Pipeline vandalism cost the Nigerian Government, oil-companies and communities an estimated $14bn dollars in 2014.
The failure of the Nigerian state to provide basic public services and security in the Niger Delta has resulted in a significant breakdown of the social contract. In the void that remains, international and national oil companies are often seen as a Government proxy, spending millions of dollars in their operating locations through various formal and informal Corporate Social Responsibility (CSR) and security instruments. However, these efforts are not perceived to have the communities’ interests at heart, preferring to secure a short-term license to operate as opposed to a long-term legacy in the region. In addition, the “quick and easy cash” approach by oil-companies in response to threats by vandals has created an implicit incentive to “crack pipes”, earn money and survive.
In communities, the feeling of anger and demand for attention motivates vandals to interrupt pipelines at the expense of their environment and livelihoods, with many addicted to easy money from surveillance and clean-up contracts. Others vandalise to survive in the absence of other employment choices ignoring the long-term impact to their local environment and health. The environmental impact is immense with an estimated 51,500 hectares devastated by oil spills in 2014 as a direct consequence of pipeline vandalism.
In the creeks, enormous sums of money are earned from the illicit trade of stolen oil, often settled through cash and arms deals, fuelling a “cold-war” between entrenched actors and the State. This threatens the fragile and purchased peace currently holding together the Niger Delta. As previous patronage networks strain after elections, and the means to gain access to oil-proceeds are mitigated, old militant tactics of pipeline vandalism, kidnap and organised crime may again emerge to illicit a response from Government and oil-companies. The communities that surround Nigeria’s pipeline infrastructure will continue to demand for socio-economic development of the region and based on history, there has been no quicker way to get the Government and oil companies’ attention than by vandalising pipelines and halting production.
The new Administration has a short window of opportunity to address these issues once and for all, riding on post-election feelings of optimism and hope washing across the Delta; perhaps one of the first times there has been marginal support for a President not from the region. However, should the new Administration not act quickly, rising agitation and reduced patronage flows may inflame feelings of anger, resentment and hopelessness, with various individuals and groups, heavily armed and very wealthy, threatening the security of the oil industry and national income.
Our investigation confirmed that International Oil Company (IOC) pipelines have more incidences of vandalism than their National Oil Company (NOC) counterparts. This is due in part because IOC’s still own the majority of pipeline infrastructure, but also due to historically high community expectations as a result of enormous budget allocations and the availability of formal and informal channels of “easy-money” into host communities for CSR related activities, clean up and surveillance contracts.
Our research has identified examples of alternative community based models to tackle pipeline vandalism that have been trialled with some success giving a degree of confidence that change is possible and relationships can be fixed. A solution will need to take into account the successes, challenges and lessons learnt from current approaches to provide a clear direction towards a sustainable and collaborative approach to tackle the issue.
This report encourages the incoming government to consider alternatives away from a sole-security response to pipeline vandalism. There is a need to review and reset the relationships between Government, oil-companies and communities as a first step to tackle pipeline vandalism,maintaining oil production whilst reinforcing peace in the Niger Delta.
We believe efforts to reset relationships could lead to new social contract in the Niger Delta. A sustainable approach to tackle pipeline vandalism will develop local institutions and economies, increase employment and lift many out of poverty whilst reversing current incentives away from vandalism and towards pipeline and environmental protection.
The relationship between communities, oil companies and Government has been broken for too long. Now is the time to fix it.