PIB: Can Oil Producing Communities Stop Crude Oil Theft?

By Chika Onuegbu PENGASSAN/NUPENG 

Recently, the Nigerian National Petroleum Corporation (NNPC) and the Ministry of Petroleum Resources estimated that Nigeria is currently losing some 250,000 barrels of crude per day to oil thieves. Most of these thefts are carried out through the outright sabotage of oil facilities especially the pipelines and the flow stations from where products are taken for sale. Essentially, Nigeria loses between U$6bln to U$12bln per annum. These estimates are just for loss of crude, and does not include losses from refined products, or the value of the equipment and lives lost during numerous blow outs e.g. the Arepo recurrent incidents. 

Not long ago, the NNPC/Shell Petroleum Development Company Joint Venture declared a force majeure on Bonny Crude due to persistent crude oil theft, resulting in the shutting in of 150,000 barrels per day (bpd). Just across the 97-kilometre Nembe Creek Trunk line, 53 break points were discovered. Also Agip has suspended crude oil production activity in Bayelsa state where 60% of its production of about 90,000 kbpd is stolen. By government’s own admission, what is lost to crude oil theft alone is about 10% of Nigeria’s total crude oil production of about 2.5million barrels per day (MMbpd). This is almost two and a half times the total production of our neighbour, Ghana. 

This level of oil theft is a very serious threat to national security and constitutional democracy. Also the painful damage to the environment and the destruction of the eco-system in the Niger Delta resulting from crude oil pipeline vandalism and oil theft cannot be over-emphasized. 

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WHAT DOES THE PETROLEUM INDUSTRY BILL (PIB) SAY?

 

Section 118 (5) of the PIB requires oil producing communities to safeguard oil installations located in their various locales. The implication of this responsibility is that these communities may be held accountable in the event of any vandalism of oil installations in their localities. Why was this clause inserted into the Bill? The insertion of this clause seems to be anchored on certain assumptions some of which are detailed below:

These assumptions are: 

Pipeline/installations’ vandals are locals: One of the basic assumptions is that most of the incidences of oil thefts are carried out by locals. This is however not entirely the truth as recent revelations have shown that while the several cases of small breakages here and there may have been the handiwork of locals, the theft through these sources are not up to 30% of the entire heist. However, the other 70% which is done with the active collaboration of those in authority and military top hierarchy is a highly sophisticated operation which most of the time do not require breakages but a breach of the major transport points. Assumption number one therefore has a huge challenge and would pose serious problems to the effectiveness of the provision in the PIB. 

Consequences of vandalism are immediately felt by the host community: This is very valid as both the direct acts of breaking pipelines to steal oil and other associated activities along the theft–chain have wrecked the immediate environments where these facilities are installed. It is not only in environmental degradation and its corollaries but also in the lives that were lost while such activities were being executed. Accordingly, communities should therefore take steps to protect themselves with or without the provisions of the PIB given the inability of the security agencies to contain the criminals. 

Installations are hosted by communities: A popular saying that it is the duty of the host to protect his guest holds true here. It is therefore the moral duty of the communities to protect these oil installations. However, herein lays one of the basic contradictions in the oil and gas equation in Nigeria; that oil equipment and installations that are supposed to belong to the people are classified as “GUESTS” given the implications of the definition of the term “host communities”. It is an aberration with deep consequences for the smooth operation of the industry. 

They know the terrain very well: Flowing from the above is the understanding that because these installations are established in places owned by some of these communities, they therefore know the terrain very well and can therefore provide better surveillance and protection to such installations. They know the dangerous zones and the flashpoints and would easily police the environment thus guaranteeing safety to the installations. 

Communities cooperate with vandals: Whether the communities collude with the vandals or not, fact remains that it is assumed that because some of the vandals mingle with the communities, they are therefore shielded from the law enforcement agents. They also assume that the communities point out the vulnerable portions of every installation and guide those interested in stealing products to the best place to attack. However, when vandals with sophisticated arms invade a community, hold them to ransom and move products from oil installations, the alternatives are slim. 

Some are because of community agitations: It is also believed that most of the locally driven thefts are actually signs of deeper malaise in the polity. This means that they were carried out as a sign of protest against the State and the continued degradation of their respective environments. Agitations against innate inequities, injustice and deprivations apparently made oil installations targets for the expressions of such feelings.

How Effective Will Community Policing Be?

It will undoubtedly improve security of oil installations and contain the micro oil thieves but whether it will stern the organised and high-level stealing of the crude oil by organised syndicates with their powerful allies remains questionable. 

The strengths and weaknesses of S.118 of the PIB include the following:  

Strengths 

Sense of proprietary interest: The first thing this provision does is that it rebuilds the psychological disconnect between the communities and the oil installations. The people are given a sense of ownership no matter how vacuous it may be to the installations in their communities. This proprietary sense creates in them the necessary passion and drive needed to ensure the protection of such installations from both internal and external criminals. As the integrity of the installations is increasingly assured, it becomes difficult for crude theft to be carried out in those areas. 

Communal alert/watch is triggered: With the provision, a security consciousness is activated in the community increasing the awareness of the need for everybody in the community to make contributions towards the safety of the installations. It would definitely lead to the creation of community vigilantes that would be charged with ensuring the safety of these installations. 

Civic responsibility and duty is built: The provision imbibes in the communities a sense of responsibility as enshrined in the law. This sense of responsibility increases civic consciousness. With the building of communities with higher civic responsibilities, increasing civic action becomes the necessary outcome. This civic action is what will be channeled towards ensuring the safety of oil installations in the communities. 

Increases community commitment: When communities realise that the condition attached to accessing the community host fund is the safety of oil installations in their locality, commitment to ensuring success is increased. As commitment increases in the communities, oil installations become well-policed, thus theft of products is reduced proportionally. 

Empowers the youth/community through job creation: A necessary flow from this is that communities would become more empowered as more funds for greater economic activities come into them through policing activities.  Direct jobs for the youth are also created as those that would form the safety committees and actually police the installations would be employed full-time. This takes away more youth away from criminal activities and involvement in vandalism of the oil installations. Taking more people away from pipeline-breaking through job-creation and empowering the communities through fund injection means that there will be less participants involved in oil theft. Naturally, the communities will not treat kindly anyone that wants to take away their means of empowerment. 

Sabotages when carried out are easily and quickly contained: The communities know some of the vandals and could easily trace the culprits when a successful crude robbery operation succeeds. They can easily provide security for maintenance teams to access breakpoints and carry out maintenance activities quickly. This reduces loss of products thus revenue. 

Challenges 

This provision may have been well-intended, it is based on some false assumptions. It also tends to deal with symptoms of a deeper issue than going deeper into the roots to solve the problem. However, it could be discerned that those who crafted the Bill never had any intention of the communities replacing the security agencies in the provision of security for the nation’s oil installations. Rather, their role is designed to be complementary. In playing this complementary role, we anticipate the following challenges: 

Paucity of effective capacity by locals: The critical capacity to effectively guarantee the safety and security of oil installations in the communities is clearly insufficient in the communities. Since this entails the mounting of full security operations given the nature and character of crude theft operators, we are worried that the communities may lack the critical mass needed to effectively stop the organised operators. 

Capability to deliver surveillance and protection is low/skill gaps: The know-how or competence needed for intelligence gathering, technical monitoring of installations like pipelines that are not close to areas where community members live will pose a serious challenge to the operability of this provision. Anybody with the skills that are needed for these operations are already employed elsewhere and are therefore not available for use in the communities. 

Deployment of technology requires large capital outlay: Needed technology to effectively carry out the mandate of this provision requires huge capital investment, which we know is beyond what the communities can provide. If the needed tools cannot be procured, communities cannot function effectively in this regards and that, poses a serious challenge to the effectiveness of safeguarding oil installations. 

Logistic and technical challenges: There will surely be operational logistic problems that will arise in the course of the communities prosecuting such a mandate. Coordinating the exercise and creating effective platforms to interface with other communities and the larger security network will surely be daunting. 

Misuse of weapons: We are worried about the weapons that would of necessity, be provided for the communities to be able to discharge their assignment as a result of this provision. Is it not possible that they may fall into the wrong hands eventually or be used for some other purposes other than what they were supposed to do? These possibilities are indeed frightening. 

 May make squabbles over territory more violent because of the introduction of arms: We have witnessed inter-communal crises within the oil-bearing communities and we have seen how deadly and destructive they can be. Our concern is that when you introduce legitimate arms into such environment, grievances that would have been settled amicably through dialogue may become more violent. 

May create local warlords: The likelihood of creating local warlords will increase with the implementation of this provision. This will allow individuals to carve out niches for themselves and with personal ambition coming in, what may happen can only be imagined. Will this not put weapons in the hands of those whose ambitions may likely tomorrow overshadow the intentions of peace and safety in those regions and turn them into warlords?

The above article is an excerpt from a paper presentation delivered by Mr. Chika Onuegbu at SPACES FOR CHANGE's conference, Host Communities and the PIB held in Port Harcourt on April 23-24, 2013. 

Mr. Onuegbu is the Chairman, PENGASSAN/NUPENG National Joint Committee on the PIB