Presentation on theme: "PRESENTATION OF RESEARCH REPORT"— Presentation transcript:
1 PRESENTATION OF RESEARCH REPORT PRIVATE GAIN, PUBLIC DISASTER: SOCIAL CONTEXT OF ILLEGAL OIL BUNKERING AND ARTISANAL REFINING IN THE NIGER DELTABYBEN NAANEN & PATRICK TOLANIUNDER THE AUSPICES OFNIGER DELTA ENVIRONMENT & RELIEF FOUNDATION (NIDEREF), PH, NIGERIA &REDEEMERS RELIEF AGENCY INT’L (RAIN), OXFORD, UK30 SEPTEMBER, 2014
3 INTRODUCTIONNigeria has been losing about $6 billion worth of oil pa to theft in recent years which is about 6.25 % of the country’s total export value. About 80% of the stolen oil is exported while 20% is crudely processed into low quality petroleum products for the internal market. This scale of loss is close to a national economic emergency.Nigeria has the highest rate of oil theft in the world – about 145,000 bpd or 7.25% of total production. Closest rival is Russia which looses about 150,000 bpd or 1.5% of total production.Unfortunately, theft of Nigerian oil is seen abroad as a uniquely Nigerian problem that does not represent credible threat to the international economy or world peace and security, hence it is difficult to get the support of int’l community to combat it. So Nigeria has to find an internal solution to its self-inflicted crisis.
4 KEY FACTSAmount of oil stolen per day – 145,000bbl = 52, 925,000bbl/year.Financial loss to Nigeria - $6 billion pa.Size of illegal bunkering economy - $9 billion pa.Illegal bunkering employment – more than 26,000 men and women directly or indirectly receive incomes from illegal bunkering and artisanal refining.
5 Public health risk oil pollution: Bodo creek in Gokana LGA of River State has one of the highest levels of hydrocarbon contamination in the world – 0.526mg/kg of TPH and 0.044mg/kg of PAH.Reference point for most researchers is Potomac River, USA which has 598ng/kg of PAH.High values of TPH and PAH correlate with possible lung, kidney, heart and testicular damages. Exposure to PAH is primary risk factor of lung cancer.
6 RESEARCH OBJECTIVETo unravel the processes and social ramifications of illegal bunkering (oil theft) and artisanal refiningTo produce recommendations and social action tools that would lead to the mitigation of the problem
7 PROJECT GEOGRAPHICAL SCOPE BAYELSA STATENembe, Southern Ijaw LGAsOgbolomabiriEkulamaEkeremor LGADELTA STATEUgheli SouthUgheli NorthBurutu LGAWarri SouthRIVERS STATEGokhana, Adonis, Tai LGAsBodo - B/K Dere – Bolo axisOgu Bolo LGABolo communityArea of Study
8 FIELDWORK ACTIVITIES Fieldwork, between March and October 2013 Rivers State – Gokana, Tai & Ogu Bolo LGAsHot Spot – Bodo-Bolo Axis
9 FIELDWORK ACTIVITIESBayelsa State – Nembe, Ekeremor & Southern Ijaw LGAHot Spots – Nembe Axis, Azagbene and Igbomaturu
10 FIELDWORK ACTIVITIES Delta State – Ugheli, Burutu & Warri South LGAs Major hot Spot – Ojobo, Obi-aghaga and Kiagbodo, Uzere
11 FIELDWORK ACTIVITIES Relevant Government Institutions – Interviews IOCsJTF Op Pulo Shield & camps in RV, BY & DTNNS PathfinderIllegal bunkering com’tiesFirst hand observations of bunkering ops in campsInt’views at oversea locations
12 FINDINGS / OBSERVATIONS SOURCES OF CRUDEAbandoned and uncapped Well headsPipeline vandalization3,203 oil spills occurred in Nigeria from 2006 – 201070 % attributed to sabotage – FMENV
19 FUTURE TREND IN OIL THIEFT The effectiveness or otherwise of current anti-bunkering measures:Effective enforcement measures will vastly reduce oil theft while the current lackluster approach will contribute to increasing or stabilizing theft at the current levelThe prospects of stability in the region:Widespread conflict such as occurred between 2001 and 2010 will most likely lead to increase in theftInternational oil prices:Current price levels will continue to be conducive to theft while a fall will diminish the profit margin and act as disincentive. In fact should there be a glut, oil thieves may find it difficult to sell and thereby reduce the rate of theft
20 CAUSES OF ILLEGAL BUNKERING Socio-Economic FactorsPoverty and deprivation / capital accumulationLocal bunkering and artisanal refiners mostly driven by povertyExport-led theft driven by profit and capital accumulationHigh youth unemploymentUnderdevelopmentPerceived exclusion from the benefits of the oil economy
21 CAUSES OF ILLEGAL BUNKERING Political FactorsFailed state syndrome – weak institutions, weak governanceCorruptionResource curse thesis/paradox of plentyResource control assumptions
22 CAUSES OF ILLEGAL BUNKERING Market FactorsHigh oil prices, soaring profitsScarcity of petroleum products in riverine communities of Niger DeltaHigh domestic demand for cheaper fuelRobust international demand for oilVulnerability of Oil Installations and Weak DeterrenceOil installations, especially pipelines, are not protected hence vulnerable to attackOil installations can easily be sabotaged without serious consequences for perpetrators
23 IMPACT AND CONSEQUENCES Economic Impact- Huge loss of revenue to government- Impact of revenue loss on national, state and LG budgets and socio-economic development- Dwindling oil and gas investment- Neglect/death in the local communities of other artisanal occupationsSocial Impact- Social crisisdecline of education – increase in school drop outslack of interest in other necessary low income occupations
24 IMPACT AND CONSEQUENCES Political Impact- Nigerian politics, driven by desire to control oil revenues- Threat to democracy – overwhelming influence of oil money on elections- Weakening of state institutions and political instability- Potential rise of petrocracy- Arms proliferation- Security and human rights violations
25 FINDINGS – CONSEQUENCES Environmental and Public Health ImpactWide spread environmental impact – land degradation and possible groundwater contaminationCompounded destruction of marine ecology and fishery economyPossible outbreak of cancer pandemic due to hydrocarbon contamination - Potential Bhopal or Chernobyl in the Niger DeltaLung and skin diseases and burns are on the increaseSpread of sexually transmitted diseases, including HIV_AIDS
26 Environmental ImpactDEFORESTATION – LAND DEGRADATION – GROUNDWATER CONTAMINATIONFOREST FIRES – CO2 EMISSIONS – CLIMATE CHANGE IMPLICATIONS
27 LIMITATIONS OF CURRENT COMBATING MEASURES Criminalization/legal approachDiscouragingly negligible rate of conviction of arrested suspectsCorruption by security and law enforcement officialsIntervention of influential individualsAdvocacyInadequate education and awareness campaignsMilitary Action – use of security forces, JTF, NavyPipeline Security (surveillance)Challenges and Shortcomings of Current Pipeline Surveillance ProgrammesTechnology and Oil Theft MitigationAerial SurveillanceSensing TechnologyPressure MonitoringLIMITATIONSHigh level corruption among State security officials
28 SUMMARY OF RECOMMENDATIONS Immediate MeasuresAddressing the socio-economic foundation of illegal bunkering through an attack on poverty and job/livelihood creation targeted at the youth who must be made to come out of the creeks.Pipeline protection through community-based surveillance, replacing the private contractor surveillance. In exchange for this role communities receive development support through GMOU.
29 Speedy prosecution of oil theft cases by setting up a special judicial mechanism exemplified by special courts.Policy review to allow communities own modular/cottage refineries that would contribute to addressing local supply disequilibrium, build local capacity in the downstream sector and empower local communities through job creation.
30 SUMMARY OF RECOMMENDATIONS Recommendation for the IOCsSocio-Economic Initiatives-Towards a new Development ParadigmSocio-Economic Approach-Mitigating exclusion, building inclusiveness in host communities by attacking poverty and unemploymentPipeline Protection and Management –Review of Pipeline Surveillance Initiatives: Community Based ApproachRestructuring Community Relations, Changing Perception and AttitudesConstructing Sustainable Partnership with Local CommunitiesBuilding a Robust Advocacy Strategy
31 Recommendation for the Federal Government SUMMARY OF RECOMMENDATIONSRecommendation for the Federal GovernmentLegal IssuesSpeedy prosecutions – Special CourtsStrengthening the Legal / ProcessStrengthening Enforcement RegimeTargeting the Market for Illegal OilPolicy Reform – Promoting Cottage/Modular RefineriesPolitical ApproachGood GovernanceCombating Corruption,Strengthening State Institutions, e.g. law enforcement, judiciaryResource ControlProactive Environmental Restoration ProgrammeCleanup and Remediation Projects
32 SUMMARY OF RECOMMENDATIONS Recommendation for the Local CommunitiesEffective Leadership and GovernanceGood local governance will strengthen community bargaining powerCredible leaders will earn the support and respect of the youths and members of the communityPave the way for peace which is a crucial condition for developmentEnhances and drive socio-economic growth and developmentSustainable Partnership and ownershipSuch partnership could create a sense of ownership which would enhance the security of oil facilities and oil workers
33 SUMMARY OF RECOMMENDATIONS Recommendation for International CollaborationTargeting External Demand SourcesImplementing an international tracking system for the major destinations of Nigerian crudeNigeria to initiate an international campaign that would treat oil theft as a trans-national organized crime (TNOC)Formation of an International Coalition Against Nigerian Oil Theft (ICANOT)Reform of Nigeria’s crude oil sale and contracting processInstitutionalizing a transparent process not political considerationEmpowerment of the local marine industry
34 CONCLUSIONCombating illegal bunkering requires addressing its socio-economic foundation including Poverty and UnemploymentGovernment policy initiatives should be monitored to produce expected outcomeThe IOCs must construct new equitable and mutually beneficial partnership with the local communities, to enable the communities develop a sense of ownership that will make them protect oil facilities in their domainEfforts should also be intensified through positive advocacy to change old community perceptionsThe study also call for a new community – based pipeline surveillance initiative and an effective judicial mechanism to ensure speedy prosecution of arrested suspects.We believe oil theft will be substantially mitigated if these urgent measures are rigorously implemented