...and what hope for the hapless people of Niger Delta?
In this pieceVanguard Politics examines the influence of high international oil price, which hits 50 dollars per barrel, in motivating the 19 governors of north and two southwest governors to approach the Supreme Court to reopen the issue of onshore/offshore dichotomy. This matter already adjudicated by the apex court two years ago, which ruled against some of the political measures taken by the administration may have encouraged the governors to seek a repeal and thus a re-introduction of the oil dichotomy in sharing of federal revenue.
Since the court action started on the 6th of August tension has increased, and it is uncertain what turn events will take in the coming weeks. From the littoral states it has been outrage and a sense of frustration. The language of the people have began to harden which portends danger of a return to the trenches in the region. Can the nation afford another round of bloodletting, sabotage, and kidnapping? This piece discusses the implications of the coming anarchy.
Like the abiku child, who died and buried only to be given birth to again to torment the parents with his circle of agony, the onshore/offshore oil dichotomy controversy has become Nigeria’s abiku child. Since Late Justice Minister Chief Bola Ige went to the Supreme Court in 2001 to seek interpretation of what constitutes the seaward boundary of littoral states within the Federal Republic of Nigeria, for the purpose of calculating the amount of revenue accruing to the Federation Account directly from any natural resources, the matter has been one of the most debated in the life of the present republic.
The onshore/off shore dichotomy ranks perhaps, aside from the clamour for a sovereign national conference, the most divisive and the most misunderstood phrase. The Federal Government court initiative in 2001 was to stave-off burgeoning standoff between it and some states of the south-south over the latter’s successful campaign for resource control. It was a move calculated to put the littoral states in a strait jacket, and stall further success in the campaign for resource control.
Chief Ige, represented by Chief Rotimi Williams, in the main statement of claims averred: “The plaintiff states that in the context of section 162(2) of the Constitution the expression “principle of derivation” means the principle that revenue accruing to the Federal Account from any natural resources shall be deemed to have been derived from the state or territory where such resources are located.
The plaintiff further states that the proviso to section 162(1) of the Constitution requires that any approved formula for revenue allocation from the Federation Account shall reflect the fact that not less than 13% of revenue accruing to the said Federal Account from any natural resources are allocated to the government of the state or territory where such resources are located. By reason of the facts pleaded in paragraphs 5,6 and 7, of this statement of claim, the plaintiff states that for the purpose of calculating the amount of revenue accruing to the Federation Account directly from any state or territory pursuant to the proviso to section 162 of the Constitution.
The natural resources located within the boundaries of any state are deemed to be derived from that state; in the case of the littoral states comprised in the Federal Republic of Nigeria (i.e. the states of Akwa-Ibom, Bayelsa, Cross River, Delta, Lagos, Ogun, Ondo and Rivers) the seaward boundary of each of the said states is the low water mark of the land surface therefore or (if the case so requires) the seaward limits of inland waters within the territorial waters of Nigeria and the Federal Capital Territory are deemed to be derived from the federation and not from any state.
The natural resources located within the Exclusive Economic Zone and the Continental Shelf of Nigeria are subject to the provisions of any treaty or other written agreements between Nigeria and any neighbouring littoral foreign state, derived from the federation and not from any state.”
But in their counter claims the seven littoral states of Akwa Ibom, Bayelsa, Cross River, Delta, Edo, Ogun, Ondo, and Rivers disputed the averment of the Federal Government of Nigeria maintaining their position that the natural resources located off shore ought to be treated or regarded as located within their respective states.
The action of the Federal Government sparked off a fire storm of protests, especially from the affected littoral states that correctly saw themselves as the main target of the lawsuit. Specifically, Governor Victor Attah of Akwa Ibom State, a man whose people voted massively for the ruling Peoples Democratic Party, PDP, made it known that the Federal Government’s case, which ever way it was couched, was a deliberate attempt to pay his people back in bad fate.
His contention was that since the Ibrahim Badamasi Babangida administration abrogated the dichotomy arrangement via a decree, it was not necessary for the Federal Government to attempt to re-introduce same through a court process.
Because Ige was a southwesterner, people recalled that it was Chief Obafemi Awolowo, a Yoruba who through decree 9 of 1971 introduced onshore and offshore dichotomy for the first time. And it did not matter then that listed as defendants were the 36 states.
Some commentators from the littoral states of South-south could not understood what agenda Ige was pushing especially coming from his background in politics of progressivism and support for fiscal federalism.
The confusion in this matter was not helped by the fact that Osun State under Chief Bisi Akande, an AD governor, was the only southwest state that openly supported the Federal Government court action, which again points to the fact that the politics played in Nigeria is not of principle but one of sentiments - and blind one at that.
With the ambiguous position of Ige not clarified adequately, commentators recalled with nostalgia the decision of former military President Ibrahim Babangida, who abolished the oil dichotomy with decree 106 of 1992 , which then pegged derivation at 1%. Under General Sani Abacha junta, another northerner, the constitutional conference he setup in 1995 recommended 13% derivation for states.
Thus, the conclusion then in some people’s view was that while the north was favourably inclined to allow for adequate compensation to areas producing mineral resources, some states in the south west have somehow worked to undo this - and there was ( and is) no basis to fault this reasoning, even if it did not represent the true position.
While the matter was being argued in court, some perceptive observers like Senator Udo Udoma had warned in 2001, that the solution to the problem would not come from the courts, but through political dialogue. Indeed, Udoma’s warning was to become a reality because the Supreme Court judgement on April 5th 2002 had been the most contentious.
The Court after its careful consideration of the claims and reliefs sought before it ruled thus: “That the seaward boundary of a littoral state for the purpose of calculating the amount of revenue accruing to the Federation Account directly from any natural resources derived from that state is the low-water mark of its land surface or the seaward limits of inland waters within the state as in Cross River State with an archipelago of islands; the contentions of the littoral states that their boundaries extend to the exclusive economic zone or the continental shelf of Nigeria is rejected; there is no provision anywhere in the 1999 Constitution which makes it possible for revenue derived from the continental shelf contiguous to a region to be payable to that region; that the Federal Capital Territory is not a state or a local government in a state. It, therefore, cannot qualify for distribution of the Federation Account; that the exclusion by the Federal Government of natural gas as constituent of derivation is unconstitutional.
Similarly, so is funding of the judiciary as a first line charge on the Federation Account as well as servicing of external debts as first line on the Federation Account; that it is equally unconstitutional and against the grain of the 1999 Constitution for the Federal Government to refuse payment of the shares of Delta State in respect of proceeds from capital gains taxation and stamp duties; that the funding of joint venture contracts and the Nigerian National Petroleum Corporation (NNPC) priority projects as first line charge on the federation account is unconstitutional.”
Just like the federal court action provoked a country wide controversy the judgement of the Supreme Court rather than calm the situation, ended up satisfying no one in the littoral states, even though there were a number of land mark decisions contained in that judgement.
Prof Itse Sagay, a leading authority in maritime law was unsparing in denouncing the Supreme Court decision. His position was that the apex court misdirected itself. “The Supreme Court misdirected itself in so many areas. It was concentrating on common law, but common law has nothing to do with it. It was concentrating on maritime law, but maritime law has nothing to do with it. It was talking about shore line, low water mark, all these have nothing to do with it.
The court did not seem to appreciate that maritime territory is territory; the fact that once you leave actual land, the state does not have land anymore, is not correct. Under international law there is land territory, and maritime territory, and the closest to maritime territory is the land territory, and that is the continental shelf.
The continental shelf as you know is the sea bed and sub-soil, that adjoins the coast, which is hard soil too, but happens to be covered by water. If you look at the law of the sea conference of 1982, Section 72, it is very clear. That coastal states have sovereignty over its continental shelf. And it goes on to describe the continental shelf as a natural prolongation of the land of the coastal states.”
Itse Sagay’s well articulated critique of the Supreme Court judgement was to frame public debate. It perhaps also influenced the urgency of the federal government and the national political leadership to examine ways out of what was becoming a log jam. Because as matters stood, the federal government might have gained some leverage over the littoral states, but it increasingly became alienated from public support. And with election around the corner in 2003, the president was being made to look like he was anti-south-south. To correct the flaws in the strict interpretation of the apex court ruling , which had already caused causalities in states like Akwa Ibom, whose federal allocation declined to negative index, chieftains of the ruling PDP and other officials of the federal government began talking about a political solution.
Prof Sagay’s review of further implications of the court’s decision held that: “If you look at the decision, a case has been made for true federalism. And to have a situation where the continental shelf is said to be owned by the federal government is a contradiction of true federalism. We now have a basis for re-negotiation to re-install that provision of a continental shelf. And we have a basis for the convening of a national conference. All this show that we were entitled to true federalism, but we do not have it, in spirit and in fact. And there is a need to sit around a table and discuss it and come to a new agreement as to the basis of our co-existence.”
Two issues stood out from Sagay’s prescription: That of a national conference and the correct interpretation of the continental shelf. Since those comments were made not much had happened either in the direction of a national conference, or in the correct interpretation of the continental shelf. On the matter of national conference the president has never hidden his opposition to the convocation of such a conference.
Yet, with the country split round the middle a conference in some commentators view is what is needed. Indeed, Obasanjo’s political solution committee headed by Chief Tony Anineh, observed in the report it submitted to government that there was an urgent need to have a constitutional amendment as a permanent solution to the problem of oil dichotomy. So far there has been no constitutional amendment, and this in large part has paved the way for the governors to re-institute a court action.
The fresh law suits make no pretense about its intention, which is to stop the federal government from implementing the new revenue allocation formula, that would come into effect following the abrogation of the oil dichotomy. The fresh claims say: “If the Act is implemented, it will impact negatively on the amount that will accrue to the Federation Account and this will in turn reduce the sharable revenue due to them.” The governors amongst other reliefs sought are asking the apex court to make “an order setting aside, annulling and make void the said Revenue Allocation (Abolition of Dichotomy in the Application of the Principle of Derivation) Act 2004.
With international oil prices hitting record highs the governors involved in this court action have their sights firmly fixed on preventing the littoral states from deriving any such benefits - to their own detriment. This is so because even though the revenue commission is yet to determine the proper demarcation of the seaward boundary of the continental shelf , or the so-called 200 metre depth isobath for the purpose of calculating the 13% derivation, when eventually it happens, the littoral states would also certainly earn more revenue.
At the present time N37 billion is reportedly accumulated in the escrow account of the offshore derivation. A further possibility of huge revenue accruing to littoral states appears to be making some governors uncomfortable, and as such it seems there has to be found some ways to stop this happening. And because the constitution has never been amended in line with the thinking of Anenih’s committee, or the far reaching proposition of Sagay on setting up a national conference to look at the structure of Nigeria, the governors who are in court appear to have found sufficient legal cover to stop the littoral states from getting much more than them.
Now the annoyance this is building has forced some leaders from the south-south to warn of dire consequences if the court action proceeds. Thus, if in this heated atmosphere they carry through their threat of shutting down oil and gas pipelines, it is a cinch that the federal government will react with heavy hand, and if that happens a spiral of instability would be installed again. According to Chief Gamaliel Onosode, a leader from the Niger Delta, “It will be unwise to reopen at this point in time issues concerning the onshore/offshore abrogation, because in fact larger issues of resource control have not really be resolved.
While I am not competent to comment on the judgement of the Supreme Court on this matter, I want to add that even if a strict interpretation of the constitution provides ground to challenge the decision abrogating the dichotomy, I still do not think it is in the best interest of this nation to reopen this matter. I caution against this action, particularly when reopening it is done outside the structures of a national conference.
I do not believe the action being taken is in the interest of those promoting it, nor in the interest of the nation as a whole. I appreciate the arguments of some people about some aspects of the constitution, but it must be understood that many of us are just coasting along with this constitution which opens with a big lie, that says ‘we the people’, when in actual fact the document was imposed.” Even in his analysis Onosode might appear restrained , but the same cannot be said of other leaders from the zone who have not disguised their disgust and are spoiling for a show down.
