OIL GOVERNANCE IN NIGERIA AND MARITIME SECURITY IN THE GULF OF GUINEA, 2010-2014

OIL GOVERNANCE IN NIGERIA AND MARITIME SECURITY IN THE GULF OF GUINEA, 2010-2014
 
ABSTRACT
This study examined the relationship between the contradictions of rentier oil governance in Nigeria and their implications for maritime security in the Gulf of Guinea (GoG). Specifically, the study examined the effect of the security leakages in the management of oil resources in Nigeria; the proliferation of armed groups’ protests over mismanagement of oil rent in Nigeria; as well as the margin of oil revenue in relation to fishing in Nigeria, on the sustenance of illegal oil trade, the rise of illicit arms trade and use; and the ineffective control of Illegal, Unreported and Unregulated fishing in the Gulf of Guinea respectively. Thus, the central questions of this study are: Do security leakages in the management of oil resources in Nigeria account for the sustenance of illegal oil trade in the Gulf of Guinea? Does the proliferation of violent oil rent protests in Nigeria lead to the rise of illicit arms trade and use in the Gulf of Guinea? Was the prioritization of oil revenue in Nigeria implicated in the ineffective control of Illegal, Unreported and Unregulated fishing in the Gulf of Guinea? The theory of the Rentier state was adopted as our framework of analysis and data was gathered through the documentary method of data collection. Our data analysis was based on qualitative descriptive analysis and the ex-post facto research design was adopted. The study found that security leakages in the management of oil resources in Nigeria in the form of complicities of oil marketers, Private Military Contractors (PMCs) and state security agents
accounted for the sustenance of illegal oil trade in the Gulf of Guinea. The study also found out that proliferation of violent oil rent protests in Nigeria; owing to oil wealth deprivation, oil patronage conflicts and state repression of citizens’ agitation against oil wealth mismanagement, led to the rise of illicit arms trade and use in the Gulf of Guinea. Finally, the study found out that the prioritization of oil revenue in Nigeria as a result of the rentier character of oil resources management was implicated in the ineffective control of Illegal, Unreported and Unregulated fishing in the Gulf of Guinea. The implication of our findings is that the undemocratic nature of oil governance in Nigeria results in criminal alliance between
aggrieved politicians and non-state actors, mostly organized militant groups to boost their primitive access to oil wealth. The study recommended the there is need to democratize oil resources management in Nigeria, as well as discourage non-state actors’ involvement in the regulation of oil and other maritime activities in the Gulf of Guinea.
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Over the past two decades, there has been a surge in international concerns about maritime safety and security, with particular attention to the danger that insecurity on the seas pose to global commerce, peace and stability (Ukeje & Mvomo-Ela, 2013). This increased interest has, in turn, coalesced around the need to reflect upon and critically rethink conventional wisdom as it relates to the geopolitics of the seas, and to understand how such feeds into existing policies and actions at the national, regional, continental and global levels.
Within the past decade, the Gulf of Guinea (GoG) has become one of the most dangerous maritime areas in the world. According to the Crisis Group report of 2012, maritime insecurity is a regional problem that is compromising the development of this strategic economic area and threatening maritime trade in the short term and the stability of coastal states in the long term. The GoG is a vast, diverse and highly important region. It constitutes about 16 countries that are strung along roughly 6,000 kilometres of unbroken coastline. From the north-western coast of Africa, these countries include Senegal, Sierra
Leone, Liberia, Cote d’Ivoire, Ghana, Togo, Benin, Nigeria, Cameroon, Equatorial Guinea, Gabon, the Island State of Sao Tome and Principe, Central African Republic, the Republic of Congo, the Democratic Republic of Congo, and Angola on the Southernmost fringes (Agence Congolaise de Presse, 2012:1).
In recent times, the GoG waterways have served as a critical gateway to the world for virtually all of its littoral countries which depend on access to the sea for the import and export of goods and services from and to major global markets. According to Ukeje & Mvomo-Ela:
With globalization, the region is also fast becoming pivotal to international navigation as a relatively safer, if longer, route connecting the Far East to countries in the North and South of the Atlantic. Given that over 90 percent of global freight is by sea, the GoG has become a veritable sea-route for international trade and commerce, especially now that the shorter Arab Gulf passage is costlier and riskier due to
wars and piracy in the Middle East and North Africa (Ukeje & Mvomo-Ela, 2013:9). Historically, the GoG was critical to the penetration, advancement and consolidation of the European colonial enterprise and presence in Africa via missionary, commercial and consular activities. Thus, at the peak of European pacification missions in Africa, the GoG was a theatre for unprecedented economic, political, diplomatic and military rivalries among key European Colonial powers jostling to gain access to and control new territories (Ukeje & Mvomo-Ela, 2013). During that period, the GoG was the hub of extensive trans-Atlantic trade relations linking Africa with Europe. Trade relations during this period was dominated
by the export of slaves, palm oil, rubber, ivory, gold, and so on, and the importation of sundry goods such as firearms and ammunition, liquor and spirits (Blade, 2012).
Maritime security is an emerging issue in the Gulf of Guinea (GoG) owing to its importance in promoting international trade in the region. Energy trade depends to a large extent on sea based transport, and the region is currently the source of around 5.4 million barrels of oil per day (bbl/d). This is equivalent to more than the total amount imported by European Union’s (EU) 27 countries in 2008 and over half of the United States’ crude oil imports in 2008 (Ukonga, 2013:3). Oil supply from the region in 2011 was equivalent to 40 percent of total EU 27consumption and 29 percent of total U.S petroleum consumption in the same year, with Nigeria accounting for nearly 50 percent of the region’s total oil supply (Ukonga, 2013:3). International interest in the GoG has significantly increased in recent years due to the rise in its volume of global trade, associated with the discovery of considerable oil and natural gas deposits along the coast and offshore. Some countries with deposits have become focus of a multiple and growing interest. As noted by Ricardo (2007), the Gulf of Guinea (GoG) has become one of the main sources of oil and gas imported by Europe, the United States, China, India and Brazil with Nigeria and Angola as the leading regional producer for several decades.
The Gulf’s raw materials and hydrocarbons makes the region an increasingly coveted zone which attracts the attention of many actors; local communities claiming rights of use and a share of the wealth generated by these resources; states anxious to ensure sovereign control; and private companies that have been operating there for some time (Riols, 2011).
Maritime security is no doubt essential to maintaining the flow of revenues from oil and gas, which have the potential to contribute significantly to development in the region. Maritime security is also important for exploiting maritime resources, securing livelihood and development. Maritime resources such as fish, agriculture and intact ecosystems directly contribute to the livelihoods of many Africans (Ukonga, 2013). Fish stocks are an important source of protein in the Gulf of Guinea. For instance, Angolan annual per capital food supply from fish and fishery products between 2002 and 2007 was 14kg per person – above the sub-Saharan average of 8kg (Ukonga, 2013:5). Also, the poorest 40 percent of the regional population depend on fish as a crucial component of their diet.
The rise in maritime insecurity, along with the rise of radical Islam in the Sahel, is one of the two major threats emerging in Africa. According to the International Maritime Bureau (IMB), the GoG has become one of the world’s most dangerous maritime zones owning to consistent rise in cases of pirate attacks in recent years with dangerous repercussions on both development and the global economy. As noted by Ukonga (2013), there has been increased incidence of armed robbery at sea and piracy; theft of hydrocarbon resources on the high seas/illegal oil bunkering; pipeline vandalism, illegal trafficking in
arms, drugs and persons; and illegal unreported and unregulated fishing in the waters of the region. Piracy in the GoG accounted for nearly 30 percent of attacks in African waters between 2003 and 2011. According to the IMB report of 2013, the attacks witnessed an increasing use of violence against crews and it is expected to rise.
Until recently, countries in the GoG focused on land-based threats to security while the Maritime dimensions were hardly considered in the design and implementation of security and defence options and strategies. As noted by Ukeje & Mvomo-Ela (2013), at a level, this may be partly due to capacity deficit which many countries in the region face in terms of the acquisition, maintenance, deployment and necessary resources required to establish and exercise credible presence on the territorial waters.
GoG states with larger economies are the most affected by maritime insecurity in the region. In terms of population for instance, Nigerians account for more than half of the region’s estimated 300 million people. The Nigerian market accounts for more than 60 percent of the region’s volume of trade which makes it the biggest economy in GoG (Crisis Group African Report No. 156, 2012). Nigeria contributes almost 70 percent of the regional GDP and its oil industry is the most important industry in the entire region. Oil is the region’s most valuable export and constitutes more than 70 percent of total foreign exchange earnings by GoG States. In 2009, Nigeria produced 2.2 billion of the GoG’s 2.9 billion barrels per day and the country has 37.2 billion barrels of the region’s total proven reserve 42.9 billion barrels (Johnson, et al, 2012:14). In 2012, Nigeria accounted for 47 percent of the total 5.4 million barrels per day (mbpd) of crude oil production in the Gulf of Guinea (Ovadia, 2013).
Nigeria has been the leading regional producer of oil for several decades and arguably, the worst affected by maritime insecurity of all the GoG states. Renewed international interest in combating maritime insecurity associated with the rise of illegal maritime trade activities in the GoG has not only emphasized the need for cooperation between GoG states and international partners, but also effective maritime security coordination among GoG states.
Also, the rise in organized criminal trade such as illegal oil trade, illicit arms trafficking and IUU fishing in the GoG is associated with their rise in oil-producing GoG states. In other words, the maritime domain of oil-producing states, particularly Nigeria, account for most of the illegal maritime trade in the GoG. This suggests a connection between the management of oil resources and issues of maritime security in the GoG. As observed in the European Union’s Council of Foreign Affairs report of 2014, in the GoG, more than half of the 551 attacks and attempted attacks by pirates and armed robbers in international waters and national jurisdictions occurred off the coast of Nigeria. The report also noted that the coast of Nigeria accounted for more than half of the total reported cases of attacks on oil vessels and hijacks in the Gulf of Guinea.
The foregoing suggests that insecurity in the coast of Nigeria is implicated inmaritime insecurity in the entire Gulf of Guinea. It follows that analyses on maritime insecurity in the GoG require an understanding of the contradictions of rentier oil governance in Nigeria and their implications for the rise of maritime insecurity in the region. Thus, the central focus of this study was to examine the contradictions of rentier oil governance in Nigeria and their implications for the rise of maritime insecurity in the Gulf of Guinea (GoG) between 2010 and 2014. The justification for this scope stems from the fact that international interest in maritime security in the GoG gained momentum from 2010 as a result of the growing security concerns in the Middle East occasioned by the Arab unrest.
1.2 Statement of the Problem
The seas surrounding the west coast of Africa, known as the Gulf of Guinea (GoG), poses a potential threat to international security and the global economy according to the United Nation’s Security Council, as evidenced in Resolutions 2018 and 2039, adopted in 2011 and 2012 respectfully. The semantic limitations of “piracy”, however, as defined by the United Nations as only illegal acts occurring on the high seas, creates a void on how to defend against those same acts that occur within the territorial waters of a state or states within the GoG (Keeney, 2014). Nigeria alone is estimated to have lost US$ 1 billion of
crude oil every month from piracy and oil bunkering (Crisis Group African Report, 2012).
In addition to piracy raising the concerns of the international community, the dangers posed by narcotic, illegal arms, and human trafficking in the GoG has also become an area of focus. A 2008 report by the United Nations Office of Drugs and Crime (UNODC) estimated that 50 tons of cocaine was entering West Africa yearly, then transported to Europe where the drug is sold for almost US$ 2 billion. Illegal, Unreported and Unregulated (IUU) fishing occurring in the GoG is also an area of concern to states in the region. According to a study funded jointly by the United Kingdom government and the Pew Charitable Trusts, IUU fishing is estimated to be between US$ 10 billion and US $ 23 billion annually.
Scholars have tried to explain why there have been rise in activities that threaten maritime security in the GoG in recent years. With respect to the rise in illegal oil trade in the region, scholars like Albert-Didier (2013), Ukeje & Mvomo-Ela (2013) and Antangana (2007) blame increase in oil-related crimes, particularly piracy on the existence of weak maritime policies in the region. This view is however, contradicted by the 2012 African report of the Crisis Group, that states that the attitude of states in the GoG has changed to their territorial waters since the discovery of oil, with most of them allocating substantial resources to formulating maritime policies.
Related to the weak maritime policies argument is the weak legal framework argument as contained in the 2005 report of the Integrated Regional Information Networks (IRIN). This is reflected in the institutional capacity of most states’ security agencies to respond to distress calls in the coast on armed robbery at the sea and acts of piracy. Similarly, Ukeje and Mvomo-Ela (2013) noted that fundamental weakness in the criminal justice system undermine efforts of stakeholders to enforce compliance with rules or to impose sanctions in the event of breaches. However, this argument only explains the challenges faced by relevant authorities in prosecuting offenders.
Riols (2011), Ukeje & Mvomo-Ela (2013) and Ukonga (2013) have also blamed rise in illegal oil trade in the GoG on poor coordination of global and regional efforts directed at combating maritime insecurity in the region. This argument is weakened by the fact that it only focus on efforts to combat crime on the high sea, it fails to explain why there is rise in number of people in the GoG engaged in oil-related crimes.
As noted earlier, the rise in illegal oil trade in the GoG is associated with its rise in oil-producing states in the region. The Nigerian economy constitutes more than 60 percent of the GoG entire economy and her citizens constitute more than half of the entire population of about 16 countries around the region. Also, Nigeria dominates in oil related trade that accounts for 70 percent of the region’s foreign exchange earnings. Illegal oil trade in the GoG has mostly been associated with rise in oil-related crimes in the maritime domain of Nigeria. Thus, the need to understand the nature of oil resources’ management in Nigeria and the propensity and vulnerability to illegal oil trade in the GoG.
Oil wealth in Nigeria is characterized by rentier management. One of the implications of rentier management is the tendency of the state to limit its direct involvement in oil extractive activities, as well as shift the burden of ensuring oil production safety away from the state to non-state actors like International Oil Companies (IOCs) and Private Military Contractors (PMCs). The legitimization of private security management in the oil sector by the Nigerian state also leads to poor regulation of the activities of state security agencies in the oil industry, since the burden of generating oil rent is not on the state. Accordingly, this study addressed the relationship between security leakages in management of oil resources in Nigeria and the sustenance of illegal oil trade in the Gulf of Guinea.
Scholars have tried to associate the rise in the numbers and use of illicit arms in the GoG with the collapse of the Soviet Union. Oche (2005) reported on the disintegration of the former Soviet federation and sale of their stock piled surplus weapons. Naylor (2001) and Darkwa (2011) reported on the ability of non-state actors to access and purchase weapons hitherto inaccessible to them in the Cold War era. However, the argument linking the rise in the acquisition of Small Arms and Light Weapons (SALW) by non-state actors to the end of the Cold War failed to explain why there was a sudden rise in the demand for SALW in the GoG, particularly by non-state actors.
Porosity of boundaries in GoG states have been blamed for the proliferation of illicit arms trade and use in the region by scholars like Che (2007) and Ayissi & Sall (2005). They argued that it will be very hard to find any country in the world capable of effectively controlling the kind of borders GoG states have owing to arbitrary delimitation of both land and maritime boundaries by the Colonial powers before political independence of most African states. Arms traffickers exploit this situation to smuggle SALW into the region.
However, this argument also failed to account for why the proliferation of illicit SALW in the GoG is a recent phenomenon.
Scholars like Kollicoat (2006), Bourne (2007), Boutwell & Klare (1999) and Ayissi & Sall (2005) attribute the proliferation of illicit arms trade and use in the GoG to factors like simplicity and durability, low cost and wide availability, portability and easiness to conceal; lethality and usability by civilians.
The sporadic rise in the demand for SALW in the GoG by non-state actors is a recent phenomenon and there is need to place more emphasis on the demand-side perspective, rather than the current over-emphasis on the production and supply perspectives as over 80 percent of the illegal weapons in the region are circulating among non-state actors and criminal groups in oil producing states, particularly, Nigeria. In this light, this study addressed the relationship between the proliferation of violent oil rent protests in Nigeria and the rise in illicit arms trade and use in the Gulf of Guinea.
Similarly, one common argument in the literature is to associate ineffective control of IUU fishing on loopholes within fishing laws, corruption and prevalence of poverty in the GoG (Stiles, 2013; EJF, 2012; Martini, 2013; Che, 2007; Ayissi & Sall, 2005; Fabra, 2002;
Johnson, 1993 and Brooke, 1988). They reported that IUU fishing is most likely to happen and also more detrimental in counties where governance is weak and corruption is rampant.
Most of the arguments on why there is ineffective control of IUU fishing in GoG such as existence of loopholes in fishing laws, corruption and the prevalence of poverty suggest that there is a lack of political will and/or complicity on the part of the government to combat IUU fishing. Also, oil-producing states in the GoG, particularly Nigeria, have demonstrated the least political will in tackling IUU fishing. Nigeria since 2010 has consistently been blacklisted as one of the top ten countries whose fishing laws are exploited to facilitate IUU fishing in the world. While the lack of political will in most scholarly arguments is correct, such arguments failed to explain why there is absence of such political will in regulating an
economic activity that is a source of revenue to the Nigerian economy. To understand this, there is a need to examine in comparison; the relationships between volumes of revenue accrue to Nigeria from oil and other revenue sources, including fishing, the dominance of oil income in the Nigerian economy and weak government regulation of the other sectors.
Accordingly, this study investigates the relationship between the prioritization of oil revenue in Nigeria and ineffective control of IUU fishing in the Gulf of Guinea. To this end, the contradictions of rentier oil governance in Nigeria, attendant security leakages, violent protests, prioritization of oil revenue and their implications for the rise of maritime insecurity in the GoG is yet to be given adequate systematic scrutiny. This study specifically addressed these observed loopholes in existing literature. Therefore, we were guided by the following research questions:
1. Do security leakages in the management of oil resources in Nigeria account for the sustenance of illegal oil trade in the Gulf of Guinea?
2. Does the proliferation of violent oil rent protests in Nigeria lead to the rise of illicit arms trade and use in the Gulf of Guinea?
3. Was the prioritization of oil revenue in Nigeria implicated in the ineffective control of Illegal, Unreported and Unregulated (IUU) fishing in the Gulf of Guinea?
1.3 Objectives of the Study
The study has both broad and specific objectives. The broad objective of this study was to examine the contradictions of rentier oil governance in Nigeria and their implications for the rise of maritime insecurity in the Gulf of Guinea.
Specifically, the study seeks to achieve the following:
1. To examine if security leakages in the management of oil resources in Nigeria accounted for the sustenance of illegal oil trade in the Gulf of Guinea;
2. To determine if the proliferation of violent oil rent protests in Nigeria led to the rise of illicit arms trade and use in the Gulf of Guinea; and
3. To investigate if the prioritization of oil revenue in Nigeria was implicated in the ineffective control of Illegal, Unreported and Unregulated (IUU) fishing in the Gulf of Guinea.
1.4 Significance of the Study
This study has both theoretical and practical significance. On a theoretical level, by examining the contradictions of rentier oil governance in Nigeria, the study explains their implications for the rise of maritime insecurity in the Gulf of Guinea. The study departed from scholarly arguments that blame maritime insecurity on factors like the existence of weak maritime laws; weak institutional capacity of states in the GoG, lack of political will on the part of the leadership and poor regional cooperation. Rather, the study locates it on the contradictions of rentier oil governance in Nigeria as manifested in the problems of security leakages in oil resources management; violent oil rent protests and prioritization of oil revenue.
Practically, the study will be of interest and immense benefit to policy makers and executors, as well as stakeholders on how to tackle maritime insecurity in the Gulf of Guinea for the following reasons:
· By clarifying issues and facilitating understanding on security leakages in the management of oil resources in Nigeria, as well as its prevention, the study enriches public consciousness on how such leakages, mostly associated with rentier management of oil resources, lead to the sustenance of illegal oil trade in the GoG. It also will provide an invaluable insight on how the transformation of a rentier
economy to a ‘production’ based economy can help solve the problem.
· The study will also enrich public consciousness on the relationship between proliferation of oil rent protests in Nigeria and the rise in illicit arms trade and use by militant groups in GoG.
· The study will also highlight the relationship between the prioritization of oil revenue over fishing and the complacency of the government in Nigeria to effectively control Illegal, Unreported and Unregulated (IUU) fishing in their maritime domain. The ability of this study to establish a connection between the contradictions of the dominance of foreign oil capital in the domestic economy of Nigeria and the
ineffectiveness of the government in tackling IUU fishing in the GoG will also provide useful insight on the deleterious challenge of rentier oil governance in the GoG.