Offshore/Onshore Abrogation Bill

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BEFORE OBASANJO SIGNS THE OFFSHORE/ONSHORE
ABROGATION BILL

By

Mobolaji E. Aluko, PhD
December 12, 2002
alukome@aol.com

 



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One of the tragedies of our country is that our leaders sometimes
display both cowardice and lack of attention, and then later on the
whole country suffers for it.

Back in May 2002, in an article entitled: "MID-WEEK ESSAY:  More on
Resource Control - A Few "Last Words" " , I wrote,  inter alia:


QUOTE

http://www.dawodu.com/aluko17.htm

The present mantra of a "political solution" to the Supreme Court
ruling will in fact be found in POLITICAL NEGOTIATIONS - most
preferably in a National Conference - that MUST result in FAIRNESS to
ALL of Nigeria,  and not through bluster or threats.  All of that
must be realized  within the reality that the littoral  states make
up only 8 out of 36 states (or 22%), 26.6% of Nigeria's population,
12.5% of the land area, 168 out of the 774 local councils (21.7%
although those numbers are growing in leaps and bounds), 24 out of
109 Senators (22%) and  87 out of 360 National House of
Representative members (24%).   Thus, in general, they are a one-
quarter to one-fifth-clout region, and their political
maneouvarability in passing laws must be realistically evaluated
within those numbers.  President Obasanjo cannot just through
legislative fiat - and for short-term political advantage - come up
with a "political solution".  After all, this is not 1976 - 1979 when
he was a military dictator.
 
Prof. Umozurike highlights an important issue:  the importance of
certain jurisdictions in the sea beyond the ephemeral "low water mark
(LWM) along the coast", which is referred to as the coastal
baseline.  I can assure you that if you pick the last most seaward
village along the coast of a given state (say Akwa Ibom), and
provided one mile is still 1760 yards, that "low water mark" cannot
be more than 880 yards - or half a mile, even less - beyond that last
village!  Beyond this coastal BASELINE (CB), there  is
 
(i)  the 12 nautical mile Territorial Sea TS (by Article 3 of the
1982 United Nations Convention of the Law of the Sea UNCLOS)
 
(ii)  the High Seas, which is internationally recognized (according
to several 1958 Geneva Conventions which have now been superceded by
1982 UNCLOS) as everywhere beyond this outer boundary of this
territorial sea;
 
(iii)  the additional 24 nautical mile Contiguous Zone CZ (according
to Article 33 of UNCLOS) making 36 nautical miles beyond the baseline;
 
(iii)  the 200 nautical mile Exclusive Economic Zone EEZ from the
baseline [according to Article 57 of UNCLOS];  this makes the
territorial sea AND the Contiguous Zone PART of the EEZ, with an
additional 176 nautical miles to spare beyond Contiguous Zone;
 
 
(iv)  because of certain shapes of their Continental Shelf, some
countries (eg the United States) are allowed to claim up to but no
more than 350 nautical miles of the EEZ without challenge - some kind
of Extended EEZ (EEEZ). 
 
So the question is:  what do we assign to eight littoral states:  13%
of all oil revenue from CB (LWM), TS, CZ, EEZ or EEEZ off their
coasts?  Can we with a straight face claim that 350 miles away from
Akwa Ibom disrupts the life of fishermen of Akwa Ibom - do their
canoes go that far? -  and a spill so far away pollutes their land? 
Or even 80 miles, like the Agbami offshore field is?  Depending on
the ocean currents, could such a spill not get to Lagos State coast
before getting to Akwa Ibom?
 
Those are questions that inquiring minds want to know.
 
My suggestion is  that oil revenue derived from oil fields only in
the territorial seas TS (that is 12 nautical miles) plus half of the
Contiguous Zone CZ (that is a further 12 nautical miles, making a
total of 24 nautical miles) should be assigned to ALL THE LITTORAL
STATES in a manner INVERSELY proportional to the distance between
SPECIFIC oil fields and the state capital (40%) and local government
headquarters. (60%).  Any net revenues OUTSIDE the 24 nautical miles
zone should be FULLY put in the Federation account to be split by all
tiers of government.

UNQUOTE

See also:

http://www.dawodu.com/aluko16.htm
MONDAY QUARTERBACKING:  Revenue Allocation and the Nigerian State:
Of  Derivation,  Dichotomy and Debt Issues
 
Recently, a bill to abrogate the onshore/offshore dichotomy was
passed by the National Assembly, and quite rightly President Obasanjo
is now balking to sign it because it has obnoxious new provisions
(different from his own original bill) which militate against
national unity.  I strongly believe that the bill was passed in the
first instance in its present form at a time when the relationaship
between the NA and president Obasanjo was at its lowest ebb, and
hence the deed was done simply to put Obasanjo in an embarrassing
situation in order for him to VETO it, so that, like Pilate, the
National Assembly can wash its hand clean of it.

That is not in the national interest.

In this situation, I therefore FULLY support both the Kano Elders
Forum and the Daily Trust editorial (below) in asking President
Obasanjo NOT to sign this bill in its present form.  Soon, it will be
case as a North-South issue.  In fact, I strongly believe that it is
in the national interest for the oil-producing states to agree to a
delimitation of the contiguous zone for derivation to be 24 nautical
miles beyond the territorial sea, no more, no less, rather than 200
nautical miles of EEZ from the baseline.


Bolaji Aluko


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Vanguard  Wednesday, December 11, 2002
http://www.vanguardngr.com/articles/2002/headline/f111122002.html



Onshore/Offshore resources: Bayero, Kano elders kick against
Abrogation Bill
 
By Nathaniel Ikyur
Wednesday, December 11, 2002

KANO- A NORTHERN elite group- Kano Elders Forum- led by the Emir of
Kano, Alhaji Ado Bayero, has raised objection to the Onshore/Offshore
Abrogation Bill as passed by the National Assembly, and declared that
moves by the legislative arm to over-ride President Olusegun
Obasanjo's veto of the bill is a threat to Nigeria's corporate
existence.

In a two-page communique issued at the end of its meeting in Kano on
Monday, the Forum said the bill would infringe on the economies of
the non oil producing states. It said: "The aim of the bill was to
regard the contiguous zone within the seaward boundary of Nigeria's
territorial waters as part of the adjacent states, for the purpose of
computing the revenue accruing to the federation account from the
states."

It, however, expressed displeasure at the introduction of additional
elements into the bill by the National Assembly which it said
extended the jurisdiction of the contiguous states up to 200 nautical
miles (exclusive economic zone) as opposed to the 24 nautical miles
proposed by the president for the purpose of revenue derivable to
them.

The Kano Elders Forum noted that although the bill was yet to receive
the assent of the president after the 30-day statutory period, "the
National Assembly may override Mr. President's veto with 2/3 majority
and adopt the bill as amended by the National Assembly."

The Forum said that after critical examinations of the implications
of the bill, it opposed its provisions. "The bill as it is, goes
against the spirit and letter of the constitution of the Federal
Republic of Nigeria. The bill seems to extend the territorial
boundary of some states without going through the proper
constitutional procedure for making such amendments and give them
additional rights without corresponding responsibilities. The bill as
proposed by the executive and amended by the National Assembly will
have devastating consequences on the economies of non oil producing
states and seriously undermine the security of the greater part of
the nation and ultimately the country at large," it said.

Consequently, the group urged the National Assembly "not to pass the
bill into law in the overall national interest." It also urged the
general public "not to support this bill in its present form in the
interest of national unity, security and stability."

The Forum resolved to set up a committee to undertake further
consultations with prominent Nigerians to prevail on the National
Assembly to reconsider its position on the matter in the interest of
justice and fairness.


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Daily Trust: Thursday, December 12, 2002

Onshore/offshore dichotomy: Obasanjo meets leaders of oil-producing
states

By Henry Omunu

President Olusegun Obasanjo is to meet with leaders of thought from
oil-producing states of the country at the Aso Villa tomorrow to
dialogue over the onshore/offshore dichotomy bill passed into law by
the National Assembly.

The meeting billed for 4.00 p.m. at the Presidential Villa is to be
attended by governors of the eight oil-producing states of Abia,
Bayelsa, Delta, Edo, Rivers, Cross River, Akwa Ibom and Ondo.

Also to attend tomorrow's parley are National Assembly members from
the eight states, speakers of the state Houses of Assembly, members
of the PDP board of trustees, state PDP chairmen, ministers and the
deputy national chairman (South-South) of the PDP.

The president has, however, written the Senate President, Chief Anyim
Pius Anyim, detailed salient reservations about the onshore/offshore
dichotomy bill sent to him for assent by the National Assembly on
November 11, 2002.

Daily Trust gathered that the president is convening a meeting of the
leaders of oil-producing states to sensitise them about the far-
reaching effects of the bill as passed into law by the National
Assembly.

He similarly envisages to use the forum to convince the oil-rich
states to allow the bill to remain in its original form as drafted by
the Presidency.

In his letter to Senator Anyim, read on the floor of the House by
Speaker Ghali Na'Abba, the president faulted the National Assembly's
decision to amend the provision of the original bill dealing with the
contiguous zone of a littoral state, to the continental shelf and
exclusive economic zone contiguous to a state.

President Obasanjo is arguing that the contiguous zone of a state
which next to the territorial sea is an area not exceeding 24
nautical miles from the base line.

"In this zone, a coastal country may exercise the control necessary
to prevent or punish infringement of customs, fiscal immigration or
sanitary laws and regulations within territory or international sea.
"Therefore, this zone appears to be farthest out into the open sea
over which Nigeria or any coastal state for that matter could claim
sovereignty over the natural resources therein without engendering
counter-claims by neighbouring or adjacent states," he added.
The amendments effected on the bill by the legislature, the president
further argued, are sources of conflict between Nigeria and her
neighbours.

"This is so principally because unlike in the case of territorial sea
which is automatic to the coastal country, both the contiguous zone
and the exclusive economic zone introduced in the bill the National
Assembly have to be expressly claimed by the coastal country as
possession of these zones is not right per se," the president stated.
Explaining that Nigeria was yet to establish its own continental
shelf, Obasanjo observed that it will be wrong to make a municipal
law on what has not yet been established, adding, however, that a
claim by a coastal nation over any of these zones may engender a
counter-claim by adjacent or apposite states which may have interest
in the area.

He continued: "In the event of such development, the contesting
countries may have to resort to negotiations to delineate their
respective boundaries within the framework of UNCOS III and customary
practice in international law.

"In some cases, resort may even be taken to war to resolve the claims
and counter-claims," Obasanjo said further.

Therefore, the president said he considers it inadvisable and
dangerous to extend the application of the bill to the continental
shelf and exclusive zone contiguous to a state to be part of that
state for the "purpose of computing the revenue to the Federation
Account from that state."

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The Trust Editorial:  Thursday, December 12, 2002

Stemming the slide to crisis over the onshore/offshore Bill
It is becoming increasingly likely that a new crisis will burst forth
soon between the executive and the legislature, this time over the
onshore/offshore Bill that President Obasanjo presented to the
National Assembly to douse the agitation by the littoral states.
The agitation reached a crescendo in the wake of the Supreme Court
judgment which was interpreted within the context of Nigeria's high
wire politics as being against the interests of the oil producing
states, especially such states as Akwa Ibom that had depended almost
entirely on revenues accruing from offshore fields to earn the
revenue by derivation.

As it was, President Obasanjo took a decisive step to ensure a
solution to the crisis when he presented the Bill which said that for
the purpose of derivation, the littoral states will be entitled to
revenue sourced within 24 nautical miles (the so-called contiguous
zone) of Nigerian territorial waters.

Contrary to the Bill presented to parliament by the president, the
National Assembly awarded the derivation revenue within 200 nautical
miles (i.e. within the country's Exclusive Economic Zone). President
Obasanjo vetoed the Bill; and it looks likely that the National
Assembly is preparing to use a 2/3 majority to adopt the Bill as
amended by the National Assembly.

The issues here ought to be clear enough, at least to the parties
involved in this dispute. The original Bill presented by President
Obasanjo was a very realistic premise which located the area of
derivation within 24 nautical miles. Most of our national offshore
oil production currently takes place within the 24 nautical miles.
For the National Assembly to push further into the Exclusive Economic
Zone (EEZ) is to prepare ground for all kinds of problems and serious
conflicts in the future. It is noteworthy that our EEZ coincides with
that of the tiny Republic of Sao Tome and Principe, and it was to
avoid a conflict that Nigeria has entered an agreement with the
country to open up a Joint Development Zone, a process that has
considerably reduced potential rift between the two countries.
It is also important to point out that the Exclusive Economic Zone
can only be treated as the patrimony of the entire country and not a
zone belonging to littoral states, since it is only sovereign Nigeria
that can enter into agreements in respect of the use of the resources
of the zone. Such revenues accruing therefrom should therefore
benefit the entire Nigerian nation.

It is the realisation of the danger involved in the National
Assembly's amendment to President Obasanjo's original Bill that
informed the recent outcry of the Kano Elders Forum which says that
if passed into law as it stand, the Bill will "have devastating
consequences on the economies of the non-oil producing states". The
forum further noted that the implication of the amendment effected by
the National Assembly is to extend the boundaries of some of
Nigeria's littoral states.

We share the sentiments coming from the Kano Elders Forum and call on
the National Assembly to re-examine its amendments to the original
Bill presented to it by President Obasanjo. In this particular case,
the executive is on the right side of Nigeria's national collective
interest which takes into cognisance the well being of the oil
producing and non-oil producing states alike.

It is therefore important to stem the potential slide to crisis over
an issue that represents the main revenue earner for Nigeria. We
recognise the imperatives to satisfy the derivative principle in
revenue allocation as provided for by the country's constitution and
also note the emotions that the onshore/offshore controversy has
generated in different communities located in the oil producing
region of Nigeria. However legislation must be carried out with
reason and the realism that protects the national patrimony.
Extending the boundaries of the littoral states for the purpose of
revenue into the nation's Exclusive Economic Zone is honestly
irresponsible because it overturns the entire basis of national
economic cohesion.

We urge the legislature to rethink the amendment and retrace its
steps back to the original provisions of the Bill presented by
President Obasanjo.


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