October 8, 2013

Oil theft, Chatham House and the Ribadu report

THE London-based independent think tank, Chatham House, has just released a damning report on the thriving oil theft in the oil-rich Niger Delta region.

The report, which is more or less the vindication of similar meticulous investigation done by the Nuhu Ribadu-led Petroleum Revenue Special Task Force, last year, has once again diagnosed the source of a rabid fiscal malady gradually hollowing our economic fortunes as a country.

This disease is no more than the deliberate secrecy shrouding the Nigeria’s oil industry – from exploration to pricing, regulation and security of the product, thereby providing convenient atmosphere to plunder our commonwealth. While official silence crowns this increasing national tragedy, the symptoms of the self-imposed diseases further manifest by the day.

It is no longer a secret that government is staggering to meet its fiscal obligations because of this big cover up in the industry – both the one accounted as oil theft and the one filtering into the coffers of those who should be the custodians of this common vault.

The news has been rife in the media that series of meetings of the Federation Allocation Committee ended in naught as there is nothing to share.

The executive summary of the Chatham House report, published on the webpage of the think-tank, gives the summation of the findings thus: “Nigerian crude oil is being stolen on an industrial scale. Nigeria lost at least 100,000 barrels of oil per day, around 5% of total output, in the first quarter of 2013 to theft from its onshore and swamp operations alone.

Some of what is stolen is exported. Proceeds are laundered through world financial centres and used to buy assets in and outside Nigeria, polluting markets and financial institutions overseas, and creating reputational, political and legal hazards. It could also compromise parts of the legitimate oil business.

“Officials outside Nigeria are aware that the problem exists, and occasionally show some interest at high policy levels. But Nigeria’s trade and diplomatic partners have taken no real action, and no stakeholder group inside the country has a record of sustained and serious engagement with the issue. The resulting lack of good intelligence means international actors cannot fully assess whether Nigerian oil theft harms their interests.

“Nigeria’s dynamic, overcrowded political economy drives competition for looted resources. Poor governance has encouraged violent opportunism around oil and opened doors for organised crime. Because Nigeria is the world’s 13th largest oil producer – exports often topped two million barrels per day in 2012 – high rents are up for grabs.”

The subject of the Chatham House’s
investigation was an aspect covered in greater details by the report of the presidential committee on petroleum revenue, headed by Mallam Nuhu Ribadu.

The committee, which was composed of many eminent Nigerians with patriotic mien did a thorough job in appraising the present situation of the oil industry as regards the revenue drive.

It did not only work to “determine and verify all petroleum upstream and downstream revenues (taxes, royalties, etc.) due and payable to the Federal Government of Nigeria” – in line with its terms of reference, the committee equally came up with a lot of insights into how accountability eludes the sector.

It was to the credit of the committee that the odious underhand dealings in the name of fuel subsidy handouts to importers was blown off, leading to investigations that in turn led to arrest and prosecution of many culprits.

The report also states, in clear terms, those complicit in the web of frauds that surround the industry, ultimately stepping on the toes of those who felt should not be exposed because they constituted the committee.

The report of that all important committee, which was submitted to President Goodluck Jonathan since October 2012, is yet to be acted upon despite the promise by the President during the handover of the report to him.

What followed, rather ironically, was a campaign of calumny against the committee and Ribadu in particular on some flimsy bases, in order to rubbish that widely acclaimed report. It is instructive to state here that Ribadu’s resolve to stay above board in the conduct of that exercise did not go down well with some people at the government level and elsewhere.

First, despite leaving a lucrative United Nations job to come and take up the national assignment, Ribadu refused to collect even his entitlements as the chairman of that committee. Not only that, he rebuffed attempts to compromise him that came even from unlikely places. This was something that some people who dine on the poisoned pie were not happy with, thus they set out to ensure that the report did not see the light of the day.

However, while they scuttle the Ribadu Report, they obviously did not envisage that Chatham House could commission a report like this. The home-truths the government refused to heed to, and the prescription jettisoned by the government, is now re-told by a foreign physician, in the name of Chatham House.

What those in government who were falling over themselves to discredit the Ribadu Report forgot, or ignored, was that this man actually took up that task as a patriotic Nigerian who was determined to see change happen in his country.

He refused to take any pay because he felt he was giving back to his country. In fact, Ribadu suffered political scars because of that personal decision to help a government formed by a different party from his. For him, Nigeria is greater than an individual or a party.

But all this goodwill and good intention was bastardised by some who do not desire prosperity for this country due to their selfish ends.

The question is, now that Chatham House has vindicated Ribadu, will the Federal Government eat the humble pie to now act on the Ribadu Report to save Nigeria from this dire strait?

Mr Abdulaziz Abdulaziz, a commentator on national issues,   wrote from Abuja.