustainable partnerships for the advancement of human development.

However, it would seem that the people of the Niger Delta have rejected this agenda or that the Marshall Plan has failed to treat the underlying issues in the Niger Delta Crisis because, in the year 2006, the activities of the militants shifted from high-profile kidnappings of foreign oil workers to more deadly activities, including car bombings.

Therefore, this paper will endeavor to examine the issue of the Niger Delta Crisis and the ownership and control of mineral or natural resources in Nigeria. The paper would also propose effective ways to curb the present crisis and a preferable legal framework on the ownership and control of resources in the country.

One will not fully grasp the conflict impact of land expropriation and “unjust” compensation on ordinary farmers and fishermen in Nigeria’s oil region-or indeed, how the compensation framework plays out at the grassroots – without first becoming familiar with some historical facts about Nigeria upstream petroleum industry.

2. HISTORY OF THE NIGERIAN UPSTREAM PETROLEUM INDUSTRY

Although early initiatives to explore petroleum in Nigeria date back to 1906, Shell (the Royal Dutch consortium then known as Shell D’Arcy Petroleum), on its arrival in Nigeria in 1937, began the search for oil in the Niger Delta. Prior exploration activities in Nigeria had been restricted to the southwest. The shell struck oil in the Niger Delta town of Oloibiri in June 1956. Nigeria formally commenced petroleum production in 1957 and a year later made its first crude oil export.

Before Nigeria’s independence, Shell enjoyed almost a monopoly of the upstream petroleum sector. It possesses the “best” oilfields in the country and controls most crude oil reserves and production. The dominant (mainly onshore) position has not always been a positive achievement for Shell and has proved rather ominous for the company in recent years. At different times since the early 1990s, local youths have threatened to expel (and in some places have succeeded in expelling) the company from their territory because of what they regard as Shell’s anti-community and exploitative operational culture.

Some competitiveness began to be apparent in the industry from 1960 when more foreign companies (mainly from the United States of America) began to acquire oil exploration concessions. By the late 1960s, the Niger Delta region had become a crowded site for upstream petroleum business. Shell, ExxonMobil, Chevron, Agip, Total, and Phillips currently dominate the Nigerian upstream petroleum sector.

The Nigerian upstream petroleum industry is characterized by two contractual fiscal regimes, namely Joint Ventures (which account for about 95% of production) and Production Sharing Contracts. These two regimes replaced the colonial-era sole concession system whereby companies obtained exploration rights to a given territory, became private owners of the petroleum resources in the designated concessions, and assumed full financial responsibility for its exploitation. The government benefited mainly through the royalties and taxes paid by the companies.

The Petroleum Decree No. 51 of 1969 repealed the colonial Mineral Oils Ordinance of 1914, ended the sole concessionaire era, and laid the basis for the contractual system of joint ventures between the Nigerian Government and transnational oil companies. In a joint venture, the federal government-owned Nigerian National Petroleum Corporation (NNPC – established in 1977) and transnational oil companies work as partners. NNPC contributes between 55 to 60 percent of the costs involved in upstream oil operations. The Nigerian government, through NNPC, also takes the greater portion of the revenues accruing from the operations. In the existing joint ventures, the foreign oil companies are the designated “operators,” responsible for the day-to-day business of searching for oil, developing oilfields, laying and maintaining pipelines, managing the export terminals, acting as custodians crude oil tanks as well as managing operational budgets.

The major difference between a joint venture agreement and a production sharing contract is that full financial costs of operations in the latter fall on the contractor's (foreign or local) oil company. The contractor recovers its costs, posts profits, and pays taxes and royalties through stipulated fractions of the total quantity of oil produced. At the same time, the Nigerian government (through NNPC) shares the “profit oil” with the contractor.

Since the major point of conflict between the oil communities and the Nigerian state on the one hand, and the communities and the oil companies on the other is rooted in the issue of petroleum ownership and control, it is appropriate to examine closely the laws that define these relationships, and how the relationships play out with regards to land expropriation and compensation.

3. PERCEPTION/INTERPRETATION OF RESOURCE OWNERSHIP/CONTROL IN

NIGERIA

Historians all agreed that disputes between the regions over the sharing of centrally collected revenue contributed significantly to the review of the Macpherson Constitution. Hence, the Chick Commission of 1953 was set up to revise the revenue allocation system to streamline it with the constitutional changes under the Lyttleton Constitution, giving greater autonomy to the regions and re-assigned functions between the federal and regional governments.

However, following the decision of the 1957 Constitutional Conference, another commission called the Raisman Commission was appointed in 1958 to review allocation arrangements and rectify the defect(s) inherent in the Chick Commission’s report. The Commission met that year (1958), this time without the government emphasizing its terms of reference of any of the major principles of revenue allocation. Rather the Commission’s attention was devoted to reducing the problems caused by a limited range of independent regional sources of revenue and dissatisfaction over the regional share of the revenue accruing from import duties. It was at this time that oil resources became a dominant factor in generating centrally controlled revenue.

Recall that one of the principal features of Chicks Commission on Revenue Allocation was its emphasis on the principles of derivation. Hence under Chick’s formula, 100% of the revenue derived from mining, rent, and royalties went to the regions of origin. Before 1958, oil was discovered in commercial quantity in the Niger Delta and when columbite and tin were in hot demand in the western world. Accordingly, the Commission (Raisman Commission) recommended a reduction of 50%. It redistributed the revenue accruing from this source: 50% to the regions of origin, 30% to the centre, and 20% to the newly designated distributable Pool Account.

Commenting specifically on Allocation of Mineral Royalties and Rents, the Raisman Commission observed in its report that the allocation of the proceeds of mining had presented the Commission with a most perplexing problem. It stated that although the revenue from columbite royalties rose rapidly at the time of the American stockpiling in 1953-55, royalties on tin and columbite minimally yielded a fairly constant annual gain. If these were the only minerals concerned, the Commission remarked, there might be no difficulty in recommending the continuation of the existing system, namely, that all mineral royalties should be returned in full to the Regions in which they originate. The problem, according to the Commission, was oil. At the time, test production of oil on commercial quantities had already commenced in the East. At the same time, exploration was being undertaken in both the North and the West and along the continental shelf, which was taken to the federal territory.

Then came the turning point. The Committee remarked that although the yield from oil royalties was comparatively small, estimated at 65,000 in 1958-59, it cannot be ignored that this figure might rise remarkably within the next few years. On the other hand, the Commission argued, there was nothing so uncertain as an oil prospect right up to the time it was or was not finally achieved.

They, therefore, stated that there was a double obstacle to their recommending the simple continuation of the existing method of allocating mineral royalties. First, it would involve then in the revenue assessments for the next few years in crediting the Eastern Region with a source of income, which was at once too uncertain about building upon, and too sizeable to ignore. Secondly, it would rob their recommendations of any confident claim to stability for the future since an oil development might occur on the scale, which would quite upset the balance of national development. The Commission, therefore, concluded that the time to change the principle of allocating 100% of revenue accruing from mineral resources to the region of origin was now. At the same time, there was still uncertainty as to which of the regions might be the lucky beneficiary or benefit the most.

In the light of the above, the Commission made the following recommendations regarding mining and mineral taxation.

i. The jurisdiction over mining royalties and rents should continue to be exclusively federal.

ii. Whenever a profit-sharing arrangement is negotiated in Nigeria between the Federal Government and the oil company, the Federal Government should consider the desirability of associating other governments within the federation as parties to it.

iii. It should be made clear in the Constitution that the federal government’s jurisdiction regarding mining extends to all financial arrangements and transactions in the field.

iv. Mining and mineral rents should be shared between the regions of their origin, the federal government, and all the regions together, the last by way of a Distributable Pool. The proportions in which these royalties and rents should be divided should, for the present be, respectively, 50 percent (to the region of origin) 20 percent (to the Distributable Pool to benefit other regions).

As could be seen from the above, the Raisman Commission surreptitiously laid the foundation for the denial of communities of the control of the benefits of minerals/assets located in their areas.

A plethora of laws governs the Nigerian Petroleum industry. The Department of Petroleum Resources (DPR) identifies on its website[1]?more than 35 of these under what it calls “principal” and “subsidiary” pieces of legislation. These include the Oil Pipelines Act of 1956, Petroleum Control Act of 1967, Petroleum Act No. 51 of 1969, Offshore Oil Revenue (Registration of Grants) Act of 1971, Exclusive Economic Zone Act of 1978 and the National Inland Waterways Decree of 1997. for this paper, the most viable approach to discussing ordinary people’s perception of resource control/ownership in Nigeria is to examine the pieces of legislation that govern ownership and control of petroleum resources.

3.1 THE PETROLEUM ACT

The most important petroleum ownership/control legislation in Nigeria is the 1969 Petroleum Act, which explicitly and intricately defines petroleum resources ownership and control issues. This Act repealed the 1914 Mineral Oils Ordinance (the first oil-related legislation since Nigeria formally became a colony), which had forbidden non-British citizens and companies in oil prospecting and exploitation. It also repealed, among other colonial laws, the Minerals Act of 1945, which had vested ownership and control of petroleum in the British Crown.

The 1969 Act transferred the rights cited above to the Nigerian government. This right is enshrined in Section 44(3) of the 1999 Constitution, but the Petroleum Act provides the enabling details.

The Petroleum Act set the stage for Nigerian companies and Nigerian citizens in the oil enterprise. It gave the state the legal basis to promote an operating policy and fiscal environment that would best serve the development needs of the Nigerian society. But, as in present-day Nigeria, the reality is not always a true reflection of the stated intentions.

The logical consequence of the Nigerian government’s right to “the entire property in and control of all minerals, mineral oils and natural gas in, under or upon any land in Nigeria or in, under on upon the territorial waters”[2]?is that the government can condemn private land for any aspect of petroleum development. This right, however, is not new, nor is Nigeria the only country where mineral rights vest in the state while individual landowners have only surface rights. For example, in the petroleum-rich Alberta province of Canada, the Surface Rights Act of 1977 vests with the state the right to “explore for and produce oil, gas and other minerals” while individual landowners control only the “land surface and the right to work on it”[3]. Nevertheless, a fundamental difference between Canada and Nigeria is that in Canada, the mineral rights vest in the government of the oil-producing province rather than in the national government.

In Nigeria, the Petroleum Act spawns discontent in the oil-producing communities mainly because it stipulates no clear benchmarks for what should be paid as compensation. Section 77 of the Act expects an oil operator to pay the landowner a fair and reasonable compensation for any disturbance of the surface rights of such owner.

Even though the act is not explicit on actual minimum or maximum amounts payable, residents are generally unaware of what anyone affected by any aspects of oil exploitation might legitimately expect to be paid. There is no government of NNPC outreach programmes through which communities are periodically enlightened about their entitlements on mineral rights, surface rights, and compensation[4]. The Petroleum Act’s silence on compensation benchmarks and the absence of outreach programmes leave a penumbra, a grey area, over which affected parties could amicably negotiate with petroleum operators.

Another source of controversy and discontent relates to environmental protection. The Petroleum Act requires operators to adopt all practicable precautions to prevent land and water pollution. Should such precautions fail, companies are required to take prompt steps to contain the effects of pollution? Operators perform duties properly and professionally, following the regulations and practices accepted as “good and oilfield practice.” The Act contains no threat of serious sanctions against polluters. Possibly as a result of such “silence,” oil operators have on occasion contravened even the petroleum industry regulator’s “Let Polluter Pay” principle. For example, according to the Nigerian scientist, Professor Alfred Susu, the claims procedures about the January 12, 1998 oil spill at Idoho, Eket (Akwa Ibom State) was fundamentally flawed. According to Susu, the polluting company presided over the ultimate process of determining the quantum of compensation payable to aggrieved individuals or communities, in addition to the fact that the entire claims process failed to take into account “immediate, short-term and long-term damage of oil spills.”[5]

The above suggests that there are no environmental laws in Nigeria dealing with the adverse consequences of petroleum exploitation or other human activities; there are several pieces of legislation aimed at protecting the environment. However, the main point I am trying to present here is that these laws tend to operate from the basic template that because the Nigerian state “owns” the country’s petroleum resources, it tended to proceed with compensation and other community issues as if the community did not matter.

The third issue of discontent over the Petroleum Act is in the Act’s definition of land. The Act defines land in such a way as to limit people’s claim to crops, shrines, tombstones, and other physical improvements and expressly excludes the minerals under the land.

3.2 THE OFF-SHORE OIL REVENUE DECREE

The Offshore Oil Revenue (Registration of Grants) Act was enacted in 1971 as Decree 9. The Decree intended to set apart an economic petro-zone for the federal government- a zone whose petroleum resources the littoral states?[6]of the Delta could legitimately make no claims. The Act put offshore resources entirely in federal territory, thus amending the 1963 constitution that had defined the continental shelf of a littoral state as part of that state.

The first notable response to years of overt and covert resistance to the law occurred in June 1992 when the Babangida administration enacted Decree 23 to abolish it. With the return to civil rule in 1999 and the eventual “adoption” of a new constitution, the debate re-emerged. The federal government in 2001 instituted a case against the 36 states of the federation, asking the Supreme Court to interpret what constituted the seaward boundary of a littoral state in Nigeria. In April 2001, the court gave a ruling that effectively resuscitated the controversial 1971 Decree that had only in 1992 been abolished! The Supreme Court ruled that “the seaward boundary of the country’s … littoral states terminated at their low-water mark”, thus “effectively giving the federal government control over the offshore oil and gas resources.”[7]

To avert a wave of protest and resistance that could truncate the country’s new democracy, the federal government struck what it called a “political settlement” with the oil states. An Onshore/Offshore Dichotomy Abrogation Act of 2004 made it possible for the littoral states to receive derivation revenues on petroleum resources lying within a water depth of 200 metres.

There are two problems with this Act concerning the Niger Delta crisis. Firstly, it does not still settle the issue of control and ownership of petroleum resources. The act only makes it possible for the littoral states to receive derivation revenues. Still, it does not give them ownership or control over the revenue from which the revenue is derived.

The second problem is aptly stated by the following remarks by Professor Itse Sagay:

By far, the most disturbing consequence of the coastal states’ limitation to a 200-metre depth belt for derivation purposes is that all the major offshore oil and gas finds are now in the deep off-shore zone between 1000 and 2,500 metres as against the 200-metre limitation for the coastal states…In short, the future of the Nigerian oil and gas exploration and exploitation lie in the deep offshore outside the derivation zone to the coastal states under the [Onshore/Offshore Dichotomy Abrogation Act][8]

3.3 THE LAND USE ACT

The Land Use Act was enacted in 1978 by a military government. It replaced the pre-existing plural land tenure system in Nigeria, thus bringing uniformity into the Nigerian land tenure system. Its target was the reform of the customary land tenure system, which was considered a clog to development efforts. According to a government statement, "at present it is not only the individual who wants to build his or her house that is facing difficulties in finding a suitable land; the local, state and federal governments are also inhibited by problems placed in their way in acquiring land for development." However, being a law issued by a dictatorship, it did not enjoy robust debate in the legislature.

The effect of the enactment of the Land Use Act was elaborate in the case of Abioye v. Yakubu, where the Supreme Court (the highest court in the land) held, inter alia, as follows:

(1) That the Land Use Act has removed the radical title in land from individual Nigerians, families, and communities and vested the same in the governor of each state of the federation in the federation in trust for the use and benefit of all Nigerians (leaving individuals, etc., with ‘rights of occupancy'); and

(2) That the Act has also removed the control and management of lands from family and community heads/chiefs and vested the same in the governors of each state of the federation (in the case of urban lands) and the appropriate local government (in the case of rural lands).

It should be observed that this decision accords with the Court of Appeal decision in the case stated above. It also accords with an earlier decision of the Supreme Court where the court had pointedly said:

"This appeal deals with the interpretation of some of the provisions of the Land Use Act 1978. Since the promulgation of the Act by the military administration of General Obasanjo in 1978, the vast majority of Nigerians have been unaware that the Act swept away all the unlimited rights and interests they had in their lands and substituted them with minimal rights and rigid control of the use of their limited rights by the…governors…This appeal…will bring the revolutionary effect of the act to the deep and painful awareness of many…Section 1 of the Act has made no secret of the intention and purpose of the law. It declared land in each state of the federation shall be vested in the… governor of each state."

As for the effect of the promulgation of the Land Use Act to the Control and Ownership of natural resources in the Niger Delta, kaniye Ebeku gives a clear picture:

“It appears the impact of the Land Use Act on the Niger Delta people ranges beyond the two ‘broad' issues considered above[i.e., the loss of power by traditional authorities and the loss of the right to compensation]. Perhaps the full amplitude of injustice that the LUA is visiting on the Niger Delta people would be better appreciated if the following facts are considered:

(1) Disputes over the quantum of compensation payable for land compulsorily acquired under the Act or other issues connected therewith are to be settled administratively (and not by the courts as before) by a statutory body called Land Use and Allocation Committee, members of which are appointed by the appropriate state governors (who are known to be in alliance with the multi-national oil companies and against the communities). There is no statutory provision to ensure the independence and impartiality of these bodies. In fact, a provision indicates that they are under the control and direction of the governors: "The Land Use and Allocation Committee shall,…subject to such directions as may be given in that regard by the governor…have the power to regulate its proceedings". Perhaps ex abundanti cautela section 47(2) of the Act expressly ousts the jurisdiction of the courts: "No court shall have jurisdiction to inquire into any question concerning or pertaining to the amount or adequacy of any compensation paid or to be paid under this act."

(2) Oil-bearing communities of the Niger Delta are traditionally fishermen and farmers and depend on the land for their livelihood. Oil pollution (which occurs frequently) can cause serious or permanent damage to the land itself. There is evidence that farm yields are now poor in the region because of pollution on the land. As has been stated, one commentator has noted, "gas flaring has been associated with reduced crop yield and plant growth on nearby farms, as well as disruption of wildlife in the immediate vicinity."

(3) Several years of unsustainable oil exploitation have devastated the local environment, thereby depriving the people of the optimum use of their lands and waters. This observation captures this point: "Environmental pollution from the oil industry has had far-reaching effects on the organization of peasant life and production. In addition to the effects of spills on mangroves…spills of crude, dumping of by-products from exploration, exploitation, and refining operations (often in freshwater environments) and, overflowing of oily wastes in burrow pits during heavy rains has had deleterious effects on bodies of surface water used for drinking, fishing and other household and industrial purposes. The percolation of industrial wastes (drilling and production fluids, buried solid wastes, as well as spills of crude) into the soil contaminates groundwater aquifers." The impact of the Funiwa-5 oil blow-out on the affected areas illustrates this observation. Investigations at Fishtown (one of the impacted areas) eighteen months after the blow-out showed the topsoil and groundwater still contaminated. Yet all these are not counted in the assessment of damages due to the victims under the LUA.

(4) Since oil is statutorily and exclusively vested in the state, oil-bearing communities of the Niger Delta are not entitled to rents and royalties paid for oil exploitation in their lands by the oil companies. Annual land rent was an important way by which the people partook in oil revenue.

(5) The Niger Delta people are ‘minority groups' in the Nigerian federation. There is no constitutional or other legal provision guaranteeing them access to political power at the centre to take or partake in decisions on how oil revenue can be utilized. Annual land appeared to be their only consolation.

(6) The Niger Delta remains undeveloped despite the enormous revenue derived by the Nigerian state from the exploitation of oil in their homestead. According to a recent World Bank report, "of the resources available in the Niger Delta, oil is by far the most valuable to the national economy. However, the benefits to the Niger Delta region are less obvious." It seems the situation is worse today since they are no longer considered stakeholders in any sense whatsoever.

(7) The Niger Delta people are amongst the poorest people in Nigeria, despite the huge revenue derived from an oil exploited from their lands. This poverty is accentuated by the despoliation of their lands by the activities of the oil companies. In the words of an observer: "Ironically, the oil industry which has brought development to many parts of Nigeria has become a source of misery to the people of oil-producing communities whose existence is now threatened by the scourge of oil pollution."

(8) There is an alliance between the Nigerian state (controlled by the majority ethnic groups) and the oil companies, which helps to deprive the Niger Delta people of employment in the oil companies, resulting in unemployment in the Niger Delta. Annual rents compensation had been a source of some income for the people.

(9) Since the enactment of the LUA, the oil companies no longer approach the communities to negotiate access to land for oil operations on payment of compensation, as was the case before. In fact, "it is possible for the government to acquire a vast area of land for petroleum purposes, i.e., granting the operator a lease over a large area, yet the villages will know nothing about the acquisition"; they wake up one morning to find that the government has given out their farmland to oil operators. Hence the feeling of participation in the exploitation of oil found in their land has been lost, accentuating a sense of deprivation.[9]

4. BASIS OF THE CONFLICT IN THE NIGER DELTA

It is important to understand the underlying causes of the conflict in the Niger Delta to be better positioned to submit practicable solutions. It suffices to say that the strife in the Niger Delta is the culmination of a diversity of largely human-induced factors. They include:

4.1 POLLUTION

Oil production activities are the foremost sources and causes of pollution in oil-producing communities. The catastrophic effects of pollution on the environment are well known to the industry and all those concerned with it and affected by it.

The major causes of pollution arising from oil production operations are oil spills, and these could themselves arise from several causes, including

(1) Blowouts

(2) equipment failure

(3) operator/maintenance failure

(4) sabotage

(5) Sand cut (erosion) and, of course

(6) accidents.

Apart from the causes mentioned above, which is associated with the oil industry, the normal operations of the machines and engines used in the production, refining, and transportation/transmission of oil, pollute the environment. Thus, the air, surface water, and land are adversely affected by toxic and other hazardous wastes. At the receiving end of such environmental pollution, the victim is the oil-producing community, which are not merely deprived of their means of livelihood but are confronted with the danger of hunger and starvation. As in the recent Mobil oil spillage, the whole village could be overwhelmed with oil pools, rendering the people homeless and displaced. Periodic overflow of crude oil in the Niger Delta of oil operations destroy thousands of hectares of mangrove swamps, pollution of rivers and streams, and the elimination of marine creatures like fishes, crabs, mudskippers, oysters, etc.

Gas flaring, on the other hand, apart from the huge economic loss this represents to the nation, the cost of the degradation of the environment and the health of the people of the oil communities is incalculable. Unburnt carbon is transported into homes and working areas, the vegetation is destroyed, the soil is rendered completely infertile, and the tremendous heat creates unceasing hardship and discomfort.

In the quest for development, activities in the oil industry have greatly impaired the ecosystem by undermining its viability. Oil exploration, refining, and storage have carried many environmental problems with them, especially in the Niger Delta region. Oil spillage, for instance, destroys aquatic life, eutrophication of water bodies, de-vegetation, and other forms of ecological damage. Gas flaring, gas emissions, and fumes are hazardous to human and animal health.

4.2 LONG YEARS OF NEGLECT

This has been an ongoing problem in the Niger Delta. Firstly, there is no legislation with genuine consideration for the environment. Secondly, there is inferior ethical consideration and or practice in the industry. In this regard, there is ineffective monitoring and control of practices in the production activities. There is also a lack of monitoring equipment and personnel by monitoring bodies such as the DPR, and there is equally the refusal to rehabilitate exploited land.

4.3 HARSH PETROLEUM LAWS IN NIGERIA

The following major pieces of legislation, enacted between 1969 and 1999, show how oppressive the laws made under the leadership of the majority ethnic nationalities in Nigeria deprived and marginalized the minorities and ensured no real and sustainable development of the Niger Delta and other oil-producing States where the resources of Nigeria come from.

A few of this oppressive legislation include:

1. The Petroleum Decree (No. 51) of 1969, which expropriated all petroleum resources from the oil-producing states and placed them under the control of the Federal Government.

2. The Off-Shore Oil Revenue Decree (No.9) 1971 The Federal Government expropriated all the minerals in the continental shelves.

3. The Land Use Act, 1978-transferred ownership from the Communities to the State Governors without compensation.

4. Oil Pipeline Act, 1965; Petroleum Drilling and Production Regulation, 1969 and Petroleum Decree 1969. These pieces of legislation are commendable in themselves. Still, they are ineffective in protecting the communities when compensation for oil spillage pits them against compelling multinational oil companies.

5. CONCLUSION AND RECOMMENDATIONS

Finally, it should be known that host communities have never been the same again since the commencement of the oil exploration in their communities. The influx of people from different parts of the world has no doubt had a tremendous socio-cultural impact on the indigenes of these host communities – assault on their traditional norms, taboos, etc. have significantly changed the people's lifestyle and sense of community living, to say nothing of the fact that the community has nothing to show for it economically and developmentally when compared with the amount of profit being made by these multi-national oil companies and their local surrogates.

Therefore, my humble submission is that the 1999 Nigerian constitution should be revisited to consider the fact that the control and management of natural resources should indeed be devolved to the local communities where these resources are located, not necessarily to the state as a political entity.

Accordingly, in true Federalism, communities should be entitled to their constitutional and legitimate shares of the federally collected revenues as and when due and entitled to a considerable measure of control and ownership over their revenue resources. This is an important attribute of a Federal system.

A case in point is in the U.S.A., where communities in Wyoming in 2001 reaped the full benefits of its resource control of oil realized from the oil boom. Before the 2001 upswing in energy prices, the oil-producing state of Wyoming was experiencing a great depression with an expected budget shortfall of $183 million. But in that year (2001), it had a glowing $700 million surplus, thanks to quintupling natural gas prices. Yet, the US Federal Government did not and could not interfere with the State’s earnings or prescribe how the excess oil revenue must be spent. In Spain, which is not even a federation, a considerable measure of autonomy over resource control was granted to the Basque region fighting for secession or separate identity. The same is true of the Province of Quebec in the Dominion of Canada, where the province was granted substantial autonomy in managing its resources and internal affairs to discourage it from seceding from Canada.

In Switzerland, the federating entities called “the cantons” are so autonomous in self-government and the control of their natural resources that one could easily refer to Switzerland as a confederation of quasi-independent states. The political arrangement in that country is such that even the President of the Republic rotates amongst the cantons to ensure equality, equity, and freedom of association amongst the federating units.

Decentralization or devolution of political and economic powers is a common attribute of other successful federations in Latin America, Europe, and Asia. Nigerian federation should not, therefore, be an exception. The principle of fiscal federalism requires that the respective tiers of government be independent in their resources and that such resources should be enough for them to carry out their autonomous functions. The federating units, i.e., states, the local governments, and the communities, should have the power to control, allocate and manage the resources in their areas. In this way, the communities will have control for and benefit directly from their resources. However, they should pay taxes to the Federal government at a rate that will be agreed upon by all stakeholders. The resources being referred to should include mineral, agricultural and human resources.

In the case of mineral resources, however, and because of our own peculiar political and constitutional history, it is important to organize a national conference of the various ethnic nationalities to work out a suitable constitutional framework for devolution of control and management of natural resources to the communities where natural resources particularly oil, exist.

Meanwhile, it is suggested as a way to dampen the demand for resources control by some states, to involve not just the states but indeed the communities in which oil or other mineral resources are located, in a partnership arrangement with the expatriate oil or mining companies, the state and the community where the mineral is located. Ideally, it should be a four-level joint ownership agreement between the foreign company, the Federal Government, the State government, and the community. Each has its equity contribution, share, and other stakes in the company's operation. The dividends earned by the community from their equity holdings and their participation or involvement in the major policy decisions of the operations of the company would ameliorate their grievances of marginalization and exploitation by both the foreign oil/mining companies and the Federal Government. It is only when this arrangement is complimented with a fair and equitable revenue allocation formula that would emphasize the derivative principle that the political tensions over derivation and resource management and control will be effectively contained. The spirit of true federalism rekindled in Nigeria.

The predicament of the Delta is not a no-hope case. It is a solution-prone situation which, however, depends on us to bring to birth. As we have seen above, the ugly scenario in the Niger Delta was created and fueled by law. Thus the situation can be emancipated by law by repealing certain laws, enacting certain laws, amending some laws, and strictly and conscientiously enforcing others.

All the repressive laws discussed above should be repealed. The 1999 constitution is not democratic. It is a Military contraption. It should be reviewed by the people’s representatives and be made to reflect the aspirations of Nigerian Federalism.

Laws with repressive provisions should be amended. For example, all relevant laws governing ownership and control of petroleum resources should be amended to vest all title and resources upon and below to the owner(s) of land and leave the owner with the choice of determining what happens to his/their land. The laws should also empower owners to negotiate with an operator before the government gives a permit or license to the operator to explore any resources in the area.

The government should also enact laws that will give communities in the Niger Delta opportunity for economic and social growth and promote the region's environmental well-being. For example, enact a law for biodiversity protection and conservation.

Finally, it is imperative that a democratic Constitution, which will be based on a true federalist system of government, unrestricted access to justice, and the protection of environmental rights, must be put in place.

[1]?https://www.dprnigeria.com/legislation.htm

[2]?Section 1(1) of the Petroleum Act

[3]?Alberta Department of Energy, 2004 “Resource and Land Access – Frequently Asked Questions.”?https://www.energy.gov.ab.ca/1533.asp

[4]?Frynas, J. G. Oil in Nigeria: Conflict and Litigation Between Oil Companies and Village Communities. Hamburg: Lit Verlag Munster. 2000 p. 225

[5]?Susu, A. A. “The Road to Peace in Oil Producing Communities.” The Guardian. Lagos, Nigeria. April 13, 1998

[6]?These states are Bayelsa, Akwa Ibom, Cross River, Delta, Ondo, and Rivers state.

[7]?A.G Federation v. A.G. Abia State & 35 Ors (2001) F.W.L.R (Pt. 64) 202 - 420

[8]?Vanguard 2005. “Oil: Sagay Raises Alarm Over Derivative Rights.” Lagos, Nigeria. April 4

[9]?Ebeku, k. S. A. Oil And The Niger Delta People: The Injustice Of The Land Use Act