By
Victor Onyegbado
In
February, Nigeria’s minister of petroleum announced to delegates at the Nigeria
Oil and Gas conference held in Abuja that the federal government was promoting an
international framework to tackle the menace of crude oil theft in our country.
I was both bemused and amused.
Mrs.
Alison- Madueke said, “The products from [illegal] oil bunkering are not sold in ECOWAS waters,
neither are the financial earnings from them laundered through West African
banks. They actually end up in far-flung international fiscal institutions.
That is why government is soliciting the assistance of these foreign governments
to help recover them.”
By my
reckoning, such grand statements, though usual in times of intense political
activity, are certainly inappropriate – by Nigerian standards – for peace time.
After all, general elections are 2 full years away and in keeping with the county’s
fire brigade policy, no one ought to
have been thinking that far ahead in February 2013. Yes, it would have been easy for me to
dismiss the minister’s assertion as mere political posturing, but the timing of
the statement made rubbish of my calculations. Were these guys really serious?
By April 2013, yet another member of Dr. Jonathan’s
cabinet appeared on CNN to talk about the same thing. Mrs. Okonjo-Iweala,
Coordinating Minister for the Economy, told Christine Amanpoure that “My thesis
on corruption is [that] we are still a poor country. We cannot afford any
leakages. Nigeria and Mexico have this problem. In their case they are losing
about 25, 000 barrels per day and they found out Mafia elements are involved.
In our case, we have international people who also buy that stolen oil. We need
them [the international community] to treat this stolen oil like stolen
diamonds. The blood diamonds. Make it blood oil. Help us so that those people
don’t have a market to sell this stuff”.
Theft
of oil in Nigeria, costs oil companies, governments (and the communities they
serve) hundreds of millions of dollars each year. In addition to loss of
revenue, oil theft fuels violence and insecurity, feeds corruption, finances
the purchase of illegal weapons and escalates youth unemployment. It causes
environmental pollution and destabilizes communal life as well. All of these vices
were associated with the trade in conflict diamonds in its hay days but this
fact alone cannot justify the adoption of a similar strategy for dealing with
oil theft.
In the
late 90s, African war zones accounted for about 4 per cent of global supply of
uncut diamonds, but the whole sector – an $8bn annual business involving more
than 20 countries across the world, supplying a $50bn-plus retail trade – was
tainted. Rough diamonds valued at approximately $370 million in 1999 and $170
million in 2000 passed through rebel territory in this region. To address the bad image that this had cast
on the legitimate side of the trade therefore, talks began in May 2000 in the
city of Kimberley, South Africa over possible means by which the illegal trade
in diamonds could be halted. What
started out as a consultative process became a negotiating process that
culminated in the adoption of the Kimberley Process Certification Scheme (KPCS)
at a Ministerial Meeting in Interlaken, Switzerland in November 2002.
The
KPCS sets an international benchmark for national certification schemes to be
implemented by each Participant country through national legislation.” All
participating countries must provide every diamond with a government-backed
certificate of origin; countries outside the agreement are not allowed to sell
to big markets such as the US and Europe, or trade with diamond-processing
countries such as Belgium, India and Israel.
As of March 2003, 58 countries had adopted and ratified the Kimberley
Process. In essence, these countries
have agreed that they will only allow for the import and export of rough
diamonds if those rough diamonds come from or are being exported to another
Kimberley Process participant. Shipments
of rough diamond exports must thus be transported in tamper-resistant
containers and must be accompanied by a government-validated Kimberley Process
certificate.
Even if
one assumes that a shipments certification regime would be effective in choking
off the market for the stolen oil, the feasibility of instituting such a regime
must also be considered. As petroleum is a truly universal commodity, every
country on earth has to be part of this pact for it to be effective. Thus, the
crafting of an international accord having all oil exporting and importing
nations as counterparts would be required. Is the Nigerian government seriously
asking all of the world’s 200 or so nations to provide or demand legitimacy
certificates for oil imports and/or exports, enact domestic legislations
requiring such legitimacy certification, add another level of enforcement bureaucracy
to their oil trading systems and provide modalities for punishment of
offenders? Even a cursory observer of international politics will appreciate
the enormity of such a venture. I dare to say that global consensus on climate
change stands a better chance. The Kimberly process was easily enacted in part
because the counterparts to it – restricted to diamond trading nations – were limited in number. The same cannot be
said however for oil.
Perhaps
even more critical than the issue of sheer enormity of work required for
enacting an oil certification regime is the issue of vested interests. With the
Kimberly process, it was in the interest of the entire diamond industry that
the regime be put in place. Prior to its establishment, several humanitarian
groups had created massive sensitization, particularly of diamond consumers, on
the evils of blood diamonds. A major strategy for these groups was to instigate
consumer apathy and thereby force an industry faced with declining demands to
take action. Since
the majority of the vested interests were faced with a real possibility of
being affected adversely, this internal commercial pressure made the Kimberly
Process relatively easy to carry through. Again, the world was continually
being called upon to intervene in wars and humanitarian crisis fueled by the blood
diamonds trade of the 1990’s. With the United Nations and the Super Powers
almost continually faced with having to commit money, aid materials and troops
to peace keeping operations in such areas as Angola, Congo, Liberia and Rwanda,
the external pressure on the diamond industry to take action was quite strong. With
oil theft however, no one is being asked to make a switch from say petrol to
ethanol because of the violence in the Niger Delta for instance. The fact
remains that whether oil theft continues or abates, it is majorly Nigeria that
stands to gain or lose. Thus, if Nigeria even succeeds at bringing the entire
world to the negotiation table, what are we going to offer them? What benefits,
other than Nigeria’s national interests, can be derived from an oil
certification regime that will involve the whole world?
Last
year, the United States Coast guards donated a frigate to the Nigerian Navy. That
ship has since been renamed NNS Thunder and she is currently being employed for
coastal patrols and securing of Nigeria’s offshore oil installations. If for
nothing else, I think that this gesture demonstrates the attitude of the
outside world the problems being experienced in Nigeria’s Niger-Delta region.
These problems are domestic problems requiring domestic solutions. The
international community can only offer us help in solving them, but they are
essentially our problems. We –and “we” means Nigerians – must deal with them.
