Again, the resource control furore (II) By Mohammed Haruna

Pretty early in the first term of President Olusegun Obasanjo, his attorney-general and minister of justice, the late Chief Bola Ige, went to the Supreme Court ( SC) over “Resource Control.” In allocating revenue from the Federation Account to the three tiers of government, the president had insisted the principle of derivation be applicable only to onshore oil revenue, contrary to the demands of the oil producing littoral states that it must also apply to offshore oil.

Apparently it was this dispute that prompted Chief Ige to go to the SC for judgement, even though for some strange reason the man himself insisted Resource Control was not what he went to court for. “I have not gone to court for resource control,” the man whose way with words was legendary, vehemently insisted in an interview with editors of Tempo (March 22, 2001), since rested. “I continue to ask you my friend,” he told the weekly newspaper, “go and read my writ of summons and go and read my statement of claims which are only ten paragraphs. Have you read it?”

Tempo: I have.

Ige: What did I ask for?

Tempo: You were asking for the interpretation of that section you quoted (earlier in the interview, i.e. Section 162{2} of the 1999 Constitution).

Ige: Good, where did you get the idea that I went to court for resource control, where did you get that from?

This altercation, which spoke volumes about the sensitivity of the issue, went on for a while before Chief Ige finally ended it with an answer that even the Supreme Court’s judgement would not be the final word on the controversy.

“The Federal Government,” he said, “feels one way, the littoral states feel another way. Let the court be the arbiter. And I continue to say one thing, the judgement of the court, whatever it is, will be the beginning of further political engineering in Nigeria. I hope you understand what I mean.”

Chances were the chief, the accomplished lawyer that he was, knew the judgement was likely to favour his principal – it is a notorious fact that offshore resources are owned exclusively by nation-states that are signatory to the United Nation’s Law of Sea Convention, which Nigeria was, and not by their constituent littoral states which, in any case, are not recognized by international law.

Not surprisingly the court ruling which favoured the Federal Government elicited cries of “I told you” so from leading opponents of resource control, notably the late Professor Sam Aluko, whose response I said I will quote in this piece.

The reader will pardon me if I quote him extensively because what he said provided, in my view at least, some insight into a way out of the resource control conundrum.

“I told them,” he said in an interview in The Country (May 20-26, 2002), since rested, “they could never win. No country has ever won it. No state can say it wants to control resources offshore. The offshore belongs to the whole country, not to a particular state… When the case began I wrote a letter to the Attorney-General that I wanted to join the Federal Government in the suit against the states. And I cited examples of Canada, Australia and United States judgements on this type of resource control, that in every instance, they lost. And some of them were my friends. Governors Dr. Peter Odili and Chief Lucky Igbinidion of Edo State where I grew up and Chief James Ibori, Dr. Diepriye Alamieyeseagha of Bayelsa where my wife comes from. She is Ijaw…Frankly the resources are near them, but the resources are developed by the whole wealth of Nigeria, not by their wealth. They talked about cocoa, but the Nigerian farmer plants the cocoa, he tends it, harvests it, bags it and sells it. Is this the same thing with oil?”

If Chief Ige went to court probably confident of winning, he did so also knowing that a judgement that favoured his principal was even more likely to generate greater heat than there was before he went to court, hence his attempt at mollifying opponents of his journey to the SC by his remark that the court judgement would not be the final word on the issue.

And indeed, it wasn’t; far from being the final word it became a call to war by the oil producing littoral states. And they deployed every weapon in their formidable arsenal – the media, threats, sabotage of the oil infrastructure and, above all, money which they already had aplenty – to ensure victory against the SC judgement.

That victory came in the form of the February 2004 enactment by the National Assembly which abolished the onshore/offshore dichotomy that the SC judgement had affirmed in 2002. The federal legislators passed the law by overriding President Obasanjo’s veto, thanks obviously to the greed of many of its members who sold their souls and the interests of their constituencies for a mess of oil money. Obasanjo’s initial executive bill which was his attempt at the “political engineering in Nigeria” which Chief Ige had spoken of, had limited the application of derivation to offshore oil revenue to 24 nautical miles (45 kilometres) seaward. The legislators extended it to 200 nautical miles.

This is the law that some Northern governors, led by that of Kano State, Dr. Rabiu Kwankwaso, want revisited, a revisit which President Goodluck Jonathan, in an un-statesman-like partisanship, has dismissed as “disruptive, outright mischievous and aimed at causing disaffection.”

Obviously if the 2002 SC judgement had merely left the resource control issue hanging fire, so also has the 2004 law abrogating the onshore/offshore dichotomy the court had affirmed.

Unlike our president, I do not see why calling for a revisit to the abrogation of the onshore/offshore dichotomy on oil revenue allocation is mischievous and malicious. I do agree with him, however, that it could – indeed will – be disruptive, witness, for example, the none-too subtle threat by Governor Rotimi Amaechi of Rivers State, the leading littoral oil state, that such a revisit may take us back to the darker days of militancy in the Delta region.

“When the Niger Delta militancy was on,” he said in an interview with Daily Trust (August 9), we were producing only 960,000 bpd (barrels per day) of oil. We are now producing 2.7 bpd so if you do something to incite people and they go and stop people from doing their work then it will not be good for the country.”

The solution to the resource conundrum seems obvious; we should revert to first principles and we must uphold transparency and accountability in governance. First principles dictate that offshore oil belongs to all and should be shared equally by all. But it also dictates that derivation should attract no less than 50% for onshore oil.  That was the principle the old three regions – and later four – freely agreed on and applied before the soldiers ended the First Republic six years after independence in 1960. And the agreement, contrary to Professor Aluko’s inferences, was not just on agricultural produce. It also included mineral resources. The logic was obvious; compensation for the environmental degradation mining activities cause in the mining regions.

Even more important than going back to first principles, is the issue of transparency and accountability. The fight over oil money by our elites is simply because it is cheap money which our leaders do not think they should account for. This explains why, so many of the Northern governors that are now demanding for more of it are notoriously mixed-up in their spending priorities. Two ready examples are the billions Zamfara State spent last month ostensibly to feed fasting Muslims during the just ended Ramadan, and the plan  Niger State has of building structures for the three arms of government, a la the Three Arms zone in Abuja. A more extravagant waste of resources than any of these two is difficult to imagine.

The trouble with going back to first principles and upholding priorities is that they are easier said than done. The same, however, cannot be said of reviewing the vertical allocation of our revenues among the federal, state and local governments. Almost everyone agrees that the current formula gives too much to the Federal Government, which is why it dabbles into things that are best executed by states because they are closer to people, things like health, agriculture and education. This is why, for example, the central government has dabbled into building schools for almajirai, something clearly best handled by local governments.

Allocating less than 50% of federal revenue to the Federal Government will be a good place from which to start looking for a solution to the seemingly intractable issue of revenue allocation.