Contractual resolutions as solution to discontent in Niger Delta

In this edition, Tolulope Aderemi, Partner, Perchstone & Graeys attempts to throw light on how an Impact Benefit Assessment/Agreement (IBA) can minimize the agitation in the Niger Delta and Oil Producing Communities – providing a contractual resolution between Host communities, the Federal Government and the International Oil Companies (IOCs). He speaks of proprietary and compensatory rights and where they arise. Excerpts…

ON IMPACT BENEFIT ASSESSMENT

The whole idea of an Impact Benefit Assessment (IBA) is to look at ways and means by which, we can pacify all the parties involved in exploration and to avert conflict in future; between Oil Producing Communities on one hand and the IOCs and government on the other hand.

We need to pay attention on sustaining our production level. For a long time, we have not been meeting our Organisation of the Petroleum Exporting Countries (OPEC) quota and as you know, failure to meet this quota translates to loss of revenue. If there’s loss of revenue, then we will not be able to fund infrastructure. There’s no doubt that there is a rebounding effect of our inability to manage the Niger Delta situation on our economy. We must be creative in resolving these issues.

DOES IMPACT BENEFIT MEAN THAT THERE IS A PROPRIETARY RIGHT TO THE NIGER DELTA?

Not necessarily. What the IBA suggests is that, there exist compensatory rights – which means that where exploration activities which usually culminates into ecological damages are carried out in your locality, you will be entitled to compensation.

ON ASSESSING DAMAGES

There is no doubt that the activities of the iOCs will cause some form of ecological damage to the means of livelihood in the regions/localities where they carry out exploration. These exploration activities are carried out in the waters, while the communities rely on the same water for their livelihood, e.g. fishing, etc. Therefore, as a global standard, the IOCs are expected to compensate these communities for all of these damages.

To this extent, and in order to create a fair balance for both parties, the Impact Benefit Agreement (IBA) seeks to determine the extent of damage; the impact it has had on the subjects, and to measure the level of compensation due each community or individual affected. Adopting the same method as land matters, there will be need to enumerate and determine the value of the land/location in question, based on a number of parameters.

HAVEN’T THERE BEEN ASSESSMENTS BY STATUTORY BODIES CREATED FOR THIS PURPOSE?

We do not think any of the past development boards did any real assessment in this regard, which is why they ran into murky waters, i.e. OMPADEC Oil Mineral Producing Areas Development Commission (OMPADEC), Niger Delta Development Board (NDDB), the Niger Delta Development Commission (NDDC), which is still struggling with this feat. And this is because the level of damage is never ascertained before handouts are passed to the host communities and thus never adequate to resolve the real issues. Most often than not, these ‘handouts’ or compensations end up in the wrongs hands, which of course has led to lots of conflict situations. No real impact assessment was done, and which is why we commend the Vice President’s visit to the Niger Delta to assess situations in the region.

WHY IBA?

We propose an IBA because its provisions are very clear, and it also has stabilization provisions in it, such that where there is a change in law or policy, it would naturally affect the contractual terms we both have.

NATURE OF THESE CONTRACTUAL RESOLUTIONS?

For the first time, we are proposing a ‘Contractual Resolution’ NOT just between the IOCs and the Oil Producing Communities, but more with government’s implicit back up. So while this relationship is a bilateral one, it is also has a superintendent – which in this case would be the government because, whatever the government does or does not do will have an effect on the ‘Contractual Resolution’.

For the first time, we will be looking at a Contractual resolution to the discontent, and conflict issues in the Niger Delta, such that what the Niger Delta activists have been agitating for several years, will now be reduced into contracts in terms of rights. The rights they have claimed before now have been propriety rights, which they cannot efficiently claim, but now they will be disposed to the right to a clean environment, which the Impact Benefit Agreement is set to achieve for host communities.