Introduction I have carefully read the Report of the APC on true federalism and restructuring of Nigeria. I have also read the recommendations therein. Of great concern and interest to me is the recommendation on the onshore, offshore oil which attempts to resurrect the vexed issue of oil dichotomy in Nigeria. I am however not oblivious of the fact that, just at the name entails, a recommendation is only but a proposal or suggestion made by a person or group of persons to another with intent that it be acted upon. I also know that such recommendation may remain in the realm of recommendation and may never be acted upon any time soon or at all. But when one remembers our peculiar historical antecedents, one becomes justified in raising the flag when a contentious issue such as the onshore, offshore dichotomy conundrum, which almost tore the country apart some years back, is re-introduced to the national discuss in the name of recommendation for restructuring or true federalism or whatever it is called. The El’Rufai Report It would be recalled that in the buildup to the 2015 general election, the APC (then leading opposition party in the country; now the ruling party) made huge promises to Nigerians. These promises were to be implemented if the party wins at the general election, especially if it wins the presidency. The party won. One of such promises was the promise to restructure Nigeria and make it more efficient for the benefit of the entire citizenry. In Article 7 of the party’s Constitution, it has been stated that the APC shall, firstly, promote and foster the unity, political stability and national consciousness of the people of Nigeria, and secondly, promote true federalism in the Federal Republic of Nigeria. Also, at page 7 of its Manifesto, the APC entered into a pact with Nigerians to create a federalism with ‘more equitable distribution of national revenue to the States and Local Governments because, this is where grassroots democracy and economic development must be established.’ At page 37 of the Manifesto, last paragraph, under the heading ‘A Government You Can Trust’ the APC pledges to ‘devolve more revenue and powers to the States and Local Governments…’ Perhaps in its bid to actualize these promises, the leadership of the APC constituted a 10 – Member Technical Committee to work out the roadmap and advise the party as appropriate in line with the terms of reference of the committee. It is important to note that one of the terms of reference was ‘To examine the Party’s Constitution, Manifesto and other publications to distill the true intent and definition of the true federalism promised by the party in its Manifesto and during the Presidential campaign.’ After due deliberations on the nature and scope of its assignment, the Committee recommended to the party, an expansion of its membership for more inclusiveness. The party then expanded the membership of the Committee to 27 with Mallam Nasir El’Rufai as Chairman and Senator Olubunmi Adetunmbi as Secretary. The Committee went to work and published its Report in January, 2018. The Report is made up of 56 pages with a preface written by Mallam El’Rufai at page 4 and acknowledgment written by Senator Olubunmi Adetunmbi at pages 5 to 6. In the Report, the Committee has made far-reaching recommendations, one of which is that, ownership and control of resources in the continental shelf and territorial waters should remain with the Federal Government. [See pages 37 to 38 of the Report]. It is this recommendation on the ownership and control of resources in the continental shelf and territorial waters that is the concern of this article. The Recommendation is About Oil Though the Committee in its Report refers to ‘resources in the continental shelf and territorial waters’ without specifically naming the resources, it goes without argument that as at today (and indeed many years to come) the most significant of Nigeria’s resources in the continental shelf and territorial waters is crude oil. This is the main stay of Nigeria’s economy. So, the recommendation is specifically targeted at the black gold. By this recommendation, the Committee has again raised the issue of Onshore – Offshore Oil Dichotomy in Nigeria. It simply proposes that the oil producing States of the Niger Delta Region should only benefit from such oil drilled onshore (that is, on its land separated from water) while such quantity of oil drilled from the belly of the ocean (which ocean is simply an extension of the boundaries of the States) shall belong to the Federal Government. Even by the onshore arrangement, the oil producing States will be entitled to only 13 percent of the revenue while the Federal Government will be entitled to the larger portion of the remaining 87 per cent. In addition to the larger share of the 87 per cent, the Federal Government will also be entitled to 100 percent of revenue from the offshore oil. The reality for the Oil Producing States A State like Akwa Ibom will automatically become a non-oil producing State. This is because, Akwa Ibom has no onshore oil. All its oil wells are in the deep sea and therefore, offshore. No reality can hit a people harder than this; that the number one oil producing State in the country can suddenly become a non-oil producing State within a twinkle of an eye as a result of the re-introduction of the unfathomable onshore, offshore Oil Dichotomy policy. Other States in the Niger Delta Region will also be greatly affected by the dichotomy. Most of them will also become non-oil producing States. Recall that the most visible onshore oil well in the Niger Delta Region is traceable to Oloibiri in the then River State. Oloibiri is now in Ogbia Local Government Area of Bayelsa State. This oil well was operated by Shell Petroleum but was abandoned owing to restiveness in the area, which restiveness is a direct product of years of marginalization. Today, there are scanty onshore oil wells in the Niger Delta Region. Some of the wells have deposits of oil in non-commercial quantities and therefore not economically viable. The implication is that the majority of functional oil wells in the Niger Delta Region today are offshore. If these offshore wells are taken or handed over entirely to the Federal Government as recommended by the El’Rufai Committee, then the Niger Delta Region is as good as obliterated or wiped off from the map of oil producing regions of the world. If the El’Rufai Committee’s recommendation is accepted and implemented, the stack reality will be that many oil-producing States of the Niger Delta Region will become non-oil producing States overnight. The Federal Capital Territory, Abuja will then become the new ‘oil producing State’ in Nigeria. But there is a law against dichotomy One is tempted to ask whether the El’Rufai Committee averted its mind to the fact that there is a law in Nigeria which abrogates the Onshore, Offshore Dichotomy policy. Pardon me for being this inquisitive, but I consider this question very pertinent considering the caliber, pedigree, political exposure and educational qualifications of the members of the Committee. As a legal practitioner and ‘student’ of law, I know as a fact that laws are not made for fun but mostly for purpose of arresting a prevailing situation and in the process, providing a roadmap to avoid future occurrence. In the history of Nigeria’s socio-economic and socio-political developments, this same Onshore – Offshore Dichotomy policy has been introduced and implemented by various administrations to the detriment, cheat, deprivation and marginalization of the people of the Niger Delta Region. At every epoch of such introduction, the reaction of the affected people of the Niger Delta Region and the condemnation by the international community and people of conscience is usually of such magnitude that there is always the urgent need to re-visit the issue with a view to abrogating the policy. Whenever the policy is introduced, the level of restiveness in the Region increases. Economic stagnation afflicts the Region like plague while hunger and outright starvation roam the land in four legs. The consciousness of marginalization heightens, especially as the people watch the oil companies extracting crude oil (from their backyards) for export and in the process flaring gas and polluting their waters and farmlands. It was in response to the above that the National Assembly of Nigeria in 2004 enacted the Allocation of Revenue (Abolition of Dichotomy in the Application of the Principle of Derivation) Act, 2004. It is sad to note that the El’Rufai Committee never made mention of this Act in the Report that is now in the public glare. The Report only mentioned three federal laws and recommended consequential amendment of the said laws to reflect the proposal for exclusive ownership of offshore oil by the Federal Government. The three laws mentioned in the said report are: Petroleum Act, 2007, Nigerian Minerals and Mining Act, 2007, Petroleum Profit Tax Act, 2007 and the Land Use Act, 1978. (See pages 37 – 38 of the Report). As noted earlier, the abolition of oil dichotomy law has not been mentioned anywhere in the El’Rufai Report. If this is an omission on the part of the Committee, it is indeed a very expensive one. If someone is trying to be mischievous by deliberately excluding the law from the Report, such mischief is indeed highly regrettable. I hold the opinion that any contemporary discussion on the onshore – offshore oil dichotomy issue in Nigeria is incomplete, lopsided and deeply biased if the existing onshore – offshore dichotomy abrogation law is not mentioned and carefully analyzed in the discussion. The Allocation of Revenue (Abolition of Dichotomy in the Application of the Principle of Derivation) Act, 2004: What exactly does it say? This Act was indeed a child of necessity and a product of legislative wisdom. It goes straight to the point and leaves no room for conjecture or forensic interpretations. Unlike most Acts of the National Assembly which have numerous sections and sub-sections, the Onshore-Offshore Oil Dichotomy Act has only two sections. While section one provides for abrogation of the onshore-offshore dichotomy, section two simply provides for the short title. For ease of reference and clarity of our discussion, I take the liberty to reproduce the provisions seriatim, herein below: Abrogation of the Onshore and Offshore Dichotomy: 1(1) As from the commencement of this Act, the two hundred meter water depth Isobaths contiguous to a State of the Federation shall be deemed to be a part of that State for the purposes of computing the revenue accruing to the Federation Account from the State pursuant to the provisions of the Constitution of the Federal Republic of Nigeria, 1999 or any other enactment. 1(2) Accordingly, for the purpose of the application of the Principle of Derivation, it shall be immaterial whether the revenue accruing to the Federation Account from a State is derived from natural resources located onshore or offshore.
- Short title
- The recommendation of the El’Rufai Committee on the expropriation of 100 per cent offshore oil revenue to the Federal Government of Nigeria is first and foremost, a contradiction of the Manifesto of the APC which pledges amongst others, to ‘devolve more revenue and powers to the States and Local Governments…’ Taking the entire revenue from offshore exploration and leaving the States contiguous to the sea with not even a percentage of the revenue derived there from is obviously antithetical to this pledge.
- A recommendation that proposes that the government at the center should own and control the entire offshore oil revenue in a federation is a recommendation that runs contrary to the spirit and letters of true federalism which the APC promised Nigerians. It is interesting to note that the report of the El’Rufai Committee is titled ‘Report of the APC Committee on True Federalism’. True federalism basically entails the control of resources by the federating units and payment of an agreed percentage to the government at the center. The recommendation is therefore a betrayal of the title of the report.
- The undeniable truth is that it is the people living by the sea that bear the direct brunt of offshore oil exploration. No large scale exploration of oil can be done without spillage. Oil spillage, everywhere in the world, can only be controlled or at best, minimized. Whatever may be the degree of the spillage, it is the people living contiguous to the sea that are directly affected by the impact of the spillage. The mature fishes are killed. The fingerlings are not spared neither are the millions of eggs. The natural source of drinking water is polluted. Before oil exploration, the people harvested fresh sea foods and made money from them. Periwinkles, oyster, prawns, crayfish, fishes, etc.
- Nigeria is currently facing serious security issues in nearly all parts of the country. It is therefore the most inauspicious time to make a recommendation such as the one under discussion. The present calm in the Niger Delta Region which has seen to the increase in oil production and the concomitant increase in revenue generation for the entire country should be allowed to permeate and every such recommendation capable of provoking restiveness in the region should be carefully avoided.
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