LET THE DRY BONES OF ON-SHORE/OFF-SHORE 'DICHOTOMY' REST

Nigeria's off-shore mineral resources are presently found and mined in the Continental Shelf off the coast of the South of the country. Some segments of this country, particular those of the core North, are frantically trying to resurrect the dry bones of on-shore/off-shore dichotomy. They argue that the principle of derivation under Section 162(2) of the Constitution of the Federal Republic of Nigeria 1999 (as amended) should not take account of off-shore mineral resources. That Section provides:

The President, upon the receipt of advice from the Revenue Mobilisation Allocation and Fiscal Commission, shall table before the National Assembly proposals for revenue allocation from the Federation Account, and in determining the formula, the National Assembly shall take into account, the allocation principles especially those of population, equality of States, internal revenue generation, land mass, terrain as well as population density:

Provided that the principle of derivation shall be constantly reflected in any approved formula as being not less than thirteen per cent of the revenue accruing to the Federation Account directly from any natural resources.

The protagonists of on-shore/off-shore dichotomy, relying on non-existent principles of international law, argue that off-shore resources belong to the Federal Government. It is submitted that the pre-occupation with on-shore/off-shore dichotomy is not based on law, but on greed.

The United Nations Convention on the Law of the Sea 1982 (UNCLOS)demarcates certain maritime zones â€' Territorial Waters, Contiguous Zone, Exclusive Economic Zone, Continental Shelf, High Seas, etcetera â€' and vests (limited) rights on its State Parties. Nigeria ratified the Convention on 14 August 1986.

Article 76(1) of UNCLOS defines the Continental Shelf as follows:

'The continental shelf of a coastal State comprises the seabed and subsoil of the submarine areas that extend beyond its territorial sea throughout the natural prolongation of its land territory to the outer edge of the continental margin, or to a distance of 200 nautical miles from the baselines from which the breadth of the territorial sea is measured where the outer edge of the continental margin does not extend up to that distance'.

In simple language, the Continental Shelf comprises the submerged prolongation (extension) of the land territory of the coastal state. It is coastal land under the sea.

The UNCLOS vests on coastal states the sovereign and exclusive rights to explore and exploit mineral resources on and in the Continental Shelf (Article 77). The central question is, which of the federating units in Nigeria is entitled to exploit the resources on and in the Continental Shelf? Is it the State Government or the Federal Government? This question can only be answered by municipal law, not international law, based on the principle of domestic jurisdiction (reserve domain). International law does not direct a state on how it should manage its internal affairs.

On 5 April 2002, the Supreme Court delivered a judgment in a suit instituted by the Federal Government against the 36 States. The Federal Government alleged that the seaward boundary of a coastal state is the low water mark of the land surface of the State, but the Federal Government did not adduce evidence either orally or by affidavit to indicate the actual location of the alleged low water mark. It was claimed that it was not necessary to adduce such evidence because the case is one of the interpretation of the constitution. The Court held that the seaward boundaries of the littoral states, for purposes of calculating the revenue derived from the natural resources of these states, are the low water-mark of the land surface.

The Court, in effect, excluded the Exclusive Economic Zone and Continental Shelf of Nigeria as forming part of the boundaries of coastal states.However, the Supreme Court was not called upon to interpret the provisions of Section 162(2) of Constitution, but to precisely ascertain and fix the seaward boundary of a coastal state. That raised an issue of fact which required evidence. The Federal Government did not adduce that evidence, so the Supreme Court should have dismissed the case.

Realising the security implications of that voodoo, unjust, and biased judgment on extractive activities off the shores of the Niger Delta, the Obasanjo Administration submitted an executive bill to the National Assembly for the abrogation of the on-shore/off-shore dichotomy. This led to the passage of the Allocation of Revenue (Abolition of Dichotomy in the Application of the Principle of Derivation) Act, 2004 [See Cap. C23 Laws of Federation of Nigeria 2004].

Section 1(1) of the Act provides:
'As from a commencement of this Act, the two hundred meter water depth Isobaths contiguous to a State of the Federation shall be deemed to be a part of that State for the purposes of computing the revenue accruing to the Federation Account from the State pursuant to the provisions of the Constitution of the Federal Republic of Nigeria, 1999 or any other enactment'.

Section 1(2) provides:
'Accordingly, for the purposes of the application of the Principle of Derivation, it shall be immaterial whether the revenue accruing to the Federation Account from a State is derived from natural resources located onshore or offshore'.

The 2004 Act effectively upturned the judgment of the Supreme Court of 2002, earlier considered. The Act is a good law, based on good logic.Nigeria's constitutional history also supports the Act. Section 134(6) of the Constitution of the Federation of Nigeria 1960 and Section 140(6) of the Constitution of the Federal Republic of Nigeria 1963 provided that 'the Continental Shelf shall be deemed to be part of that Region' in the payment of royalty (derivation) to the Region. So the 2004 Act is not reinventing the wheel; neither is it unconstitutionalto warrant the call for its repeal. In law, legislation can upturn judicial decisions; and there is a plethora of such situations in the past. The 2004 Act does not violate any international law either; as a sovereign entity, Nigeria has a right to exercise its vested rights in a manner it deems fit. Oil exploration and exploitation are matters within the domestic jurisdiction (internal affairs) of Nigeria.

The hackneyed argument on on-shore/off-shore dichotomy is based on the assumption that 'Nigeria' is synonymous with the 'Federal Government'. However, there are 36 federating units, plus a central unit called 'the Federal Government', in the Federal Republic of Nigeria. That the Federal Government negotiates, signs, and ratifies international agreements on behalf of Nigeria, or protects the country's land, air, or sea territory as conferred on it by the Constitution, does not give to it the right to acquire what belongs to the federating units. A good father does not expropriate any of his children's properties to himself or to others simply because he is under a moral obligation to protect those properties from intruders.

All over the world, governments enter into treaties some of which confer rights directly on citizens or segments of their populations. Human rights treaties are genres of these classes of treaties. Governments negotiate, sign and ratify human rights treaties but the beneficiaries are individuals and groups, not the governments that ratify them. Similarly, treaties of the World Trade Organisation (WTO) confer benefits on individualsâ€' for example, farmers â€' and other economic groupings, not necessarily the governments that negotiate and ratify these treaties.In the Reservations to the Convention on the Prevention and Punishment of the Crime of Genocide (1951), the International Court of Justice (ICJ) explained the rationale for these types of treaties:

'In such a convention [treaty] the contracting States do not have any interests of their own; they merely have, one and all, a common interest, namely, the accomplishment of those high purposes which are the raison d'être of the convention. Consequently, in a convention of this type one cannot speak of individual advantages or disadvantages to States, or of the maintenance of a perfect contractual balance between rights and duties. The high ideals which inspired the Convention provide, by virtue of the common will of the parties, the foundation and measure of all its provision'.

Before concluding, it is necessary to sum up the facts and law so far as the off-shore mineral resources are concerned:

Coastal states have a sea-bed border which, in ordinary language, is called a continental shelf.The Continental Shelf is a natural prolongationinto the sea of the land mass of coastal states.

Section 1 of the Land Use Act 1978 vests on the Governor all lands in the State of the Federation. It provides:

'Subject to the provisions of this Act, all land comprised in the territory of each State in the Federation are hereby vested in the Governor of that State and such land shall be held in trust and administered for the use and common benefit of all Nigerians in accordance with the provisions of this Act'.

The Federal Government has no land of its own. Except for the Federal Capital Territory which, by virtue of Section 297(2) of the 1999 Constitution is vested 'in the Government of the Federal Republic of Nigeria', all parcels of land in Nigeria belong to the constituent States which make up Nigeria. Similarly, it is the seaward boundaries of the littoral (coastal) states that make up the seaward boundary of Nigeria. Take out the coastal states and Nigeria automatically becomes a land-locked country!

Being land, the Continental Shelf is vested under the Land Use Act in the Governors of coastal states in trust for their people. Its control and management are under the Governor of each of the coastal states.The position on on-shore/off-shore will not change even if the Land Use Act is abrogated, as ownership of land will simply revert to communities, families and individuals.

There is no rule of international law on on-shore/off-shore dichotomy. It is a mere figment of peoples' imaginations. International law of the sea vests limited rights on countries (States Parties), but the question of who enjoys the rights so vested is determined by eachcountry's municipal law.

Section 44(3) of the 1999 Constitution compulsorily (forcefully) acquires all on-shore and off-shore resources in Nigeria and vests same on the Federal Government. Section 162(2) of the Constitution allows for the payment of 13 percent derivation to oil-bearing states from the federation account. It is worth noting that the 1999 Constitution prescribes a minimum, not maximum. Section 134(2) of the 1960 Constitution and Section 140(1) of the 1963 Constitution enjoined the payment of50 percentroyalty to regions 'in respect of any minerals extracted from that Region'.

Derivation on on-shore and off-shore mineral extractions is a right, not charity. It is compensation for continuing dispossession of the Niger Delta peoples of the interest in their immovable property and depriving them of their own means of subsistence.

By abolishing the artificial on-shore/off-shore dichotomy in the application of the derivation principle, the 2004 Act effectively upturned the voodoo judgment of Nigeria's Supreme Court of 2002.

Sometimes people say things that are not true; and if they say them enough, people start to believe them,but the assumed dichotomy between on-shore and off-shore resources is untrue.Fallacies do not cease to be fallacies because they have become fashions. The South-South should collectively resist any attempt to re-open the 'dichotomy' issue at the ongoing National Conference, because it is unjust and evil. It is an attempt to create a 'Matthew Effect', so that for those who do not have, even the little that they have will be taken away and given to those who already have. Our friends in the North will do this country a great deal of good by letting the dry bones of on-shore/off-shore dichotomy rest in perfect peace.

Written Professor Nsongurua Udombana, LL.D
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