Activist company

Activists fear PIA and oil company divestments will further impoverish the Niger Delta

Health of Mother Earth Foundation (HOMEF) and We the People invited Niger Delta communities and civil society activists for a day-long conversation on the recently approved Nigerian Petroleum Industry Act. The event, held at the Ken Saro Wiwa Foundation Innovation Center in Port Harcourt, Rivers State, provided an open space to discuss recent events in divestments, where top companies Niger Delta oil companies are selling their assets and moving further offshore.

Ceremony attendees

In his opening presentation, Nnimmo Bassey, director of HOMEF, said that from the outset, the oil extraction industry operated as a mixture of corporate greed and state-backed repression. While it is important that people living in places where investors, governments or institutions carry out projects are consulted, in the Niger Delta this has never been the case.

The free, prior and informed consent of the people was never sought or obtained, he added, arguing that these relations of production have remained largely the same from the pre-colonial era to the current colonial and neo-colonial era.

Even in decisions about investments, development or even infrastructure projects, there is willful neglect and a refusal to consult or involve people in decision-making processes. The projects are often launched on the communities even when they do not correspond to the priority needs of the population. It’s no wonder projects are abandoned during construction or rot after completion.

All efforts to appease and mitigate the massive damage inflicted on the Niger Delta have been carried out through various means, including memorandums of understanding with communities led by oil companies and various government interventions through agencies such as the Council Development of the Niger Delta (NDDB) created in 1961; the Niger Delta Basin and Rural Development Authority (NDBRDA) established in 1976; the Office for the Development of Petroleum Mineral Producing Zones (OMPADEC) created in 1992; the Petroleum Trust Fund (PTF) in 1995; Niger Delta Development Commission (NDDC) established in 2000; and the Ministry of Niger Delta Affairs created in 2008.

“These band-aids have only sought to cover festering wounds, without addressing the fundamental ills that more than six decades of disastrous exploitation have caused. And they have mostly failed,” he said.

With over 1,481 wells, 275 flow stations, over 7,000 kilometers of oil/gas pipelines and over 120 flare ovens, the Niger Delta is an eco-bomb and one of the most polluted places in the world. , Bassey noted, even as he called on locals to stand up and demand ecological justice.

In his presentation, Ken Henshaw of We the People spoke about Nigeria’s Petroleum Industry Act and the new rampant divestment measures by oil companies.

According to him, while the PIA establishes a framework for the development of the host communities to transfer the benefits to the communities, it does not however allow the communities a decent participation in the management of the fund, or even in the determination of who runs the trust.

Oil companies, he noted, have overriding powers to manage the 3% of operational costs paid into the trust as they see fit; as well as determining which communities qualify to be “hosts”. Similarly, fund managers are not even required by the PIA to be from host communities.

In what looks like an outrageous display of the criminalization of communities, says the PIA; “Where in any year an act of vandalism, sabotage or other civil disturbance occurs which causes damage to petroleum and designated facilities or disrupts production activities within the host community, the community will lose its right to the amount of the cost of reparations for damage resulting from the activity under the provisions of this law during this financial year.

This provision, activists say, stems directly from the misconception that has been peddled by oil companies that communities are responsible for pipeline sabotage and oil theft. However, this view has been debunked by the NNPC and even the United Nations Environment Program, both of which attribute equipment failure to the majority of spills.

“Criminalizing oil-producing communities in this regard is unfortunate and a smokescreen to shield oil companies from liability for the ongoing ecocide in the region. turn, would generate regular conflicts.

With regard to gas flaring, although the PIA makes it illegal, it nevertheless creates a series of exemptions that ensure that the same gas flaring regime continues literally unchecked and empowers the government to license oil companies. for flaring. The PIA also does not indicate a specific date for the end of gas flaring. Given the health and environmental challenges associated with gas flaring, this is an unfortunate assault on the ecology and health of people in the region.

Surprisingly, fines for gas flaring will not directly benefit impacted communities. While Sections 52 and 104 state that fines for flaring shall be used for environmental and health remediation, they prescribe that such payments shall not be made to host communities, but to an agency it establishes. , called the Midstream and Downstream Gas Infrastructure Fund. In fact, this agency has no mandate or function related to environmental remediation. Clearly, the law views gas flaring as a waste of economic resources that should be paid for, not as an abuse that impacts the climate, health and livelihoods of communities.

One of the key issues of the PIA is the framework for using 30% of NNPC’s profits for oil exploration in the so-called frontier basins. While the law expects NNPC to become a for-profit company, it is already spending a significant portion of its expected profits on finding additional crude oil. The fact that public resources must be spent on this effort indicates that oil companies around the world do not see this as a worthwhile investment.

Rather than spending so much of NNPC’s expected profits on oil exploration in unlikely places, we believe that the government plans to invest the same percentage of NNPC’s profits in producing clean and affordable energy for Nigerians, or even supporting an environmental remediation fund aimed at addressing years of pollution, loss of livelihoods and the health effects of oil extraction.

Unfortunately, it should be noted that the entire PIA does not express any intention to steer Nigerians away from reliance on fossils. At a time when the world is moving away from crude oil, the PIA plans to invest more in this area. This indicates that the government is not following global trends and unperturbed by concerns about global warming and climate change.

Ironically, Nigeria is becoming one of the countries most affected in the world by the effects of climate change. Shrinking Lake Chad, increased desertification and regular flooding around the Atlantic coast are clear proof of this. The fact that the PIA pays no attention to climate change issues, despite Nigeria’s NDCs, and aims to plunge the country further into fossil mining is a major source of concern.

The meeting also expressed concern over emerging changes in oil and the plight of oil-producing communities.

After more than 70 years of oil extraction and the devastating effects it has had on oil-producing communities, it seems the most complicit oil companies are leaving. And new pressures are emerging from their divestment. The biggest multinational player in the Nigerian oil and gas sector, and also the most guilty in several years of oil pollution and abuse of rights, Shell, plans to divest its entire portfolio of Nigerian joint ventures and make a “break net with the assets of the Niger Delta”. In 2022, the Nigerian independent oil and gas company, Seplat Energy Plc, informed the public through a statement that it had acquired the Nigerian shallow water business of ExxonMobil.

As companies divest, local actors seize oil assets and immediately deny responsibility for historic damages. For oil producers and affected communities, divestment means more remote opportunities to hold companies accountable for pollution, as well as fewer economic opportunities for communities. As companies divest, the Nigerian government continues to fail to establish frameworks or policies to address community concerns. According to the head of NNPC, “will ensure that Nigeria’s national strategic interest is safeguarded, by developing a comprehensive policy of divestment”. No such plan has been put in place.

For the ecologically devastated communities of the Niger Delta, no precipitous divestment by transnational oil corporations will be tolerated without restoring their environment and livelihoods. For them, the definition of the just transition must include repairing the damage caused by oil pollution, an audit of the health of populations and a response plan to the threats posed by climate change.

A just transition must also bring justice to the countless victims of oil company-inspired and state-sanctioned abuses, and reparations to the people of the Niger Delta for decades of dispossession.

Anything less than these is an injustice, campaigners say.