Supreme Court Judg­ment, Game-Changer for Oil-pro­duc­ing States


The Judge­ment In its ad­ju­di­ca­tion of the suit, the seven-man Supreme Court panel which in­cluded Onnoghen, unan­i­mously ruled and or­dered that the 13 per cent deriva­tion that is due to the oil pro­duc­ing states be paid upon re­cov­ery of the sup­pos­edly un­earned funds from the re­view of the Act, in ac­cor­dance with Sec­tion 162 of the 1999 Con­sti­tu­tion (as amended).

Ac­cord­ing to re­ports on the court pro­ceed­ings, the plain­tiffs which com­prised the At­tor­neys-Gen­eral of Akwa Ibom State, Mr. Uwemed­imo Nwoko; Bayelsa State, Mr. Wodu Ke­ma­sukde; and the Rivers State, Em­manuel Aguma (SAN), now de­ceased, and who ap­proached the court for in­ter­pre­ta­tion of the sec­tion of the Act, to an ex­tent got their prayers an­swered.

In the rul­ing of the apex court as read by Jus­tice John Inyang Okoro, it adopted the terms of ami­ca­ble set­tle­ment be­tween the At­tor­ney Gen­eral of the Fed­er­a­tion (AGF); and the At­tor­neys-Gen­eral of Rivers, Bayelsa and Akwa Ibom States as its judg­ment in the mat­ter.

The terms of set­tle­ment which was re­port­edly signed by the three states and the AGF, stated that the cost of re­cov­ery shall be net­ted off and payable from the gross re­cov­ered sum from time to time, prior to place­ment of net re­cov­er­ies in the Fed­er­a­tion Ac­count.

Sim­i­larly, the terms in­cluded that the so­lic­i­tors of the three states or their nom­i­nee pro­fes­sional ad­vis­ers shall be mem­bers of the re­cov­ery body and nec­es­sary re­cov­ery mech­a­nism.

Ac­cord­ingly, the lead coun­sel, Nwosu, wit­nessed the sign­ing on be­half of the plain­tiffs, while the So­lic­i­tor-Gen­eral of the Fed­er­a­tion and Per­ma­nent Sec­re­tary in the Fed­eral Min­istry of Jus­tice, Mr. Dayo Apata, wit­nessed for the AGF.

Be­fore the Supreme Court judge­ment, the Nige­ria Ex­trac­tive In­dus­tries Trans­parency Ini­tia­tive (NEITI) had sep­a­rately urged the fed­eral gov­ern­ment to re­view the Deep Off­shore and In­land Basin Pro­duc­tion Shar­ing Agree­ment be­tween the coun­try and oil com­pa­nies, stat­ing that it was ob­so­lete and Nige­ria was los­ing rev­enues from its con­tin­ued use.

Re­ac­tions Re­act­ing to the judg­ment, the Gover­nor of Bayelsa State, Mr. Se­ri­ake Dick­son, re­port­edly de­scribed it as a vic­tory for the lit­toral states and the Nige­rian fed­er­a­tion.

Dick­son, in a state­ment from his Ad­viser on Me­dia Re­la­tions, Mr. Fidelis Sori­wei, said even be­fore the first off­shore swamp oil well was dis­cov­ered un­der the par­tic­u­lar Act by the Nige­ria Agip En­ergy, the price of crude oil had ex­ceeded $20 per bar­rel be­ing used as a bench­mark to share oil rev­enues in the state.

He stressed that in spite of the ex­press agree­ment that shares from the oil rev­enue ac­cru­able to the fed­eral gov­ern­ment should be ad­justed, the bench­mark be­ing used by the multi­na­tional oil firms had been static at $20 per bar­rel to date.

Dick­son, spoke on be­half of his coun­ter­parts from Rivers and Akwa Ibom States, and ex­plained that the judg­ment demon­strated, “The pri­macy of the law in the so­cio-eco­nomic eman­ci­pa­tion of the peo­ple of the Fed­eral Re­pub­lic of Nige­ria through the in­stru­men­tal­ity of the gov­ern­ments and peo­ple of Bayelsa, Akwa Ibom and Rivers States.”

He fur­ther stated that the im­pli­ca­tion of the judg­ment was in­crease in rev­enues ac­cru­able to the fed­er­at­ing states un­der the ex­tant rev­enue shar­ing for­mula.

The gover­nor equally com­mended the Supreme Court for demon­strat­ing the courage to up­hold the rule of law in the de­ci­sion, which he noted, was re­quired to rekin­dle the con­fi­dence of the de­prived peo­ple and com­mu­ni­ties of the Niger Delta and the Nige­rian fed­er­a­tion.

“We com­mend the Supreme Court of Nige­ria for up­hold­ing the rule of law. The coura­geous in­ter­ven­tion of the court in this case and other cases is what is needed to bring con­fi­dence to the long-suf­fer­ing peo­ple and com­mu­ni­ties of the Niger Delta and the coun­try at large.

“This judg­ment shows clearly that the ju­di­ciary is ready and has the courage in de­cid­ing cases to up­hold the rights of op­pressed peo­ple. We call on other courts in the ju­di­cial sys­tem to rise to the oc­ca­sion in or­der to give the as­sur­ance that oil ma­jors and oil block own­ers op­er­at­ing in our com­mu­ni­ties will re­spect the laws of the land,” said Dick­son, who called on Pres­i­dent Muham­madu Buhari, to di­rect the rel­e­vant agen­cies to en­sure ex­pe­di­tious im­ple­men­ta­tion of the judg­ment in the in­ter­est of the gov­ern­ment and cit­i­zens of Nige­ria.

Sim­i­larly, le­gal pro­fes­sion­als who spoke to THISDAY, on the im­pli­ca­tion of the judge­ment, ex­plained that while the fed­eral gov­ern­ment ought to have long re­viewed the shar­ing for­mula once the oil price was above $20, the de­ci­sion of the Supreme Court could in a way re­dress the anom­aly if the terms of the agree­ment are hon­estly im­ple­mented.

Fur­ther, the le­gal ex­perts con­firmed that the agree­ment and terms of set­tle­ment filed by par­ties on April 6, 2018, in­cluded that the AGF would set up the mech­a­nism for the re­cov­ery of the shares of the fed­eral gov­ern­ment within 90 days, and pay im­me­di­ately the af­fected states their share of the re­cov­ery.

Also, the re­cov­ery would start from Au­gust 2003, and the AGF would work with the three states in this re­gards.

Work­ers work­ing on an oil re­fin­ery

Oil pipe­lines

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