A CRITICAL APPRAISAL OF THE LEGAL REGIME OF OWNERSHIP OF PETROLEUM AND LAND USE IN NIGERIA

BEING A DISSERTATION IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF MASTER OF LAWS (LLM) DEGREE

SCHOOL OF POSTGRADUATE STUDIES
DEPARTMENT OF PUBLIC AND PRIVATE LAW

LAW, FACULTY OF LAW

CHAPTER ONE
GENERAL INTRODUCTION
1:1      Background of the Study
            Nigeria is Africa’s leading oil producing country and the world’s sixth producer with a production capacity of about 2-million barrels per day.  Its oil reserves are concentrated in the Niger Delta region of the country.  Petroleum from this region “account for over 80% of GDP, 95% of National Budget and 90% of foreign exchange earning”.[1] Before the discovery and exploitation of oil, Nigeria had an agrarian economy, but the above figures show that oil has grown to become an “indispensable” part of the Nigerian economy.
            As is obtained in other oil-producing countries (oil exploitation) in Nigeria is regulated by some enacted legislations.  The most important oil-related legislations in Nigeria include; The Petroleum Act 1969 (now cap10 LFN 2004), Oil Pipelines Act 1956 (now cap. 07 LFN 2004), Oil in Navigable Waters Act 1988 (now cap 06 LFN 2004), Federal Environmental Protection Agency 1988, and the Land Use Act 1978 (now cap. L5 LFN 2004).  By the Petroleum Act (continuing a colonial policy) the entire property in petroleum (mineral oils) is vested in the state.  The result is that the Federal Government has absolute right and control over oil resources in the country, which is found in the Niger Delta region of the country.  It farms out oil-mining rights to oil companies and receives rents and royalties from them in return.  As has been seen above, oil has realized so much money for the Nigerian state over the years.[2]


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Under the common law, the principle of quic quid plantatur solo, solo cedit (whatever is attached to the land is part of the land) applied in relation to land.  However, this is not the case with Nigeria.  Our section 16 of the Interpretation Act 1964 (now cap 191 LFN 2004), explicitly gives us another meaning of land.[3] Under this regime, while oil is vested in the state, ownership of land supporting oil remained with the individual or family owners of the land until 1978 when the Land Use Act (hereinafter referred to as the LUA) was made.  The Act vests all lands in any state of the Federation in the Governor of such State.[4] It is pertinent to note that before the promulgation of the LUA, oil companies that had obtained licences from the federal government approached oil-bearing/land – owning communities for a right of access to the land for oil operation. That was the way by which the communities had some sense of participation in oil operations, as they received some money for granting access and for any damage to land and surface rights. It is now clear that controls exercised hitherto by communities with oil deposits have been lost since the Land Use Act 1978 unified land ownership rights to oil deposit.[5]       
            The problem we see here is that, while the Federal Government owns the petroleum resources, the littoral State, personified in its Governor owns the land supporting the petroleum resources.[6] The littoral States have been demanding a higher percentage of proceeds from the resources extracted from their region.  The region claims that 13% of the oil revenue allocated to the states, by the 1999 constitution[7] is a slap on the face, and want as much as 50%.[8] Many juristic pens have flown in a bid to unravel the puzzle envisaged here.
            Yinka Omoroegbe[9] suggested that protection of communities should be in the form of law that give adequate protection of proceeds from sale of the natural resources to the affected communities and ensuring that they are not left out of the development process.  Ike Oguine[10] expressed a similar view.
            Former Governor of Delta State, James Ibori at the inaugural meeting of the Governors and members of the National Assembly from the south-south zone at Asaba on Friday 31st March 2000, had this to say, “…any law in our statute books which directly frustrates the realization of our dreams through a calculated scheme of expropriation of our natural resources should be seen as repressive and should be expunged.”
            Secondly, there is the problem of the state of the environment, Oil companies having no respect for the environment and that has threatened the survival of the oil producing communities.  The constitution of Federal Republic of Nigeria in section 33 (1) upholds the right to life.  This entails also a right to breathe, by implication pure air, which is part of the constitutional right to life.  Chief Eglare W.O. Ojihogar, Chief of Ugborodo community in Delta State, in an interview with Amnesty international had this to say,
It is like paradise and hell.  They have everything.  We have nothing… if we protest, they send soldiers.[11]
Over 50 years of exploration and production, oil companies have left large parts of the Niger Delta uncultivable, due to frequent oil spills, leakages and the effect of gas flaring or other accidents.  Societies disintegrate within the measures more frequently than they are broken up from external pressure.  There is disintegration when no common morality is observed, and history shows that the loosening of moral bonds is often the first stage of disintegration.[12]
            Over the years, militant groups have claimed to stand up for the inhabitants of the Niger Delta residents Adaka Boro, died while fighting for a people friendly environment for oil operation.  Ken Saro-Wiwa, equally suffered the same fate while fighting for the same course.  Alhaji Asari Dokubo led the Niger Delta Peoples’ Volunteer force (NDPVF) calling for secession of the region from Nigeria since 25 September, 2004, until he was arrested and charged with treason on October 6th 2004.  In 2006, a new militant group emerged from the region known as the movement for the Emancipation of the Niger Delta (MEND), since then militancy and hostage, taking has become a notorious phenomenon with the Nigeria polity.
            Thirdly, is the issue of compensation for land and improvement on it S.36 of schedule 1 to the Petroleum Act 1969 provide for the payment of “fair” and “adequate” compensation, which refer to surface right including and to specified plants.  It should be noted that outside crops and economic trees, oil pollution and activities of oil companies can and do affect fish ponds, farms, canal, water ways, wilding, roads, buildings, and equally the problem of desecrating of shrines, cemeteries and cultural and ancestral lands.[13]
            To solve this problem, C.A. Omaka is of the view that the Petroleum Act 1969 should be reviewed so as to define the term ‘fair’ and ‘adequate.’[14] This is in consonance with the position of Yinka Omoregbe.[15] Angaye[16] has called for the return of land to its original owners (the people).  He states:
When the rightful owners of oil become partners with oil companies and government, then justice is done, and peace and progress will reign supreme in the Niger Delta Region in particular, and Nigeria in general.
Fourthly, is the issue of conflict between the oil communities and State.  The Federal Government, by the Petroleum Act acquired ownership of petroleum leaving the surface rights to the former owners of the land.  The arrangement, the communities were not comfortable with.  However, things fell apart irretrievably, upon the introduction of the Land Use Act, which vested land in the state thereby removing the communities’ surface rights, with the following implications in the communities’ interest:
1.      Revocation of people’s right to their land
2.      Deprivation of owner’s choice as to who acquires his or her land.
3.      Denying an owner of land a choice of due compensation for the acquisition.
4.      Owners living under a perpetual likelihood of losing their land to government
5.      Owners’ inability to decide activities that should be carried out on his property or neighbourhood.
6.        The Governor may well acquire any resource rich land for any “public purpose”.[17]
To solve this problem, Kaniye S.A. Ebeku[18] has called for a repeal of the Land Use Act without delay.  This view is in line with the position of James Ibori noted above.   Omaka  calls for the review of the Petroleum Act and the Land Use Act[19] a view shared by Anaye.
      From the above review of the positions of eminent scholars work on oil ownership crisis in Nigeria, one can discover that they concentrated on the UN Resolution 1803 of environmental impact of oil exploitation despite the huge revenue oil exploitation has yielded to the Nigeria State.  There has not been any write up on the impact of the ownership of petroleum in Nigeria by the state (the federal government) on the Land Use right of the citizen, who before the enactment of the Land Use Act 1978, were the owners. Where the federal government own mineral resources, the state government owns the land, what is the position of the people who are at the end point of every political move in the society?
      Again must the strive between the state government and the Federal government last forever? Must the Niger Delta peoples abandon their ancestral homes, because of the nature’s gift of oil?
      These are the lacunae that this dissertation aims at addressing.

1:2      Statement of the Problem
All lands and natural resources (including mineral resources) within the Ijaw territory belong to the Ijaw community and are the basis of our survival… We cease to recognize all undemocratic decrees that rob us of our lives and resources, which are enacted without our participation and consent.  These include the Land Use Decree and the Petroleum Decree... (Kaiama Declaration, 11 December, 1998).
Against the backdrop of the scenario creation in 1:1 above, we wish to state the consequences of the situation on the Nigerian polity and the Niger Delta in particular.
            The crisis over ownership of oil and gas in Nigeria has been of tripodal imperative, which has been between local communities and the government; local communities and oil corporations on the other and between Federal and State Government. Jurists have debated the reasons behind these crises.  We will discuss these conflicts distinctively and analyse the writing and opinions of some great jurists on this area of our jurisprudence.
            The Federal-State conflict that is branded “resource control” calls for fair, just, equitable and manageable natural resources sharing policy that shall be favourable to all Nigeria stake holder.  Resource control is legal incidence of ownership of natural resources. The basic principle of our property law is that he who owns a thing of value manages it.  In the words of Niki Tobi, JCA (As he then was), in Abraham v. Olorunfumi[20]a, the distinguished jurist observed thus: “In so far as the property is his and inheres in him, nobody can say anything. He is the alpha and omega of the property.  The property begins with him and also ends with him”.
            According to Professor Utuama20 subject to administrative and legal qualifications which may vary in content from jurisdiction to jurisdiction, it is trite law that the owner of a thing manages and controls it.  Thus, the demand for resource control simply implies the wish of the governments and people of the Niger Delta region to exercise the legal right to control, manage, use, enjoy and abuse the natural resources located in the Niger-Delta region.  Is this demand legitimate?  It is my strong view that the legitimacy of the demand can hardly be faulted in a democracy founded on the rule of law.
            In common law parlance, land endowments in terms of natural resources in or under Land belong to its’ owner.  This is explained by the maxim quic quid plantatur solo, solo cedit earlier referred to which has been judicially recognized as an established principle of our Land law by the supreme court, the Apex court in our land, in the celebrated judgement in the case of Otogbolu v. Okeluwa.[21]  It simply means that what is attached to land is part of the land and belongs to the owner.  As such, the owner has the amplitude of rights vested in him to enjoy it as he pleases, limited by the right of his adjoining neighbour to the reasonable enjoyment of his land.
            When one considers the above principle in the light of the land ownership pattern in Nigeria, one would be left with the option of asking, who actually owns the land in Nigeria?  This is because, the constitution[22] and the Petroleum Act[23], has vested ownership and control of all mineral resources in the Federal Government, the Land Use Act[24] vests ownership of Land in the State Government, while it equally allowed the individual to use the land.  
            In a bid to solve this problem,  Utuama[25] is of the view that all the natural resources in the Niger Delta region should rightly belong to its government and people. This his view firstly, stems from the principle of quic quid plantatur solo, solo cedit stated above, which he examined in the light of section 1 of Land Use Act 1978 that vests Land in the State Government.  Secondly, on the principle of true federalism, where he posited;
A fundamental principle of federalism is that the governments of the federal union are allowed to take their destiny into their hands in the management of their respective administrative autonomy and natural resources with an agreed sovereign competence ceded to the federation for their mutual beneficial purpose[26]
On the side of  Anagaye[27], he posited thus;
The Logic that one owns the land and another owns the oil extracted from beneath the land is Nigerian Logic or illogic propounded by parochial logicians.  If crude oil were found under “the big three” eminent jurists would have inserted the enabling section in the 1999 constitution to read: “Any oil found under any big three belongs exclusively to the owner of a big three.
            Another puzzle that will trick the mind of any close observer of this area of our jurisprudence, is the question of the position or place of the individual/community user of land, since the land to the State Government, and the resources beneath the land belong to the Federal Government herein after referred to FG (this question will always come to mind whenever the FG is to exercise this power of exploitation).
            In a bid to address this, Nsongurua J. Udombana[28] said that these laws have been weighed and found wanting since they have failed to meet the human security of Nigerian, and without security, food, shelter and clothing-there can be no freedom.  Necessitous men are not free men.  Isaiah Berlin put it well when he said “men who live in conditions where there is no sufficient food, warmth, shelter and the minimum degree of security can scarcely, be expected to concern themselves with freedom of contract or of press.”  
            This is the problem with the LUA. With a stroke of the military pen, this “callous and arm twisting law’28a snatches from individuals, families, villages and other ethnic nationalities their inalienable right to property and source of livelihood and turned them into beggars.  With bowels in their hands, as all beggars do, Nigerian now go to the government or the appropriate officer to obtain crumbs of lands for housing, agricultural or other developmental purposes.  That is not just a pity; it is dangerous.[29]
            The real problem appears once; the F.G through the oil companies discovers petroleum in side the “crumbs” of land granted to the individual/community or village by the Governor. Prior to 1978 where land was not compulsorily acquired by the government and oil company had to negotiate with community land owners for access to land for oil operations, it settled the amount of compensation (annual rent) it had to pay to the community for the use of the land in its intrinsic nature (oil operation may result to a total loss of use of the affected portion of land by the land owners). Additionally, the oil company had to pay compensation for any damage to surface rights (e.g. farm crops, or building).  In this case, compensation must be fair and adequate and its payment is inconsistent with fairness and justice.[30]
            Since the enactment of the Land Use Act, acquisition of Land is now done within the compass of the Act.  The Act provides for the revocation of a right of occupancy by the Governor of a state for “overriding public interest” in that it is required for mining purposes or oil pipelines or for any purpose connected therewith.  When this is done, the law provided for payment of compensation to the holder and occupier under the appropriate provisions of the minerals Act or the Petroleum Act or any legislation replacing same.  Petroleum Act and Mineral Act provides for fair and adequate compensation to “owner or occupier” of private land for any disturbance of the surface rights of such owner or occupier.  Section 29(3) LUA gives discretion to the governor of a state to decide who receives the money (and possible how it may be utilized).[31]  
            It would be recalled that under the prevailing customary land tenure system before 1978, any such compensation would be paid to the traditional authority of the community concerned for the benefit of the community.  But by the combined effects of S. 1 and S. 29 (3) of LUA, the Governor of a state is the new owner of all the land comprised in the territory of the state. As could be observed, the provision speaks of holder and not owner. The result is that, like oil rights, land rights are now vested in the state.  Available evidence indicates that compensation for lands compulsorily acquired under the Act, are now paid to the Governor of the state concerned and not to the community headman as before.  State government now feel that communities are no longer entitled to compensation, as of right since they no longer own any land.
            Therefore, as to the right of the communities when the FG exercises its right of expropriation of oil, Ebeku.[32] is of the view that, the people have no right at all to both the land and natural resources found in their communities.  He states that they are merely at the mercy of the governor (the owner of land) to determine the compensation, value if even that will accrue to the occupiers of his land.  Therefore, he called for the immediate repeal of the LUA.  N.J. Udombana[33] is of the view that these modes of ownership s work against the human rights of the people, and the various statutes involved have been weighted in the balances and found wanting.[34]
            From the above review of the positions of eminent scholars’ works on these issues raised above, one can discover that they concentrate on 1962 UN Resolution 1803 on state sovereignty over her natural resources and environmental impact of oil exploitation on the people.  There is no known work that seeks to address the problem of ownership of Land and natural resources between the federal government and the state government in the light of the principle of quic quid plantatur solo, solo cedit (that is from private law domain). Secondly, is the problem of the position or right of the individual occupier of land when the F.G. claims the right to natural resources and the state to land.
            These are the lacunae, which this dissertation aims at addressing in the most conceptual manner.

1:3 Research Questions
1.      Considering the ownership position of Land in Nigeria and the principle of quic quid plantatur solo, solo cedit, who is actually the owner of land for the application of this principle?
2.      If the state government is the owner of land, what is the legal position of the holders of the infrastructural interest having regard to the fact that the federal government can move to expropriate mineral resources in those land.

1.4       Objectives of Study
            The dissertation is aimed at considering the legal regime of ownership of petroleum and Land Use in Nigeria. The choice of this topic stems from the fact the though the course is a viable one, and many scholars have written on this concept, but have concentrated on 1962 UN Resolution 1803 on state sovereignty over her natural resources and the environment impact of oil exploitation.  However, some lacunae have been discovered. Accordingly, our objectives in this work will be
1.      To examine the legal framework of ownership of petroleum in Nigeria and define some technical terms
2.      To assess the adequacy of the existing provisions
3.      To highlight defects and shortcomings in the existing provision.
4.      To proffer solution to the resource control problem in Nigeria
5.      To re-examine the rights of the oil producing communities in Nigeria
6.      To ensure that suggestions are made geared towards ensuring that further improvement can be made to enhance the country’s ownership right over her mineral resources.
7.      To reposition the role of the judiciary in settling oil dispute.

1.5 Research Methodology
            We conceive this work as a technical one; therefore our methodological approach will be primarily analytical.  Therefore, we will resort to the analysis of statutory enactments that are petroleum and land related.  However, we will not in the process lose sight of the non-legal factors that have influenced ownership of petroleum resources in Nigeria.
            Furthermore, a comparative analysis of the various statutes that are petroleum and related will be done.  Therefore, I intend to visit the library and Internet source to consult works of scholars in this area.

1.6 Relevance of the Study
            Although many scholars have written on the concept of ownership of petroleum in Nigeria, it is important to note that they have concentrated on 1962 UN Resolution 1803 on state sovereignty over her natural resources and the environmental impact of oil exploitation in Nigeria.  The research exercise is relevant to the extent that one should be able;
1.      To know the evolution of the statutory regime in the Nigerian oil industry.
2.      To proffer a lasting solution to the resource control problem in Nigeria.
3.      To re-examine the rights of the oil producing communities vis-à-vis the right of ownership of petroleum by the Federal Government and ownership of land by the State Government.
4.      To determine what is ‘adequate’ and ‘fair’ compensation when disasters occur in the oil industry.
5.      To assess the various petroleum related enactments, pointing out their adequacies, shortcomings and making suggestions for way forward.

1.7 Delimitation or Scope of the Study
            The main focus of our consideration is the question of who owns ‘what’ and gets ‘what’ in the Nigeria petroleum industry.  To do this efficiently, using the maxim quic quid plantatur solo, solo cedit, a critical examination of the various legislations affecting the oil industry will be done, pointing out their adequacies and inadequacies, not forget the environmental impact of oil exploitation in Nigeria.  Finally, observations, recommendations and conclusion will be made.
            Because this work is aimed at examining ownership of oil and land use in Nigeria, attention will be paid to the various contractual interests in oil and gas in Nigeria (i.e. exploration, exploitation and production).

1.8       Limitations
                        The challenges that can pose a threat to this research include the following;
i.                    Fund to be able to assess materials online and equally type the work.
ii.                 Collections and retrieval of documents from archives, libraries and even those of higher institutions and courts turned out to be huge obstacles.
iii.               The cost of traveling to obtain these materials limits the movement to some places
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