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During a survey of the
effects of diamond mining in an aboriginal Canadian community, a survey
participant described the benefits accrued to local communities as beads
and trinkets
 when compared with the fortune made by the miner. This
sentiment is often expressed as the social damage inherent in exploration and
extraction of mineral deposits. The degradation that frequently results from
such activity, depriving locals of their right to a decent living, is just one
of the many negative impacts, environmental and otherwise, which the
communities are left to contend with. Whilst mining and the related activities
are also a feature of developed economies, the presence of responsible authorities/agencies
is what makes the difference and sets those countries apart from their
developing counterparts; when assessing benefits accruing to locals vis-à-vis
the risks to which they are exposed. 


The tragic Deepwater Horizon oil spill in
the Gulf of Mexico and the Statoil Statfjord oil spill in Norway, are mentioned
as examples of how responsible regulators respond in the wake of environmental
catastrophes occasioned by exploration and extraction activity.  Indeed
the response to the Norwegian spill has been held up as the standard in the
management of oil spillage. The swiftness of the response to that particular
spill, the thoroughness of the investigation that followed, the sanctions
imposed on the offending parties and the clean-up were all in conformity with
international best practices.

The Nigerian spillage
case(s) is not different. What is peculiar about Nigeria however is the
frequency of the spillages and more importantly, the clean-up response times.

Oil spillage is the
release of petroleum substances or products into the waters, poisoning those
waters and threatening coastal areas. The oil floats on land and on water
surfaces forming an oil slick such that no reasonable commercial activity can
then take place there. This paper seeks to review the various structures in
place in Nigeria to ameliorate the impact of spillages and the consequence of
delayed responses.

The online images of the
Niger Delta are often disheartening. The images of oil-slicked fauna, decimated
mangroves, drinking water with sheens of oil; generally a hopeless picture.
These images appear to corroborate the narrative consistently coming from these
regions on the extent of the devastation suffered. Whilst one may argue that
some of these agitations are laden with emotions, scientific data detailed in
the United Nations Environmental Programme’s (UNEP) report on Ogoniland shows
pollution levels are below acceptable international standards. A juxtaposition
of the health risk with the social damage further demonstrates that the source
of livelihood (which stands at about 70%) is lost to degradation that is often
talked about.

The Niger Delta area has
had a history of non-performing government institutions. It will be recalled
that attempts by the Nigerian Government to tackle this problem frontally
birthed, in 1961, the Niger Delta Development Board (NDDB); with the mandate to
develop the region. The Board’s activities were funded with a 15% revenue
contribution from the Federal Government. It enjoyed relative success by executing
about 358 contracts. However, that success was not to live long as it was
plagued with inefficiency, mismanagement, political interference and its
operations, hampered by militancy.

In 1972, the Niger-delta
River Basin Development Authority (RBDA) was established to replace the defunct
Niger Delta Development Board, however it was bedevilled with administrative
and political schemings. The Oil Minerals Producing Areas Development
Commission (OMPADEC) was established by the military government of General Ibrahim
Babangida pursuant to under Decree No 23 of 1992 (with emphasis on Section 2
thereof). Section 4a of the Allocation of Revenue (Federation Account)
(Amendment Act No 106 of 1992) provided that, 3% of the federation account
monies derived from mineral revenue be paid to the Commission and shall be used
for the rehabilitation and development of the oil mineral-producing areas on
the basis of the ratio of the oil produced in the particular areas, and not on
the basis of dichotomy of on-shore or off-shore oil production. Like its
predecessors, OMPADEC also failed on what was claimed to be financial sabotage
which took three different forms to wit:

a.)   Shortage
of funds to the Commission,
b.)    Manipulations
of the Commission funds;
c.)     Withholding
of its monthly allocations.

In 2000, former President
Olusegun Obasanjo submitted to the National Assembly a Bill for an Act to
provide for the repeal of the Oil Mineral Producing Areas Development
Commission Decree 23 of 1992 and this was to be replaced by the Niger Delta
Development Commission (NDDC) in 2000. Again, this did not achieve its
establishment purpose as it failed like its predecessors. There have also been
several other efforts of government (and indeed the IOCs) to address the issues
of degradation and compensation in the Niger Delta. These include: the recent
proposal of ‘Host Community Funds’ of the Petroleum Industry Bill
(PIB) as well as various bilateral contractual agreements which hitherto were
ordinarily designed to achieve relative peace in the region. Some of these
contractual agreements may include the Global Memorandum of Understanding
(GMOU) etc. Again, it is in doubt how much this has achieved.

The ultimate consequence
of the inability of various government structures to achieve relative peace in
the Niger-Delta region the continuous vandalisation of pipelines and Nigeria’s
inability to meet its OPEC quota. Kudos must however be given to President
Buhari and Vice President Yemi Osinbajo’s foresight and wisdom as relative
peace (through physical human intervention) has now returned to the Delta
region. Albert Einstein once posited that it is ‘insanity doing the same
thing and expecting a different result
’. Having engaged all the above, it
is now time to consider other more result-oriented options.

The Impact Benefit
Agreement
An Impact and Benefit
Agreement (IBA) is a formal contract outlining the impacts of a project, the
commitment and responsibilities of both parties, and how the associated
Aboriginal community will share in benefits of exploration through employment
and economic development. This, it may be argued, is a replica of the Global
Memorandum of Understanding (GMOUs) signed by the International Oil Companies
and the communities.
Although not legally
required, IBAs have evolved in part to reduce uncertainty and potential delays
in developing projects. Companies are seeking to solidify support for the
projects, while Aboriginal groups seek community support, recognition, respect,
and various economic and social advantages such as employment, investment, and
funding among other things. IBAs can help both parties achieve these goals.
Though contractual, IBAs may contain certain  regulatory element(s)
covering a holistic range of provisions by creating detailed internal structures
which helps the indigenous communities overcome marginalization and increasing
indigenous control of resources (to the extent permitted by the law) to ensure
that the benefits flow to the communities affected by degradation.

IBAs are enforceable
contractual documents through which communities can seek redress in court. This
is evident in its robust and tested dispute resolution mechanisms. In addition
to the above, IBAs limits governmental involvement and are managed by
transparent internal bodies with checks and balances. Finally, IBAs can operate
on an extremely large scale unlike the proposed ‘Host Community Funds’ and
GMOUs as seen in their use in Australia. They are also flexible enough to be
implemented with small communities without sacrificing bargaining power and
this is key due to tribal tensions that could see individual communities seek
to make agreements alone.

Tolu Aderemi is a Partner
with Perchstone & Graeys while Tolu Ogidi is currently on internship from
the University of Aberdeen, Scotland.

Photo Credit – www.perchstoneandgraeys.com