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    FUELLING THE NIGER DELTA CRISIS

    Africa Report N118 28 September 2006

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    TABLE OF CONTENTS

    EXECUTIVE SUMMARY AND RECOMMENDATIONS................................................. i

    I. INTRODUCTION .......................................................................................................... 1

    II. OIL AND POWER ......................................................................................................... 1

    A. THE PERILS OF CIVILIAN RULE .............................................................................................1

    1. The Ijaw-Itsekiri crisis...............................................................................................2

    2. Gangs, guns and ballots .............................................................................................2

    3. Alhaji Mujahid Dokubo-Asaris challenge to the Nigerian Federation.....................3

    4. MEND: An evolving insurgency.................................................................................5

    B. THE SPOILS OF VIOLENCE.......................................................................................................8

    1. Illegal bunkering .........................................................................................................8

    2. Oil rent and cash payments........................................................................................10

    III. THE NIGER DELTAS PLACE IN NIGERIA........................................................... 12

    A. RESOURCE CONTROL AND THE DERIVATION DEBATE:IS AGREEMENT POSSIBLE? ..................12

    B. THENEED FOR CREDIBLE NEGOTIATIONS ..........................................................................14

    1. Foreign mediation .....................................................................................................142. The danger of inaction: worst case scenario............................................................15

    IV. CORRUPTION AND CULPABILITY........................................................................ 16

    A. PRESIDENT OBASANJOS ANTI-CORRUPTION PLATFORM .......................................................16

    B. OIL INDUSTRY TRANSPARENCYEFFORTS ..............................................................................17

    C. POLLUTION AND CONFLICT ..................................................................................................19

    1. Gas flaring ................................................................................................................20

    2. Anatomy of an oil spill..............................................................................................21

    3. Missing money?........................................................................................................22

    V. BREAKING WITH THE PAST................................................................................... 23

    A. JOINT VENTURES:EXCLUSIVE PARTNERSHIPS .......................................................................23B. OIL SECURITY AND ITS COMPLICATIONS ...............................................................................24

    VI. CONCLUSION.............................................................................................................. 25

    APPENDICES

    A. MAP OF NIGERIA.................................................................................................................27B. MAP OF THE NIGER DELTA .................................................................................................28C. GLOSSARY OF ABBREVIATIONS AND ACRONYMS ................................................................29D. ABOUT THE INTERNATIONAL CRISIS GROUP .......................................................................30E. CRISIS GROUP REPORTS AND BRIEFINGS ON AFRICA...........................................................31F. CRISIS GROUP BOARD OF TRUSTEES ...................................................................................33

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    Africa Report N118 28 September 2006

    FUELLING THE NIGER DELTA CRISIS

    EXECUTIVE SUMMARY AND RECOMMENDATIONS

    Less than a year before Nigeria holds its third nationalelections since the end of military rule in 1999, tensionsare running high in the southern Niger Delta. A numberof militant groups have begun allying themselves to localpoliticians with electoral aspirations. These groups andothers continue to use legitimate grievances, such as poverty,environmental destruction and government corruption,to justify increasingly damaging attacks against government

    and oil industry targets. Removing the incentives forviolence will require granting a degree of resource controlto local communities. Engaging Delta groups in sustained,transparent dialogue also remains critical to finding asolution to the militant puzzle. Equally important, credibledevelopment efforts must be supported and stiff penalties forcorruption imposed upon those who embezzle andsquander funds.

    Crisis Groups first report on the Niger Delta1 examinedthe historical and societal underpinnings of the growinginsurgency. This report focuses on more recentdevelopments. It examines the often hazy overlap between

    the militant Niger Delta cause and criminal and politicalmotives, and identifies the steps required to defuse theconflict.

    Demands from militants have included the creation ofadditional states for Ijaws, amenities and jobs for ruralcommunities, contracts and oil concessions for factionleaders and even calls for independence. The spokesmanfor the Movement for the Emancipation of the Niger Delta(MEND), the most vocal and best organised of the militantorganisations to emerge in 2006, says his groups goal isto achieve resource control concessions or wreak anarchy.

    Attacks since December 2005, including a spate of oilworker kidnappings, have at times forced oil productionshutdowns of up to 800,000 barrels per day, threateningNigerian government plans to nearly double productionto four million barrels a day by 2010. Only some ofthose production losses have been offset by recent offshoredevelopments. Two companies with foreign shareholders

    1 Crisis Group Africa Briefing N115, The Swamps ofInsurgency: Nigerias Delta Unrest, 3 August 2006.

    signalled in August 2006 that they would be withdrawingfrom the Niger Delta due to security concerns.

    The most potent weapon in the militants arsenal is thegrowing anger among the regions twenty millioninhabitants. In more than seven years of civilian rule,functionaries at the local, state and federal levels areperceived to have failed to deliver tangible economic

    benefits for impoverished residents. Militant groupshave largely ignored the incremental administrativereforms begun since 2003 and are succeeding in drawingupon anger against a pervasively corrupt system ofgovernance inherited from the military era. Militantgroups have managed to win sufficiently broad popularsupport to operate openly in many communities andhave not been weakened by the imprisonment sinceSeptember 2005 of publicity-seeking warlord AlhajiDokubo-Asari. To date, militants have not been sufficientlyorganised or united to mount a viable separatist insurgency.Most fighters would concede that winning independencefor the Niger Delta remains highly unlikely, although

    support for such a movement is growing.

    Community groups in the Niger Delta complain theyhave few incentives to protect oil infrastructure frommilitant and criminal groups. For impoverished locals,government officials and even oil company staff, oiltheft offers significant rewards. Since a governmentcrackdown on oil theft began in mid-2005, piracy andkidnappings have been on the rise. Oil facilities andworkers are difficult to defend, nowhere more so than inthe Niger Deltas tangle of swamps and rivers.

    Environmental claims are increasingly incorporated into

    the rhetoric of insurgency and need to be independentlyaddressed. Locals have long complained that spilled oilfrom deteriorating decades-old pipelines has devastatedfishing, although overfishing is also to blame. Oil companiesinsist that the vast majority of spills that have occurredin recent years are the result of sabotage by oil thievesand other groups trying to extort compensation payments.

    National elections scheduled for 21 April 2007 are causingmajor concern, especially in the Niger Delta. A repetitionof the widespread ballot fraud of 2003 risks aggravating

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    Fuelling the Niger Delta Crisis

    Crisis Group Africa Report N118, 28 September 2006 Page ii

    an already tense political climate. Many Nigerians fearPresident Olusegun Obasanjos anti-corruption campaignlaunched in 2003 may be too little, too late. Others havedismissed reforms as a weapon wielded against politicalenemies of the countrys ruling elite. Although someWestern analysts have touted the merits of a recent packageof promised infrastructure development in the Niger Delta

    under the umbrella of a centrally-controlled ConsolidatedCouncil on Social and Economic Development, fewpeople in the Delta have faith that this will be any moreeffective than the failed, federally-controlled developmentmechanisms of the past.

    Resolving the Niger Delta crisis will require far greatercommitment on the part of the federal government andcorporate stakeholders in ensuring the oil industry operatesfairly and transparently in the region, with visible benefitsto the local population. Without serious and sustainablereforms, all parties stand