Wednesday, 11 September 2019

LEADING THEORIES TOWARDS A JUSTIFICATION FOR ARTISANAL/ILLEGAL REFINING OF CRUDE OIL IN NIGERIA

LEADING THEORIES TOWARDS A JUSTIFICATION FOR ARTISANAL/ILLEGAL REFINING OF CRUDE OIL IN NIGERIA.

BY:

Mathew Ojoago AROME *


ABSTRACT

This treatise takes into account the five leading theories aimed at justifying artisanal refining of crude oil in Nigeria ad in currency. It contends that the very idea of artisanal refining as conceptualized by many authors or writers is what can best termed as “illegal” or “modular refining” and or “oil bunkering”. In this wise, to set up a petroleum refinery in Nigeria, the law is that one must first obtain a license. Today, the reverse is the case, while artisans are siphoning huge amount of oil on a daily basis without license thereby causing hardship on the nation’s economy, successive government only appears busy in giving it a name. For them, the situation has developed into a syndrome and has eaten deep into our system understandably because - (1) the germane question of ownership and control of the nation’s number one source of wealth namely, crude oil is in issue; (2) past or previous administration failed in arresting the ugly situation;(3) the continuing agitations for a lion share in the distribution of the proceeds from crude oil by scores of people in the Niger Delta region being the hub of that commodity despite government’s introduction of  a derivative formula still persists; whilst the big issue remains- what, and why must we share away everything? The paper further argued that these challenges are surmountable notwithstanding the above short-comings owing to the actions and in-actions of government and its agencies especially as it pertains to the investigations, arrest, detention, and prosecution of offenders which appears to have negative impact on what already holds-sway in the clamping down exercise. Worse still, the continuing burning of illegal refineries come with many environmental implications as it affects the marine fauna and flora. It concludes by recommending some solutions that will help ameliorate if not totally extinguish some of these problems.

KEYWORDS: Crude Oil, the Concept of Artisanal Refining, Theory, and Justification.

INTRODUCTION

Since the discovery of oil in large commercial quantities in Oloibiri town, Bayelsa state, in 1956 the Nigerian government has continued to invest huge sums of money for continuous exploration and exploitation of crude oil. Even though Nigeria is blessed with abundant gas deposits, the development of gas in the country was not given the same pride place as oil  and the net result of this is the continued flaring of gas to the detriment of oil-bearing states in Nigeria. It is common knowledge that Nigeria has officially classified nine states as oil-producing states(and still counting)that benefit from the 13 percent oil derivation fund. These states are; Abia, Akwa Ibom, Bayelsa, Cross River, Delta, Edo, Imo, Ondo and Rivers.  The increasing share of Nigeria’s oil production has been coming from off-shore in recent years, the country’s on-shore production has been concentrated in three states to wit; Rivers, Bayelsa and Delta states respectively. These states have been regarded as the core states of the Niger Delta and therefore constitute the center for artisanal refining in the country.

UNDERSTANDING THE CONCEPT OF ARTISANAL REFINING

Artisanal refining could mean the same thing as “Oil Bunkering”.“Bunkering” is simply the supply of fuel to marine vessels. It becomes illegal or artisanal when it is unauthorized. Illegal bunkering in the Nigerian context is the unauthorized lifting of crude oil and processed petroleum products. In the official circles, this is oil theft. However, the term “oil theft” has become contentious and emotional in the Niger Delta communities where illegal bunkering is on the increase among advocates of local or regional control of natural resources. They reject the terminology for obvious reasons chief among their contention is that one cannot steal what belongs to him. According to professor Oyebode,  he opined that-

One of the sore points of controversy among the various peoples relates to ownership and control of natural resources. Understandably so since the ownership of property, is closely tied to domination. In a situation of decreasing living standards and mass impoverishment, the struggle over resources could assume almost suicidal proportions. Since politics is essentially about authoritative allocation of values, the determination of who gets, what, when and how questions bordering on resource allocation and control tend to exert an overreaching influence on political discourse and analysis especially in under-developed or deformed capitalists socio-economic formation such as ours.

But the petroleum Act  vests the ownership and control of oil and gas in Nigeria (including under its territorial waters and continental shelf) in the Nigerian state. This is further reinforced for the very first time under the 1979 Constitution of the Federal Republic of Nigeria  same as can obtain under the current 1999 Constitution  and further reaffirmed under the “fundamental objectives” provision of the Petroleum Industry Bill.  In this wise, any unauthorized appropriation of crude oil or processed petroleum products through siphoning from oil pipelines or other channels has always been treated as an act of theft.

SOME ECONOMIC IMPLICATIONS

Ownership matters though of great functional and symbolic significance in the oil industry particularly in Nigeria beginning from the early 1960’s and 70’s. Nigerian economy today is oil driven. The dislocation of it either through price reduction in international market, or sabotage through vandalism and illegal refining or bunkering has negative impact on Nigeria economy. Take for instance, the former minister of finance under Dr. Good luck Ebele Jonathan’s Administration, Dr. Ngozie Okonjo Iweala puts the figure of oil theft and illegal artisanal refining at 400. 000 barrels per day.   While one Joint Venture Operator (Shell Petroleum) estimates the loss to be between 150, 000 and 180, 000 barrels per day. However, relying on the official government figures, it means that Nigeria and her operating partners have been losing a cumulative estimate of $40m (about N 6 billion) per day at a flat price of $100 per barrel of crude oil. This translates to an estimated N 2. 184 trillion naira per annum and still counting.

THEORIES JUSTIFYING ARTISANAL REFINING OF CRUDE OIL IN NIGERIA TODAY

It is gain said that Nigeria is a country that is blessed with rich human and natural resources and some of these resources include oil and gas.  It is on this note that some writers have further posited that artisanal refineries emanated from the Niger-Delta region of the country  wherein the nation’s number one natural resource resides. Accordingly, there are emerging theories accounting for this unfortunate act tending towards a justification or rationale for same.

a. The Massive Spill Theory

According to the proponents of this theory, they strongly belief that the large volume of oil spilled by major oil companies provided ready raw materials which saw through the establishment of illegal refineries because the people needed to refine the spilled oil for their own personal use.  For example, between 2008/2009, a massive spill occurred as a result of rupture following equipment failure in shell’s Bomu-Bodo-Bonny TNP (Trans- Niger Pipeline).

b. The Civil War Theory

According to this theory, the actual technology for artisanal refining in the Niger Delta region is at best hazy. For example, the Biafran side of the Nigerian civil war that lasted from 1967-1970 innovated a particular technology for small scale refining when its refined petroleum needs could not be met because of the blockade proceeds placed on the rebellious region by the federal forces.

c. The Illicit Relationship Theory

According to the dictates of this theory, the illicit relationship that existed between oil workers and idle youths in the Niger Delta who are out to make a quick living or illicit profits brought about the existence of artisanal refineries. The said theory preaches that unknown oil engineers offered the technology to these locals out of sympathy in order to provide them with a means of livelihood following the breakdown in farming activities and fishing vocations in the early beginning of oil induced environmental devastation. However, the theory has been criticized on the ground that rather than an act of benevolence, it is a mutual collaboration between greedy oil brokers and self-seeking local youths and to this extent the theory no longer holds water. 

d. The Local Gin Theory

The proponents of this theory claimed that the practice of artisanal refining of oil started by the makers of alcoholic beverage (local gin), which is made from distilling palm wine. This distillation technology was successfully used to refine petroleum products at a time of dire scarcity of petrol, diesel and kerosene in Nigeria. By this theory, it is strongly believed that the ingenuity of palm wine tapper was apparently sparked by the importance of demand and supply where need refined petroleum products were in high demand with limited supply from legitimate sources.

e. The Self-imposition Theory

According to this theory, oil companies themselves introduced the technology in order to be able to obfuscate information regarding the real volume of oil being lifted in the Niger Delta region.  Submissively therefore, apart from the theories highlighted in this work, there are  other theories relating the origin of artisanal refining in Nigeria to the extent that it has also been theorized that the emergence of militancy in the Niger Delta  is not unconnected with the illegal activity called artisanal refining of crude oil or bush refining.

THE CLAMPING DOWN EXERCISE

It is interesting to note that the recent increase in oil thefts is not far from the doings and un-doings of government agencies especially as it pertains to the investigations, arrest, detention, and prosecution of offenders. For example, there are plethora of cases making the dailies  wherefore law enforcement agencies especially the Nigeria Security and Civil Defense Commission (NSCDC), without charging suspects to Court after arrest, dissipate energy in burning artisanal refineries. This is totally unacceptable. The words of professor Oluyede while commenting on the five meanings attributable to the rule of law is very instructive-

The rule of law means that all governmental departments and functionaries must be able to justify their actions according to law…

Needless to add that our law enforcement agencies must ensure that they observe the spirit and letters of the law in carrying out their functions, duties and responsibilities at all times. And what is more on this point, the provisions of the Hydrocarbon Oil Refineries Act , is most apposite an authority as this is not the rightful place to dig into matters relating to procedure.
CONCLUSION

Today, and in Nigeria, illegal petroleum refineries no doubt plays a pivotal role in the local economy serving a source of creativity, innovation, job creation and income for the poor. Yet it attendant a consequence that constitutes failure to the Nigerian state cannot be over emphasized. This is regardless of the growing agitations that same be decriminalized.

RECOMMENDATION

It is strongly recommended that illegal oil bunkers, artisans and thieves, their allies, sponsors and cohorts should be brought to justice by proper identification, arrest, prompt and diligent prosecution to forewarn and further serve as deterrent to other intending artisans. To do justice therefore, a special tribunal for the prosecution of cases in this area of crime be set up in Nigeria as weighing theories accounting for its justifications is not enough to stomach the situation.







REFERENCE:

- Edu .O.K., “Ownership of Oil and Gas in Nigeria: Matters Arising” Delta State University Law Review Volume 3 No. 1, 2007.

- Ben Naanen and Patrick Tolani: “Private Gain Public Disaster: Social Context of Illegal Oil Bunkering and Artisanal Refining in the Niger Delta” NIDEREF Report 2014.

- Oyebode, A., “The Legal Framework of Oil and Exploration in Nigeria: A Critique”, CDHR Publication 2001, at p.52 cited in: Femi, O., “International Law and Legal Regime of Resources Control and Ownership: A Critique”, University of Ado-Ekiti Law Journal, Volume 2, (2003).

- Omoregbe, Y., Oil and Gas Law in Nigeria Simplified, First Edition, (Zaria: Malthouse Law Books, 2001).

- Akpan .D.A., “ Impact of Illegal Oil Business and Nigeria Economy: The Experience of Crude Oil Theft, Bunkering and Pipeline Vandalism in the 21st Century” International Journal of Advanced Academic Research/  Arts, Humanities& Education Vol. 2, Issue 8, August (2016).

- Femi, O., “International Law and Legal Regime of Resources Control and Ownership: A Critique” University of Ado-Ekiti Law Journal, Volume 2, 2003.

- Edwin O. E., “The Problem of Natural Resources Control in Nigeria: A Legal or Economic Solution?” (Bench Legal Consult port-Harcourt, Rivers State Petroleum, Natural Resources and Environmental Law journal Volume 4, 2012).

- Gibson Ikanonne et al: Crude Business: Oil Theft, Communities and Poverty in Nigeria, (Isaac A. O., Eds), Social  Development Integrated Centre (Social Action), 2014 Report.

- NSCDC., Arrests 50 Militants, Destroys 15 Illegal Refineries- Punch Newspapers, September 13, 2016 Available on line at:URL:WWW.Punchng.com<http:// Punch Newspapers.com/nscdc-arrests-50-militants-destroys-15-illegal-refineries-2/> Date Assessed- 6th March, 2019.

- Daud K.A., “To Retain or Remove? The Jurisprudence of Immunity Clause in the 1999 Constitution of the Federal Republic of Nigeria’’ EBSU Journal of International Law & Judicial Review, 1 (2010).

- Petroleum Act 1969 Cap P10 Laws of the Federation of Nigeria (LFN) 2004.

- The 1979 Constitution.

- Constitution of the Federal Republic of Nigeria, 1999

- Petroleum Industry Bill, 2008.


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