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Urhobo Historical Society |
EXECUTIVE SUMMARY AND RECOMMENDATIONS
A potent cocktail of poverty, crime and corruption is fuelling a militant threat to Nigeria’s reliability as a major oil producer. Since January 2006, fighters from a new group, the Movement for the Emancipation of the Niger Delta (MEND), have fought with government forces, sabotaged oil installations, taken foreign oil workers hostage and carried out two lethal car bombings. MEND demands the government withdraw troops, release imprisoned ethnic leaders and grant oil revenue concessions to Delta groups. The Nigerian government needs to forge far-reaching reforms to administration and its approach to revenue sharing, the oil companies to involve credible, community-based organisations in their development efforts and Western governments to pay immediate attention to improving their own development aid.
The root causes of the Delta insurgency are well known. Violence, underdevelopment, environmental damage and failure to establish credible state and local government institutions have contributed to mounting public frustration at the slow pace of change under the country’s nascent democracy, which is dogged by endemic corruption and misadministration inherited from its military predecessors. Nigeria had estimated oil export revenues of $45 billion in 2005 but the slow pace of systemic reforms and the lack of jobs, electricity, water, schools and clinics in large parts of the Delta have boosted support to insurgents such as MEND. Militants appeal to the kind of public disaffection that prompted ethnic Ogoni leader Ken Saro-Wiwa to protest the military-led government and Royal Dutch/Shell before his execution in November 1995.
A decade later, the potential consequences of this conflict have escalated in both human and economic terms across a swathe of territory 30 times the size of Ogoniland. Nigerian and international military experts have recognised that the crisis requires a negotiated political resolution. Any attempt at a military solution would be disastrous for residents and risky for the oil industry. Most facilities are in the maze of creeks and rivers that are particularly vulnerable to raids by well-armed militants with intimate knowledge of the terrain. But inaction risks escalating and entrenching the conflict at a time when tensions are already rising in advance of the 2007 national elections.
MEND increasingly serves as an umbrella organisation for a loose affiliation of rebel groups in the Delta. It has not revealed the identity of its leaders or the source of its funds but its actions demonstrate that it is better armed and organised than previous militant groups. Observers warn that a worst-case scenario could lead to a one to two-year shutdown of the oil industry in the Delta, where most of Nigeria’s 2.3 million daily barrels of crude oil originate.
Illegal oil “bunkering” – theft – has accelerated the conflict and provided militant and criminal groups with funds to purchase arms. Another source of funding are the discreet payments oil companies make to militant leaders in return for “surveillance” and protection of pipelines and other infrastructure. This practice, frequently cloaked as community development, has fueled conflict through competition for contracts and by providing income to groups with violent agendas. Oil companies also pay allowances, perks – and sometimes salaries – to “supernumerary police”, as well as regular duty police and soldiers deployed to protect oil installations. Security forces consider these plum postings and are alleged to use excessive force to protect company facilities and their jobs.
President Olusegun Obasanjo’s government has begun important reforms but these must be deepened if peace is to succeed. Yet, his government has downplayed the seriousness of the insurgency. Senior officials have dismissed the militants as “mere” criminals and defended security crackdowns that have embittered locals, making it easier for armed groups such as MEND to gain new recruits. In an effort to deflect growing public impatience, government officials have demanded oil companies spend ever larger amounts on community projects. Oil industry officials counter that, after taxes and royalties, the federal government collects the vast majority of earnings on a sliding scale – 90 per cent of industry profits when oil prices are above $60. The companies rightly place the primary responsibility for political solutions to the crisis – including increased development – on the government but they also chafe at the suggestion that their own development strategies have failed.
Transparent and participatory development schemes can foster hope and accountability in Delta communities. Development efforts led by the European Commission and Pro-Natura International provide models for an approach that could reverse the cycle of poverty and violence – but only if their scale is significantly broadened to include a wide range of groups in oil producing areas. Government must also tackle corruption by making development initiatives more transparent. Otherwise, even dramatic increases in spending will be wasted.
RECOMMENDATIONS
To Nigeria’s Federal Government:
1. Initiate a credible, sustained dialogue on control of resources with Niger Delta civil society groups, including militants, activist leaders, religious leaders, women and youth drawn from nominees submitted by councils of ethnic groups in the Niger Delta states.
2. Institute while this dialogue is proceeding a derivation formula of between 25 and 50 per cent of mineral resources, including oil and gas, to all Nigerian states, and phase this in over five years in order to avoid budgetary shock to non-oil producing states and to encourage exploration and production of other mineral resources throughout Nigeria.
3. Amend or repeal the 1978 Land Use Act to expand the opportunity for communities to seek compensation for land through legal means and to allow a more transparent adjudication process of potential land seizures.
4. Seek in parallel with the dialogue on control of resources an agreement with militants that includes a phased withdrawal of troops from Delta towns, concurrent with a weapons-return amnesty program that pays militants and gang members market rates for guns and enrols them in skills and job training and that pays attention as well to the needs of girls and women who may not carry guns but have roles within those bodies (such as forced wives or cooks).
5. Bring the increasing number of quasi-independent local government institutions formally into federal structures as part of an effort to rationalise local governments in Niger Delta states, particularly in areas where these are unworkably large or combine substantively distinct ethnicities or communities.
6. Ensure that security force personnel are paid on time and in full in order to help prevent dependency on oil company payments and illicit and corrupt practices; increase enforcement of penalties for corruption and consider raising salaries; clarify the chain of command; and change the uniform of the “supernumerary police” that provide security services for the energy companies.
7. Refashion the government/transnational oil company joint ventures that control production to offer residents a substantial ownership stake along the lines of what corporate majors including Royal/Dutch Shell, ExxonMobil and Conoco have done in Canada’s Arctic.
To the State Governments:
8. Engage more fully with professional, non-governmental organisations that demonstrate a capability and willingness to assist communities to take responsibility for their own development.
9. Accelerate steps to implement poverty reduction strategies outlined in State Economic Empowerment and Development Strategies (SEEDS) that have been developed in conjunction with Nigeria’s national umbrella anti-poverty strategy, NEEDS.
10. Make budget details publicly available and respond to queries about specific spending patterns and projects.
To the Energy Companies:
11. Improve measures to ensure transparency of contracts and other community payments, including for surveillance, development projects and compensation for land use and pollution, and in particular:
(a) honour company commitments and ensure that payments are made in full, by bank transfer – not in cash – to the intended recipients;
(b) conclude agreements wherever possible that provide for individuals and local communities to be compensated for land use and pollution; and
(c) seek independent mediation or arbitration when agreements are in dispute.
12. Prioritise long-term ability to operate in Nigeria over short-term production goals and seek community assent before proceeding with production-related projects.
13. Develop partnerships with non-governmental, community-based bodies with a demonstrated ability to provide skills training and capacity building for development projects, including women’s and religious groups that have played significant roles in mediating among various ethnic groups and actors in the past decade.
To the U.S., the EU and EU Member States with major oil interests in Nigeria (the UK, France and Italy):
14. Press the Nigerian government to institute resource-control reforms and negotiate in good faith with Niger Delta groups, and encourage oil companies headquartered in their countries to be transparent about revenue and payments.
15. Condition assistance to the government upon greater transparency in federal and state budgets, particularly with regard to energy revenues.
16. Lobby China and India to sign the Extractive Industries Transparency Initiative.
To the United Nations and the wider International Community:
17. Offer the good offices of a neutral country without oil interests in Nigeria to mediate between the federal government and Delta groups, an idea already accepted in principle by MEND.
18. Consider delaying or postponing cooperation with state governments that have a poor record for delivering public services or controlling graft, and do not work with government or party officials who provide weapons or funding to armed groups for political purposes.
Dakar/Brussels, 3 August 2006