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Battle of the oil Czars
The Abrogation of the Onshore/Offshore Dichotomy Act 2004 is raising fresh dust. MUSA SIMON REEF, JOHN ALECHENU and STANLEY YAKUBU write.
The recourse of the 19 governors of Northern states and three South-West states to the Supreme Court for a legal interpretation of the Onshore/Offshore Abrogation Act 2004 has raised fresh questions on how the country�s revenue from oil should be shared. At least, there is a sum of N37.9 billion currently in the escrow account for the 13% derivation to be shared by the littoral states, and this is causing disquiet.
Since the signing of the Onshore/Offshore Abrogation Act by President Olusegun Obasanjo, oil producing states in the Niger Delta region have received huge monthly allocations, the sum of N5 billion on the average, while nothern and some South-West states, which are not oil-producing states are allocated, on the average, the sum of N2 billion. When their external debts are deducted from the relatively paltry sum, the states contending the lopsided allocations return to their huge expenditure with an average sum of N1.5 billion.
The attempt to challenge the Abrogation Act did not just begin with the submission at the Supreme Court. It had been on, a source told Sunday Punch. The reasoning among the Northern states governors and some other states in the South-West was that since no special funds was allocated to them for their production of solid minerals, it was an act of illegality to allow such allocations to oil-producing states, simply because the product is Nigeria�s major foreign exchange earners.
In a chat with Sunday Punch in Dutse, the Special Adviser to Jigawa State Governor on Media, Alhaji Amuni Sule Sankara, said it would not be in the interest of the country for oil-producing states to insist on taking everything for themselves instead of thinking of the over all interest of the country.
According to him, �We must all remember that there was a time in this country that people of other parts of the country, like we in the North and the people of the South-West, were the highest revenue earners for the country because of our agricultural produce. The money from the sales of these products were used for the exploration of oil and the construction of refineries so what is the matter today?�
He reasoned that land mass and population should not be discarded in computing what each state should get because: �more people means more amenities to provide. We need to build more roads, schools and hospitals. I don�t think the people of Nigeria, especially we in the North, are asking for too much�.
But Comrade Joseph Eva, of Ijaw Monitoring Group told Sunday Punch that the point of view of the 22 governors was myopic, as they did not consider the fact that the Niger-Delta region suffers from gas flaring, water and general environmental pollution. Again, he argued that while the Northern and South-West states enjoyed the Federal Government�s allocations to agriculture and water resources, the oil-producing states do not benefit from such funds because no meaningful agricultural activities can take place in the Niger-Delta any longer.
Arguing further, he said: �If you are talking about the N5 billion being allocated to Niger Delta region, let me ask you this question: How many local governments are in the oil-producing states. Kano State has 44 local governments, Bayelsa is having only eight local governments. So, how do you compare the amount of money that will go to 44 local governments, apart from the allocation to the state government, with what is given to just eight local governments.�
However, Kaduna State Governor, Alhaji Ahmed Makarfi has said that the legal tussle to void the abrogation of the onshore/offshore dichotomy, is to set the records straight and ensure that whatever advantages the littoral states were enjoying should be done according to the dictates of the Constitution. To him, the Act is unconstitutional.
�I want you to know that it was an overwhelming decision of the state governors who are non-oil producers to challenge the Act because we believe that it is an illegal Act�.
�Nobody is against the oil producing states from getting a reasonable share of the revenue accruable to the nation. But whatever would be done must be done constitutionally�.
�Whether it is through the revenue allocation formula to increasing for example the derivation formula, so be it and nobody has said he is against that�.
�But there is a belief that the Act contravenes the constitution of the country and, therefore, must be set aside�.
�This is why we are asking the Supreme Court to say whether it is constitutional or not, and if it does say yes, so be it, but if it says no, then let the government and the agitators discuss and arrive at what is the constitutional way to resolve the issues�.
�To me, it is not a question of envy or acrimony, but that, we are saying that as a democratic nation, we must always abide by the constitution to resolve our problems�, Makarfi declared.
When reminded about the likely consequences that their legal action may cause, particularly given the nature of Youths restiveness in the Niger Delta region, the governor dismissed such thinking.
�What consequences are you talking about, what likely consequences? I don�t think anybody should allow himself to become or act unconstitutionally or illegally or taking the law unto himself while agitating for something�, he stated.
However, the action of the 22 states governments has led to swelling opposition from the oil-producing communities, with many of them condemning the legal tussle. Last week the traditional rulers in the oil producing states comprising of Abia, Rivers, Cross Rivers, Bayelsa, Imo, Edo, Delta, Akwa Ibom and Ondo State under the Traditional Rulers of the Oil Mineral Producing Communities of Nigeria (TROMPCON) condemned the 22 states governments who took the oil dichotomy act to the Supreme Court, insisting that those states never meant well for the Niger-Delta areas.
The traditional; rulers in a communiqu� read by Pere Charles Ayemi-Botu declared: "We have read with shock and disbelief the recent suit instituted by 22 governors in the country against the Federal Government with a view to voiding the Act abrogating the onshore/offshore oil dichotomy.
"This conspiracy by these governors was, indeed, designed to take our people for another ride, which we shall collectively resist in its entirety, their unguarded and public utterance, attitudes and actions betray a lack of readiness to embrace the time tested system of civil governance".
The South-South People Conference (SSOPEC) last week threatened the disruption of oil and gas operation once the suit instituted by the non-oil states commences.
In a communiqu� released in Yenagoa, the capital of Bayelsa State cautioned " these misguided governors and their cronies and supporters against beating the drums of war".
From the court summons prepared by the non-oil states, there are many areas the governors are seeking for the interpretation of the law.
According to the summons the 22 plaintiffs are seeking, "Whether having regard to the provision of section 44(3) of the Constitution of the Federal Republic of Nigeria 1999 the provision of Territorial Water Act Cap 428 Laws of the Federation 1990, the provision of the Exclusive Economic Zone Act Cap 110 Laws of the Federation 1990 and binding international convention to which Nigeria is a signatory, the defendant could validly cede or give away or concede any part of the sea ward boundaries of Nigeria" to the littoral states who are joined in the suit as 2nd - 8th defendant.
The 22 governors are also asking the Supreme Court to declare its stand on the implementation of the Allocation of Revenue (Abolition of Dichotomy in the application of Derivation) Act of 2004 in view section 16 and 44(3) of the Constitution.
"Whether in view of the decision of this Honourable Court in Suit No. SC/28/2001 Attorney-General of the Federation vs. The Attorney -General of Abia State and 35 others delivered on 5th April, 2002 the allocation of Revenue (Abolition of Dichotomy in the Application of the Principle of Derivation) Act 2004 is not a legislative judgment, thereby making it unconstitutional, null, void and without any effect," the plaintiffs declared.
The non-oil governors are seeking for an order stopping the continued reliance on the allocation of revenue based on the abolition of the onshore/offshore dichotomy and are demanding that the issue be reverted to status quo ante.
"That I know as a fact from the briefing given to my principal by the plaintiffs that the act once implemented will impact negatively on the amount that will accrue to the Federation Account and this will in turn reduce the shareable revenue due to the plaintiffs," declared an affidavit sworn to by the legal counsel of the 22 states governors.
Senators Victor Ndoma-Egba (PDP, Cross Rivers) and David Brigidi (PDP, Bayelsa) in a telephone interview reiterated the determination of the Niger-Delta to defend the interest of their people.
According to Ndoma-Egba, there could be an ulterior motive behind the suit as the action of the 22 governors came too soon after the president had accented to the bill.
"I think there is more than we can see. May be the court case is a smokescreen for a certain agenda we are yet to know. When you consider that only recently we overcame the bickering over the Abrogation Act for the bill to be signed into law by Mr. President, you will agree with me that there might be more than we can see. It took some years for the country to finally arrive at a solution over the issue.
"We must try and avoid anything that would bring confusion and overheat the system. There is need to embrace national interest and mutual existence as a people," declared Ndoma-Egba who is the Vice Chairman, Senate Committee on Solid Minerals.
Senator David Brigidi, carpeted the Northern Governors for questioning the Abrogation of the Onshore/offshore dichotomy Act.
He maintained that, looking at the sufferings and decay that have characterised the lives of people living in the Niger-Delta area, it was clear that the Act being challenged by the non-oil states was an attempt to foist back the era of negligence suffered by the oil producing communities.
"I think if these non-oil states feel that they have a strong case, they should have taken their case to the National Council of States for arbitration. I think the people of the Niger-Delta have suffered for a long time and the concession being given to them through the Abrogation Act should not be seen as too big for the unity of the country," the lawmaker maintained.
For now the debate over the controversial legal suit might continue to linger as the Presidency is not in a hurry to intervene in the tango. A highly placed source in the Presidency told Sunday Punch that the Federal Government was watching the event with keen interest and was favourably disposed to allowing legality takes its full course.
"The president believes in the rule of law. If some states are not happy over the Act, then they have their constitutional obligation and rights to approach the apex court for interpretation. I can assure you that Mr. President is watching with keen interest and will always act in the best interest of the nation," a top aide of the president declared last Tuesday.
As the country awaits the Supreme Court�s ruling on this matter, the major concern of many Nigerians is that any ruling that would affect the revenue accruing to the oil-producing state could lead to another round of restiveness. But previous experiences have shown that the apex court had made landmark rulings that have been adjudged to be fair to all the parties concerned. The Supreme Court is expected to perform a similar feat again.
Sunday PUNCH August 29, 2004
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