2.1 Introduction
A critical analysis of the
expropriation of Minerals and solid mineral deposits by the federal government and
implications on the Land Use Act in Nigeria will not achieve its objective with
out clarification of some concepts associated with this area of law. Hence,
this chapter among other thing seeks to define some of the term associated with
the expropriation of Minerals and solid mineral deposits.
This chapter also intends to trace
the history of oil ownership in Nigeria, whether the ownership of is the
exclusive reserve of the Federal Government to entitled it the monopoly of same.
2.2 Minerals
Minerals are one or more substances,
especially in a rock. Nearly all weeks are composed of minerals. In fact,
nearly everything we use is made of or contains, minerals, without mineral,
none of the devices and structures that surround us in our daily lives could be
made. Some minerals are rare and highly for their characteristics1.
According to the Oxford Advanced
learner’s Dietinonary2 mineral
means a substance that is naturally present in the earth and is not formed form
animal or vegetable matter for example gold and salt. Some minerals are also
present in food and drink and in the human body and are essential for good
health. From this definition of mineral, it should be noted that mineral is not
only found in the earth, but can also be found in food and drives as well as in
the human body.
According to the mineral and mineral
Act3, the word “mineral’ excludes mineral
oil but includes the following.
(1) Metalligerous
minerals, including antimony, arsenic, bismuth, cerium, copper, collabt,
colunibiumehromium, calcium, iron, leading, manganese, mercury, Molybdenum, mekeld, tanfaluin, tin,
tin system, zinc and all others of similar nature0to any often and all ones
containing them and combinations of any of them with each or with any other
substance except those that occur in the form of precious minerals,4
(2) Corbuslible carbonaceous mineral,
including
(i) Tarsand,
(ii) coal (iii) Igniti, including brown coal and any coal which the minister
may declare to be lignite if advised by the director of Mines that the estimated
average ash content is so high or the estimated average thermal value is so low
that the coal may properly be classed as lignite.
(3) Non-metallic
mineral, including any mineral used for their abrasive or regulatory qualities
and asbestos, barites, bauxite, china clay, fuller’s earth, graphite, gypsum,
limestone, marble, mica, nitrate, phosphate pipe clay, potash, salt, state,
soda sulphur, falc an all other subs farces of a similar nature to any of them
including sands;
(4) Precious mineral including:
(i) precious
stones, namely: Amber amethyst, beryl, cot’s eyes, chrysolite, diamond,
emerald, garnet, opal, ruby, sapphine, turquoise, and all other substances of a
similar nature of any of them.
(ii) Precious
metal, namely: Gold, silver and any of the metal of the platnoid group in the
un-manufactured state; including ore containing any of these metals, excluding
any ore containing any of those metals in combination with other mineral when
the metal cannot be worked apart from the mineral and the value of the metal is
less than. The cost of producing both the metal and the mineral;
(5) Radioactive
mineral namely: Mineral, either raw or
treated (including residues and fallings) which contain by weight at least 0.05
per cent of uranium or thorium or any combination of uranium of thrium;
including but not limited to:
(1) Monatie sand and other ores containing
thorium, and
(ii) Carnotite, pitchblende and other ore
containing uranium:
6. The
valuable part of any are or other substance for marketing or export;
7. The
product of treating or dressing any ore other substance for marketing or
export.
The mineral and mining Act has gone
extensively to define the term mineral and also excluded such things as mineral
oil form the definition. Therefore, for a thing to qualify as mineral, it must
be listed in the Act. This in because the Act is exhaustive on the definition
of mineral.
Also, according to the Webster’s
dictionary5 mineral means “a naturally occurring,
homogenous substance or material founded
by inorganic process and having a characteristic set of physical properties, a definite range of chemical
compositions and a molecular structure usually expressed in crystalline form.
According to this definition, any
substance or material that occurs naturally by inorganic process qualifies as
mineral so long as such material or substance has the feature of physical
properties.
Finally, the Wikipedia free
encyclopedia online Dictionary6 defines
mineral as a naturally occurring solid
chemical substance formed through biogeochemical processes, having
characteristic chemical composition, highly ordered atomic structure, and
specific physical properties. By. Comparison, a rock is an aggregate of
minerals and/or mineraloids and does not have a specific chemical composition.
Mineral range in composition from pure elements and simple salts to very
complex silicates with thousands of knows forms7.
The study of minerals is called mineralogy.
There are three types of minerals.
They are as follows:
(i) Hard
and solid minerals which can be liquidities by beating or fire and can be
reduced to sheets and chains. Examples of this type are gold, silver, brass and
metal.
(ii) Hard
minerals which cannot be liquidified and include things like diamond, corundum,
emerald, etc.
(iii) Liquid minerals like mercury, crude oil
etc.
2.2.1 Solid Deposits:
The Mineral and Mining Act did not
define what solid deposits are, neither was it defined by any other statue.
However, for the purpose of this work, solid deposits can be defined as those
minerals in their natural state that are discovered in different parts of the
country.
Nigeria now has at least 24 solid
deposits in commercial quantity and of international standard across the
country8. there are more than 450 locations of
solid deposit of mineral across the country with new occurrences being.
Discovered from time to fine. Recently such minerals as talc, tantalite, lead
and Zink and several others.
2.2.2 Federal Government
Federal Government, in Nigeria we
have three tiers of Government, ie the Federal Government, state government and
the local government. These tiers of government are provided in the
constitution of the Federal Republic of Nigeria9.
In this chapter, our concern is the Federal Government.
According to the classic
encyclopedia10 federal Government is a
form of government of which the essential principle is that there is a Union of
two or more states under one central body for certain permanent common objects.
In the most perfect form of federation, the states agree to delegates to a
supreme federal government certain powers or functions inherent in themselves
in their sovereign or separate capacity, and the federal government, in turn,
in the exercise of those specific powers act directly, not only on the communities
making up the federation, but on each individual citizen.
The free online dictionary11 defines federal government as a
government of a union of a state in which sovereignty is divided between a
central authority and component state authorities. A federation differs from a
confederation in that the central power acts directly upon individuals as well
as upon states, this creating the problem of dual allegiance. Substantial power
over matters affecting the people as a whole, such as external affairs, commerce,
cornage and the maintenance of military forces, are usually granted to the
central government. Nevertheless, resention of jurisdiction over local affairs
by state is compatible with the federal system and makes allowance for local
feelings. From the above definition, it is observed that a federal government
is a system of government in which powers and responsibilities are divided into
national levels to address national an regional needs. It therefore means the
federal government does not only take care of the need of those at the federal
level but also those at the states or
regional level as the case may be.
Finally, the Wikipedia online
dictionary12 defines federal
government as a type of governing characterized by a union of partially self governing
state or regions united by a central (federal) government. The self-governing
status of the component state is typically constitutionally entrenched and may
not be altered by a unilateral decision of the central government.
In Nigeria, Powers are shred between
the tier of government. That is to say the areas which each level is entitled
to over see. These powers are given to them by the constitution13. In relation to this topic, the
federal is given the power over all mineral and solid mineral deposits in
Nigeria for the purpose of exploitation and exploration.
2.3 History
of oil Ownership in Nigeria
The search for crude oil in Nigeria
started as far back as 1908. then there was no legislation on exploration and
production until 1914 when the Mineral ordinance was promulgated to regulate
the right to search for, win and explore mineral oil. It was in 1946 that the
first legislation on ownership came to force. The law previewing for ownership
of petroleum and the right to search for and win and own mineral oil was
contained in the mineral ordinance14,
which provided thus:
“The entire property in and control of all mineral and
mineral oils in, under and upon any land in Nigeria and of all rivers, streams
and waters throughout Nigeria is and shall be vested in the crown15”
This was the legislation in force in
Nigeria during the pre-independence administration of Nigeria. Three years
thereafter and precisely. In 1963, Nigeria through their elected
representatives enacted the republic constitution. Section 158,16 vested petroleum among other
properties in the president of Nigeria. It provides that:
“all property which immediately before 1st
October, 1969 was held by the crown or on behalf of the crown should vest in
the president of the federation on behalf of and for the benefit of the
federation”
The petroleum Act 1968 which is the
principal law governing oil in Nigeria provided that:
“The entire ownership and control of all petroleum in
and under or upon any land to which the section applies shall be vested in the
state”.
It is worthy to note here that the
Exclusive Economic zone (ECZ) Act of 1978 vests in the federal Republic of
Nigeria the sovereign and exclusive right with respect to the exploration and
exploratory of the natural resources of the sea bed, subsoil and super and
adjacent water of the Exclusive Economic zone17.
Section 1 of the Act Delimits the exclusive economics zone as “an area
extending form the external limits of the territorial miles form which the
break of the territorial waters of Nigeria is measured”.
The Federal Republic of Nigeria as
it is now know as endowed with abundant mineral resources and hydro carbons,
besides such other variable resource as bitumen, coal columbite, tin gold and
lime stone18 As vast oil fields are
concentrated in the Nigeria Delta region, which comprises Akwa Ibom, Baryelsa,
(cross River, Delta, Edo and Ondo states. Oil was first discovered or found in
Nigeria in 1956, in a town call Oloibiri19which
is located in the present day Bayelsa state. This resource has been vested in
the Federal Government of Nigeria through various legislation.
2.4 Does
the Federal Government own oil in Nigeria?
The Federal is the first tier of government in
Nigeria. It exercises those functions contained in the exclusive legislative
list in the 1999 constitution (as amended)20.
It also has concurrent powers with the state government with respect to matter
provided in the concurrent legislative list,21
like in the area of education, sports, health etc. Before answering the above
question, it is important to consider the concept of ownership in brief.
The Osborn concise law dictionary,
eight edition defines ownership as:
“the right to the exclusive enjoyment of a thing strictly
at denotes. The relationship between a person and any right that is vested in
him. Ownership is absolute or restricted. Absolute ownership involves the right
of free as well as exclusive enjoyment, including the right of using, altering,
deposing of or destroying the thing-owned-districted ownership is the ownership
listed to some extent as for example, where there are several joint owners or a
life tenancy or where the property is changed with the payment of a sum of
money or subject to an easement”
From the above definition, ownership
involves the right to free as well as exclusive enjoyment including the right
of using and disposing or destroying the
thing owned.
The 1999 constitution of the Federal
Republic which replaced the 1978 constitution in section 44(3), which is impariteria
with section 40 of the 1978 Constitution provides that “not withstand the
forgoing provision of this section, the entire property in the control of all
mineral out and natural gas is, under or upon any land in Nigeria under or upon
the terrtional waters and the exclusive economic zone of Nigeria shall be
vested in the government of the Federation and shall be managed in such a
manner as may be prescribed by the National assembly. This section expressly
makes known that the control of oil and natural gas vested on the government of
the federation and nor the state governments or the individuals.
It is hereby submitted, going by the
definition of ownership, that the Federal Government does not perse own mineral
oil in Nigeria. This is because it cannot dispose or enjoy it with the
exclusion of the state who land the oil is explored. In fact, the revenue
occurring to the federation Account is distributed to all the states of the
Federation with the oil producing states enjoying the 13% derivation priciple22.
2.5 Federal
Monopoly of Mineral and solid mineral deposits and the idea behind it.
The monopoly of mineral oil by the
Federal Government has statutory and constitutional backing23. In the eye of the Lawmakers, it will
be utilitarian24 for the Federal
Government to have monopoly of it.
The cardinal purpose of the
exclusive Economic zone Act of 1978 is to facilitate the development of oil and
gas and other natural resources in the zone solely under the jurisdiction. Law
and control of the Federal government. This provision was reenacted in our 1999
constitution. Section 44(3) provides thus:
“…the entire property in and control of all mineral,
mineral gas in, under or upon any land in Nigeria or under or upon the
territorial waters and the Exclusive economic zone of Nigeria shall ves in the
Federal Government and shall be managed as may be prescribed by the National
Assembly”.
The effect of section 44(3) of the
1999 constitution (as amended) and previous Legislation relating thereto is
that no individual or state Government in Nigeria has any legal claim to
mineral and solid mineral deposits under or within his or her individual land
or the geographical boundaries of the states or within the seabed of the waters adjourning the states. From the
digest of the above statutory provision, it is clear that the Federal
government has been given proprietary right over mineral and solid mineral
deposits in Nigeria. This reinforced Nigeria’s national jurisdiction over
mineral oil both in off-shore and on-shore operations.
In the light of the pre-going, it
can be presently conceived that Nigeria has an uncomprisingly clear and
unambiguous policy of the Federal monopoly of all minerals. This policy has a
colonial antecedents by virtue of the Mineral ordinance of 194625. Which vests ownership of all mineral
throughout Nigeria in the crown.
As has been emphasized earlier in
this chapter, the provision which vests ownership of oil in the Federal
Government do not strict census vest absolute ownership in the Federal
Government because of the reasons stated above. Each state is allocated its own share from the
federation account. what exists between the federal government and the states
of the Federation is a “beneficial monopoly” and not absolute monopoly. It is
ownership or monopoly in theory but not in practice.
The reasons for this is that such
exercise of monopoly as is provided in section 44(3) of the 1999 constitution
is strictly that of national interest for the over all development of the
nation. It is against this back ground that the demand for resource. Control
will be vary difficult to actualize, under the present Federal structure of the
country. Such demand may be tenable under a non-Federal system of government
where the component states are stronger than the central government and
constitutionally granted autonomy in certain states.
What the littoral states should
agitate and press for is the modification of the provision of the constitution
in relation to the derivative principles with a view to ensuring that a
reasonable percent age above 13% is allocated to them.
For the sake of national interest
and even development the federal government cannot cave in to such demand for
resource control. In order to buttress my view of the national interest
position applicable to the crude oil in Nigeria, it is germane to make a survey
of the United Nations Resolution on the subject. The principle laid in those Resolutions reflect and may have some bearing
upon the prevailing legal thinking in those third World countries today.
2.6 United
Nations Resolution and Approach to Ownership of Natural Resources.
The current position of several
countries with respect to ownership over mineral rights can be traced to
various actions of the United Nation General Assembly. The first document
adopted in this area which concerned the sovereignty of the nations over its
natural resource sis titled the integrated Economic Development and Trade
Agreements26. The first paragraph
provides that:
“Underdeveloped countries have the right to determine
freely the use of their natural resources and they must utilize such resources
in order to be in a better position for further the realization of their plans
of economic development in accordance with their nation interest and to gather
the expansion of World economy”.
1 Such minerals
include: Gold, Siler, Diamonds e.t.c
2 Sally Wehmeir: Oxford Advanced learner Dictionary, 6th
edition page 747.
3 Mineral and
Mining Act Cap M12 LFN, 2004
4 Section 259
Ibid.
5 The new
international Webster’s comprehensive Dictionary of the English Language
Encyclopedia education 9.810.
6 http://en.wikipedia.org/wik/mineralvisited
on 22/06/2012
7 Darva Janes
(march 6 1985) manual of mineralogy 20 edition.
8 Dr. Siyan
malomo; the Director General, Geological survey of Nigeria Agency (GSNA).
9 Sections 2,
3 and 8 of the 1999 Constitution (as amended) respectively
10 1911,
Encyclopedia Britaniea-free online, vorited 22/0f/2010.
11 H. Bakvis
and W.M. Chandler, ed; Federation and the role of state (1987) p. 84.
12 http://en.wikipedia.org/wik/mineralvisited
on 23/06/2012
13 This is as
contained in the exclusive legislative list, conversant legislative list and
the residual list.
14 Section 3(1) of
the Mineral ordinance of 25th February, 1946.
15 The queen of England
was still the head of Nigerian Government within this period.
16 Section 158 or
the Mineral Ordinance of 25th February, 1946.
17 exclusive
Economic Zone Act was the determinant of the territorial and boundaries of the
literol states. The Act delimits the exclusive economic zone of Nigeria as
extending to an area extending up to 200 nall feal mile seaward form the coast
of Nigeria.
18
Investment Opportunities in solid mineral, http://ww.nigeriabusiness
sinfo.com/minerals.htm. visited 23/06/2012.
19 Ken
Saro-Wiwa martyr for peace in Nigeria
http://ww.Warresisters.org/nvao54-1htm.cistet 27/06/2011.
20 See
second schedule, part 1 to the constitution. There are 68 items for the Federal
government only
21 See part
II of the second scheduled to the constitution which contains 20 items.
22 Section
162 of the 1999 constitution (as amended).
23 Section
44(3) o the 1999 Constitution (as amended)
24
Utilitarianism is a philosophy of law which provisory for the happiness of the
greatest number.
25 section 3(1)
of the Mineral Ordinance of 25th February, 1946.
26 This is
contained in resolution 523 (vi) adopted on the 12th January 1952.