STAKEHOLDERSHIP: A PANACEA FOR RESOURCE CONTROL AND DETERMINATION IN NIGERIA
Beyond the issue of direct resource control and Determination is the perspective of Stakeholdership. This view does not toe the line of merely agitating for economic freedom to explore and exploit natural resources especially oil by host communities/states in isolation since this is not an option that the Federal government of Nigeria is willing to concede to but evolves a more collaborative approach which makes the host communities stakeholders in terms of equity/ownership.
The reasons for this approach are legion; Firstly, Several oil bearing communities in Nigeria have become captive to the machinations of not only the draconian land use laws by the federal government as well as the sleek antics of the multinationals but also their so called elite and freedom fighters. This tripod of varying interest further undermined the genuine developmental challenges of oil bearing communities.
Secondly, oil as a natural resource has a finite nature which makes it susceptible to depletion when continuously exploited over time. Due to its finite nature, oil reserves extraction will reach an all-time maximum and it will not be economically worthwhile to exploit even marginal deposits. It has been estimated in geological terms that the life expectancy of the energy sources is minimal. At constant consumption rates crude oil will last only another 40 years, and natural gas 60 years. Furthermore with increasing research into alternative energy sources due to the rising social and economic cost of oil exploitation, renewable forms of energy such as wind and solar energy or biomass will compete with crude oil as better alternative energy forms.
This coupled with the growing cost of oil exploitation compared to other energy sources will result in significant reduction of firms engaged in crude oil exploitation in the future. The attendant consequence is that most oil bearing communities will just remain ghost towns with landmarks littered with oil exploitation paraphenellia like oloibiri. Most significantly, oil exploitation has engendered sociopolitical and economic instability in Nigeria. With increasing instability and restiveness, it will become more and more costly to engage in oil exploitation in Nigeria in the future.
However, oil plays a central role in satisfying the global energy demands. Thus as long as that demand exists and as long as there are current reserves in oil bearing communities especially in the Niger Delta, the Nigerian government will continue to exploit such reserves.
Prior to 1979 the Nigerian government was a passive tax collector(royalty) in the oil industry. But with the establishment of decree 33 of 1977 which established NNPC and replaced its predecessor NNOC, the government became a major stakeholder through its equity participation in most oil companies operating in the country. In addition to holding equity shares, the Federal Government owned all the refineries. This coupled with the draconian land use act further gave the state full rights and control over all mineral oils and natural gas in, under, or upon a land vested in any state of the federation including any land which forms part of the continental shelf. Thus, any person(s) interested in undertaking any exploration or exploitation activity required formal authorization in the form of OEL, OPL, and OML.
Interestingly both the state and the oil companies have benefited tremendously from oil exploitation while the oil bearing communities remain neglected, underdeveloped, impoverished and beset with a host of environmental and social problems. Even in the face of increasing demands for change, the state is unwilling to concede to the demand for oil bearing communities to directly control their resources for self-determination. In recent times there have been increased calls for the Federal Government, to transfer 10 percent equity of its oil and gas ventures to oil-producing communities in the Niger Delta. However, the government's response has been that it will create unnecessary legal troubles and offered host communities dividends (supposedly higher than 10 per cent equity) based on the value of the assets in their areas.
However it remains to be seen how this dividend will be calculated and disbursed to the oil bearing communities. Unless and until the federal government explores this a viable and enduring option to the sustenance of peace and the development of the Oil bearing communities, the status quo will endure.
As a more feasible approach to our call for resource control and self-determination, it is becoming increasingly pertinent that such calls be continuously sounded to the multinationals and the state in times such as this. Most importantly, our elected representatives and community leaders should create avenues through which we can better strengthen and espouse this approach. We are still a very far way from where we want to be in terms of our stake in Nigeria and especially in the control of resources or self-determination.
Written By Bryan Gere