CRITICAL APPRAISAL OF OWNERSHIP AND CONTROL OF MINERAL RESOURCES IN NIGERIA

ABSTRACT

 Natural resources worldwide are a gift of nature and an endowment of comfort that makes the existence of mankind complete. As nature’s priceless gift to man and because nature’s endowment of these resources is without reference to people or nation, the subject of ownership and control is one that has generated a great deal of passion and controversy amongst people and nations. Unfortunately, these resources have been identified as playing key roles in triggering conflicts, and, all through history, thestruggle for possession and control of natural resources has been the remote, if not the immediate, cause of agitations  and human tragedies. The Federal Republic of Nigeria is endowed with abundant mineral resources and hydrocarbons but the scope of this dissertation is oil and gas. Its vast oil fields are concentrated in the Niger Delta region, which comprises of Akwa Ibom, Bayelsa, Cross Rivers, Rivers, Delta, Edo and Ondo States. When God provided Nigeria with mineral resources, his purpose was to lift up the country’s economic and social status and make the citizens enjoy respect and honour among the comity of nations. But like in the story of creation where God created man and put him in the Garden of Eden; the Garden of hope and comfort, man lost this great free gift due to greed and selfishness which led him to sin. The crisis over ownership of mineral resources in Nigeria is in diverse folds which have led to several heated debates, conflicts and misinterpretations. Some of these conflicts are between the Federal and State Government and the Local Communities and the Government. The Federal and State conflict that is branded “Resource Control” calls for fair, just, equitable and manageable natural resources sharing formula that shall be favourable to every Nigerian.This dissertation is aimed at considering the legal rights of the Niger Delta States in relation to the ownership and control of mineral resources under Nigerian Law. The choice of this topic stems from the fact that though the course is a viable one and many scholars have written on this concept but have concentrated more on state sovereignty over her natural resources. What then is the position of the people who are at the end point of every move in Nigeria?As is traditional with legal research, the methodology shall essentially be the doctrinal method which entails the study of major laws and textbooks written by distinguished scholars on the subject matter and other relevant materials such as academic journals, articles and judicial decisions or case laws as well as the internet.

Keyword: CRITICAL APPRAISAL OF OWNERSHIP AND CONTROL OF MINERAL RESOURCES IN NIGERIA         

 

CHAPTER ONE

GENERAL INTRODUCTION

1.1.  Background to the Study

Mineral Resources which comprise of oil and gas, a whole lot of which Nigeria is blessed with is one of the most important sources of energy in the world today. World energy statistics indicate that it presently accounts for about 53% of world energy supply^[1] . In Nigeria, the oil sector has continued to remain the mainstay of the national economy. Presently, it accounts for about 90% of Nigeria’s total export earnings and over 70% of Federal Government revenue³. Oil and gas are treated as two separate but overlapping mineral concepts. In actual fact the Nigerian law tends to deal with “Petroleum” as an embodiment of both “oil and gas”, and to try and legislate thus, the evidence of this may be seen in the definition of petroleum that may be found, upon curious enquiry of some of our statue books and in case laws which state that “petroleum can be defined as mineral oil or any related hydrocarbon or natural gas as it exists in its natural state. It also defines natural gas as gas obtained from boreholes and wells and consisting primarily of hydrocarbons”^[2] .So within the definitions of petroleum and gas, the law recognizes the overlap between the two mineral resources.

Furthermore, the origin of oil and gas industry is often traced to the discovery of rock oil in the 1850s and the first oil well striking petroleum in 1859 in Titusville, Pennsylvania, United States of America^[3] . From this humble beginning came the multi trillion dollar oil industry and the development of the framework for the commercial exploration and exploitation of the fuel that will power the great technology advances of the late 19^th, 20^th and 21^st centuries.

However, in Nigeria, the first commercial discovery of oil was in June, 1956, by the then Shell

D’Archy Petroleum Development Company in Oloibiri, in present day Bayelsa State^[4] . Within our current regime which was established under the Petroleum Act 1969^[5] .

1.2. Statement of the Problem

The crisis over ownership of mineral resources in Nigeria is in diverse folds which have led to several heated debates, conflicts and misinterpretations. Some of these conflicts are between the

Federal and State Government and the Local Communities and the Government. The Federal and

State conflict that is branded “Resource Control” calls for fair, just, equitable and manageable natural resources sharing formula that shall be favourable to every Nigerian. Resource control is the legal incidence of ownership of natural resources. The basic principle of our Property Law is that he who owns a thing of value manages it. In the words of Hon. Justice Tobi JCA (as he then was), in Abraham & Anor v. Olorunfumi & Ors^[6] , the distinguished jurist observed thus: “in so far as the property is his and inheres in him, nobody can say anything. He is the alpha and omega of the property. The property begins with him and ends with him”.

When one considers the above principle of our property law and the case cited above in the light of ownership pattern in Nigeria, one would be left with the view that our laws contradict each other. This is because the Constitution^[7] and the Petroleum Act^[8] has vested the control and ownership of all mineral resources on the Federal Government.

Another puzzle that will prick the mind of any close observer of this area of our jurisprudence is the provision of the Land Use Act. This is because we cannot talk about mineral resources without mentioning land that actually houses these mineral resources.  The Act states thus^[9] :

Subject to the provision of this Act, all the land comprised in the Territory of each state of the Federation are hereby vested in the Governor of the 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 question is what is the place of the people who were the original owners of the land since trusteeship of the lands in any state in Nigeria has been vested on the state governor and the mineral resources found on the land is owned by the Federal Government. This is the problem with the Land Use Act. In the raging debates over who should control what resources, the interest of the oil producing communities and the occupiers of the land have been relegated to the background. The pertinent questions now are:

1. Can the existing laws relating to the ownership of mineral resources in Nigeria be said to be

beneficial to the people of the Niger Delta region?

2. Can the concept of ownership of the natural resources be said to be the root cause of the agitation in the Niger Delta region?
3. Why has oil wealth failed to translate into rapid economic growth and increased standard of living for the Niger Delta region and Nigerians?
4. Should the people of the Niger Delta region be blamed for the natural resources bestowed on them by Mother Nature?
5. Is the issue of resource control merely a struggle control of the resources of the Niger Delta?

 

1.3        Aims and Objectives of the Research

This dissertation is aimed at considering the rights of the Niger Delta States in relation to the ownership and control of mineral resources under Nigerian Law. The choice of this topic stems from the fact that though the course is a viable one and many scholars have written on this issue but have concentrated more on state sovereignty over her natural resources. What then is the position of the people who are at the end point of every move in Nigeria? However some lacuna has been discovered. Accordingly, my objective in this work will be

1. To examine the legal framework of ownership of mineral resources in Nigeria vis-à-vis its application and impact on the people.
2. To assess the adequacy of the existing provisions of our local legislations in relation to ownership and control of mineral resources.
3. To highlight defects and shortcomings in the existing laws.
4. To re-examine the rights of the oil producing communities in Nigeria
5. To ensure that suggestions made would be geared towards improvement that would enhance

Nigeria’s ownership right over her mineral resources.

1.4        Justification of the Research

Countries, which are largely dependent on their resources have created legislations which devolve ownership of those resources from the hands of citizens in whose lands they are found and placed them under the care of the government. The rationale behind this is basically to secure and ensure that such resources are utilized in a sustainable manner which is beneficial not only to the government in whose hands the resources are controlled, but the generality of the people in the country as well as posterity after them. This topic is as relevant today, as indeed any other period in our socio-economic history on account of the restiveness associated with the ownership, control and management of these God-given natural endowments.

Common sense and simple economics suggest that countries endowed with an abundance of natural resources should prosper. Yet over many years, it has been observed that developing nations such as Nigeria rich in oil, gas or mineral resources have been disadvantaged in the drive for economic progress. It is rather unfortunate, that after over fifty years of oil exploration and exploitation in Nigeria, the basic infrastructures seem to be in decay. Poverty is an endemic problem as most of the erstwhile fertile lands in the Niger Delta region are infertile and devastated by pollution.

 

1.5       Scope of the Research

The scope of this research work is the legal rights of the Niger Delta states with respect to ownership and control of mineral resources under Nigerian law. Hence, this dissertation would cover relevant areas such as:

To analysis the legal framework regulating the rights of ownership of mineral resources by the Federal Government

The various laws regulating ownership of mineral resources, pointing out their adequacies, shortcomings and make suggestions

The examination of the term resource control in Nigeria

The assessment of the environmental impact/pollution of oil exploration in the Niger Delta region and

Findings and recommendations

 

1.6       Research Methodology

As is traditional with legal research, the methodology shall essentially be the doctrinal method which is broken down into primary and secondary documents. Primary documents include statutes, case laws of superior courts of records or recommendations of tribunals. Secondary documents include opinions of eminent jurists and scholars expressed in journals, magazines, textbooks and the internet.

 

1.7       Literature Review

A significant number of literatures in this subject matter dwells more on the causes of militancy in the Niger Delta. However, we shall be analysing the legal rights of the Niger Delta states in relation to the ownership and control of mineral resources under Nigerian laws. Moreover, since mineral resources are found on lands, we will also briefly examine the vesting of lands on which these mineral resources are housed on the State Governors as trustees for the people of their states. Also we will examine the various laws regulating the ownership of mineral resources in Nigeria. Particularly, we will look at how scholars have treated the relationship between the legal regime of ownership of mineral resources in Nigeria.

In the municipal jurisdiction, the concept of economic self-determination is limited to the provisions of the state law. Therefore, state law on the ownership pattern of mineral resources is exclusively within the prerogative of the federal authorities. According to Cotula,

The ability of states to regulate activities within their territory is a key attribute of sovereignty. It is also important for the quest for economic development and sustainable development of the environment in such a way that long term benefits would be sustained and derived from their natural resources^[10] .

 

In his work, Oil and the Niger Delta People: The Injustice of the Land Use Act^[11] painted a gloomy picture of how the expropriation of mineral resources and land by the Federal Government of Nigeria has negatively affected the participation of the Niger Delta people in the petroleum industry inspite of the fact that the commodity is exploited from and on their land. According to him, the Petroleum Act vested the ownership of every mineral oil found on any land in Nigeria on the Federal Government. The result is that the Federal Government has absolute right and control over mineral resources in Nigeria.

The Land Use Act on the other hand did vest all the lands comprised in the territory of each state of the federation on the State Governor in “trust” for the people of his state. This implies that the governors stand in trusteeship position of all lands in their states.

The United Nations Development Programme (UNDP) describes the Niger Delta region as suffering from administrative neglect, crumbling social infrastructure and services, high unemployment, social deprivation, abject poverty, filth, squalor and endemic conflict^[12] . Meanwhile, the poverty in the region contrasted with the wealth generated by oil which has become one of the world’s most disturbing examples of the resource curse^[13] .

The fact that the people of the Niger Delta region have not benefitted from oil wealth is only one part of the story. The most unfortunate thing is the deleterious effect which the exploration and exploitation of mineral resources has had on the people’s livelihood, health, human rights and local economy. Unchecked activities relating to mineral resources have pushed many people in the Niger Delta region into poverty and deprivation, fuelled conflict and led to a pervasive sense of powerlessness and frustration.

While oil spills^[14] and gas flaring^[15] are the most frequently referenced forms of oil related pollution in the Niger Delta, there are in fact several other ways in which the oil industries have continued to harm the environment, such as disposal of waste and effluents, dredging, drilling and seismic activities^[16] .

Another set of literature has focused on how oil legislation in Nigeria is a consequence of power politics in the country. This can be seen in the dwindling fortunes of the derivation principles in the Constitution. Thus, an author^[17] noted the progressively diminishing revenue accruable from oil that has been allocated to the region by the Federal Government since independence to its present 13percent. He observed that this percentage has failed to satisfy the yearnings of the people of the Niger Delta region. This state of affairs has served to exacerbate insurrection and create violence, instability and conflict in the Niger Delta.

Furthermore, commenting on the issue of resource control, an author^[18] did not go in-depth to distinguish the difference between resource control and mere increase in revenue which is just a part of resource control. He writes with passion and uses some emotive languages. He describes the neglect of the oil producing communities in very strong language. For instance he describes the treatment of Bayelsa state, one of the states in the Niger Delta region as pathetic and the overall neglect of the region as unconscionable.

I tend to agree with all the above postulations especially the statement made by Mahler. But the pertinent question missing is how well has the current 13percent derivation fund accruable to the oil producing states been put to proper use. It is my opinion that the states should also properly utilize and give account of the 13percent derivation fund accruing to their states and this could be done through provision of basic infrastructures in the state where oil is being explored.

 

1.8. Organizational Layout

This dissertation is a devoted study on the legal rights of the Niger Delta States in relation to the ownership and control of mineral resources under Nigerian Law. Its purpose is to analyse some of the existing laws regulating ownership and control of mineral resources by the Federal

Government and give recommendations. This dissertation is made up of five chapters.

Chapter one begins with the background to the study which consists of the importance of mineral resources in Nigerian economy, the main ethnic groups of the Niger Delta region, history of oil exploration in Nigeria, etc. It also has the statement of the problem, aims and objectives of the study, scope of the research, justification for the research etc.

Chapter Two elaborates on the Legal Framework on the Ownership of Mineral Resources in Nigeria. On independence, Nigeria adopted some significant laws that vested the ownership of mineral resources on the Federal Government and also vested the trusteeship of land on which mineral resources is found on the State Government. Some of these laws are the Constitution of the Federal Republic of Nigeria, 1999, Petroleum Act, 1969, Cap P10 Laws of the Federation of

Nigeria, 2004, Minerals and Mining Act, No. 20 of 2007, Exclusive Economic Zone Act, 1978 Cap E17 Laws of the Federation of Nigeria, 2004 and Land Use Act, Cap L5 Laws of the Federation of Nigeria, 2004.

Chapter Three is a Comparative Analysis on the Ownership of Mineral Resources in other Jurisdictions. This chapter focuses on countries like the United States of America and Brazil which operate the same federal system of government like Nigeria and how the ownership of mineral resources by their respective government has improved their countries’ economies and if Nigeria could borrow a leaf from them.

Chapter Four dwells on The Effect of the Ownership of Mineral Resources by the Federal Government on the People of the Niger Delta Region. This would include the principle of self determination, the principle of derivation, the resource control question and the impact of oil exploration on the people of the Niger Delta region. In this chapter, issues such as oil exploration, gas flaring, oil spillage, deforestation and vulnerability to natural disasters were highlighted, their losses and gains and how the government and the relevant corporate entities operating in the region can better the lot of both the environment and people.

Chapter Five is devoted to Summary, Findings, Recommendations and Conclusion

 

 

[1] Oge, O., Oil and Nigeria, http://www.nigeria–planet.com/oil–and–nigeria, Accessed on the 5/4/2013 at 11.53am.  ³ Ibid.

[2] Sections 14(1) and 15(1) Petroleum Act, Cap P10 Laws of the Federation of Nigeria, 2004. This Definition was also adopted by Section 22 Nigerian National Petroleum Corporation Act, Cap N123 Laws of the Federation of Nigeria, 2004.

[3] OseIgehon, M.,(2012), The International Legal Regime Relating to Oil and Gas Being a Paper Presented at the Conference for Judges at the National Judicial Institute, Abuja, p. 4.

[4] Udosen, C., et al., (2009), Fifty Years of Oil Exploration in Nigeria: The Paradox of Plenty, Global Journal of Social Sciences, Vol. 8, No.2, p. 37.

[5] Cap P10, (Ibid).

[6] (1991) 1 NWLR, pt. 165, p. 53.

[7] Section 44(3) Constitution of the Federal Republic of Nigeria, 1999 (as amended).

[8] Section 1 Petroleum Act, (Op. Cit).

[9] Section 1 Land Use Act, 1978, Cap L5 Laws of the Federation of Nigeria, 2004.

[10] Cotula, L., The Regulatory Takings Doctrine http://www.iied.org/pubs/pdf, Accessed on the 26/7/2015 at 5:34pm.

[11] Ebeku, K., Oil and the Niger Delta People: The Injustice of the Land Use Act, Centre for Energy Petroleum and Mineral Law Policy Journal, http://www.dundee.ac.uk/cepmlp/journal/html/vol9, Accessed on the 26/7/2015 at 5:58pm.

[12] UNDP, Niger Delta Human Development Report, 2006.

[13] See Amnesty International, Nigeria, (2009), Petroleum, Pollution and Poverty in the Niger Delta, p.9.

[14] Sinden, A., (2008),  An Emerging Human Rights to Security from Climate Change: The Case against Gas Flaring in Nigeria, in Burns and Osofsky, (Eds.), Adjudicating Climate Change Sub-National, National and Supranational

Approaches, Cambridge University Press, p. 3

[15] The practice of gas flaring has been on in the Niger Delta since oil production started in the 1950s. See The Climate Justice Programme and Environmental Rights Action/ Friends of the Earth Nigeria, Gas Flaring in Nigeria:

AHumanRights    Environmental     and         Economic Monstrosity,http://www.climatelaw.org/media/gas.flaring/report/gas.flaring.in.nigeria.html,             Accessed               on           the 26/7/2015 at 6:46pm.

[16] Ibid.

[17] Mahler, A., (2010), Nigeria: A Prime Example of the Resource Curse: Revisiting the Oil Violence Link in the Niger Delta, GIGA Research Programme (Violence and Security) Working Paper, No. 120, p.16.

[18] Dibua, J., Citizenship and Resource Control in Nigeria: The Case of Minority Communities in the Niger Delta, Africa Spectrum, Institute of Affairs, GIGA, Hamburg Germany, Vol. 40, No.1, p.9

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