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Nigeria: Why we must stop oil theft now

 by Eze Onyekpere

Government exists to protect lives and property, enforce law and order, and provide security and the framework for peaceful and reasonable conduct of human affairs. Several political theories and our observation of human evolution have told the story of disorder, chaos and tyranny that prevailed when every person works for his selfish interest without an overriding social interest determined by law. Clearly, law as an instrument of social engineering, seeks to resolve the conflicting interests in society so that everyone will be free to pursue their legitimate interests within the context of legally acceptable norms. We hope to analyse an issue that has been in the news lately in order to seek a resolution to the poser whether the Federal Government of Nigeria appreciates the importance of governing through the instrumentality of the law. Alternatively, whether the government appreciates that it may be sending a very powerful but wrong message to the rest of law abiding citizens who watch in disbelief as the government condones or encourages lawlessness.

It is the issue of crude oil theft which is estimated to be in the region of 400,000 to 600,000 barrels a day. Nigeria’s Bonny Light Crude Oil sells at over $100 per barrel; at 400,000 barrels, we are losing about $40m a day while at 600,000 barrels, we are losing about $60m a day. This loss amounts to between $1.2bn and $1.8bn every month. What are the likely scenarios leading to this oil theft? The first is that there are criminals stealing over 20 per cent of the mainstay of our economy. This is a very serious crime. Nigeria is blessed with a plethora of security agencies from the Police, Army, Air force, Navy, Nigerian Maritime Administration and Safety Agency, State Security Services, Nigeria Intelligence Agency, etc. We are even informed that a private company has been given a contract worth billions of naira to police the pipelines. In the last couple of years, our security budget has ballooned. All these agencies and institutions report to and are at the beck and call of the President and Commander in Chief of the Armed Forces of the Federal Republic of Nigeria. Yet, we are unable to bring the oil criminals to book.

It does not sound reasonable that there are criminals in Nigeria who have mustered strategies and have become so organised that they can withstand and outsmart the combined efforts of these security agencies. The oil theft scenario is different from the about Boko Haram operatives who most times operate like guerrillas. They hit and run away before security agencies arrive at the scene. To load 600,000 barrels of crude to a ship is not a one day operation; it requires large oil tankers and ocean going vessels that will be hired by very wealthy criminals. For it to be a day to day affair means that a bazaar is going on and it is being done with impunity in the full glare of all. So, why are we paying and maintaining the security agencies if they cannot stop this brazen criminality? The storyline that President Goodluck Jonathan set up a committee including governors to check oil theft sounds ridiculous when all that is required of the President is to give marching orders backed with resources and the political will to the heads of the security agencies and the stealing will stop within a couple of days. A combination of a well-resourced Navy with good sea going vessels and the Air Force overflying the relevant blacks spots and the intelligence authorities doing the background work will put oil thieves out of business.

The second scenario of the oil theft is that it is being organised and masterminded by insiders at the highest level of governance. Pray, how can this be ongoing and causing so much pain and nothing concrete is done to stop it? At the level of the individual, do we know of anyone who allows over 20 per cent of his income to be stolen and still condones the theft? States cannot get their dues at the Federation Account meetings and the Federal Government cannot execute capital projects due to the shortfall in revenue. Where is the law in all these scenarios? If insiders in government are involved, that would be the highest type of criminality which should not be condoned by Nigerians. But if insiders in government are not involved in this theft and it is a matter of criminals outsmarting the government, then, this is gross negligence on the part of the authorities; negligence at the highest level that demands that those in charge should give a serious thought to vacating their office.

Never in the history of our country have we witnessed such massive and organised crime which has led to serious deficits in the sums accruing to the Federation Account for sharing among the three tiers of government.  Never in our history has government been seen to be surrendering to criminals without a fight. Never in our history have we done our revenue estimates (as is happening in the current Medium Term Expenditure Framework) by taking cognisance of the conduct of criminals and the failure of the Federal Government to stop brazen criminality. The MTEF revenue projections for 2014 are less than the projections of 2013 and the MTEF states that the shortfall will be borne by reducing the capital budget. This development shows Nigeria as a country that is not yet ready for the task of development. How can we account for drawing down our reserves in the Excess Crude Account from $10bn as of December 2012 to about $5bn six months down the line? This is happening at a time of high oil prices when the ECA should have been repositioned with inflows. Can we survive an oil price shock if it trends below the $50 per barrel curve?

Heads should roll and those responsible should be held to account. The expectation is that the National Assembly should move beyond passing resolutions to demand strict accountability from those charged with getting the oil revenues in. In approving the MTEF, it will not be enough for the National Assembly to bicker with the executive on the benchmark price of crude oil which at the end of the day will not produce any results beyond crafting a budget on paper. After the oil price benchmark war of the 2013 budget between the Presidency and the National Assembly, what did we achieve? The doctrine of checks and balances in a presidential system of government anticipates that the National Assembly should act expeditiously to stem revenue loss, leakages and waste in the system. If the National Assembly fails to act to stem the rot, I have a strong feeling that as the 2015 elections draw nearer, the level of oil theft will increase.

Back to the law; from the divine laws to the laws of man, the command is ‘thou shall not steal”. Law as the command of a sovereign backed by sanctions implies that anyone who violates this injunction should be subject to sanctions. Particularly, when this is seen from the context of economic sabotage, the implications become clearer. If oil thieves are allowed to continue to steal, the message to the rest of the populace is clear: Criminality pays.

Onyekpere is a Lawyer and ESCR Expert

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