Wednesday, April 25, 2012

NIGERIA CASE STUDY: Comparative Analysis on Enforcement of Laws relating to oil Bunkering

By Ogunnusi Morolake Afolasade

Nigeria, particularly the Niger Delta region, which constitutes of Bayelsa, Delta, Abia, Akwa-Ibom, Cross River, Edo, Imo and Ondo states is notorious for illegal oil bunkering activities, as a result of this activity the country has lost a lot of revenue.
A reform of the law to reflect illegal oil bunkering as an economic crime is necessary as this would allow for offenders to be dealt with. The enforcing agents should also arrest offending ships in a bid to serve as a deterrent to offenders who may want to engage in this activity.
In subsequent paragraphs, I would build a relative outcome in achieving the enforcement of laws relating to oil bunkering. I would further look at the concept of bunkering and the role which enforcement agencies like the Nigerian Police have to play towards curbing this activity. I will also show various instances where reforms of relevant legislative documents would be imperative. In addition, the provisions of the International Convention on Civil Liability for Bunker Oil Pollution Damage and other international Laws would be examined especially with respect to its effect on Nigerian Law. Also a comparative analysis of the methods applicable in Australia and Nigeria would be made and an analysis of the feasibility of the application of the Australian model to the Nigerian environment would be examined.
 Definition of bunker: 
A bunker can be defined as fuel consumed by the engines of a ship, or the compartment or
tanks in a ship for fuel storage. It can also be defined as fuel used to power a ship or a ship’sfuel[1].
Definition of bunker oil:
"Bunker oil" means any hydrocarbon mineral oil, including lubricating oil, used or intended to be used for the operation or propulsion of the ship, and any residues of such oil[2].
 Definition of Illegal Oil Bunkering:
Illegal oil bunkering is a euphemism for theft of oil[3], which involves direct tapping of oil[4]. Though oil bunkering is a necessity for maritime shipping within the maritime sector, it becomes an illegal oil bunkering when it is carried out without requisite statutory licenses or valid documents, or in violation of the Nigerian Maritime Sector and the guidelines made by the statutory institutions regarding it[5].
The recent upsurge of oil theft or illegal bunkering has become an issue that now gives the Government, oil producing companies and Nigerians in general sleepless nights. As such, Nigeria’s economy has continued to dwindle even though the country is the biggest oil producer in Africa. However, the economies of other countries where Nigeria’s illegally bunkered oil are sold thrive on this cheap and illicit oil[6].
Other terms such as oil theft, pipeline vandalization, fuel scooping and oil terrorism have been employed in describing instances of crude oil theft[7].
 A brief summary on the legal regime on bunkering in Nigeria:
Enactments and regulations have been made based on Government policy to regulate and control oil bunkering because production and exportation of crude oil is the main stay of the economy[8]. As regards consumption of crude oil in a tank as earlier stated,[9]The  Crude Oil (Transport and Shipment Regulations)[10] Sec 4 (1), states that, “No loading shall be made into a ballast or a tank or receptacle of a ship other than those designated, dedicated and designed for the storage and transportation of crude oil. Sec 7[11], further states that, “No loading of crude oil shall be carried out within Nigeria at any Location other than those approved by the Minister for that purpose.


The necessity for the approval in form of a license by the Minister is also stated in The Petroleum Act [12], Sec 4(1) states that nobody shall import, sell, store or distribute any petroleum products without a license granted by the Minister of Petroleum Resources. 


Acquisition of a license is required as the Act reinforced by Government ownership of Nigeria’s Mineral wealth in Sec 1(1)[13] which states that, "…The entire ownership and control of all petroleum in, under or upon any lands to which this section applies shall be vested in the state”.

Sec 1(2)[14] further states that this section applies to all land, (including land covered by water) which is in Nigeria or under the territorial waters of Nigeria or forms part of the continental shelf’s; or forms part of the exclusive economic zone of Nigeria.

Furthermore, the current Constitution of the Federal Republic of Nigeria[15] Sec 44(3) affirms the Government’s proprietorship and control of all mineral oil and natural gas in, under or upon any land in Nigeria, its territorial waters and exclusive economic zone.

To prevent illegal activities such as oil pipeline vandalism[16], the Oil Pipelines Act[17]states that provision of licenses would be granted for the establishment and maintenance of pipelines incidental and supplementary to oil fields and oil mining for the purposes ancilliary to such purpose. Sec 2[18] of the Act provides that “license means an oil pipeline license granted by the provision of this Act

“Minister” means the Minister for the time being charged with the responsibility for matters incidental to oil fields and mining. Sec 3(b) [19]states that “the minister may, subject to the  provisions of this section grant oil pipeline licenses to construct, maintain and operate oil pipelines.

Grant of a license by the Minister is subject to Sec 7(2) [20]which states that grant of license is subject to payment of fees required by Sec 31 [21]of the Act, by the applicant. Sec 7(4)[22] further states that no person other than the holder of a license shall construct, maintain or operate a pipeline[23].  
The Coastal and Inland Shipping Cabotage Act[24] Sec 22(5) states that “A bunkering vessel or tanker or barge or floating petroleum storage is eligible for registration for sabotage trade in oil bunkering. The Petroleum Production and Distribution Anti Sabotage Act[25] creates the offence of “sabotage” with regards to the production and distribution of petroleum products in Nigeria. Sec 1[26] in defining the  “Offence of sabotage states that any person who does any of the following things, that is to say— willfully does anything with intent to obstruct or prevent the production or distribution of petroleum products in any part of Nigeria; or willfully does anything with intent to obstruct or prevent the procurement of petroleum products for distribution in any part of Nigeria; or willfully does anything in respect of any vehicle or any public highway with intent to obstruct or prevent the use of that vehicle or that public highway for the distribution of petroleum products, shall, if by doing that thing he, to any significant extent, causes or contributes to any interruption in the production or distribution of petroleum products in any part of Nigeria, shall be guilty of the offence of sabotage under this Act”.

 Sec 2[27]defines a Saboteur as anyone who aids another person; or incites, counsels or procures any other person or incites, counsels or procures any other person, to do any of the things specified in subsection (1) of this section shall, whether or not that other person actually does the thing in question, be guilty of the offence of sabotage under the Act.

Conclusion

Oil bunkering is regulated by the provisions of various laws, and these laws must be adhered to. The main requirement of most of the provisions is the procurement of license before engaging in oil bunkering activities. This is because ownership of all mineral oil, and natural gas in, under or upon any land in Nigeria or its territorial waters and exclusive economic zone is vested in the Government. Penalties for non-adherence to these provisions would be the payment of a prescribed sum, sentence to imprisonment (which is inclusive of life imprisonment) and death penalty.

Nutshell
"Oil Bunkering", a major plague stifling the Nigerian oil economy and a topic which has over the years triggered  debates and conflicts. This is the first part of  three segments of this sizzling piece of work by Morolake. Here the author looks at the various legislative materials and suggests a reform of relevant Nigerian laws. Will a reform of the law serve to curb this activity? What is your take on this issue? Read, Learn and Discuss! Your comments are very welcome.

[1] .   Oil bunkering within the Nigerian Maritime Sector: The urgent need for reform of Government policies and
laws –being a paper presented by Mr. Michael Igbokwe at the Annual Conference of the Nigerian Maritime Law Association held in Victoria Island on the 5th and 6th of May 2004(www.mikeigbokwe.com)
[2] . Article 1(5) International Convention for Bunker Oil Pollution Damage 2001
[3] . Human Rights Watch/the Warri crisis: Fuelling violence by Human Rights Watch @ pg 17-(www.unchr.org)
[4] . Oil Pipeline Sabotage in Nigeria:Dimensions,actors and implications for national security-Freedom C.Onuoha  @pg 106(www.iss.co.za)
[5] . Op cit @ no 1 pg 2

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[6] . Ilegal Oil bunkering in Nigeria
[7] . Op cit @ no 4 pg @ pg 105
[8] . op cit @ no 1 pg 3
[9] . op cit @ no 1
[10] . S.I.44 of 1984
[11] . ibid
[12] . Chapter P10-Cap 350 LFN 1990

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[13] . op cit @ no 12
[14] . ibid
[15] . 1999
[16] . op cit @ no 13
[17] . Chapter 338 of the Laws of the Federation of Nigeria 1990
[18] . ibid
[19] . ibid

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[20] . ibid
[21] . ibid
[22] . ibid
[23] . ibid
[24] . Laws of the Federal Republic of Nigeria No 5  2003
[25] . Cap p 12, Laws of the Federation of Nigeria,2006
[26] . ibid
[27] . ibid

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