UNEP Report, Ogoni Clean-Up And Chameleonic FG

For most members of the current Ogoniland community, chronic oil pollution has been a fact of life… Treating the problem of environmental contamination within Ogoniland merely as a technical clean-up exercise would ultimately lead to failure… Achieve long-term sustainability for Ogoniland will require coordinated and collaborative action from all stakeholders,” the United Nations Environment Programme (UNEP) indicated in the recommendations of its report on the Environmental Assessment of Ogoniland, submitted to President Goodluck Jonathan on August 4, 2011, at the Aso Rock, Presidential Villa, Abuja.

In his well-crafted Forward to the report, United Nations Under-Secretary-General and Executive Director, United Nations Environment Programme, Achim Steiner, noted: “The history of oil exploration and production in Ogoniland is a long, complex and often painful one that to date has become seemingly intractable in terms of its resolution and future direction. It is also a history that has put people and politics and the oil industry at loggerheads rendering a landscape characterized by a lack of trust, paralysis and blame, set against a worsening situation for the communities concerned. The reality is that decades of negotiations, initiatives and protests have ultimately failed to deliver a solution that meets the expectations and responsibilities of all sides.”

Steiner’s fears resonate in the fact that since October, 1956, when 22,000 barrels of crude oil was discovered and produced in Ogoniland, relations between the people and the operating stakeholders – the Federal Government, represented by the Nigerian National Petroleum Corporation (NNPC), and Shell Petroleum Development Company (SPDC) with its co-venturers (Total Exploration and Production Company and Eni’s Agip Oil Company) – have shown serious lack of confidence, trust and commitment to fulfill obligations arising therefrom, and operate in line with global best practices. That fear still exists today, especially in respect of Federal Government’s commitment to lead efforts in the clean-up and restoration of polluted Ogoniland, particularly as it relates to the honest funding of the project.

Flagging off the clean-up and restoration of polluted Ogoniland, Thursday, June 2, 2016, President Muhammadu Buhari, boasted the commitment of the All Progressives Congress-led Federal Government to religiously implement the UNEP Report, warning that “The current oil theft and illegal refining will not be tolerated. The regulators in the oil industry must live up to expectations.” Represented by Vice President Yemi Osinbajo, the president cautioned the regulators to “ensure that oil companies carry out their operations in line with universal best practices.” In fact, the then minister of environment, who is now UN deputy secretary general, Amina Mohammed, captured the mood more succinctly when she said the government had taken stock of the work done in the past to start the implementation, which “requires transparency, accountability, genuine partnership and proper representation of the people at the grassroots in what we are doing in investing in their future.” But unfortunately, in spite of Steiner’s fears in the UNEP Report, and the minister’s remarks at the launch in Bodo, Gokana Local Government Area of Rivers State, it is on record that the same Federal Government that has till date, exhibited lack of “transparency, accountability” and readiness for “genuine partnership” in the implementation of the clean-up and restoration of polluted sites in

Ogoniland. Indeed, the signs, body language and budgetary allocation by the Federal Government for the clean-up exercise justify this characterisation.
Before expounding on this, let me first recall the UNEP position on the funding of the Ogoni clean-up exercise. Of course, a closer examination shows that the UNEP report specifically recommended “that the Government of Nigeria establishes an Ogoniland Environmental Restoration Authority (OERA) to oversee implementation of this study’s recommendations. With a fixed initial lifespan of 10 years, the authority will have a separate budget which will accrue from an Ogoniland Environmental Restoration Fund (OERF). The overall cost of the clean-up should not be an obstacle to its implementation. Therefore, an Environmental Restoration Fund for Ogoniland should be set up with an initial capital injection of $1billion contributed by the oil industry and the government. To be managed by the authority, the fund should be used only for activities concerning the environmental restoration of Ogoniland, including capacity building, skills transfer and conflict resolution.” In fact, the report recommended that “The Fund should be established with financial inputs from the oil industry operators with prevailing interests in Ogoniland (currently SPDC and NNPC) and the Federal Government of Nigeria as a major shareholder in both these entities.” In Page 227 of the Report, UNEP recommended 11 line items on the clean-up and restoration template with “initial preliminary cost estimate of $1,012,448,640 over the first five years of the exercise”.

The template included Emergency Measures (80 per cent for providing alternative drinking water to communities with contaminated water supply) to cost $63.750million, while clean up of land contamination would cost $611,466,100. Clean up of Benzene and MTBE contamination and Nsisioken Ogale to cost $50million, clean up of sediments at $20million, and restoration of artisanal refining sites at $99,452, 700. It further captured mangrove restoration and rehabilitation to cost $25.5million, surveillance and monitoring at a cost of $21.468million, setting up of Ogoniland Restoration Authority (now Hydrocarbon Pollution Restoration Project – HYPREP) at a cost of $44million, establishment of Centre for Excellence in Environmental Restoration to cost $18.6million, and initiative on alternative employment to those in artisanal refining activities at a cost of $10million. If these line items are put together, the total figure recommended by UNEP is $964,236,800. In addition to that, UNEP made provision for third party verification and international expert support to implementation of the recommendations at five per cent of total cost, and specifically put the cost at $48,211,840. This is what sums the total $1,012,448,640 required to fund the project in the first five years. And given the operating agreement for the SPDC JV, operator of the oil fields in Ogoniland, the Federal Government (represented by NNPC) controls 55 per cent of the stake; Shell 30 per cent; Total E & P 10 per cent; and Agip 5 per cent. This simply means that the Federal Government must lead the funding of the project and should naturally cough out 55 per cent of the total cost of $1,012,448, 640 for the first five years of the Ogoni clean-up and restoration.

Now, using the benchmark of the official exchange rate of N361.175 to a Dollar as at Saturday, January 6, 2018, the Federal Government is expected to pay to HYPREP $550million (approximately N198,646, 248, 399.700) over the first five years of the clean-up exercise, translating to $110million or approximately N39,729,249,679.940 each year. The SPDC ought to commit $300million (approximately N108,352,499,127.109) over a five year period, or pay HYPREP $60million (about N21,670,499,825.421) each year. Total E & P Limited is supposed to commit $100million (approximately N36,117,499,709.036) or $20million (about N7,223,499,941.807) each year for five years of the clean-up process. Agip must domicile $50million or approximately N18,058,749,854.518 to cover the first five years of the clean-up. In the alternative, it could annually pay to HYPREP $10million or approximately N3,611,749,970.903 each year for five years consecutively. This is what the UNEP Report recommends, and by committing to its implementation, all parties have agreed to fund HYPREP to deliver on its mandate. Besides, the UNEP Report also recommended a 10-year lifespan for HYPREP, renewable thereafter. It follows that another funding obligation of $1billion is required for the project to wrap-up the 10-year lifespan.

From a duty of care point of view, it is important to remind the Federal Government and Nigerians that UNEP did not give cost of the holistic clean-up and restoration of Ogoniland. No. In fact, in Page 226 of the report, UNEP stated that “A detailed costing of the various recommendations made in this report was not within the scope of the work and was therefore not attempted. However, it is clear that major investments will be needed to undertake the report’s recommendations. The preliminary estimates of the initial investments needed to rehabilitate and restore the environment are only provided so that there is sufficient funding to initiate follow-up actions.

“The final clean-up costs are likely to be different, indeed much higher, for the following reasons: Full environmental restoration of Ogoniland will be a project which will take around 25-30 years to complete, after the ongoing pollution has been brought to an end. The current cost estimates are operational costs of the new institutions over the first five years. The clean-up costs for contaminated soil will depend substantially on the remediation standards set. A more stringent standard will lead to higher clean-up costs. Another issue is that the cost of clean-up of groundwater is not included in this costing (except for Nsisioken Ogale). The clean-up objectives, standards and targets will first need to be decided before a volume estimate and associated costing can be attempted. No estimate is given for the clean-up of surface water. The response and clean-up costs for any new spills, or newly discovered spills, simply cannot be estimated. Cost of land for the Integrated Contaminated Soil Treatment Centre and mini treatment centres is equally not included. The costs of a set of asset integrity actions, which include better securing of the oil facilities and proper decommissioning of abandoned ones, are also not included. A major cost item will be the restoration of mangroves and forests within the creeks around Ogoniland. The current estimates are limited to a pilot area of impacted mangroves and forests around the Bodo West oil field facilities.” Without prejudice, operators of the oil and gas business in Ogoniland: Federal Government (NNPC), Shell, Total, and Agip should have known this by now. This is the crux of the matter, and a burden the government and its co-venturers must bear to prove that they are transparent, accountable and ready to promote genuine partnership with themselves and the communities for the sake of the environment and the future of the people.

Therefore, it is an understatement to conclude that the Federal Government has yet to show serious commitment to the Ogoni clean-up project, with regard to its financial commitments to the exercise. Of course, as noted earlier, the government, which has the highest share in the business necessarily should lead the funding portfolio with a commitment of the equivalent of 55 per cent of $1,012,448, 640, to HYPREP account for clean-up and restoration of Ogoniland. Anything short of that commitment only amounts to a lip service to the exercise, and an attempt to make the project fail from the start.

An examination of efforts towards funding the clean-up exercise shows that in 2017, the Federal Government allocated N148,387,837 for “Ogoniland Clean-up Programme Support”, out of a total recurrent and capital budget of N28, 588,353,295 for the Federal Ministry of Environment. In the 2018 Appropriation Bill presented to the joint session of the National Assembly on Tuesday, November 7, 2017, President Muhammadu Buhari gave a total recurrent and capital allocation of N27,369,935,624 for the Federal Ministry of Environment. Out of this amount, the president allocated an abysmal N20,228,621 for “Ogoniland Clean-up Support”. The president effortlessly tried to justify this meager allocation to the clean-up project when he said, “We are working hard on the Ogoniland clean-up project, and have engaged eight international and local firms proposing different technologies for the mandate. This would enable us select the best and most suitable technology for the remediation work, and have asked each firm to conduct demonstration clean-up exercises in four local government areas of Ogoniland. Although the International Oil Companies (IOCs) will fund the project, we have made provisions in 2018 budget for the costs of oversight and governance, to ensure effective implementation.”

Ironically, a close perusal of both the 2017 Appropriation Act and the 2018 Appropriation Bill explains the Federal Government’s lack of seriousness and commitment to fund the Ogoni clean-up project. It also shows the desperate attempt by the same government to shirk its responsibility from driving the funding of the clean-up exercise.

Take for instance the allocations to the Federal Ministry of Environment of N31,438,173 in 2018 and N31.5million in 2017 for materials and supplies, including stationeries, consumables, newspapers, magazines, among others; N24.870million in 2018 and N22,323,600 in 2017, respectively for cleaning and fumigation of offices; as well as N185million in 2017 and N99,350,953 in 2018, respectively for local and international travels and transport. Others include allocation of N250million apiece in 2017 and 2018 for attendance of statutory and international bilateral/multilateral meetings; renovation and rehabilitation of offices in the 36 states at a cost of N36,533,993 in 2017 and another N32,768,583 in 2018; and clean and green programme at N111,387,837 in 2017 and N42,249,053 in 2018. Projects audit got allocation of N114,061,500 in 2017 and N108million in 2018 while monitoring and evaluation of projects got N124,822,728 in 2017 and N94,799,950 in 2018; tree planting got N210,764,946 in 2017 and N369,428,609 in 2018, while revision of Environmental Impact Assessment Act got N13.5million in 2017 and N9.655million in 2018.

Other areas of concern include allocation of N41,430,649 for institutional agreement for development of Bamboo and RATTAN as well as establishment of Bamboo processing machine at N30million in 2017; and establishment of Bamboo processing machines in six geo-political zones at N6.2million and collaboration with international network for Bamboo and RATTAN for Bamboo and RATTAN production for export (phase 2 of 3) at N45million in 2018; up-scaling of EIA Registry at N65.5million in 2017 and digitization of EIA Registry at N67.130million in 2018; as well as development and production of Environmental Assessment procedures and revision of existing ones (guidelines, regulations and standards) at N75.975million in 2017 and the same project at N25.005million in 2018. These are laughable allocations in the Ministry of Environment spending portfolio that are of less importance to the Ogoniland project, given its complex history, significance and revenue contribution in shaping Nigeria’s development.

According to the UNEP Report, oil and gas exploration and production activities spanned over 1,000 square kilometers across Eleme, Tai, Gokana and Khana, with 12 oilfields, 116 drilled wells, 89 completed wells, and five flowstations, with installed capacity for 185,000 barrels of oil per day for more than 40 years. Assume that we monetise the value of this volume of crude oil using the current oil price of $67 per barrel – a staggering revenue earning by the operators, led by the Federal Government – would suffice. In fact, 185,000 barrels would amount to $12.395million per day; $371.850million in 30 days; $4,462,200.000 in 12 months; and $178.488billion in 40 years. Therefore, spending roughly $6billion from $178.488billion over the next 30 years, no doubt, is enough sacrifice to make by the government and oil industry players which partook in the business before 1993 when Ogonis stopped oil exploration and production in the area.

Put in perspective, it is callously uncharitable and gravely disappointing that the Federal Government, which blindly pocketed the huge revenue earnings from its 55 per cent stake in the joint venture operation for over 40 years, would turn around in 2017, to shirk its core responsibility of leading the way in the funding of efforts to restore the environment crassly degraded and polluted by oil exploration and production activities it consciously, wittingly and aggressively led. No right thinking person, without intent to exploit and undermine, would preside over a government that suggests and allows Shell, which took 30 per cent, Total which went away with 10 per cent, and Agip, which smiled home with just five per cent, to bankroll the monumental cost of the Ogoni clean-up. It is doubly saddening that President Muhammadu Buhari would make such allusion in his 2018 Appropriation Bill presentation to the National Assembly. It is already shameful enough that Shell literarily funded the UNEP scientific survey, without compromising the damning report arising therefrom, as attested to by Steiner.

The Federal Government’s posture, to say the least, amounts to an abdication of key social responsibility to remedy the mess it led in creating in Ogoniland for over 40 years. It is a clear violation of the global best practice in the extractive industry that the polluter necessarily pays for any measures to prevent and control the environmental pollution and health risks its activities had wrought. In fact, the ‘polluter pays’ principle, which is the commonly accepted practice that those who produce pollution should bear the costs of managing it to prevent damage to human health or the environment, is well known and applies globally. Ignoring this principle smacks of brazen insensitivity and lack of commitment to redress the humongous plight of the Ogoni people in particular and the entire Niger Delta in general. It shows Federal Government’s reluctance to accept responsibility for the devastation of Ogoniland, and willingness to commit commensurate funds with its 55 per cent stake in the lucrative business to clean-up and remediate Ogoni environment it robustly benefited from for decades.

Unlike the Federal Government’s chameleonic double standard in funding projects in other parts of the country, especially the North-East, where it has secured $1billion from Excess Crude Account to fight insurgency and execute other initiatives, the Shell Petroleum Development Company of Nigeria, appears to have displayed more commitment to remedy the mess, and taken responsibility to right the wrongs of the past. This is because in line with the UNEP Report, it has undertaken a number of initiatives specifically assigned to it by the recommendations in the last six years in Ogoniland. Those initiatives would be attempted in a later piece.

Suffice to note that in addition to addressing those specific tasks, Shell, last year domiciled $10million (approximately N3,611,749,970.903) in HYPREP account as its funding obligation for the commencement of the clean-up exercise. SPDC General Manager, External Relations, Mr. Igo Weli, who disclosed this to journalists in Port Harcourt on Saturday, August 5, 2017, explained that the funds that would be used for the clean-up will come from the Joint Venture and budgeting process with the Federal Government through the NNPC making available 55 per cent, while Shell provides 30 per cent of its share in the funding arrangement.

According to Weli, Total Exploration and Production is expected to contribute 10 per cent of the funding for the clean-up of Ogoniland, while Eni’s Agip would provide five per cent. “SPDC JV commits to support HYPREP ….in the clean-up process. SPDC JV has made available the $10million take-off fund for HYPREP as part of its contribution towards funding its share of the Ogoni Restoration Fund. SPDC JV remains fully committed to continue supporting and contributing its share to the Ogoniland Restoration Fund (ORF) within the appropriate framework and governance structures. We encourage all relevant stakeholders to also remain committed to contributing their quota to the Ogoni Restoration Fund,” the Shell general manager clarified. To show further clarity to Shell desire to keep its part of the bargain, Weli was quoted on August 7, 2017, as saying that $200million was ready for deployment to HYPREP for the clean-up of Ogoniland.

That position appears to be what the Senator representing Rivers South-East Senatorial District, Magnus Abe, was alluding to when he said that the Federal Government has voted $190 million towards the implementation of the United Nations Environment Programme (UNEP) on Ogoniland. Abe had disclosed that fact in Port Harcourt on Saturday, April 22, 2017. According to him, “We (Senate) are still pressing to increase the budgetary provision to $200 million to enable the project to begin. The amount was part of this year’s contributions by Shell.”

Thus, if Shell had last year set aside $200million in addition to the $10million it already paid to HYPREP out of its $300million, where then is the Federal Government’s $550million share of the total cost of the project in the first five years? From the paltry budgetary allocation of N148,387,837 in 2017 and the wickedly projection of N20,228,621million in 2018, the Federal Government appears to be simply playing politics with the clean-up project. This is why the Rivers State Governor, Chief Nyesom Wike’s expressed fears that the body language of the Buhari-led Federal Government is to use the sustained propaganda around the Ogoni clean-up exercise to gain cheap political mileage ahead of the 2019 general elections, buys to the truth. It also justifies Wike’s argument that if $1billion could be approved from Excess Crude Account (ECA) by the Nigerian Governors’ Forum (NGF) for the Federal Government to fight insurgency in the North-East, there was nothing wrong with the approval of same amount from ECA to tackle environmental challenges in the Niger Delta identified in the UNEP Report, for which $1billion had been recommended to be spent over the first five years of its implementation.

Speaking at the Presidential Villa, Abuja, shortly after a meeting with President Muhammadu Buhari, on Friday, December 29, 2017, Wike said “However, we are talking about fighting insurgency, and no right thinking individual will say that he will not support the government to fight insurgency. But on the other hand, I believe that we have been talking about the environmental issues in the Niger Delta, particularly in Ogoni land. I believe that we can also take the same $1billion from the excess crude account to fund the problem in Ogoni land and other Niger Delta areas. That is my position.”

Wike’s position is shared by many stakeholders in the Niger Delta, who loath Federal Government’s apathy towards funding critical development projects and livelihood-sustaining initiatives in the region. Ogoni Youth Federation (OYF) is one of such groups. President-General of OYF, Mr Legborsi Yamaabana, in a statement, late last December, at the annual national congress of the body in Bera Community, Gokana Local Government Area, Rivers State, expressed the feeling of the youth. He said: “We have been in devastation for over 30 years, and the Federal Government has been very slow in the implementation of the United Nations Environment Programme (UNEP) report for over six years now, as nothing has been done to assuage the situation of the people. A huge amount of money has been approved for the insurgency that started a few years ago. We are saying that part of the money should be diverted to the clean-up of Ogoni so that the work can start.”

In a communique at the end of the congress, read by the Legal Adviser of OYF, Pyagbara Gabriel, OYF decried the lackadaisical attitude of Federal Government, international oil companies and the Hydrocarbon Pollution Restoration Project (HYPREP), in the implementation of the recommendations on Ogoni clean-up, and insisted that any oil company willing to resume oil exploration in Ogoniland must enter into an agreement with the youth of the area. That is the same stance shared by the Movement for the Survival of Ogoni People (MOSOP). While querying the approval of a whopping $1billion for the Federal Government to fight insurgency in the North-East, MOSOP said that the urgency painted by the UNEP Report makes it expedient that another $1billion should be withdrawn from the ECA to fund the Ogoni clean-up in line the extant recommendations. Speaking in Port Harcourt in reaction to the NGF’s approval, MOSOP President, Legborsi Pyagbara, noted that the Ogoniland clean-up deserves more serious consideration given the scientifically proven environmental and health implications identified in the UNEP Report.

But given what President Buhari has said thus far and the budgetary allocation verifiable from the Federal Ministry of Environment’s spending basket, it is difficult to understand where the Chairman of the Board of Trustees (BoT) of HYPREP, Mr Wale Edun is coming from when he said that the Federal Government was “funding the environmental remediation in Ogoniland”. Speaking on Wednesday, September 6, 2017, on a programme on Arise Television, Edun said already, the government has properly funded both HYPREP’s Governing Council and Board of Trustees (BoT) – the two key elements of the governance structure required for the clean-up of the Ogoniland and other impacted sites. He said HYPREP’s BoT was working with the relevant stakeholders to develop a world-class framework to measure the agency’s achievements.

According to him, “We have escrow account; we have investment advisers; fund managers are in place; we have technical advisers so that when we are given a list of what else has been done, we can check it properly. In fact, from the perspectives of the Board of Trustees, we have funded the governing council, we have funded the budget office, and they are yet to apply those funds fully and come back for more. But in the meantime, one thing I like to point out is that the idea is not just that the government or the joint venture oil companies should fund this clean-up, we expect it to last for years, and we expect it to cost huge amount. So, we are putting in place a structure that allows other people, other philanthropists, other institutions – national and international – to also put money in that fund. So, it is not a project-based organisation that we are handling; it is a fund that can take money at any time and is committed to applying it properly; to applying it prudentially to the job of cleaning up Ogoniland.”

On whether the $1billion is meant only for clean-up of oil pollution or could be deployed in other initiatives such as providing health services, Edun said the fund would also be used to intervene in the health sector and in the provision of drinking water for the people of Ogoniland, whose environment was devastated by oil pollution. “It is holistic; it is comprehensive. So, it is for the clean-up of the land by remediation; clean-up of the water, provision of drinking water, restoration of the health of the people of Ogoniland, health intervention; restoration of the means of livelihood of the people as well. So, for the young people, we have training programmes; there are empowerment programmes as well as standards of restoring agriculture and restoring the fishing industry in Ogoniland. So, it is a comprehensive attempt to really restore the lives of the people,” Edun added.

However, this explanation by Edun does not add value to the argument that more than 18 months after, HYPREP is yet to record any measurable milestone on the ground to assuage the desperation and anxiety, and ultimately restore the confidence and trust of the people of Ogoniland, and indeed, the Niger Delta, and that the Federal Government is damn serious with the holistic implementation of the UNEP Report. It also buys into the school of thought which brandishes decades of Federal Government’s record of lack of commitment to previous engagements, and implementation of agreements designed to address the Niger Delta Question. The people need Edun to do more, empirically, to convince stakeholders in the region that Buhari was not sure of his position when he said that the oil companies would fund the project, instead of the Federal Government leading the funding in line with its 55 per cent stake in the business. Edun needs to carefully read and understand Page 226 of the UNEP Report before he speaks again on the readiness of his team to deliver on the tasks ahead. He needs to fathom the letters contained in Page 227 of the UNEP Report. He needs to thoroughly digest the entire 262-page report before he speaks again!

Time has come for National Assembly members from the Niger Delta to rise up, denounce the lukewarm strategy and collectively lobby other members with the aim of raising the 2018 allocation to a reasonable amount commensurate with the Federal Government’s 55 per cent stake in the oil business. It is also natural to remind members of the National Assembly from other parts of the country to, for once, be fair and just in their debates over the paltry allocation, and ensure honest review that should up the ante for the clean-up exercise. Justice demands that Buhari should boldly shove away the shame of this dismal allocation by proposing a supplementary appropriation to fund its huge responsibilities in the Ogoni clean-up process, bearing in mind that 55 per cent of the $2billion clean-up cost over the first 10 years must be borne by a sincere Federal Government. This is the paradox of the Ogoni clean-up project!

Nelson Chukwudi

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