PIB: retain 10% host communities’ equity participation – Prof Okoro

Prof. Emmanuel O. Okoro, University of Ilorin

Prof. Emmanuel O. Okoro

To start with I have a personal interest in the development of the Niger-Delta area for a number of reasons. First, I am by birth from the Niger-Delta area, being Ijaw from Delta state, whose clan also extends to Bayelsa State.

Second, I have witnessed the systematic destruction of the rich ecosystem which   supported life so abundantly in the 1960s and 1970s in the Niger Delta coastal areas.

It stands to reason that the decline in environmental health of the area is not unconnected with increased human activities, especially those that have to do with oil/gas exploration, which is also crippling the traditional economy of the people.

There is little doubt the region also receives more share per capita of federally collected revenue that accrues from these extractive activities compared to other regions. But this increased revenue is also chasing fewer and fewer goods/services especially locally produced ones. As a consequence, price levels of basic goods and services are frequently higher than what people elsewhere in the country pay for the same goods/services.

In the end, this factor undermines local purchasing power and erodes the living standard that ordinary citizens in the area are used to.

Third, Soky Amachree, PhD (Engineering) and I worked with the administration of the Late President Umaru Musa Yar’Ardua. We were members of the Niger-Delta and Regional Development Technical Committee of Vision 2020, where the notion of 10% equity participation of host community originated as a minority report by the two of us.

The 50-page document was widely circulated, eventually reaching top government officials and other key stakeholders in the process; and in a rather pleasant twist of faith, the then President and Commander-in-Chief swiftly acted on it.

The document also contained other initiatives which we believed could fast track the development of the Niger Delta through quick wins.

The prevailing sentiments then were that government was keen to rapidly develop the region to stem the armed struggle by militants for a greater share of oil/gas revenues. More importantly, many of the initiatives/programmes in the document were such that if successfully implemented, would have also benefited other parts of the country.

As a matter of fact, the successor administration financed a fine-tuning of the initiatives to make them rapidly implementable and indeed, undertook a road show to attract local and International Community buy-ins.

Unfortunately, upon the death of the late Yar’Adua, the momentum gradually faded and nothing was subsequently heard of most of the projects until a few weeks to the end of that administration after the 2015 Presidential elections.

One example, will illustrate this point better.

Difficult to access terrain:

The coastal areas in the Niger-Delta are generally difficult to access quickly and this contributes to so many unnecessary deaths especially during medical emergencies as oftentimes, such mortalities are from otherwise preventable and treatable conditions.

Not only that, healthcare services to such remote areas can be irregular and often depend on outreach programmes by volunteers or government agencies like the Niger-Delta Development Commission-NDDC.

NDDC4This reality begs the question of how the communities survive during the rest of the year, particularly in emergency situations where people are in dire need of medical services.

This need informed our modification of one health care model which had been clinically tried out and successful in a teaching hospital in another part of the country, with a small grant from the UK government.

The model puts power in the hands of local people and utilizes mainly infrastructure and resources already available.

It is implementable even by local governments or one or more federally funded intervention agencies dedicated to developing the area, going by their funding levels at the time in 2008/2009.

Surprisingly, despite assurances of rapid implementation, for nearly six years following President Yar’Adua’s death, nothing was ever heard of it.

To be fair, physically developing coastal/swampy areas can cost more due to the shifting nature of the terrain. It is also equally true that the region receives more allocation per capita from the federation account than other regions, courtesy of the 13% derivation and federally funded intervention agencies like the NDDC and the Ministry of Niger-Delta Affairs-MND, etc.

It is important to note that physical structures which work best upland need not be the same to deliver the same benefits in coastal areas. For example, modernizing indigenous technology that the local people are familiar with in house construction and already in practice, to some extent can deliver superior benefits for less.

Commitment gaps:

Given this background, some could say that the real issues holding back the pace of development in the Niger-Delta may have less to do with funding than leadership and commitment.

Politicians and others in leadership positions in and from the area have not always demonstrated through their actions, the capacity to think beyond self and prioritize resources to make life better for their own people.

The truth of the matter is that increased revenue from oil/gas has clearly failed the majority in the region.

Details now emanating from various ongoing-probes about resource misapplication, underpins the lie in the notion that the Niger-Delta is not developing like other parts of the country because of marginalization and unfair share of federal revenue accruing from oil/gas.

Specifically, the fact is that there is little evidence that existing arrangements for spending oil/gas revenue accruing to the region have benefited ordinary people.

Alternative approach:

Consequently, it is not unreasonable to contemplate another approach that could maximize benefits to communities at the epicenter of the adverse impact of oil/gas exploration.

In this regard, expanding existing joint venture arrangements between the Federal Government and oil companies to accommodate the interests of host communities in which they share in profits after cost recovery,  seems plausible.

At the time the initiative evolved in 2008, daily crude production had plummeted from nearly 2.5 million barrels (bpd) to barely 700,000 bpd due to sabotage, vandalism, kidnappings and other criminal activities associated with militancy in the Niger-Delta area.

Even with the Amnesty programme, reports of these activities have continued with implications on the economy.

It is common knowledge that regardless of public posturing, many from the area who feel excluded from the economic benefits of extractive activities in their home land and are left to bear its ugly consequences may perceive such criminalities as self- help.

One is inclined to postulate that if local people have a stake in the industry, based on the volume of crude production, it should naturally be in their best interest to ensure that oil flows unhindered in a way that would also maximally benefit the wider federation through higher product volume and increased revenue. This is natural human behavior.

The idea, though fiercely opposed initially by those who thought of it mainly in terms of a zero-sum option, which it is not; eventually prevailed where it mattered most. Some had argued that 10% equity participation to host communities would amount to giving too much to the region and short change others in a zero-sum manner.

As a compromise, federally funded intervention agencies/programmes such as the NDDC and MND could be scaled down and eventually scrapped given the perception that they have merely served as conduits for elitist greed and aggrandizement, with little to show in terms of performance.

In any case, the constitutional provision on derivation recognizes a minimum of 13%, which means there is room for upward adjustments, given the quantum of continuing environmental damage and the need to create alternatives to the region’s traditional economy.

Petroleum Industry Bill:

It has to be said that the late Yar’Adua through decisive actions, demonstrated an uncommon sense of justice and a deep intellectual understanding of the major drivers of the crisis in the region.

Indeed the initiative was probably one among several other options available to his administration in dealing with the Niger-Delta crisis but he embraced this one and quickly acted on it, sending it forth to the 6th National Assembly for passage into law.

In light of the undue delay associated with the passage of the Petroleum Industry Bill into law and the intense diverse interests in the bill, as well as the emergence of new realities, some have called for a reworking of the proposed bill.

The move though good, may however, end up giving the bill an intent that is totally different from the one sponsored by that administration, in so far as host communities are concerned.

This notwithstanding, reconfiguring the bill in alignment with new realities that can optimize   benefits to Nigeria including the Niger Delta area, is not a move that can be faulted.

For example; one type of reworking proposed which appeared in the Guardian Newspaper’s edition of Friday, 6 November 2015, canvassed the retention of the clause on “giving something back to communities where oil is produced.”

Another one which suggests a whittling down of the omnibus powers of the Minister of Petroleum Resources as such over-arching powers could be abused given our national antecedents, are welcome.

Many fair-minded persons are unlikely to see such adjustments as inimical to national interest and industrial growth. Therefore, it would seem in the overall interest of Nigeria and key stakeholders that this clause is retained in the Bill when it is eventually passed.

New vista:

Co-incidentally, the present administration also headed by another Nigerian of Katsina State extraction, has given early notice of its capacity to do things differently in a way that can make a positive difference.

This is evident in the genuine efforts to begin implementation of the UN report on cleaning up the Niger-Delta starting from Ogoni land; and the resuscitation of the PIB are reasons for cautious optimism. But it is morning yet on creation day.

For all true champions of equity, this is a very right thing to do and it is fair. The same idea can be extended to other extractive industries including solid minerals and other natural resources. It can undoubtedly be an effective way of ensuring peace anchored on justice in any community where any type of mineral is being exploited.

To be sure, other regions including the far North, are also blessed with various minerals including oil/gas and will be beneficiaries of this clause; if not now, in the not too distant future.

Prudent monitoring:

Some may believe it is better to channel the 10% equity profits into a dedicated account for driving developmental projects in host communities but operated mainly by those alien to the community and in positions of power.

In this regard, it requires restating that this is how the 13% oil/gas revenue allocated to States and the various oil producing communities currently operates, with little or nothing to show for prudent management and monitoring of the revenues after all these years.

As a matter of observation, this notion in itself carries a patronizing undertone of inadequate agency in local people to know what is best for them. It is much like the sort of paternalism that drives foreign aids to black Africa, which has yet to make a dent in real terms for those the monies were meant to benefit in the first place.

Having said this, it has to be admitted that some justification exists for this fear, particularly with the less than honorable conduct of some “leaders” who have demonstrated little or no qualms in undermining the interests of their own people for narrow gains.

It is this fact that leads one to advocate prudent monitoring of the implementation of this clause in the Bill when it becomes law.

Fortunately, enough is known of the science of human behavior that can be leveraged upon to design effective plan of actions to minimize the risk of this occurring. Furthermore, the ongoing anti-corruption drive must necessarily be sustained and successful in securing high profile convictions with stiff penalties, to deter others inclined to abuse positions of public trust to undermine the common good.

Overall, it makes for realistic thinking and common sense to retain this clause and put host communities in charge of decisions/processes that drive their development.

Emmanuel Obi Okoro is a Professor of Medicine at University of Ilorin, Kwara State, Nigeria.