Nigeria, aside from religious terrorist violence, faces a serious threat to its economic security: the unenviable international record of unprecedented volumes of crude oil theft arising from the incessant vandalism of the 6000 kilometres of pipelines in the country. With the conspiratorial roles of the governing and non-governing elites, this high-tech illegal business has been internationalised and poses a huge threat to the national revenue and the development index of the country. The oil-rich Niger Delta region, worsened by environmental degradation arising from excessive spillage of petroleum resources, is under siege from the predatory elite, arising from the embarrassing lack of political will by government and security agencies to protect the nation's commonwealth. This paper attempts to put into perspective the critical issues of international crude oil theft in Nigeria, and suggests strategic measures to curtail the elite predatory tendencies driven by corruption, and to protect the nation's economy.
The imperatives of Nigeria's development and growth are strongly linked to the strategic economic importance of the petroleum resources of the maritime environment in the Niger Delta area and the Gulf of Guinea. The location has an armada of 5700 oil wells, 112 flow stations, 16 gas plants, 126 production platforms, 6 Floating Production Storage Offloading (FPSO) platforms and 13 oil terminals, while a key FPSO is the BONGA, a deep offshore production platform with a production capacity of about 200,000 barrels per day, currently valued at over US$4 billion (Ezeoba 2013). About 99% of Nigeria's import and export activities rely on the sea, with crude oil being a key part of the maritime activities, in a world where 80% of global trade is sea based with over 46,000 large vessels berthing in about 4000 seaports worldwide annually (Odiogor 2013).
The character of the political economy of the Nigerian state hinges largely on the rentier economy of Africa's most populous country. Nigeria, in the past four decades, has operated as a state structured on an economic process in which its dominant revenue base is derived from rent from its petroleum exploratory or mining activities (Mkandawire 1987). The management of the abundant petroleum resources of the country has defined the attitude of the ruling class as a country with a monocultural accumulation base. The political class, driven by corrupt tendencies arising from petrol dollars, prefers the proclivity towards primitive accumulation than exhibition of patriotic values. The situation makes it an anathema for the political elite to improve the nation's industrial base for real productive activities in the economy with salutary effects on the citizens’ welfare (Abutudu 2010). Nigeria, therefore, is a classic case of a third world country with the contradiction of increasing national revenue and growing indices of poverty. With the frittering away of national resources by the corrupt elite, the government has been largely dependent on external capital from international financial institutions to drive basic infrastructural, socio-economic and health programmes.
The federal government agency, the Nigerian Bureau of Statistics (2012), reports that between 1979 and 2011 the country earned about N51.5 trillion (US$34.3 billion) from crude oil. With the high international demand for crude oil between the years 2000 and 2011, Nigeria earned N48.4 trillion (US$32.2 billion) as the oil revenue grew steeply from N724.4 billion in 1999 to N4.4 trillion in 2007, and peaked at N8.8 trillion in 2011. The 11-year period oil revenue of N48.4 trillion was capable of funding a straight four-year cumulative annual budget capital and recurrent budget of Nigeria, without deficit, yet the resources have not translated into infrastructural or industrial development and welfare of the citizenry, owing to corruption and profligacy of the political class (Mbamalu 2013).
The huge resources of the country in terms of crude oil and gas exploration, refining and marketing as the most visible and critical money-spinner in the Nigerian economy from international clients, has remained the defining index in the class structure of the Nigerian citizenry. Legal or illegal participation in the oil industry, in crude oil block investment, exploration, bunkering or marketing, yields immense profits that elevate the operators to the upper echelon of the social class structure, second only to the corrupt political and bureaucratic elite. Huge financial returns are deployed in local and foreign assets acquisition and pleasures, in total disregard of the spiralling poverty of the majority and serious environmental degradation of the oil-producing communities (Olukoshi 1990).
Conceptual framework
The theme of elitism in national discourse, which has major inputs from the Italian scholars Vilfredo and Gaetano Mosca, espouses that in all modern societies worldwide, there is a noticeable division between a small group of governing political elites and the non-governing elites comprising the wealthy and the aristocrats (including the military top brass in the third world) on the one hand, and the non-elite or mass population limited by access to political and economic power (Finer 1966). The perpetuation of the dominance of the governing and non-governing elites is bolstered by their superior organisation, bonded by the pursuit of the common interest of power and supremacy, which results in the inevitability of the ‘dominion of an organised minority, obeying a single impulse of self preservation, over the unorganised majority’ (Hague and Harrop 1988, 10).
In modern political discourse, the classical perspective of popular Western democracy is that of government of the people or majority, while the central focus of elitism highlights that there is a propertied class in society that become leaders with their advantage of resources which they deploy to leverage access to political power. Modern societies or national governments are consciously divided between the rich minority which rules and the poor majority that are led (Mahajan 2010). The centrality of the elites’ power and immense influence is economic, political and social, as power in most modern societies rests on certain public institutions such as the executive, legislature and judiciary, and other operators, which play prominent political roles in the well-being of society (Mills 1956). Modern democracies tilt towards capitalist tendencies, as the political state represents largely the rule of the propertied class.
Plamenatz (1973) highlights three critical elements in radical arguments on liberal democracy, namely that, first, where there are inequalities in wealth, then it follows that power and influence will mostly reside in the economic class, whatever the form of government; second, an in-depth assessment of modern societies where the political system operates with large public organisations, power and influence mostly revolves around their leaders or operators instead of the working class; and third, in modern societies with great social inequalities, leaders who hitherto may have had modest social origins will soon acquire the attitudes and ambitions of the privileged, and steadily lose touch with their followers.
The spiralling crisis of governance by the political elite, bolstered by the non-governing elite in the underdeveloped third world, is grimly reflected in the growing poverty, infrastructural decay and social violence contrasted with the rising national revenue from the resources of such countries. Worldwide, the yearly Human Development Index has been accepted as a summary measure for understanding the long-term development in each country in three fundamental areas of human progress and well-being: a long and healthy life, access to knowledge and a decent standard of living. The United Nations Development Programme Report (2013) on the global Human Development Index ranked Nigeria a lowly 153 out of the 186 countries examined, as one of the African countries that has not recorded a remarkable improvement in the well-being of their citizenry. The UN Development Programme gave the same verdict in 2012. The UN agency placed life expectancy in Nigeria at 52 years old, with only 1.9% of the national budget expended on health, with 68% of the citizenry living below US$1.25 daily, and the adult literacy rate (for both sexes) put at 61.3%, despite the robust and resilient economy that recorded a Gross Domestic Product growth rate of 7% in the fourth quarter of 2012. It is imperative to contrast these realities of the well-being of millions of Nigerians with the fact that Nigeria has the largest galaxy of private jets owned by high net-worth elite individuals on the African continent, with the country boasting 150 private jets worth over US$3.75 billion. The fleet of executive jets owned by billionaire Nigerians includes Gulfstream, Dassault Falcon, Bombadier, Global Express and Hawker Legacy, with each category of jets costing US$25 million and imported from the United States of America, Canada, Europe, Brazil and South Africa (Agbaje 2013).
The elitist predatory mentality on the resources of the Nigerian nation is further displayed in the 2013 budget, where only 31.34% was allocated to capital expenditure (provision of infrastructures and amenities that could drive long-term investment in the productive sector of the economy), while 68.66% was directed at recurrent expenditure (which caters for the salaries and huge amounts in personal allowances of political office-holders, public servants and running costs). The trend for capital votes –i.e. budgetary estimates for infrastructural development – was lower in previous years: 2012 (1.34%); 2011 (1.01%); and 2010 (1.5%). The array of Nigeria's propertied political office-holders constitutes a meagre 0.01% of the country's 160 million people, yet eats up 68.66% of the national budget. Nigeria has 474 federal executive personnel; 469 federal lawmakers; 2664 State executives; 1152 State lawmakers; 3096 Local Council executives; 8692 Local Council lawmakers; and 934 federal and State judicial heads (Ndujihe 2013).
Nigeria's crude oil theft scenario
The oil-rich Niger Delta has a land mass of 29,100 square kilometres or 3.2% of Nigeria's territorial land area, yet it accounts for the country's economic lifeline or the cash cow in foreign exchange earnings. The Niger Delta region has become a haven of crude oil theft and pipeline vandalisation. This is due to a mixture of the sophistication of the technology, marine facilities and corrupt tendencies deployed by the elite in bunkering, as well as the activities of angry peasants led by militants who defy state authority in the prevailing circumstances of poverty, state neglect and environmental pollution. There is a significant upswing in the volume of organised crude oil theft in Nigeria. The Nigerian National Petroleum Corporation – the nation's lead investor arm of the Joint Venture Production Agreement with multinational oil giants – admitted that in the first quarter of 2013 alone, Nigeria lost US$1.23 billion (N191 billion) to oil thieves and vandals (Green 2013).
In the past three years, Nigeria has been confirmed to be losing about 180,000 barrels of crude oil per day, which amounts to US$6 billion (N930 billion) (Ogah and Hassan 2012). The International Energy Agency put the figure of crude oil theft in Nigeria at US$7 billion annually (Oketola 2013). This criminality has forced oil production to drop by about 200,000 barrels per day from the 2013 national target of 2.48 million barrels per day, with 53 breakpoints discovered in the 97-kilometre Nembe Creek Trunkline alone, a strategic facility now notorious for vandalism. The facility was replaced in 2010 at a cost of US$1.1 billion of taxpayers’ money by the Nigerian government (Green 2013). Oil giant and Anglo-Dutch company the Shell Petroleum Development Company (SPDC) reports that over 60,000 barrels per day are stolen from SPDC facilities alone with greater sophistication, as the perpetrators set up barge building yards, storage facilities and tank farms, well funded and protected by heavily armed gangs (Sunmonu 2013). The managing director of SPDC lamented thus:
We are in a crisis as a country, because this is something which is beyond the capacity of any individual company or beyond the capacity of a country to solve. We really need concerted efforts locally, nationally and internationally to actually get this under control.
My worry is not about the economy per se; the economy itself is huge, but I worry about the devastation for the people of the Niger Delta, the destruction it will cause to the social and environmental aspect of the people and to Nigeria.
This certainly is a well-funded criminal activity probably involving international syndicates.
(Sunmonu 2013, 61)
Because Nigeria's major foreign exchange earner is crude oil, the high level of bunkering and pipeline vandalisation has the capability to erode the expected revenue for 2013's budgetary target of N11.34 trillion (US$7.56 billion) (Okogu 2013). Nigeria's revenue scenario in the oil sector is further depleted by the oil subsidy fraud in 2013, in which oil sector operators and marketers fleeced the country of N382 billion (US$2.54 billion). The internally generated revenue component will fall with the security challenges in the collection of custom duties at the northeastern borders and poor investment climate in the northern region owing to Boko Haram terrorist activities in those areas.
The economic realities of governance forced President Goodluck Jonathan of Nigeria, who has lamented that international crude oil theft from Nigeria is now one of the defining images of the country, to issue orders to the service chiefs of the armed forces and the head of the police force to protect the nation's economic assets, revenue base and the 6000 kilometres of oil pipelines that criss-cross the country (Omonobi 2013). Nigerian armed forces personnel and police officers, accused of ineptitude and complicity in the criminal activities in the oil sector, have set up various joint task forces (‘Operation Restore Hope’, ‘Operation Pulo Shield’, ‘Operation Flush Out I, II and III’ and ‘Operation Farauta’) and reorganised the police maritime command to monitor the coastal waters.
The internationalisation of oil theft in Nigeria, driven by the forces of supply and demand, has been benchmarked by the revelation by arrested suspects that the main buyers of the stolen products, apart from major oil storage facilities in the commercial hub of Lagos, were based in the Balkans, Ukraine, Serbia, Bulgaria, Singapore and the West African countries of Ghana, Togo, Côte d'Ivoire and Benin (Ogah and Hassan 2012). The Nigerian security agencies have also arrested 60 foreign nationals comprising 21 Ghanaians, 15 Russians, 10 Indians and the rest from Ukraine, Lebanon, Togo, as well as other Asian and European countries (Ochoga and Alli 2013). The foreign collaboration assists the local illegal oil bunkerers in marketing the stolen crude oil, and parts of the proceeds are utilised in procuring firearms from abroad, which are smuggled into the country through the coastal waters (Agbambu 2012).
The Nigerian government has also approached the US government to use the instrumentality of the African Command (AFRICOM), headquartered in Stuttgart, Germany, to help secure Nigeria's coastal gateway through the Gulf of Guinea besieged by sea pirates, as it was in the national interests of the US and Great Britain (Nigeria's major trading partners in the Western world) to curtail shipping of stolen crude oil and protect the logistics for official crude oil supply from the Niger Delta. However, this has indicated the poor diagnostic capacity of the Nigerian government on the issue of oil theft, as the internal underpinnings driving the criminal activity must be addressed first before seeking international military assistance. The lack of political will by the Nigerian government in addressing this has been underscored by the oil firm SPDC, which has argued that:
The truth is that small criminals in the creeks of the Niger Delta bursting pipelines and stealing crude oil are not working for themselves. Like the drug cartels around the world, they are being sponsored by big principalities and powers in high places, which the government should go against if the fight against crude oil theft is to be won.
(Sunmonu 2013, 30)
The Nigerian Maritime Administration and Safety Agency (NIMASA) has alerted the nation that the confessional statements of arrested sea pirates point to the political and economic elite in Nigeria as the backbone of the organised oil theft, and identified top government officials, senior executives of the Nigerian National Petroleum Corporation, major oil marketers, armed services commanders and traditional rulers (Ogah and Hassan 2012) as the godfathers who leverage their access to political leadership and security agencies to perpetuate corruption and evade arrest.
The efforts to protect the country's commonwealth by the armed forces’ joint task forces in 2012 led to the arrest of 18 sea-going vessels and 1945 suspects, as well as the destruction of 4349 illegal crude oil distilleries along with 133 barges, 1215 open wooden boats (Cotonou boats), 187 oil tanker trucks, 178 fuel dumps and 5574 surface tanks, while 36,504 drums of distilled petroleum products, 638 pumping machines and 326 outboard engines were seized. In the first quarter of 2013, their operations yielded the arrest of 8 vessels, 9 barges, 90 open wooden boats and 260 suspects, while 452 distilleries were destroyed (Nwachukwu 2013).
The vicious character of the criminal gangs has resulted in high-profile murders of agents of law-enforcement outfits in Nigeria. The arrowhead of NIMASA's battle against criminals on the coastal waters, the Global West Vessel Specialist Limited, a privately owned firm, had its chief executive killed in a gun battle, together with 24 people including foreigners, soldiers and policemen (Ogah and Hassan 2012).
The siege on the oil sector
The Nigerian oil sector is the cash cow of the economy. As the honeypot that has principally sustained the nationhood of Africa's most populous country, it has attracted the governing and non-governing elites as bees to feast on the resources for their class interests of sustaining economic power and political leverage. The contradiction inherent in the rising volume of national revenue alongside the wealth of the governing and non-governing elites and the poverty, deprivation and environmental degradation of the oil-producing Niger Delta region encouraged the armed militancy that raged for over five years, with youths calling for resource control and sustainable development. This gave birth to the Amnesty Programme, initiated by the late president Umaru Yar'Adua, who invoked Section 175 of the 1999 Constitution (as amended) in 2009 in order to stop the wanton disruption and destruction of oil infrastructures that caused production to crash from 2.4 million barrels per day to fewer than 700,000 barrels per day. The Amnesty count of ex-militants who surrendered their arms and other weapons has risen from 20,192 to 30,000, some of whom were trained locally and others abroad, and all were given a monthly stipend of N60,000 (US$400) as social welfare. However, despite the package that followed the Amnesty Programme, crude oil theft and illegal bunkering have risen in volume, frequency and desperation by the ex-militants, in collaboration with the elites who have funded the illegal ventures in order to continue the predatory culture on the commonwealth of the country.
The intricate technical nature and huge cost involved in a successful crude oil theft process, involving the technology to burst the fortified oil pipelines running under the waterways and swamps, the texture and length of the pipes latched on the burst points and running to the barges and Cotonou boats with dozens of fortified huge drums anchored several hundred metres away from the oil installation, and the logistics of moving from the creeks to the waterways and siphoning the stolen crude oil into large ocean-going vessels and ships berthed on the nation's coastal frontiers to supply international buyers, clearly indicate an integrated approach in economic sabotage which can only be funded by the elite, utilising community youths or ex-militants as oil vandals or instruments in the propertied class accumulation. Although the ex-militants have also learnt the art and science of setting up local refineries to primitively cook stolen crude oil and sell condensate to buyers, the involvement of the governing and non-governing elites has internationalised the illegal business with foreign currencies as the medium of commerce in the huge profiteering, part of which are utilised to purchase the arms and ammunitions required to protect the foot soldiers (vandals) in the illegal business. The conspiratorial elite involved in the economic sabotage – government officials and leading politicians, national and multinational oil firms’ executives, security chiefs, major marketers, traditional rulers and community leaders – have stepped up their illegal operations on the nation's petroleum resources so much so that they have forced a sharp drop in the national production and revenue. The ruling political class panicked and in 2012 quickly metamorphosed the anti-militancy armed forces’ joint task force into an anti-oil theft outfit codenamed Operation Pulo (Oil) Shield and drafted more personnel from the National Intelligence Agency, Immigration, Customs, the Maritime Administration and Safety Agency, the anti-graft Economic and Financial Crimes Commission and the oil firms.
Critically, the nerve centre of the pusillanimous attitude to curbing the brazen crude oil theft in Nigeria is the conspiracy or connivance of the nation's security agencies, especially the naval forces, marine police and intelligence agencies. The expansive and integrated process that goes into crude oil theft from the point of bursting an active pipeline through the loading of barges and drums to the discharge into large vessels or ships on the coastal waters are hardly secretive exercises in the real sense and take considerable time, even under cover of darkness, for an alert naval force and marine police that have intelligence facilities, air wings and fast crafts to stop and arrest the criminals. A former leader of the Nigerian Union of Petroleum and Gas Workers and now a federal lawmaker lamented thus:
Crude oil theft is not possible without the connivance of the security agencies, because petroleum tanker or vessels [are] not small objects, [they] are large enough for anybody to see from anywhere. Barges and ships are not small, and they are the instruments they use in carting crude oil away. The security agencies were given uniforms and arms to protect Nigerian interest, but they are using it to protect criminal syndicates against the Nigerian people.
(Akpatason 2013, 21)
The Nigerian navy, instead of improving intelligence-gathering mechanisms and collaboration with the communities on the waterways, rather launched an elitist website (http://www.cot.navy.mil.ng), supposedly to exchange ideas with the international community and reports on suspicious activities, as well as generate global awareness of oil theft and pipeline vandalism (Director of Information 2013). The orders of President Jonathan to the armed forces chief and police to protect the nation's vast on shore and rich off-shore oil platforms in March 2013 is viewed as the government's desperate effort to rescue the nation from the grip of elitist economic sabotage.
The glaring lack of political will by the government to fight the rampaging and predatory elite engaged in economic sabotage in the oil sector seems to be a salutary commentary on the common interests of the governing and non-governing elites. Curiously, none of the federal government agencies legally empowered in the fight against crude oil theft has been able to diligently prosecute arrested suspects so far, further confirming the shared interests that define the elite's actions both in public and private sectors of the economy. Despite the fact that Section 8 of the Miscellaneous Offences Act (1999) stipulates life imprisonment for those convicted of stealing crude oil or petroleum products or vandalising the pipelines, none of the three prosecuting agencies – the police, the Nigerian Security and Civil Defence Corps, and the Economic and Financial Crimes Commission – has found the political will to charge, prosecute and jail offenders, fuelling the strong leverage that oil thieves have with the political class in government, and frustrating the efforts of the few honest military officers who put their lives on the line in the waterways to stop the economic sabotage. Further, and curiously, the National Assembly (Senate and House of Representatives) has not conducted oversight functions on these agencies in this regard to let the nation know why oil thieves are not in jail in Nigeria, as such disclosures may jeopardise the interests of the political class, who have common economic interests with the non-governing elite.
The issue of corruption endemic in the conduct of the nation's affairs has underscored the flagrant economic sabotage by the predatory elite. Corruption has weakened the political will of government, the institutions of governance and the independence of the judiciary. It has perpetuated the primitive accumulation tendencies of the political and economic class, weakened the core values of the security agencies and constitutes a serious threat to Nigeria's security and democratic practices at all levels of government.
The oil thieves in the communities have started fighting back. Corruption fuelled by the political and economic class has made the oil-producing communities tactically support the economic sabotage onshore and in the waterways as the local elite who are instruments in the crude oil theft chain utilise their gains to engage in social responsibility by grading rural roads, assisting with boats, rehabilitating hospitals and schools, and granting scholarship awards (Agbambu 2012). The seeming benevolence of the local elite is one of the key reasons the locals, who, in the throes of poverty, deprivation and environmental degradation, hoard strategic intelligence on pipeline vandalisation in the villages away from the nation's security agencies, compounding the fight against economic sabotage.
Like the ex-militants, the oil pipelines vandals have issued a challenge to the Nigerian government, calling themselves ‘Community Oil Refinery Operators’, and see nothing wrong with crude oil theft. They identify the lack of political will of government in protecting the nation's resources. The public statement issued by the so-called local operators argued that:
Our operation gives us a sense of belonging. This is the only way we benefit from our national cake. We do not steal oil. The oil in the region is our property … We have decided to crumble the Nigerian economy to stop them from exploiting us … We must take what belongs to us by force and any attempt to stop our operation by force will lead to another militancy in the region which will be worse than what we are seeing today.
(Tamana 2013, 31)
Conclusion
Nigeria faces a huge economic crisis that is home grown and driven by the governing and non-governing elites. The network of collaborators in the large-scale theft of crude oil in the Niger Delta region, to supply international buyers of Nigeria's high-quality Bonny Light crude, has imposed challenges to governance on the federal government as national revenues plummet owing to sharp drops in production quotas. Oil-producing firms have severally declared force majeure many times on their international supply commitments owing to the huge disruptions by vandals to the active pipelines pumping crude oil into officially approved vessels and ships. International buyers sail into Nigeria's coastal waters and the elite who could fund the oil theft business ensure that the petroleum resources are forcefully obtained and shipped to eager buyers on the West African coastline, Europe and Asia.
The missing link in all the grandstanding and rhetoric of the Nigerian government in the fight against crude oil theft is the political will to put into force policies and regulations. Currently, the Nigerian government's bark has been worse than its bite, as none of the three prosecuting agencies of government has been serious in diligent prosecution and conviction of oil theft and pipeline vandalisation suspects. With the grip of the conspiratorial elite on the oil sector in pursuit of primitive accumulative tendencies, it will take more than military tactics propaganda to check the menace of oil theft. The government must find the courage to fight the elite on this critical issue of economic sabotage and save the country from looming financial crisis. Until Nigerians see crude oil thieves as convicts behind bars, the community vandals or so-called local refinery operators will continue the dangerous business with impunity. It is believed that the absence of political will of government is closely linked with the debilitating effect of corruption which has been institutionalised by the governing and non-governing elites, and has weakened institutions of governance and the legal framework of the nation.
Despite the outcry by the government on the growing negative effects of crude oil theft on the national revenue and economy, the political class and business elite have frustrated the genetic fingerprinting of Nigeria's petroleum assets, in view of the dominant international perspective that disapproves of the illegal oil theft or trading. The genetic fingerprinting of Nigeria's crude oil, especially the Bonny Light variant, will ensure the identification of stolen crude oil from Nigeria in the international market, and help to frustrate the big-time oil thieves that have invaded Nigeria's coastal waters (Onuegbu 2013).
The weakest link in the chain of the integrated process of crude oil theft is the community vandal in the Niger Delta region, who is deprived of the basic necessities of life, lives in abject poverty and is prejudiced against the political class which protects the oil firms that exploit and pump away the petroleum resources and leave behind environmental degradation and destruction of the rural ecosystem. The community vandal becomes the enthusiastic instrument in the elites’ big-time oil theft, and readily deploys his knowledge of the labyrinthine terrain of the oil pipelines’ rights of way on the shore and inside the creeks, to burst the pipelines for meagre financial benefits. The living conditions of the community vandals are so important, and become the critical defining factor in determining the pull factor of engaging in economic sabotage or offering strategic intelligence to security agencies to save Nigeria's economy.
Closely linked to the living conditions of the typical community vandal is the immense dose of corruption that drives the conduct of security agencies. The uniformed officers are a reflection of the brazen decadence in public institutions and public officers. Their disconnect from the citizenry as well as inability to be assimilated into the political class make them a special breed of commissioned citizens who use their licensed guns to protect the greedy governing and non-governing elites, and in their wake, the officers’ corrupt interests. The critical challenge is how the federal government can restore the core value of putting the national interest first in absolute terms to change the mindset and actions of security agencies in Nigeria.