Business
Checking Crude Oil Theft
The Kimberley Process Certification Scheme (simply known as the Kimberley Process or KP) is the outcome of a vigorous campaign launched in 1998 by an international Non-Governmental Organisation, Global Witness, to expose the role of rough diamonds in funding conflicts, especially in Africa.
Following several violations of the sanctions imposed under the United Nations Security Council Resolution 1173 against Jonas Savimbi’s National Union for the Total Independence of Angola (UNITA), Global Witness, in concert with a few other powerful NGOs, was able to pressure diamond-producing countries in the Southern African region into holding a conference in Kimberley, South Africa, in May 2000 to discuss the issue of conflict diamonds.
Coming at the time it did, the deliberations may have also factored in the role of such precious stones in fuelling the fratricidal wars in Liberia and Sierra Leone during which many innocent citizens lost their lives and several others were maimed and abused, all on account of who controlled the huge diamond resources of the two West African neighbours.
After about three years of heated debates and negotiations, the Kimberley convention drafted an international diamond certification scheme which was endorsed and launched as the Kimberley Process by the United Nations in January 2003.
The scheme simply requires a certification of the origin of rough diamonds by participating governments as a way of preventing conflict diamonds from entering the international supply chain. Countries that produce, trade or process uncut diamonds are encouraged to join. They are expected to enact their own laws on how best to implement the scheme while also ensuring that they trade such merchandise with fellow members only.
Although the process has not brought about a complete halt to transactions in conflict diamonds, certainly not with Cote d’Ivoire, Zimbabwe and Venezuela showing little commitment, it has, nevertheless, dealt a significant blow to the flow of such bloody merchandise from conflict zones into the international diamond market. What’s more, it has also helped some of the countries that were, hitherto, hit by diamond-fuelled conflicts to earn more revenue from their official exports of the precious stone.
Nigeria may not be a member of the Kimberley scheme. She is not even a major producer, trader or processor of rough diamonds. Nor is she at war with any rebel group known to be benefitting from such illicit trade. But the country seems to be at war with a different kind of rebels. Crude oil thieves, that is. And in spite of whatever her fighting strategies, she surely needs the type of export-import certification process that Kimberley proposes.
According to Mutiu Sunmonu, managing director of Shell Petroleum Development Company of Nigeria (SPDC), Nigeria loses $5 billion (about N800 billion) annually to illegal oil bunkering in the coastal region of the country.
Speaking at a recent public hearing on oil bunkering organised by the House of Representatives Joint Committee on Petroleum Resources (Upstream) and the Navy, the oil-company chief advised government to form alliances in order to fight the menace which has now gone international.
The United States has also lent its voice in condemning the extent of crude oil theft and environmental degradation in the Niger Delta.
Speaking during the just-concluded US-Nigeria Bi-National Conference in Port Harcourt, the Deputy Assistant Secretary of State for African Affairs, Ms. Cynthia Akuetteh, attributed the rising thievery to low levels of employment and educational opportunities.
The American official was probably referring to the aspect of this robbery that is carried out by a few jobless and highly agitated Niger Delta youths. But it is already common knowledge that there exist some powerful and well-connected syndicates comprising foreign oil firms, top government officials, security operatives and shipping agents which connive with international oil buyers to defraud the nation, often using forged documents. For instance, the Joint Military Task Force (Operation Pulo Shield) raised to protect oil facilities (rather than people) in the region, has recorded several successes at arresting crude oil thieves and local refiners, even as some of its men have also been fingered as being collaborators.
Analysts have recommended that government address the wanton corruption in the petroleum sector through establishing a tougher regulatory framework. And, in addition, there have also been suggestions for the approval of a 10 per cent stake to oil communities, including the checking of pipeline vandalism and illegal refineries through community policing.
Late President Umaru Yar’Adua once likened illegal oil bunkering in the Niger Delta to the trade in blood diamonds during the civil wars in Liberia and Sierra Leone. He was reported to have called for international assistance to help Nigeria stop the trade in what he termed ‘blood oil’.
Indeed, Nigeria needs a coordinated international assistance to tackle this menace, but she has to initiate the move. OPEC is a ready-made platform. And with a clearer US position on the matter, drawing from the Kimberley experience will not be a bad idea, after all.
Ibelema Jumbo