A Review of the Nigerian Energy Industry

Oil companies must conform with global best practices – Anyanya

Lancelot Anyanya, NOSDRA chairman

20 April 2014, Lagos – Chairman of the National Oil Spills Detention and Response Agency, Major Lancelot Anyanya, speaks on the agency’s engagement among stakeholders in the oil and gas industry to prevent oil spills and enhance the quality of the environment. He also speaks on sabotage in host communities and the benefits of the Petroleum Industry Bill, among other issues

Looking at the idea behind the creation of NOSDRA, would you say the objectives of the agency have been realised so far?

To a large extent, I would say yes. As you would be aware, the National Oil Spill Detention and Response Agency (NOSDRA) was created by law in 2006, out of then-existing institutions. And prior to the creation of the agency in 2006, I believe the responsibilities were being performed by the Federal Environmental Protection Agency (FEPA) and to some extent by DPR and other related institutions.

I believe it is a demonstration of the seriousness of the then government’s commitment to address the issue of oil spillage and the effect on our environment that NOSDRA was created. So to the extent that our attention as a people, as a nation, is able to focus now on oil spill as a menace and the extent that we as an agency are doing, the current board with the management drawing national and international attention to the challenge of problem of oil spill, an agency that is able to broker relationships between different stakeholder groups and build consensus towards addressing this very crucial issue.

To that extent, the objectives have been largely realised. But in a functional sense, there still remains a lot to be done and the reason I say that is because across the length and breadth of this country, we still have oil spills going on because the nature of the enterprise itself, the conduct of business and activities in the oil and gas industry necessarily means that we have to deal with the issues of oils spill.

The considerations that matter and should be is how quickly and comprehensively we respond to the challenge of these spills so that our community, the food chain, the people and human civilisation as we know it in this part of the world does not suffer from the adverse effects and consequences of these spills. In that context, we have to admit, sadly, that there yet remains a lot of work to be done and that is not for lack of political will, it is largely because of the kind of defects in the structure that had characterised relationships in this sector. I believe this is where we must give credit and acknowledge the vision, the foresight and leadership of President Goodluck Jonathan in constituting a governing board for NOSDRA to improve, not only on the corporate governance practices but also to create a new wave of energy to drive a renewed engagement of all stakeholders to deliver, in a functional sense, the real mandate of the agency. And that’s what we are trying to do.

The constraints, understandably so, are of funding to procure equipment, to give capacity to staff and manpower of the agency, funding to procure other resources necessary to deliver on zero tolerance on spills in our environment. So this is the context in which I would like to look at it.

During your recent visit to Governor Dickson of Bayelsa State, the governor referred to chilling revelations of studies on the impact of oil exploration on the environment in the Niger Delta. Does NOSDRA have such scientific background in the crusade to save the environment?

Well, I must pay tribute to the work done by the management ably led by Sir Peter Idaboh, the Director-General. I am impressed at the amount of empirical data available to NOSDRA as put together in their quest to execute the agency’s mandate. The work done pursuant to the initiative of Governor Seriake Dickson of Bayelsa State is one other dimension of it. It looks at the effect of oil spill not just on the environment but also on human health. So I know, for instance, that they are looking at the aspects of toxicology and related issues like that, which affect public health and public safety. As you would expect, NOSDRA is still a young institution, we cannot claim to have all the data that we need but we are in the process and this is why we embarked on that visit, to build, to deepen the bond of friendship or partnership, to redefine our engagement strategies, so that we can benefit and one of the benefits we hope to gain is that from Bayelsa and we will be availed that report when it is ready and then it becomes a tool in the hands of NOSDRA for dealing with our mandate.
Clearly, our core mandate is to respond to oil spills and make sure they are managed in the most environmentally sustainable manner consistent with the provisions of national oil spill contingency plan. And in doing that the broad interpretation of our mandate would require our access to a wide array of variegated data from different sources such as coming from the studies being conducted currently by the Bayelsa State Government at the instance of the governor. We are looking forward to getting that information and to add it to our pool of information and data to do better.

Your on-the-spot field assessment of the spill at Ikarama must have been an eye opener. What were your observations?

Well, it’s indeed an eye opener. For me personally, coming from an oil producing community, the menace, the damage caused to our ecology and our environment generally by oil spills is not entirely new to me. You’ll appreciate that it is a different ball game when you see that this phenomenon is widespread and in some cases perhaps it is a bit worse from one community to the other. What has happened is that we have only started in Bayelsa State.
We are still going to other states in the Niger Delta because as you know NOSDRA’s mandate extends well beyond the Niger Delta. It includes responsibilities for other cases caused by tank farms, petroleum pipelines, petroleum products depots which are of course spread across the country.

So let there be no illusion that our mandate is somewhat limited to the Niger Delta. It happens that the Niger Delta being the epicenter of oil and gas production in Nigeria for over 50 years would logically be worst affected and we are also at the same time taking a message across the communities, a message that all of us need to re-engage in a new relationship, relationships that are not adversarial in nature like it used to be, relationships that are not exactly transactional but essentially collaborative and engaging, built on a new vista of trust so that together we can work together to rescue what’s our common heritage.

The environment is our common heritage to all of us – the national oil companies, the oil producing companies, the communities themselves in whose land and water oil is explored, exploited, the local government, the state government and the Federal Government. So at the end of the day, matters of the environment have to do with our common humanity and on that we cannot afford to build or create any lines of enmity.

So how has the response been to the new engagement?

Yes, we have been going round to pass across the message of renewal, educating on the basic issues and I believe the reality is sinking in which is good for everyone. We realise that it is important that we engage with all stakeholders and let everybody be part of the conversation in this new regime; the need for them to impact on the conversation that shapes this regime of engagement. The truth of it is that the history of oil production, oil spills in Nigeria is replete with instances where the community accuses the oil company, the oil company accuses the community and the community accuses the government. We understand our role in NOSDRA as an honest broker of very important relationships; very important relationships because oil, as we know, drives the wheel of our economy today. Oil accounts for the relative prosperity that we enjoy today and the people enjoying this prosperity are Nigerians and even beyond Nigeria. Yet as I always say and would say it again, that prosperity has come at a huge price to several communities. Some of the prices they have paid include extreme poverty of the worst imaginable kind. To that extent, it is important that in shaping our strategies, going forward, those communities themselves be engaged optimally, so that they are part of the conversation, they should buy into it and understand that it is our mutual and collective interest to build this new regime of engagement. For instance, it is important that we send out a clear message, while we talk with the oil companies and ask them to build and relate in an environmentally more responsible manner consistent with global best practices, because all these things they do in Nigeria, they do not do anywhere in the world. So it is both the moral thing to do, it is the proper and ethical thing to do for them to subscribe to new standards of behaviour. We are also carrying the message to the oil communities to say we must speak to the few deviants among us who for reasons of greed and immediate profit are investing in an enterprise that will threaten our very survival as a people, because already we have compromised that today by the behaviours tolerated in time past. While we want to see what we can rescue out of it, we must begin to make serious investments in protecting and preserving our future for our children and for those who will survive to be part of that future because what we hear from those who understand the science is really frightening. It is not a scenario any of us would want to see come to pass.

What did you gain from your recent visit to the JTF Command in Yenagoa, in terms of collaboration to fight the menace of oil theft?

Well, we went to the headquarters of the Joint Task Force Operation Pulo Shield responsible for dealing with the menace of illegal bunkering, crude oil theft and theft of other petroleum products. I must say that the NOSDRA board was deeply impressed with the commitment, the candour and the clear statement of the new Commander, Major General Atewe. With the kind of commitment he has given, with the progress already made, building on the excellent work done by his predecessors, we are confident that the JTF is able to work and very quickly degrade the capability available to criminals to conduct this very wicked enterprise across the region. What is our interest there? We know that a great percentage of oil spill occur as a result of the activities of crude oil thieves, pipeline vandals, because in the quest to just take product and go and sell, to satisfy their greed, we have seen clearly that that contributes significantly to oil spills – what some refer to as mystery spills, spills that you cannot attribute to either equipment or operational failure or on the part of oil companies or producer or due to direct community action. Thus mystery spill is the handiwork of vandals and criminals who traverse the region to ply their trade. So every endeavour that reduces their capacity and reduces the latitude to do that helps the environment, reduces the opportunity for oil spills and therefore meets our objective as an organisation to have zero tolerance to oil spills and environmental degradation in the oil environment.

There is this issue of alleged sabotage in the host communities which some attribute to lack of care or frustration among the youths. Are you concerned about this development?

We are very concerned and I will say again that for us at NOSDRA it is not just the cause of the spill that is the issue. We are very interested in the environment. We are interested in the environment because the environment is the very basis for every future plan or process we may have either as an individual or as a community or as a country. So it is important that we preserve the environment. It doesn’t matter what frustrations are dragging our youths. We have respect for the material condition of the people. But that doesn’t make crime any less than crime. It is a crime.

Secondly, this is not just ordinary crime, this is crime against humanity, and as the Bayelsa State Governor has rightly termed it, environmental terrorism. And that’s why at Ikarama, we spoke to the youths, to send a clear message and I broke it down to parlance they can understand. I told them nobody practices witchcraft against his own and what some of our youths are doing is akin to practicing witchcraft against their own. So you have to break it down that way so that they can relate to it and indeed appreciate the futility and sheer foolishness in investing so much energy to make money or whatever benefit there might be in this criminal enterprise, only to spend that same money to treat terminal illness and medical conditions medical science have not found a way to really capture. Like I asked them: does it make sense to expose yourself to cancer because of N10 million? When cancer comes calling, N10 million cannot deliver you. So it is important that we are able to send out this message to the communities and look at that balance.

Amid all of these, like I said, NOSDRA is a broker of relationships. We articulate our case to every stakeholder. We also tell the oil companies that it is important for them to come to this table of brotherhood where we are renegotiating the basis of the engagement, so that they can be part of the conversation.

It is no longer sufficient to threaten the environment and hide under the guise of whatever weaknesses that may exist in our legal regime, for instance, to perpetuate all kinds of injustice and wickedness against the environment that they will never do elsewhere in the world. Because, ultimately the ability to continue to conduct businesses in these communities, is directly tied to the stability and wellbeing of these communities. If the communities get to understand, and they are getting to understand because of the work we are doing, that these are the negative consequences of oil spills and begin to withdraw, it will be good for the interest of all. Some of the deviants who cause this havoc in these communities actually come from outside, and that’s where the work of our law enforcement, communities and military forces is extremely important. The results that we are seeing in terms of arrest of criminal gangs and their promoters are extremely important. So we are clearly sending a message to different audiences.

At the end of the day, wherever side you find yourself – whether as host community, whether as government, the host community is affected, the oil companies that live there, as part of the food chain, the part of the population is part of the food chain. Basically, there’s no immunity for anybody. We cannot continue to sustain or tolerate choices made by a few that threaten the collective survival of all of us.

Now the NOSDRA amendment bill has passed second reading at the National Assembly. What are the essentials of the bill vis-à-vis the work of your agency?

You are right that for us in this board working with them in the National Assembly, working with them in the ministry, working with our leaders at all levels, we are committed to advocating an expeditious process for the completion of the process that was already begun by committees in the chambers of the National Assembly. And the reason is that the action they have taken is the right way to go to amend the NOSDRA Act to enable the agency be indeed the watchdog it is supposed to be, that will not only bark but also bite where necessary to give full effect to its mandate.

The essential issue is to provide a clear framework for sanctions for abuses and gross violations of the provisions of the law. The thinking was that the law as is currently is does not provide sufficient mechanism for sanction. And if you don’t have that, without the ability to discipline, to sanction, then the regulatory role becomes advisory and we don’t want that in a critical sector and as we find ourselves in NOSDRA.

The other element includes providing sufficient funding to cater for the victims of spills so that they do not suffer because of bickering between other stakeholders over culpability for oils spills. For instance, I understand that the bill provides for an oil spill Trust Fund which is the practice in most countries of the world. So if community A is affected by spill, for instance, before we make a determination whether it’s sabotage, third party from the operator or from any other cause, what is essential is that that community must not suffer by action that was not perpetrated by them.

When the criminals break oil pipeline, for instance, should the innocent citizens suffer because of it? No. And because of this challenge, we all know it is not too much to set aside a very little negligible percentage, not for NOSDRA, put it in a Trust Fund that I believe will be managed by very eminent Nigerians, where a minor percentage is then allocated to the work of NOSDRA and other related agencies that have the mandate to keep our environment clean and sustainable. It is not too much to ask for, it is the ethical thing to do, it is the moral way to work and we are grateful to the leadership of the committees in the National Assembly, to the leadership of the Senate and the House, we are grateful for the leadership provided by our minister and the permanent secretary and of course the leadership of the President, who we know will assent to that bill because it is the right thing to do.

Lastly, what are your thoughts on the PIB? If it eventually becomes a law, do you see it rubbing off on the activities of NOSDRA?

The expectation of most Nigerians is that the PIB will create a more vibrant, more dynamic oil and gas industry. We clamour and advocate for its passage. We think also it will help immensely because part of the challenge we experience now is the nature of the contract the government is into. A joint venture contract, for instance, means that whenever an oil operator is asked to pay for infraction against the environment through spills, a good percentage of that burden is borne by the government. So it creates some contradictions. On the other hand, what it does is that it lures the operator into a false sense of security and protection resulting in a scenario where they do not exercise the necessary duty of care in the conduct of their business even though some of us think differently.

We believe, for instance, that even when we have a joint venture agreement, the operator has an inherent duty of care in executing that contract in such a way that it does not incur unnecessary cost to the joint venture partner. So to that extent, the PIB will throw up a new regime of contractual engagement and free the Federal Government from this burden of joint venture commitment. We think that is healthy for what we do in regulating the operations of the industry and its impact on our environment. So we are fully supportive of the PIB and we urge all concerned to support its expeditious passage.



– Abimbola Akosile, This Day

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