Technical and Legal Issues in Land Acquisition for Development of Crude Oil and Natural Gas Facilities Within the Niger Delta Region of Nigeria

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1 Technical and Legal Issues in Land Acquisition for Development of Crude Oil and Natural Gas Facilities Within the Jacob Odeh EHIOROBO and Henry AUDU (Nigeria) Keywords: Land Acquisition, Memorandum of Understanding (MOU), Global Memorandum of Understanding (GMOU), Land use Act. SUMMARY Most of Nigeria s Oil and gas reserves are located within the Niger Delta region. As a result of oil exploration and exploitation by both national and multinational oil companies, construction of export pipelines, Tank farms and other oil facilities, a lot of farm land is lost or forfeited. In addition, as a result of waste generated, water is polluted, biotic and aquatic environment are degraded. As a result of the Land Use Act of 1978 which vest in the government, the rights of ownership of all states lands which were originally communal lands and were administered by traditional rulers and families, compensations are paid only for crops and improvements on lands acquired in the course of oil exploration and exploitation. Two issues are involved in land acquisition under the act; these are legal and technical issues. The legal issues deal with the right of the individual and communities in the ownership of the land parcel within the oil producing areas while the technical issue deal with survey documents prepared showing land ownership (cadastre plan) and the limit of acquisition (Usually claims survey plans). Legal and technical issues on land ownership within the Niger Delta region of Nigeria and how they affect adequacy or otherwise of compensation paid to land owners was discussed. The effect of poor and improperly channelled compensation on development within the region and the creation of a data base for appropriate compensation of land owners and development of the region are discussed. Lack of adequate maps and cadastral plans for Land administration was found to be a hindrance to land resource management within the Niger Delta region. The study revealed the major causes of the current crisis within the Niger Delta region of Nigeria stems from long term neglect, poor and lack of purposeful and sincere development. The paper recommends the abrogation of the land use act and payment of compensation for lands and improvement on lands where oil exploration and exploitation activities are carried out to communities and the need to develop infrastructure and cottage Industries. FS 4F - Land Tenure and Land Management Projects in Developing Countries 1/10

2 Technical and Legal Issues in Land Acquisition for Development of Crude Oil and Natural Gas Facilities Within the Jacob Odeh EHIOROBO and Henry AUDU (Nigeria) 1.0 INTRODUCTION The Niger Delta region of Nigeria is situated within the Gulf of Guinea and covers an area of approximately 80, 000 square kilometres representing about 8% of Nigeria s land mass. The states that make up the region include Abia, Akwa Ibom, Bayelsa, Cross River, Delta, Edo, Imo, Ondo and River State (Fig. 1) The estimated total population of the region is 28.9million and the people are predominantly farmers and fishermen. Nigerian economy depends mainly on oil and gas and the country s crude oil production within the Niger Delta region averages over 2,118million barrels per day. On the average 90-95% of Nigeria s export revenue is derived from oil and gas (Ehigiator 2005). Thus, it can be seen that Nigerian economy depends mainly on the oil and gas produced in this region. It is however sad to note that despite the huge resources the Nigerian state derive from this region, it is one of the most under developed in both infrastructure and human resources. Employment opportunities in the industry for local communities is limited. The very high capital labour ratio in the oil industry meant that growth in the oil operation is generally reflected not in relative expansion of employment but in capital (Aghalino 2009) Due to Oil exploration and exploitation activities, construction of export pipelines, Tank farms and other onshore oil facilities, a lot of farm land is lost or forfeited. In addition, as a result of waste generated from oil and gas related activities, water is polluted, biotic and aquatic environment are degraded. As a result of the land use act which vested, in the Governors rights to hold lands in trust on behalf of the people, not enough compensation is paid to land owners in the rural communities. In the end they are impoverished more than the oil companies met them. This has been the root cause of agitation and militancy within the region during the last decade. FS 4F - Land Tenure and Land Management Projects in Developing Countries 2/10

3 2.0 LAND TENURE SYSTEM IN NIGERIA The different land Tenure systems practiced in Nigeria have some basic common features which include dependence on ethnic geographic location and the history of the people of the region. In most part of southern Nigeria, particularly the Niger Delta region, the administration of Land was carried out under the customary tenure. Land ownership was defined by clans, villages, families etc. In Benin for instance, any application for a landed property required prior approval by his Royal Majesty the OBA of Benin whereas in some other parts of the Niger Delta, Community heads administered the lands on behalf of various interest groups. Fadahunsi (2008) identified different classes of land holding to include Community lands, Chieftaincy lands, Kola tennacy, Pledge, Leasehold tenure, State land etc. He further identified other forms of land tenure to include contracted and individual tenure. Land is a key resources in national economy. However in the Niger Delta region, the traditional land holding system identified above have been thwarted by the land use act as the interest of a majority of the people have been hijacked by a few powerful individual who now control land and land resources in collaboration with multinational companies. 2.1 The Land Use Act The land Use Act of 1978 is an Act which vest all lands comprised in the territory of each state (except Lands vested in the federal Government or its agencies) solely in the Governor of the state, who would hold such land in trust for the people and would be responsible for allocation of land in all urban areas to individuals resident in the state and to organization for residence, agriculture, commercial and other purposes while similar powers with respect to non urban area were vested in Local Governments (1978 No 6) (Olakami 2008) The above act which was originated as a land Use Decree of 1978 was designed for government to take over ownership and control of lands in the country in order to provide a uniform legal frame work for a comprehensive land tenure system in Nigeria. Okumola 2006, Fadahunsi 2008 summarized the objectives of the act to include the followings: - Effect structural changes in the system of land tenure - Prevent economic inequality caused by the appreciation of rising cost of lands by land speculation - Make land available early and cheaply to both government and private individual investors and developers. It was thought that with the land Use act in place, mechanized agriculture will rapidly be developed so also industries and mass housing for the populace. However, a lot of factors have impeded the success of the act. These include: - Political manoeuvres and selective availability by the Government in power and multinational companies - Insincerity by clan heads and community representatives and leaders - Lack of adequate database for land title registration - Ambiguous boundary description as a result of inadequate land records. Some of the critics of the act opined that the law was made without efforts to relate it to our indigenous idea of land holding and our cultural values (Agbede 1992, Fadahunsi 2008). FS 4F - Land Tenure and Land Management Projects in Developing Countries 3/10

4 3.0 LAND ACQUISTION FOR OIL AND GAS FACILITIES AND DEVELOPMENT WITHIN THE NIGER DELTA REGION In order to acquire land for the development of oil fields and oil and gas facilities, survey plans (Full Preparation Plan) as they are usually called are prepared. These plans will usually form the major document for the acquisition of lands for access roads, blue peg locations, Oil and Gas pipelines right of way, flow lines Right of Way, flow stations, Tank Farms etc. Inventory of land holding and improvement on the land by individual, communities, families etc are undertaken by the estate Surveyors and Valuers using the full preparation plan as a base map. Such inventory are used to compute compensation payable to landowners. As a result of the land use act, little compensation is paid to such land owners, their means of livelihood are destroyed and they are left with little or nothing once the small compensation paid for the cash crops and other improvement in the land is exhausted. In addition, as a result of the activities of the oil companies, the Eco system is changed, farmlands, fisheries and other activities are adversely affected as a result of environmental degradation. This situation has contributed immensely to the crisis in the Niger Delta region. The young people who as a result of the poverty in the region have little access to education, and those who are educated have no access to decent jobs nor capital for investment, therefore, resorted to militancy, violent crimes and of recent Kidnapping and demand for ransom. 3.1 Creation Of Database And Maps For Land Registration, Acquisition And Land Management Ambiguous boundary description and land location as a result of inadequate land record and data has hampered coordinated development within the Niger Delta region. Essential maps and cadastre plans showing ownership of land parcels either communal, clan, villages or individual land parcels are needed to identify who owns where so that compensation can be paid to the appropriate persons. There is also the need to prepare complete oil and gas resource location maps which will be updated into a resource inventory map. Absence of land title documents and land registration poses considerable problems for the payment of compensation to the rightful land owners. With advances in information Technology, the demand for accurate and up to date data and specialists in database design and management has increased. Appropriate management of cadastre information, land use and land tenure together with environmental changes are needed to help accelerate development within the Niger Delta region. FS 4F - Land Tenure and Land Management Projects in Developing Countries 4/10

5 4.0 LAND REFORMS AND LAND INFORMATION Land is a key resource in national economy. Within the Niger Delta region of Nigeria, the interests of the majority on land have been dwarfed by the interest of few who control the resource as a result of the land use act of As the land mass within the Niger Delta region gets degraded as a result of oil exploration and exploitation, the demand for agricultural land, housing and other human needs increases. Another factor affecting land use and land availability within the Niger Delta region is the multi ethnic nature of the region and attendant population pressure on lands within particular areas claimed by individual ethnic group. Land availability, land resource, land use, land policy and management all have adverse effect on the social economic situation in the Niger Delta region today. Adedeji (2008) described land reform policy as appropriating opportunity, income and wealth. A land reform and policy for the region need to take cognisance of the human and natural resources potential of the area. It should be hinged on data and information inventory generation overtime which should be updated from time to time. 5.0 EVALUATION OF THE EFFECCTS OF LAND ACQUISITION AND COMPENSATIONS MODEL USED BY OIL AND GAS COMPANIES ON LOCAL COMMUNITIES. The general aims of this investigation was to verify some hypothesis relating to the effects of land acquisition for oil and Gas facilities development on the local environment within the Niger Delta region of Nigeria. The Survey was conducted using structured interviews with the aid of questionnaires. The questionnaire method of data collection was chosen because of its cost effectiveness and the fact that it ensures anonymity. Respondents were selected from three states within the Niger Delta region Edo, Delta and Rivers states. The sample size for the investigation was 100 divided as follows: Edo (30) Delta (40) Rivers (30). The questionnaires were administered accordingly. The questions were structured as follows: a) Some personal questions on willingness to respond to the questionnaires, State of origin, Local Government area, Town/Village of residence, organization, Status, Range of monthly income, level of education, Sex, and age. b) Understanding of the land use act, Adequacy of Compensation for land acquired by oil companies, Developments of infrastructure within oil producing communities by oil companies, Environmental degradation in local communities by oil producing companies, Youth empowerment through scholarships and employment opportunities, development of cottage industries etc. The following hypothesis were formulated for the studies: The Land Use Act does not adequately cater for the interest of rural and communual land owners during acquisition by oil companies. FS 4F - Land Tenure and Land Management Projects in Developing Countries 5/10

6 Compensation from oil and gas companies to oil and gas bearing communities for lands acquired for facilities development are quite inadequate. Oil and Gas companies do implement the MOU and GMOU reached with local communities 100% all the time Using MOU and GMOU as models for compensation of local Communities is satisfactory and does adequately address the needs of the oil producing communities. The absence of essential maps and cadastral plans for the Niger Delta region is a major factor affecting land Administration and payment of adequate compensation to land owners. 6.0 RESULTS AND DISCUSSIONS The survey consisted of a total of 20 questions. These were three formats for survey questions multiple response choices, open ended format to allow for more detailed responses on a rating side of 1 5 to obtain the extent of judgement. Part of the results of the study are presented in table 1-5 below. Table 1: Rating on implementation of the Land Use Act Title Satisfaction with Implementation of the Land use Act Total Ordinal Scale Non Response Satisfaction Dissatisfaction Satisfactory Satisfactory Unsatisfact ory Total Frequency Counts Unsatisfact ory % of Total 5% 1% 16% 20% 52% 17% 72% 100% FS 4F - Land Tenure and Land Management Projects in Developing Countries 6/10

7 Table 2: Rating on Compensation for Land Acquisition for Oil and Gas Facilities Title Land Acquisition for Oil and Gas facilities Total Total Ordinal Scale Frequency Counts Non Response % of Total 3% Adequate Satisfaction Adequate Inadequate Dissatisfaction Inadequate % 13% 35% 44% 16% 79% % Table 3: companies Rating on level of Implementation of MOU and GMOU by Oil and Gas Title Implementation of MOU and GMOU Total Ordinal Scale Non Response Satisfaction Dissatisfaction High Fair Low Low Total Frequency Counts % of Total 5% 20% 20% 32% 23% 100% 40% 55% Table 4: Rating on Adequacy of MOU and GMOU in meeting the need of Oil and Gas bearing Communities Title Success Rate of MOU and GMOU in meeting Oil producing Community needs Total Ordinal Scale Non Satisfaction Dissatisfaction Response Adequate Inadequate Adequate Inadequate Total Frequency Counts % of Total 7% 20% 22% 35% 16% 100% FS 4F - Land Tenure and Land Management Projects in Developing Countries 7/10 42% 51%

8 Table 5: Rating of influence of availability of Maps and Cadastral Plans on Land Acquisition by Oil and Gas Companies Title Availability of Maps and Cadastral Plans for Land Resource Management Total Ordinal Scale Non Response Satisfaction Dissatisfaction Adequate Inadequate Adequate Inadequate Total Frequency Counts % of Total 8% 4% 7% 25% 56% 100% 11% 81% Table 1 Represents Satisfaction level with the operation of the Land Use Acct of 1978 as it affects oil producing communities. The level of Dissatisfaction is 55% higher than the level of Satisfaction. The first hypothesis that the Land Use Act does not adequately cater for the interest of rural and communal land owners during land acquisition by oil companies is therefore valid. The second hypothesis that compensation from oil and gas companies to oil and gas producing communities for land acquired for oil and gas facilities development are quite inadequate is verified from the frequency count in table 2. The number of dissatisfied respondents is 63% more than the number of satisfied respondents. Thus this hypothesis is also valid. Hypothesis (3) and (4) are verifiable for the results in tables 3 and 4. From tables (3) and (4), it can be seen that meeting the expectation of the oil producing communities through memorandum of understanding (MOU) and Global memorandum of understanding (GMOU) only partially fulfils the yearnings and aspirations of the people as the number of dissatisfied respondents with hypothesis 3 and 4 are 15% and 9% respectively more than those for satisfied with the models. Therefore, hypothesis 3 and 4 are not valid. The final hypothesis that the absence of maps and cadastral plans is responsible for the dissatisfaction associated with compensation to land owners for oil and gas facilities sites is verifiable from Table 5. In the table, the level of dissatisfied respondents is 70% more than the level of satisfies respondents. 7.0 CONCLUSIONS The investigation has shown that the land Use Act has not adequately addressed the problem of the oil and gas producing communities. A land tenure system that deprives indigenes of their natural FS 4F - Land Tenure and Land Management Projects in Developing Countries 8/10

9 right to their lands but vest access to land in the hand of others is unjustifiable and should be abrogated or modified. The federal Government of Nigeria has set up a seven point agenda for development of which land reform is one. For the Land reform to succeed, there is need to produce: - Large Scale Digital Maps of the region - Inventory of titles to lands in both urban and rural areas within the Niger Delta region - Development of a Geographic/Land information system for the entire oil and gas producing region and the country at large. In order to address the problems arising from long term neglect and deprivation of the people of the region, both the Federal Government, National and Multinational Oil and Gas companies need to address varieties of issues which include: Using part of the oil and Gas resources to support the rapidly growing population of the region Developing infrastructure including roads, water, and electricity. Providing social services including Education, Healthcare facilities etc Providing incentive for development of residential housing and cottage industries. Providing assistance to small scale farmers and Fishermen. Protecting the environment from degradation arising from oil exploration and exploitation. Finally, the models used to compensate oil producing communities by multinational companies based on memorandum of understanding and Global memorandum of Understanding have not adequately addressed the problem of the region. More proactive models therefore need to be developed to meet the yearnings and aspirations of the people. REFERENCES Adedeji D. A. (2008) Dynamics of Land use in Nigeria and the imperatives for sustainable Resource Utilization through Land Reform Policy Proceedings 43rd AGM / Conference of the NIS, Abeokuta, Ogun State, 5th 9th May, Aghalino S. O. (2009) Crude Oil Business in the Western Niger Delta, Rhyce Kerex Publishers, Enugu, Nigeria. FS 4F - Land Tenure and Land Management Projects in Developing Countries 9/10

10 Ehigiator Raph-Irughe (2005) Environmental Safety and Monitoring of Crude Oil Storage Tanks at Forcados Terminal M. Eng Thesis Department of Civil Engineering, University of Benin, Benin City, Nigeria. Fadahunsi J. T (2008) Assessment of Land Registration under the Land use Act of 1978 in Osun State Proceedings, 43rd AGM / Conference of the NIS, Abeokuta, Ogun State, 5th 9th May, Olakanmi O. (2008) Real Property Laws Law Lords Publications, Abuja, Nigeria. BIOGRAPHICAL NOTES Jacob Ehiorobo is a senior lecturer in the department of Civil Engineering, University of Benin, Benin City, Nigeria where he teaches Engineering Mathematics, Engineering Surveying, Photogrammetry, Remote Sensing and GIS. He obtained an M.Sc Surveying Engineering Degree from MIIGAIK, Moscow in 1983, and PhD in Geomatics Engineering from the University of Benin in HE has served as a Consultant on various roads and water infrastructure development Projects and in the Oil and Gas Industries in Nigeria. His research interests are in Deformation Surveys and Analysis, Engineering and construction Surveys, GIS and Land Information Management. He is a member of the Editorial Board in various Journals in Nigeria. He is also a member of FIG Commission 6. Henry Audu is currently a lecturer in the department of Civil Engineering, University of Benin, Benin City, Nigeria where he teaches Engineering Mathematics, Technical Communication and CADD, Remote Sensing and GIS. He is currently carrying out a PhD research on Location and Maintenance Management of Water Distribution Infrastructure in GIS Environment. CONTACTS Dr. Jacob O. Ehiorobo University of Benin Faculty of Engineering Department of Civil Engineering, Geomatics Engineering Unit, PMB 1154, Benin City, Edo State, Nigeria Tel mobile , E mail: Jeffa_geos@yahoo.com Henry A. Paul Audu University of Benin Faculty of Engineering Department of Civil Engineering, Geomatics Engineering Unit, PMB 1154, Benin City, Edo State, Nigeria Tel mobile E mail: henrypauduus@yahoo.com FS 4F - Land Tenure and Land Management Projects in Developing Countries 10/10