Nigeria’s Loss To Pipeline Vandalism Hits N2.8trn | Independent Newspapers Limited
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Nigeria’s Loss To Pipeline Vandalism Hits N2.8trn

Posted: Nov 11, 2015 at 8:27 am   /   by   /   comments (0)

The Federal Government and oil companies in Nigeria have lost a cumulative amount of N2.8 trillion ($14 billion) to oil pipeline vandalism in a year. The vandalism also resulted in the devastation of about 52,000 hectares of land in 2014, according to a report yesterday by The Guardian of London. Quoting data prepared by the Stakeholder Democracy Network (SDN) released to coincide with the 20th anniversary of the execution by Ogoni leader and writer, Mr. Ken Saro-Wiwa, the report said the scale of pipeline vandalism, which sees infrastructure tapped to steal crude oil, has now reached an epidemic proportion.

The report came as a Federal High Court, sitting in Asaba, Delta State, ordered Sterling Oil Exploration and Energy Production Company Ltd (SEEPCO) to pay a fine of N68 million imposed on it by the National Oil Spill Detection and Response Agency (NOSDRA) for failure to report the oil spill at the Okwuibome location C (OPL 280) on March 5, 2011.

Delivering the judgement on the case on October 29, 2015, Honourable Justice Olatoregun-Ishola upheld the submissions by the Counsel to NOSDRA and held that SEEPCO was in breach of Section 6 (2) of the Agency’s Act when it failed to report in writing the oil spill incident at OKWC and that the Agency had the powers under its enabling Act to impose the fine of N68 million. NOSDRA had commenced the legal action against SEEPCO on February 17, 2012 by seeking, amongst others, a declaration that the defendant breached Section 6 (2) of the plaintiff’s enabling Act when it failed to report in writing the oil spill at the Okwuibome location.

The latest sanction against SEEPCO for default in reporting and cleaning up oil spill is seen by some operators in the nation’s petroleum industry as part of the renewed effort by NOSDRA to ensure compliance with all environmental legislations and detection of oil spills. NOSDRA, according to The Guardian report, recorded more than 900 sabotage incidents last year across the 12,700km of pipes belonging to local and international companies.

The thefts range from small-scale pilfering to industrial-scale theft coordinated by and in collaboration with the Nigerian military, corrupt corporate executives and community leaders. “But the way to stop the damage is not by militarising the volatile region, but by providing jobs to unemployed youths and giving communities a share in legitimate oil profits,” the report said.

The report, quoting SDN officials, said the authors interviewed 83 people, ranging from local chiefs and youths to government officials, who said the pipelines were deliberately “cracked” to create work. “There is an implicit incentive to vandalise pipelines in return for cleanup contracts.

The youth benefit from cleanup after every spill,” one interviewee said. “Our friends that have gone to school, why are they still unemployed? I can crack pipe and earn money quickly,” said one man who admitted sabotaging pipelines. Youths “vandalise to survive” in the absence of other employment choices and ignore the long-term impact to their local environment and health, the report said. “The environmental impact is immense with an estimated 51,500 hectares devastated by oil spills in 2014 as a direct consequence of pipeline vandalism.

“In communities, the feeling of anger and demand for attention motivate vandals to interrupt pipelines at the expense of their environment and livelihoods, with many addicted to easy money from surveillance and cleanup contracts,” the report added.

But the report highlighted several positive initiatives that suggest that vandalism could be stemmed. Niger Delta Petroleum Resources, a Nigerianowned company, has had few problems with vandalism because “it appears to pay its staff more than international oil companies as an incentive and to promote a culture of ownership over company internal values and processes”.

A percentage of every barrel of oil produced goes back to a community trust fund to support development. A second company, Addax Petroleum, has avoided vandalism by employing community pipeline surveillance teams, including ex-military, who were given a mandate to patrol 1km lengths of pipeline.

The Indorama Eleme Petrochemical Company, which makes pharmaceutical raw materials, operates an equity-sharing model with six communities together having a 7.5 per cent stake in the company. According to the report, it had not had any of its pipelines vandalised. Vandalism is rife because both community leaders and oil companies try to employ “divide and rule” tactics, the report said.

“Chiefs, paramount leaders and youth and cult leaders … have used their power to their own personal advantage, creating divisions, wealth inequality and distorted power structures within communities. Oil-companies, rather than intervening on a moral basis, have seen this as an opportunity to create factions in the community,” it stated.

A spokesman for Shell in Nigeria – the Shell Petroleum Development Company (SPDC) – said it took numerous measures to limit the impact of criminality and campaigned to raise awareness of the problem. “However, theft, sabotage and illegal refining continue to be the main source of environmental damage in the Niger Delta today. It is vital that collaboration between operating companies, communities, the Nigerian government and its international partners is maintained and expanded,” the report quoted the unnamed Shell official as saying.