THE PIA AND OIL COMPANY DIVESTMENT WILL FURTHER IMPOVERISH THE NIGER DELTA
On the 9th of March 2022, the Health of Mother Earth Foundation and We the People invited Niger Delta communities and civil society activists to a one-day conversation on the recently approved Nigerian Petroleum Industry Act. The event which held at the Ken Saro Wiwa Centre in Port Harcourt, also provided an open space to discuss recent happenings around divestments, where the biggest oil companies in the Niger Delta are selling off their assets and going farther offshore.
In his opening presentation, Nnimmo Bassey, Executive Director of the Health of Mother Earth Foundation stated that from the start, the business of oil extraction operated as a mix of corporate greed and state backed repression. While it is important that people living in locations where investors, governments or institutions carry out projects are consulted, in the Niger Delta, this has never been the case. The free, prior and informed consent of the people have never been sought or received. These relations of production have remained largely the same from pre-colonial to colonial and present neo-colonial times.
Even in decisions regarding investments, development, or even infrastructural projects, there is wilful neglect and refusal to consult or engage the people in decision making processes. Projects are often thrown at communities even when they are not the priority needs of the people. Little wonder that the projects get abandoned during construction or are left to rot after completion.
All efforts to placate and assuage the massive harms inflicted on the Niger Delta has been carried out through various means including oil company driven Memoranda of Understanding with communities, and various government interventions through agencies such as Niger Delta Development Board (NDDB) established in 1961, the Niger Delta Basin and Rural Development Authority (NDBRDA) established in 1976, the Oil Mineral Producing Areas Development Commission (OMPADEC) established in 1992, the Petroleum Trust Fund (PTF) in 1995, Niger Delta Development Commission (NDDC) established in 2000 and the Ministry of Niger Delta Affairs created in 2008. These bandages have only sought to cover up festering wounds, without dealing with the fundamental ailments that over six decades of disastrous exploitation has wrought. And they have mostly failed.
With over 1,481 wells, 275 flow stations, over 7,000 kilometres length of oil/gas pipelines and over 120 gas flare furnaces, the Niger Delta is an ecological bomb and one of the most polluted places in the world. Nnimmo Bassey called on the people of the region to rise and demand ecological justice.
In his presentation, Ken Henshaw of We the People reflected on Nigeria’s Petroleum Industry Act and the new frenzied divestment moves by oil companies. According to him, while the PIA establishes a Host Communities development framework to transfer benefits to communities, it doesn’t however allow communities any decent participation in managing the fund, or even determining who runs the trust. Oil companies are given overriding powers to manage the 3% of operational costs contributed to the trust in any manner they deem appropriate; as well as determine which communities qualify to be ‘hosts’. Similarly, the managers of the funds are not even required by the PIA to be from the host communities.
In an outrageous demonstration of the criminalization of communities, the PIA says;
“Where in any year, an act of vandalism, sabotage or other civil unrest occurs that causes damage to petroleum and designated facilities or disrupts production activities within the host community, the community shall forfeit its entitlement to the extent of the cost of repairs of the damage that resulted from the activity with respect to the provisions of this Act within that financial year”
This provision stems directly from the erroneous view which has been peddled by oil companies that communities are responsible for sabotage on pipelines and oil theft. However, these view has been debunked by the NNPC and even the United Nations Environment Programme. Both blame equipment failure for majority of spills. Criminalizing oil producing communities in this regard is unfortunate and a smokescreen to shield oil companies from responsibility for the ongoing ecocide in the region. This provision will most likely result in consistent denial of benefits which would in turn engender regular conflicts.
On gas flaring, while the PIA makes it illegal, it nonetheless creates a series of exemptions which ensures that the same gas flare regime continues literarily unchecked, and empowers the government to give licenses to oil companies to flare. The PIA also does not state a definite date for ending gas flaring. Given the health and environmental challenges associated with gas flaring, this is an unfortunately onslaught on the ecology and health of the people of the region.
Surprisingly, fines for gas flaring will not directly benefit communities that suffer the impacts. While sections 52 and 104 says that fines for flaring will be used for environmental and health remediation, it prescribes that such payments be made not to the host communities, but to an agency it establishes called the Midstream and Downstream Gas Infrastructure Fund. In actual fact, this Agency has no mandate or function related to environmental remediation. Evidently, the Act considers gas flaring a waste of economic resources which should be paid for, and not an abuse which is impacting the climate, the health and livelihoods of communities.
One of the key issues in the PIA is the framework for the utilization 30% of NNPC profits for oil exploration in so-called frontier basins. While the Act expects the NNPC to become a profit-making enterprise, it already dedicates a hefty chunk of its expected profit into the search for additional crude oil. The fact that public resources have to be spent in this effort is indicative that oil companies around the world do not consider this a worthwhile investment. Rather than spend so much of the expected profits of NNPC on exploring for oil in unlikely places, we reckon that the government considers investing the same percentage of NNPC profits in generating clean and affordable energy for Nigerians, or even supporting an environmental remediation fund aimed at remediating years of pollution, livelihood loses and health impacts of oil extraction.
Sadly, it is noteworthy that the entire PIA expresses no intention for moving Nigerian away from dependence on fossils. At a time when the world is moving away from crude oil, the PIA plans to make more investments in that regard. This indicates that the government is not keeping in tandem with global trends and unperturbed by concerns of global warming and climate change. Ironically, Nigeria is emerging as one of the most impacted countries globally by the effects of climate change. The shrunken Lake Chad, increased desertification and the regular floods around the Atlantic coast are ready evidences. That the PIA pays no heed to issues of climate change, despite Nigeria’s NDCs, and aims to plunge the country further into fossil extraction is a major source of concern.
The meeting also expressed concern over the emerging shifts from oil and the fate of oil producing communities.
After over 70 years of oil extraction and the devastating impacts it has had on oil producing communities, there are indications that the most complicit oil companies are leaving. And new pressures are emerging from their divestment. The biggest multinational player in Nigeria’s oil and gas sector, and also the most culpable in several years of oil pollution and rights abuses, Shell plans to divest its entire Nigeria joint venture portfolio and make a ‘clean break from Niger Delta assets’. In 2022, Nigerian independent oil and gas company, Seplat Energy Plc informed the public through a statement that it had acquired ExxonMobil’s Nigerian shallow water business.
As companies divest, local players take over oil assets and immediately deny responsibility for historical damages. For oil producing and impacted communities, divestment means more remote possibilities of holding corporations accountable for pollution, as well as fewer economic opportunities for communities. As companies divest, the Nigerian government keeps failing to establishing frameworks or policies for addressing community concerns. According to the head of NNPC, ‘will ensure that Nigeria’s National strategic interest is safeguarded, by developing a Comprehensive Divestment Policy’. No such plan has been put in place.
For the ecologically devastated communities of the Niger Delta, no hurried divestment by transnational oil companies will be tolerated without restoration of their environment and livelihoods. For them, the definition of just transition has to include repairing the damage occasioned by oil pollution, an audit of the health of the people and a plan to respond to the threats posed by climate change. A just transition must also provide justice for the countless victims of oil company inspired and state sanctioned abuses, and reparations to the people of the Niger Delta for decades of expropriation. Anything short of these is injustice.