NEITI Bemoans Poor Punishment for Oil Theft

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Chineme Okafor in Abuja 

The Nigeria Extractive Industries Transparency Initiative (NEITI) has revealed that the legally recognised fines for stealing Nigeria’s crude oil have remained abysmally poor, amounting to either N100 or N5,000, according to two separate laws in the country.

Within both laws as well, the NEITI stated that anyone found guilty of the crime of oil theft could get between six and 12 months jail terms. It made these disclosures in a recent policy paper it published on crude oil theft in Nigeria.

“Since 1975 at least, the laws of Nigeria have attempted to address the problem of oil
theft. The Petroleum Production and Distribution (Anti-Sabotage) Act 1975 contains provisions against pipeline sabotage and provides penalties of up to death penalty. However, this provision applies only to pipelines conveying petroleum products, not crude oil. 

“On the other hand, the Crude Oil (Transportation and Shipment) Regulation 1984 explicitly provides measures that sought to prevent ships, tankers and vessels from engaging in unauthorised loading of crude within Nigeria or outside any loading ports
or terminals in Nigeria. 

“The provisions also cover prohibition against false declaration of cargo volumes and mis-invoicing. However, the law provides for penalty of just N100 or six months in prison. Outside this provision of court-imposed penalty though, the minister is empowered by law to impose sanctions including, but not limited to, seizure of ship and withdrawal of license,” said the NEITI in the document titled ‘Stemming the Increasing Cost of Oil Theft to Nigeria’.

It further stated that: “On its part, the 1978 Exclusive Economic Zone Act empowers officials to curtail access to the waters around oil wells, pipelines, terminals and other infrastructure. But the law provides for punishment of only N5,000 or imprisonment up to 12 months or both.”

Providing instances of failures of Nigeria’s legal system to effectively tackle oil theft, NEITI noted that even the country’s Economic and Financial Crimes Commission (EFCC) have been unable to appropriately legally prosecute oil thieves.

According to it: “A review of the legal provisions against crude theft and vandalism shows that there are at least six legal codes dating back to 1975 that provide punishment for these crimes. However, some of the laws were found to be outdated, for example with stipulation
of prison term of 12 months or fine of N5,000 for offenders. 

“Provisions of sanctions in the EFCC Act are relatively less weak but manifestly inadequate. Overall, the legal environment does not provide sufficient deterrence for oil theft.”

NEITI noted that it, “reviewed a sample of 25 crude theft convictions secured by the Economic and Financial Crimes Commission involving 103 individuals, six companies and one vessel,” and discovered that 35 of the accused were sentenced to two years in prison with an option of fine between N50,000 and N100,000.

“Six individuals were sentenced to one year with option of fine between N100,000 and N1,000,000; 59 were simply fined N100,000; two were fined N50,000 and N500,000 respectively. Only one person was sentenced to one year in prison without option of fine. Three companies were fined N500,000 while three others were fined N1,000,000. One vessel was fined N5,000,000. 

“These sanctions are clearly not sufficient to produce deterrence and the cases only address
a small aspect of crude theft. Firstly, out of 103 individuals convicted, only two (less than two percent) are likely to serve compulsory jail term of one year, and even this cannot be sufficient deterrence.

“Secondly, all the accused were convicted for possession and sale of illegally refined petroleum products. None of the cases pertain to direct theft of crude oil, most of which is sold in the international market,” it added.

NEITI also stated that the government’s multiple efforts at tackling oil theft had not yielded the desired outcome going by current evidence that Nigeria lost at least $41.9 billion to vandalism and theft of crude oil and refined products within 10 years, which is between 2009 and 2018.