The Managing Director and Chief Executive Officer of the Niger Delta Development Commission, Dr Samuel Ogbuku, has provided more insight into why International Oil Companies (IOCs) are divesting from onshore operations.
Ogbuku said attacks on pipelines belonging to the IOCs are not the only reason they are divesting, selling off onshore assets, moving offshore, or, in some cases, exiting the Niger Delta region.
He revealed that part of the reason is the huge sums of money these multinational oil companies are made to pay as compensation following court judgments.
Dr Ogbuku made the assertion while speaking at the NDDC Law and Development Summit, themed ‘The Role of Law in Driving Sustainable Development in the Niger Delta Region,’ held in Port Harcourt on Wednesday.
According to Ogbuku, these firms believe that, aside from contending with heavy taxes, they are spending substantial amounts and losing money through compensation payments to communities that take them to court for one reason or another.
While stressing the importance of law, Ogbuku said any society without law would revert to a state of nature.
“And that is why, in our philosophical theory of social contract, John Locke and Thomas Hobbes talked about their various theories of how man lived in a state of nature where it was lawless, and then it was all about survival of the fittest and jungle justice.
“And today, man is living in a civil society governed by laws. But even the laws that man is being guided by are tailored towards specific societies.
“That is why when you look at the Lockean theory of social contract, you can see it reflects American democracy. But the Hobbesian philosophy of social contract reflects that of British democracy.”
He continued: “If we ask ourselves what our own philosophical foundations of law are, we take a little from here and a little from there to make our laws,” which is why he said the summit was germane.
“Sometimes, if you look at some of our laws, various states have their own amendments to their laws, especially their criminal laws, but we must also look at how these laws affect us as a people.
“One thing I know too well today is that IOCs divest from onshore to offshore and sometimes want to sell their assets to local operators.
“We ask ourselves how much the local operators have to fund oil production. One of the major reasons the IOCs are also leaving is not only because of pipeline vandalisation. It is also because of judgments that come from the courts.
“Sometimes the IOCs feel that, apart from the taxes they are paying, they also get judgments from the courts that make them pay heavily in compensation. They feel they are spending so much and are operating at a loss.
“But we must also know that it is hurting us so much because you find out that even Oando, which just bought Agip, most of our children, our sons and daughters, have been dropped. They are being laid off because the company does not have the capacity to carry all of them.”
He continued: “So it is also a two-way thing. I think we must also look at a way of managing national interest and what our personal interests are. The law is there to guide everybody. Everybody needs to be protected, but we must look at how this law will serve all of us better.”
He stated that, for the NDDC, the importance of such discussions is key to its operations and programmes, saying: “Because we (NDDC) also need to be advised.
“For the first time, bringing legal luminaries, judges and professionals into one room to talk about law and development because, as an interventionist agency, we believe law is very critical to our development because without law there will be no discipline.
“And when there is no discipline, there will be no development. So law, development and security are all intertwined,” he added.
