AN OPEN LETTER TO HIS EXCELLENCY, DR AHMAD LAWAN, PRESIDENT OF THE SENATE OF NIGERIA AND RT. HONOURABLE BARR FEMI GBAJABIAMILA, SPEAKER, HOUSE OF REPRESENTATIVES, ON THE DEMAND BY THE PEOPLE OF THE NIGER DELTA FOR 10% FOR THE HOST COMMUNITIES IN THE PETROLEUM INDUSTRY BILL (PIB).
DATE: 5th JULY, 2021
My Distinguished President of the Senate and The Rt. Honourable Speaker of the House of Representatives, we have noticed with dismay, anger, disappointment and embarrassment, the oppressive and domineering attitude of most members of the National Assembly (NASS) over the Petroleum Industry Bill (PIB), now due for imminent harmonization by the National Assembly.
At the Public Hearings in January 2021, representatives from the Niger Delta continued to insist on the principle of the 10% equity participation. However it seems as if this has continued to fall on deaf ears; from the Press Reports on 2nd July 2021, it seems as if the principle of the Host Communities Trust Fund being funded based upon Operating Expenditure is being proposed by both houses of the National Assembly, much to the disappointment of the Region. We have heard that the House of Representatives have seen fit to increase the percentage from 2.5% to 5% for Upstream Host Communities – those who are directly impacted by the exploration and production activities of the Oil & Gas operators – whilst a percentage of 2% would be applied to communities that are host to midstream and downstream infrastructure, such as refineries and pipelines; however, we have also heard that the Senate has only seen fit to set the percentage as 3%.
The people of the Niger Delta, at all levels both at home and abroad, have expressed their great displeasure over the satanic and obnoxious allocation of a paltry percentage of Operating Expenditure to Oil Producing Communities by the National Assembly. It is important to state clearly here to all well-meaning Nigerians that the demand of the oil bearing communities of the Niger Delta Region was for a minimum of 10% equity participation. But you Mr. Senate President, the Right Honourable Speaker and some of your colleagues in the National Assembly, have further shown your disdain to the Niger Delta people by redefining host communities to include pipeline-bearing pathway communities, in which case States where pipelines pass through to aid them with the privilege of cheap supplies of Niger Delta petroleum products could also be entitled to the ridiculous and unacceptable percentages that the legislators are willing to cede to oil-bearing Communities.
The long suffering and oppressed people of the oil-bearing communities of the Niger Delta are not surprised at the news that the National Assembly finally passed the PIB, albeit the lofty dreams and vaunted expectations of over two decades of legislative dilly-dally had been dashed. This unhealthy anti-climax is a predictable end as northern Legislators combined with the dilutional efforts of IOCs to pass an unjust piece of legislation to deny our people the benefits of the resources in their region. The kernel of the Bill passed is to deny our people commensurate benefits of the resources of our region while using our natural resources to earn profits for everyone other than the Oil-Bearing Communities in the value chain and increasingly fatten the profits of IOC investors who are miles away from our communities. This also brings to mind some of the assertions by some northerners that while the land belongs to the people of the Niger Delta Region who live on it, whatever is underneath it, belongs to everyone nationally. This negates the principle “Quic quid plantatur solo, soso cedit” which means that something affixed to the land is part of the land; therefore, whoever owns that piece of land will also own the things attached to the land. That is why in Zamfara State, where gold is mined, the land belongs to the State, as does the minerals underneath it. But in the Niger Delta, the same doesn’t seem to apply; the Federal Government has maliciously laid claim to the oil minerals under the land. What double standard! Different rules and laws for different parts of the same country.
The issue of real local content, that is to say, for Niger Deltans in general and the Host Communities in particular to play a major part in the Oil Industry is something that we consider our inalienable right. In spite of assurances in the past that efforts would be made to prioritise Niger Deltan content, there is very little evidence of it happening in real terms. During the Government of the late President Umaru Yar’Adua, it was agreed that when the Federal Government divests of its equity in its JVs with the IOCs, that 10% would be given to the Host Communities; however we see no sign of any commitment to this in any of the recent versions of the Petroleum Industry Bill, or any mention of it in any other Government Bill or Policy.
As part of the Pan Niger-Delta Forum’s (PANDEF) 16 Point Agenda, we demanded inclusive participation in the Oil Industry, covering issues such as the ownership of oil blocks, marginal fields as well as the boards and personnel of parastatals and agencies such as NNPC and its subsidiaries. Sadly we are yet to see any real progress in any of these areas and the latest version of the Petroleum Industry Bill does nothing to address these issues. Instead, in spite of us as the owners of the land wanting to be real equity participants in the Oil Industry, that is to say to be owners, shareholders, directors and senior management in Local Oil Companies, International Oil Companies and Oil Contractors, the concept of Host Communities Trust Fund is being imposed upon us.
On good authority, we are aware that hours before the Bill was passed, the International Oil Companies (IOCs), convened the Nigerian co-conspirators in hotels that some of us as stakeholders monitored. And these IOCs were doing what they had done over the years to delay and deny host oil-bearing communities of the 10% minimum percentage that they had demanded.
We want to warn seriously, that the people of the Niger Delta have had enough of this colonial and oppressive mentality of our Northern brothers and friends. Today, the north controls the Oil Sector, even though day-to-day operations are being handled by the International Oil Companies (IOCs) on behalf of the Federal Government of Nigeria.
The ownership, control, marketing, maintenance, management and the accruable benefits from the operations of the IOCs are in the hands of some Northerners. Appointments to the top most positions in the Oil Companies owned by the Federal Government are in the hands of the North who have at least 25 Managerial appointments, up to the position of Group Managing Director (GMD). And only few of these positions are held by Southerners, and fewer still by the Niger Delta, the home of oil production, an area which produces over 91% of the total oil production, and who are the true owners of these God-given resources, contrary to the bogus and fraudulent claim by some uninformed persons that they own the oil because it was the revenue generated from groundnut that was used to develop the oil industry.
We emphasise that the Federal Government or the three Regional Governments, namely the Northern Region, the Western Region and the Eastern Region, did not participate in the production of oil when it was first discovered or first struck as far back as 1956, in Oloibiri, in the then Eastern Region, now part of Bayelsa State.
It will be recalled that in 2009, a member of the House of Representatives, on the floor of the House, arrogantly and provocatively demanded that our people of the Niger Delta who occupy the Oil producing areas, should be relocated by the Federal Government, in order to give free access for oil exploration. It is unimaginable how someone can think of such atrocities against fellow men. Either coincidentally or by design, the Military waged an all-out war on Gbaramatu, an Ijaw clan in Warri Division, where oil and gas are produced in large quantities. Several persons were killed, and villages and towns burnt down, including Oporoza, Okerenkoko and Kurutie, where the Nigeria Maritime University is now located.
Again, at the 2014 National Conference which was attended by 492 Delegates drawn from the entire federation, where it was earlier resolved to increase the 13% Derivation provided in Section 162 of the 1999 Constitution of the Federal Republic of Nigeria, to a minimum of 18% instead of the 25% which we demanded for, the same Northern beneficiary raised objections. In order not to truncate the Conference, a committee was set up comprising 50 of us, named “Committee of 50 Wise men”. That Committee recommended to the Conference that the matter should be referred to Mr. President to take a decision. The Conference took that recommendation.
The 13% which was entrenched in the Constitution since 1999 as the minimum percentage for derivation, has not been increased by even 1% for the past 22 years because of the oppressive nature and selfishness of those who believe that the country belongs to them, and so should be the only beneficiaries of the oil. Therefore, the status quo should remain.
We are aware of the lack luster and conservative attitude of Mr. Senate President, Dr Ahmad Lawan, who is indeed a great obstacle to the smooth running of the country, and to her unity and oneness. We wish to advise him strongly that no one can force other Nigerians to be in the so-called united Nigeria where the citizens are not equal, and where some people do not have opportunity to aspire to positions they are qualified to attain. And where Southern Nigerians who are already in Service are being replaced by Northerners, even when some of the Northerners are being called back from retirement.
At this juncture, I wish to reproduce some extracts from a letter, dated 9th September 2005; a letter I addressed to our revered former President and my friend, His Excellency, late Alhaji Shehu Shagari, in reply to a letter he wrote to me after we staged a walk-out from the National Conference in 2005, where he wanted to build bridges between the South-South and the North. In that letter, I categorized the contributions of each region to the economy of Nigeria:
Re: Bridge Building
I received with great honour, your invitation letter requesting me to attend a meeting at your suite at Hilton, Abuja, on Tuesday, 20 September 2005. Your letter is indeed a clear demonstration of your statesmanship as a nation builder. I salute you.
After due consultation with prominent leaders of the South South and some delegates to the National Political Reform Conference, NPRC, both at home and abroad, I have decided to reply to your invitation…….
…It is true that the South South delegation under my leadership, made every attempt at the conference to see that the disagreements were settled amicably in the best interest of the nation….
…On our part, we have resolved that anything short of 25% in the interim and graduating to 50% in 5 years is unacceptable to us and we have therefore decided to take our destiny in our own hands and it is also our resolve that we believe in the unity of Nigeria based on equality, justice, fair play, and equity. At this juncture, it may be necessary to brief your Excellency or restate our position when we declared at the conference that “we are going home”.
“We wish to note that in the course of deliberations throughout the Conference, we have always bent over backwards to accommodate the fears expressed by opinions contrary to ours, no matter how unfounded, all in our quest to promote unity, peace, and stability, and in our resolve to continue to be our brothers’ keeper. We came to the conference, believing it to be an opportunity to design a new federal paradigm, and to construct a viable democracy from the militarised wreckage of our well thought out federal system based on the wisdom of our founding fathers. Regrettably, that hope is forlorn. We came with mandate of our people to demand for 100% resource control. We conceded that demand to merely accepting 25% in the interim, which is being denied. Therefore, we can no longer participate in the proceedings of the conference.
We are going home,
But before leaving, we wish to restate our position for the avoidance of doubt the 1960 and 1963 constitutions of the Federal Republic of Nigeria made provisions for the Regions to retain 50% of all accruable income from their natural resources. The Regions contributed 20% to the Federal Government and 30% to the Distributed Pool. With the incursion of the military into politics in 1966, the Fedral Military Government unilaterally sliced the regional share of derivation, claiming that it needed funds to enabled it prosecute the Civil War successfully. Consequently, the derivation percentage was reduced to 45% in 1970. in 1971, soon after the Civil War, the Federal Government Introduced a dichotomy into the management of onshore/offshore oil revenue and appropriated to itself 100% from offshore earnings until 1992 when the dichotomy was abolished, only to be reintroduced in April, 2002, following the notorious Supreme Court judgment. Onshore earnings were progressively sliced to 20% in 1975, 0% (zero percent) in 1979, 2% in 1982, 1.5% in 1984. 3% in 1992. It was not until the 1994/95 Constitutional Conference that the derivation percentage was raised to 13%, the implementation of which commenced in 2001.
Apart from the above injustice from federal allocations, comparative revenue generation profile from the six zones is a demonstrative evidence of disequilibrium between contribution and allocation in which the people of the Niger Delta have been perpetual victims. The table below shows it all:
Contributions and Allocations to Zones (States and LGAs) from the Federation Account (Jan. -April, 2005)
|Zones||Amount Received by each Zone (in billions)||%Contribution||%Allocation|
Source: Federal Ministry of Finance, Abuja.
It is clear from the above data that from 1967 to date, the rights and welfare of the Niger Delta peoples have been sacrificed for the sustenance of the Nigerian Federation. A plausible case could be made for the forfeiture of revenue which would otherwise have accrued to the Niger Delta states during those war years and immediately after. Definitely, the exigencies of the Civil War should not be a permanent feature in the organization of our political economy. This is why we have been resolute in pursuing the reorganization of our fiscal federalism, the aim being to diversify our national economic base thereby facilitating speedy national development.
It is on the basis of the foregoing that:
- We maintain our irreducible minimum of 50% derivation;
- We conceded in the interim, 25% derivation with a graduated Increase to 50% over a period of five years; and……
…We wish to use this opportunity to salute all Delegates who share with us the urgent need to lay a new foundation for a viable federal political economy and democratic practice in our country. It is, however, unfortunate as it is embarrassing that some conservative and self-conceited Delegates in the Conference are determined to frustrate the laudable objectives of the Conference.
Conscious of our experience as an oppressed people within the Nigerian state, and having regard to the reckless pollution, degradation and desecration of our environment through four decades of oil and gas exploration and exploitation, we the Delegates from the South-South, irrevocably committed to the unity of a Nigeria founded on justice, equity and fair play and the pursuit of the collective welfare of our people, hereby reject any further internal colonial arrangements and declare as follows:
1. That all-natural resources found in any territory belong to the owners of that territory including the continental shelf which is a natural prolongation of the coastal states as recognized by the Independence Constitution of 1960, the Republican Constitution, 1963 and in international law;
2. Any law or policy that contradicts the above is unjust, inequitable, unfair, and unacceptable;…
…You can therefore imagine my enthusiasm for such a meeting conveyed by you that we must be cautious and careful that proper arrangement and agenda is worked by both parties for the meeting to be successful since these issues of special relationship which we laboriously canvassed at the confab did not stop or prevent the misunderstanding at the confab….
…I deeply regret and apologise for the length of my letter.
Chief Dr. E.K. Clark OFR Leader of the South-South delegation to the NPRC
N.B. A copy of this letter will be sent to all the 6 Governors of the South South zone and the delegates and other leaders of the South-South.”
Funding of the Frontier Exploration Fund
Meanwhile, an additional 30% has been awarded to the Funding of the Exploration of Frontier Basins (Frontier Exploration Fund). The newly proposed Upstream Regulator, the Commission, has a number of responsibilities with respect to what is referred to as “Frontier Basins”, especially with respect to their exploration. The proposed bill goes on to state that the Commission may request the services of the commercialised National Oil Company, NNPC Limited, to drill or test prospects and leads where no commercial entity has publicly expressed an intention to do the same. The bill puts the responsibility for the definition of frontier basins within the remit of regulation issued by the Commission and goes on to propose the establishment of a Frontier Exploration Fund as a means of funding the exploration of these Frontier Basins.
It is not clear to us where these Frontier Basins currently reside. We the people of the Niger Delta would be more than happy were all the regions of Nigeria to be oil producing; however, we must be careful to use the resources put at our disposal as judiciously as possible. Rather than using our Country’s funds to exploit its existing resources, we are using our scarce funds on exploring for oil in the North, an exercise that many industry stakeholders have described as “wasteful”, others have labelled “a wild goose chase” and “a purely political exploration”.
So the recommendation made by the Ad-Hoc Committee that the funding to the Frontier Exploration Fund, which previously had been based upon 10% of rents on Petroleum Prospecting Licenses and Petroleum Mining Leases should be augmented by an additional 30% from the newly commercialised “NNPC Limited’s profit oil and profit gas as in the production sharing, profit sharing and Risk service contracts” took us entirely by surprise. It is not clear where this recommendation came from; those of our representatives that attended the Public Hearings do not recall hearing any request for additional funding for the Frontier Exploration Fund from any industry stakeholder. Therefore we totally condemn it, not only the concept itself but also the means via which it was smuggled into the Bill.
Given the depth of ingratitude expressed and delivered after decades of exploitation and neglect of the region, the entire people of the Niger Delta region, for and on behalf of the host communities, vehemently reject the following aspects of the bill:
- The 3% and 5% of Operating Expenditure granted to the Host Communities;
- The fraudulent and provocative 30% provision for the Frontier Exploration Fund
And now demand:
- The PIB must be reversed, reviewed and amended to ensure that the Oil-Bearing Communities must now receive not less than 10% of Operating Cost.
If this is not done, the Niger Delta people may be forced to take their destiny into their own hands and all IOCs may find themselves denied access to their oil activities in such communities.
Chief (Dr) Edwin Kiagbodo Clark OFR, CON
National Leader PANDEF, National Leader South-South Region