Speaker 1
Hello and welcome to the School of Law from the University of Aberdeen. My name is Neil Weightman and it's great to be back. In this episode, we're exploring the subject of the resource curse. And I'll be honest, before recording this conversation, I didn't know very much about the topic at all. But after speaking with my guest, Doctor Eddy Wifa, it quickly became clear just how relevant and how far reaching it really is.
Speaker 1
Some listeners might even recognize elements of this subject from popular culture, from a television drama starring Billy Bob Thornton that I saw a few months ago to a well-known blockbuster movie from 2006 starring Leonardo DiCaprio. We touch on that during the conversation, which I found genuinely fascinating, and I hope you'll enjoy listening to it as much as I enjoyed recording it.
Speaker 1
I met lecturer doctor Eddy Wifa in the basement of the Rice Library here at the University of Aberdeen, where I sat down to talk about natural resources development and the law. I began asking, what is the resource curse and why is it surprising that countries rich in natural resources can still struggle economically?
Speaker 2
Yeah. Thank you. The resource curse is a well-established phenomenon that sees resource poor countries outperforming research rich countries economically. In other words, you would see countries that might be rich in all you go diamond, natural resources and even critical minerals and suffering from economic stagnation in many ways. And we start to see other symptoms poor economy growth, poor human development index.
Speaker 2
We would see political instability and in some cases conflict and civil war. You would see some issues and challenges within the political or democratic space as well. So all of those things are symptoms of the reverse curse in in a variety of ways. But then the researchers itself is divided into two key aspects. Until we've got the Dutch disease and the Nigerian and Venezuelan disease.
Speaker 1
This is the Dutch disease, you say?
Speaker 2
Yes, the Dutch disease. So basically the Dutch disease is from the Netherlands. And it's really an economic element of the researchers basically looking at situations where resources discovered and all other sectors, including manufacturing and textile and all of that, stop growing where there's so much effort in green, that sector where the resource has been found. So in the Netherlands, when all was covered around the 1960s in the fields, oil was was the was the mainstay and the oil industry began to grow and a lot of other sectors stopped growing economically.
Speaker 2
So that's the resource curse from an economic standpoint. And in other words, you would see that most people would want to work, for example, in the oil industry, and you would see other industries grow, but they are likely largely supported by that industry to the extent that when there's no more oil in town, everything that depended on that industry begins to crash.
Speaker 1
And that's because other industries are supported by by.
Speaker 2
Absolutely. So if you if you've got your restaurants, your bars, your hotels, you know, all of those activities are largely supported by all and even the financial sector houses, all of those things. Prices of houses will be high because there's an oil boom, so to speak. And so once the oil goes away, everything else goes past. So it's almost like a bubble.
Speaker 2
And that's an economic, economic dimension of the resource curse in that sense. So it happened in the Netherlands. And that's why it's called the Dutch disease. On the other hand, you've got the Nigerian or Venezuelan disease, which is more politically motivated in some sense. So politically you're seeing increased rent seeking and that informed by the nature of the resource itself.
Speaker 2
And natural resource is one of those wealth making machines that you almost don't need to do anything to get wealthy. And as a result, you would see rent akin behavior whereby political elites would begin to, you know, tip their hands and corruption with thrive in all of those circumstances, the resources from all will be used as a political to, you know, in some situations and circumstances.
Speaker 2
So that increases corruption, ransacking in those instances.
Speaker 1
On a governmental level.
Speaker 2
On a governmental level. And that means the resources or the the benefits of the do not go to the populace or the or the citizens in that case. So that that's a political dimension of of the resource curse. And then numerous examples of of the Venezuelan again, the name from the experiences in Venezuela and Nigeria, from the experiences there as well.
Speaker 2
So that's a political dimension of the resource curse.
Speaker 1
Is this extraction of all from within the land itself?
Speaker 2
Yes. So that would be extraction from all from from the country. And in those instances you would see the wealth from the oil being cut it away by political elites and not being used in the right way to benefit all citizens.
Speaker 1
So in simple terms, is this about deals being made where the resources are extracted, but the revenues don't stay in the country?
Speaker 2
Yeah. So you in some cases you would see them in, you know, they're carted away in some of these developed countries. And you would see a lot of cases where very wealthy African oligarchs or, you know, are being sued or in court in different countries in the world as a result of the resources and the money that they had stolen from their own countries.
Speaker 2
So so you see that happening. And there are a number of examples, you know, explanations for that. But again, it's fundamentally, you know, just just being mindful not to go into the, you know, preempting some of the questions. But fundamentally we see instances where political elites are taking resources that are meant for the nation as a whole, resources that are meant to build schools, hospitals, roads and all of these infrastructure and just basically stealing them.
Speaker 1
And it's recently, I guess, being brought to light again in very recent times. We're recording this at the start of February with regards to the resources that are available in Venezuela. A lot of people like myself wouldn't have been aware just how rich in all that part of the world is.
Speaker 2
It's happening all across the global South, but even in other countries that we do not make mention of, you know, very, very often. And the situation in Venezuela and, you know, and Trump and all of that really raised a lot of eyebrows. But for decades, the Venezuelan government had failed to maximize its oil resources, put it into good use for the citizens, had destabilized the national oil companies and the political institutions in many ways.
Speaker 2
And as such, there was just this clamor for power. And once you begin to do that, you need the money from all to keep yourself in power for years and years and years to come to the resources becomes a cash cow for the political elite in some cases. And that's why I said it's a it's a point resource that you don't need to do very much, you know, to make money out of.
Speaker 2
I've got all in my country. I call on an international company. They take on all of the risk and they just give me my share. You know, you you don't need to do a lot to get your.
Speaker 1
Share because there are already oil and gas businesses, energy businesses that can extract the oil and do all of that.
Speaker 2
Part of the whole structure is all set up, and all you need to do is I have all. And there would be so many international companies clamoring to, to to invest and those resources, you know, and take on all the risk. And once that happens, you wait for for the benefits and that's all it takes.
Speaker 1
So is this essentially the result of formal agreements being signed where rights to extract resources are transferred, often with long term consequences for the countries involved?
Speaker 2
It is more it is more than that. It is. It is a station where even a company comes into a country, for example, and takes the first. All is a very risky business. Okay? There's a likelihood that the company would invest and not find all in commercial quantity. That's one. There's a likelihood that there might be some political risks.
Speaker 2
Governments might change. And, you know, they don't they don't make as much as they anticipated. And because it's all business, it's long term. And so as you know, all the natural resources is long term. You you know, they're in it for 30, 40, 50 years and beyond. And in those circumstances governments and powers are shifting. And so they need a buffer.
Speaker 2
They need a situation where they can be reassured that their their risk and other rewards of them taking on that risk is guaranteed. There could be technical risk. They could go in there to drill, and then you could have a health and safety risk or disaster and explosion or an environmental issue that means, oh my God, you know, they're not they're not able to go ahead.
Speaker 2
And so many sorts of risk that might happen even, you know, financial risks and all of that. So once you have an oil company take on all of that in very many circumstances, a government has almost how do I put it has almost given off, you know, the power to negotiate as well as it should have. And that's something that's missing in many of these jurisdictions.
Speaker 2
When resources are discovered, you almost don't have a say anymore because someone has largely taken on all the risk. And if you're not, if you're not negotiating, which is the balance of negotiating power, if not negotiating from a place of strength, very likely you would sign a bad deal. And just when you think you're getting enough, you really aren't.
Speaker 2
And these are some of the things we've observed historically with some of the very early deals that were made in the oil industry overall.
Speaker 1
And I guess as well, for some of these places.
Speaker 3
Some of these countries where they.
Speaker 1
May be rich, there is that infrastructure issue as well you've just touched on, which isn't in place in the first place. So it doesn't make it as straightforward as just extracting the oil, which is something that.
Speaker 4
Is beyond just.
Speaker 1
The risk of extracting it in the first place.
Speaker 2
Yeah. So there's something called the obsolescence in bargaining theory, which is essentially what happened in the very early days of oil or natural resource extraction. You're not expected as a country to have everything right, but you have to strategically position yourself in the long term to put yourself in a position where you would be operating or negotiating from a place of strength.
Speaker 2
So you might start off really weak, in which case you don't open your doors entirely to everyone. Sure, you strategically position yourself bit by bit, use an opportunity to learn, to understand and hopefully, you know, be part of the game and not just let someone make the rules for you and hope long term. The idea is long term, you know, not too distant future.
Speaker 2
You're then beginning to negotiate from a place of strength because perhaps, maybe you've joined in one of the JV, or you've learned the ropes, you've built some resources, you've built some institutions, you've built some capacity. And that's essentially what happened with Start Now. Equinor, you know, back in the early days.
Speaker 1
What about different minerals. And because we've just talked about all as the obvious one, we are here based in Aberdeen and we all know about the, you know, the historical position of Aberdeen and the oil and gas industry. And we can even we can even think of the resource curse if there's a downturn and all locally what that happens to the local economy, we are all affected by it.
Speaker 1
But can we touch on a different resources, please? Because the one that comes to mind, I'll be really honest with you is diamonds.
Speaker 2
Yeah.
Speaker 1
Yeah.
Speaker 2
I mean, the reserves, Chris is is not just all about all is about oil, natural resources. And even in the context of the energy transition, we are now seeing a climate for critical minerals by water propellers. You know, your phones, your batteries, all of those things.
Speaker 1
Silicon is what it is.
Speaker 2
Yes, yes, lithium, silicon, all of those things. These are all critical minerals that you would find in your phone. Copper, cobalt, all of those things.
Speaker 1
In microchips, the minor factor of.
Speaker 2
Microchips, computers they used in the batteries, all of that. So there's there's a clamor for critical minerals. And that's because the energy demand is going to be increasing, and we cannot continue to depend on all as a result of climate change and all of that. So there's a shift to cleaner energy sources, renewable energy, and that is the energy transition.
Speaker 2
Now we can have a debate on how fast and how slow that is happening. But overall, we're seeing that countries like China, Russia, US, the EU are really going for partnership and deals with countries where they can get critical minerals. You look at the situation in Congo. You know, Congo has one of the largest deposits of, of of lithium.
Speaker 2
And yet it is one of the poorest countries in the world. Right. How do you then reconcile that? The same Congo is, you know, has diamond, has gold, has all of the resources, but you cannot even envisage the amount of military groups and conflict that are in the in the dark. So how do you reconcile. So the resource curse is, is is historically with related largely to the curse.
Speaker 2
And, you know, from the works of Doughty and Jeffrey Sachs and Thurber and others. But overall, it's it's prevalent today as we shift towards renewables and other critical minerals.
Speaker 1
How does the law influence who benefits from natural resource extraction, such as gas or minerals?
Speaker 2
So law plays a very, very fundamental role. And it starts off with something as easy as ownership. Right. Who owns the resource. So you know, typically people would say, you know, the resources owned by the country, but depending on the regime or the licensing regime or the contract you sign, you know, your source might be owned by someone at some point.
Speaker 2
So take, for example, in the UK where we operate a licensing regime, the oil belongs to the Crown while it's underneath the seabed. Right. And then once it leaves the seabed and it's been extracted, it belongs to the company. Right. But you know, and that's under a licensing regime. Now, if you were to operate a production sharing contract regime or a JV, for example, you would continue to own the all even when it leaves the ground.
Speaker 2
So it's something as simple as ownership law plays a fundamental role in the US is different. Once you find all in the ground, you you basically own it.
Speaker 1
Oh, really?
Speaker 2
Yes, that's that's the regime. So that's about the only country in the world where you will find that if you, you know, if you have a in your backyard, you're a millionaire, you could, you could extract an automatic.
Speaker 1
And now the story storyline of a recent drama I've seen on the television suddenly makes sense, where a local farmer who's a farm, a landowner, happens to be sitting on a well of oil.
Speaker 2
Absolutely, absolutely. But, you know, that wouldn't happen in other parts of the world because the government would say, well, we own the the land and everything beneath it, right? So, so, so, so fundamentally, law begins to play that role even from the point of ownership. And then you decide what regulatory model would you use for the extraction of oil.
Speaker 2
And there are different legal and regulatory model because what law does laws. Law gives rights duties and responsibilities and shares that across between the government and other stakeholders. So once you choose what model you want to use that and informs what you get from the resource. So take for example, you use a production sharing contract, which we see used in most of Africa.
Speaker 2
And a production sharing contract is essentially saying a company takes on all of the risk for the extraction and then shares the production with the government. In that case, right after taking away its cost of production.
Speaker 1
Okay.
Speaker 2
All right. So I take on the risk to come into your country and extract. For all you know, we're in this together. We signed a production sharing contract. When we start producing, I have to take the cost. Whatever the cost of that production is, it's called the cost. So I take out the cost and whatever is left, we then share it at a certain percentage.
Speaker 2
So the country might take 70% of what is left and the other companies might take 30, or it might be 5050 or might be 6040. We then share that percentage. So is he law in in form of a contract is now playing a very fundamental role. But ultimately even with with the resource as well. Law, please. You know, a lot of roles in the institutions that are built in transparency, in accountability, in designing regulatory regime for, say, sovereign wealth funds and management of those resources.
Speaker 2
Law continues to play a really, really fundamental role. So you'd have had something like.
Speaker 1
Norway Springs to mind here with.
Speaker 2
Absolutely. So Norway, for example, has the most robust sovereign wealth fund in the world, over $1 trillion. Yes. And it's law was the instrument to design that. Of course, you would have political will and all of those things. But laws instrument to set up fund for rainy days that we cannot always just dip in and use whenever we want.
Speaker 2
So Norway has a very, very robust, you know, sovereign wealth fund. But unfortunately other countries who have copied or tried to develop theirs have not been as strong. Because, again, if you don't have the right institutions, if there is regulatory capture, in which sense you have the regulator been more powerful than, than, than the regulator then capture sets in and that weakens institution.
Speaker 2
So, you know, you need laws to work, but laws does not do not work in isolation. So take for example, transparency is one of the most, you know, one of the most important tools in ensuring accountability and mitigating the resource curse. Right. And transparency is essentially saying shine the light. Let's see where the money is. Let's see who is paying who and what have you done with that resources.
Speaker 2
And that's all transparency is, is asking for. And so you've got the Extractive Industry Transparency Initiative that have, to a very large extent, been domesticated in a lot of resource rich countries and then passed into law. That requires, you know, companies to declare what they're giving to government and government to declare what they're receiving and how they're spending the oil money.
Speaker 2
And that's by virtue of the legal regime. But unfortunately, transparency would not work in isolation because you need a very strong civil society organizational regime to be able to, to, to, to fight government and, and ask questions. You need a very, very educated populace to hold government to account. So, you know, you could declare all you want, but if people don't understand it, it makes no sense.
Speaker 2
So law does play a very, very fundamental role from, you know, the ownership of the resources all through through the contracts that have been signed, true transparency initiatives, through designing robust institutional institutional regime as well as, you know, rainy day funds like the sovereign wealth fund.
Speaker 1
Why do local communities often see fewer benefits from resource extraction than expected? You know, I could almost relate to this question to when you hear somebody who might be local here in the northeast of Scotland and say, where is all that money go? It doesn't go onto our streets. Our streets aren't paved with gold and so on and so forth.
Speaker 2
So again, you know, the resource curse is, is is ripe, you know, in different parts of the world, other other sources of it, people, there are two levels to it and the suffix people. See, you know, bad contracts. Right. Being being signed, for example, people see a lack of transparency. People see corruption, for example, people see weak institutions.
Speaker 2
People see a government that doesn't prioritize citizens. And that's all people see. People see conflicts, as you would see in different parts of the global South. In Africa, in dark, people see civil wars as a result of all resources. And if that is concentrated in one region, then you see illegal mining or refining of those resources in order to flow political conflict.
Speaker 2
In that sense, we all see that. But there's one thing a lot of people don't see, and that is capture the role of capture. Back in 1884, when, you know, Western countries basically divided African countries for themselves.
Speaker 1
Yeah.
Speaker 2
That was capture. People do not see the role of that. And colonialism ultimately in creating existentially fragile states. And colleagues like doctor Mark Gillen and others and myself have written extensively on existential, fragile states. So we all see the corruption and all of those things. At the surface. We still see the mismanagement of resources, but ultimately it dates back to things like the burning conference, where basically the rules were made before you even came into the game.
Speaker 1
Right.
Speaker 2
And so fundamentally, you have a situation where superpowers coming to different countries and basically take ownership of their resources. And I give you an example. Well, exploration started way back in 1906, in Nigeria. Okay. And then it wasn't until 19, now altered by different the wars and conflicts and World war. It wasn't until 1958 when there was a commercial lift of oil from the country.
Speaker 2
The very first commercial lift was from that was was in 1958, 1960, exactly two years after Nigeria was granted independence.
Speaker 2
It's not too hard to see the connection between the first olives and the granting of independence in 1960, just two years after. And that was only after Nigeria had granted the first license to an oil company to explore for oil in all of the country, without limitation. Now licenses are given on the basis of accurate.
Speaker 1
When you say without limitation.
Speaker 2
Basically go in every part of the country where you find all and take.
Speaker 1
It, you just literally just extract it wherever you wish.
Speaker 5
Wherever you find it. That was the very first license that was given to an oil.
Speaker 2
Company in Nigeria. So that's insane because all, you know.
Speaker 5
Licenses.
Speaker 2
Are given on the basis of an accurate. You you take a small area, you give it to a company, they search. If they find they even relinquish part of the area you're given to them. But how do you give a company a license to.
Speaker 5
Exploit for.
Speaker 2
All in all of Nigeria without limitation?
Speaker 1
Wow.
Speaker 2
And in two years after you grant us independence. So now why everybody is screaming and jubilation for independence? The reality is that the license for all of the in the country has just been given to someone else. And so while you know when you say, why don't you know why? How do communities, you know not benefit? And all of the things yes, it's all of the corruption.
Speaker 2
Oh, it's all of the mismanagement of resources is all of the political instability and civil wars and all of those things. But ultimately that was informed by an existentially fragile system, informed by colonialism, to the extent that even when the colonial the colonialists are out, they have created a system that serves them almost in perpetuity.
Speaker 1
Yeah.
Speaker 2
And so there's nothing you know, you're going to do, or you can try your best, but you're constantly you know, it's a race against time. You're just like a hamster in a wheel and no progress is made. And we see that time and time and time again. Right. And so, you know, we do the research and the analysis with, with countries because resource is usually analyzed when you no oil is all or the resources discovered and then it's not managed properly.
Speaker 2
Yeah. Right. So then we say, oh, you know that country is experiencing the resource curse. Oh I'm asked myself. Can't we predict the possibility of a resource curse, you know, before the extraction begins? That way you can tell the country and you can advise the government. Could you hold on a minute? Because if you go ahead, you will be way worse than you currently.
Speaker 1
Are because you haven't thought through.
Speaker 2
You haven't thought through the whole process. You haven't thought, where are you standing even to negotiate all of your petroleum contracts? Where do you stand.
Speaker 1
And how it's going to be divided up?
Speaker 2
How is it going to be divided? How is it going to be used? How is it going to be extracted? You're not asking those questions. Do you have the right institutions in place to manage those resources when they do come? Are you having fragments of conflicts and all of these things before your money comes, or the resource money comes because when it does, it would make it worse.
Speaker 2
Yeah. What's your education system like? What are your civil societies? Do they have a voice? Can they speak? Can I hold you to account? That is even before the oil comes.
Speaker 1
Yes.
Speaker 2
And so if you have all those questions acts you would be able to determine, do I need to get into all money that is going to make everything worse? Or do I hold off until I have defined, you know, designed the system that can accommodate that amount of wealth when it does come in? And that's what we've been doing for a number of countries.
Speaker 2
And I've written a paper on predicting the resource curves rather than waiting until something goes wrong. And they were like, oh my God, we're experiencing the reserves because, well, you should have known the symptoms are there.
Speaker 1
And there's no method of reversal. Once contracts, bad contracts have been written, and the way things are divided haven't been thought through properly.
Speaker 2
Yeah. So it's a very interesting question because and I'll give you a number of examples. I mean law works you when people sign contracts and people do deals, you're expected to say what you mean and and and mean what you say. So you know, if we agree then then we agree. I'll use an example. Historically, we saw a number of African countries signing what we call freezing clauses.
Speaker 2
Now because companies wanted stability, okay. They wanted some form of stability. And, you know, colleagues have done extensive work on this. Professor John Paterson has written on it. People want companies want stability. They want because all business is long term. So they want, you know, they want to be sure that, you know, they would still be playing by the same rules in 20, 30, 40 years, maybe not entirely the same, but the changes shouldn't be that drastic.
Speaker 2
But then we saw historically that countries were signing freezing clauses. And what that basically meant was in the year that the contract was signed, the companies inserted a freezing clause, which meant that everything the contract was frozen in time, and so the government of the country could not make any changes. That would in some ways, you know, have an impact or be detrimental to an oil company.
Speaker 2
And that's understandable. But what that meant was the tax regime stayed the same. What that meant was if there was need to change their environmental regulation or the safety regulations that require the company to do a little more, spend more on environmental issues and all of that, the companies wouldn't, because why you sign the freezing clause. So if you sign the freezing clause, that clause held the contract and all the parties bound for the next 20, 30, 40 years.
Speaker 2
Now that has that is changing because in modern times, what we now have is a balancing equilibrium clause or a renegotiation clause that says that in the event that something happens that would have an impact on either of the parties, then both parties would have to negotiate in terms and blah, blah, blah, blah, blah. So that's an example of a situation where it's not entirely easy to reverse.
Speaker 2
Yes, you know, these things, but more than legal, contractual arrangements are now being designed to accommodate changes in time and society. And, you know, things are changing. I mean, you know, the energy transition and climate change countries should be allowed to pass laws to make society, you know, any better.
Speaker 1
And will these these agreements, will they expire in order for them renegotiation to happen or are they written indefinitely?
Speaker 2
So the incidence of either of the parties, if something happens that triggers a negotiation, then both parties would need to renegotiate. Otherwise you would have a contract that might be, you know, 18 years for or 20 years or 30 years, for example. And there would be a renewal clause, and ideally it would be at the time point of renewal, you know, when that would be the point where people will ultimately renegotiate.
Speaker 2
But it means it shouldn't mean that for the next 20, 30 years, if something.
Speaker 1
Happens.
Speaker 2
People should not. But historically, we saw a lot of contracts that were signed on the basis of a freezing clause, which means whatever happened, we just kept on going. But modern contract is saying that doesn't work in interest of both parties, and particularly in interests of the host countries. And in such instances, they would it would trigger a renegotiation.
Speaker 2
So there are instances where you could you could have that and renegotiate the, you know, the terms of the contract. And that's, that's that's very possible. But ultimately the oil business and all those are largely long term.
Speaker 1
Can you explain an example of a country or project in Africa that helps explain how the resource curse works in practice?
Speaker 2
All right. So again, I would I would use Nigeria as an example because I lived I lived through this. So I come from a region known as the Niger Delta. And more specifically I come from a community known as Ogoni. Okay. Right. Or was discovered in the Niger Delta in a lawyer back in 1950s and 60s. And for all of this year's till now, the Niger Delta remains impoverished by poverty.
Speaker 2
Not only have they had very, very little to no benefit from, basically, you know, the resources that has made Nigeria one of the largest oil producers in Africa and well recognized in the world for, for, for, for its oil at one point pumping close to 1.8 million barrels a day and even more. Right. Unfortunately, that community where the oil comes from have not had, you know, anything to show for it.
Speaker 2
Not only that, they've experienced significant, significant environmental degree addition. The Unep report of 2011 suggests that the water, the drinking water in in that community is one 1000 times worse than the World Health Organization standard.
Speaker 1
Wow.
Speaker 2
Yes. And that's a community where all comes from. And then you've got increased environmental degradation. So even if yes, we're not getting anything from the all, but hopefully we should be able to get something from our environment. Then you have all their water and their land polluted in that region. So ultimately, you know, it's double jeopardy. You don't get the resources from the oil, you don't get any benefits from it, and you don't even you're not even able to use your land, you know, for survival.
Speaker 2
So to to the Niger Delta region is a classic example of the resource curse. And there's so many others you could look at the DRC, you could even look at Ghana. And I remember many years ago when I was discovered in Ghana and the physician was, oh, we, we don't want to be in Nigeria. Well, it didn't take too long before, you know, Ghana currently experiences the resource curse.
Speaker 2
And so while we have historically we have all of these countries that are experiencing the resource curse, people are asking the same question, what happens of emerging all states, Guyana, Mozambique, Uganda that are now discovering and, you know, already starting to explore for all? Okay, what lessons are they drawing from all of this historical countries that are experiencing the results.
Speaker 1
And of course, we'd all hope that they that they will learn from from the mistakes made by other countries.
Speaker 2
Absolutely.
Speaker 1
We've touched on this already, but what kinds of environmental or human rights problems can be linked to resource extraction?
Speaker 2
Yeah. So again, back to the point of you would have severe environmental degradation. And if you don't have the right, you know, institutions in place, these these these these spills go on for a very long time. And, you know, there has been efforts to to clean up. But again, there's been a lot of questions raised as to how those efforts have been made.
Speaker 2
And then you look at human rights abuse, you look at the DRC, for example, how children are made to mine, you know, gold and diamond and some of these critical minerals. That's that's a human rights abuse in that sense, for us to get the things we have. And I'll tell you a story of, of of the Ogoni nine very popular story.
Speaker 2
There are cases in, in British and and dodge courts in Europe basically arguing this exact same point. So again, back to the point of the region where I come from, the Ogoni, after several decades of oil exploration and exploitation, nothing was, nothing could be shown. Now a number of educated, highly educated elites in the community thought they would stand up to government and say, you know, wait a minute, you're taking all of these all and we have nothing to show for it.
Speaker 2
And they were led by a man known as Ken Saro-Wiwa. Right. He was a, you know, quite a writer, a TV producer, you know, very, very educated and light and enlightened individual. And what did they do?
Speaker 2
They killed him. Government basically set up a court and charged him and ate others for mother, and then hanged him and the others. And so if you even go on Google and you typed the Ogoni nine, you would you would see the story and what was their crime. Basically asking the government for some benefits of the oil that had been extracted from their land.
Speaker 2
That was it. They were hungry in 1995.
Speaker 1
Wow. 1995?
Speaker 2
Yep. And so there are lots of cases. You would see cases in British courts, you see cases in European courts taken up by the families and and people within that community, you know, asking for some form of restitution. So that's an example of, of of human rights abuse at a, at an extreme level. But it's going on even today.
Speaker 2
And that's basically what filled the militia groups because people felt, well, dialog didn't work and it got these guys killed. Well, maybe we should all then take arms. Right. And then, you know, militia groups sprang up and illegal mining and refining of extraction became the order of the day. So it really shows you how bad things can get if we don't deal with some of these very fundamental issues that I've raised.
Speaker 1
And it's still going on, which is which is frightening.
Speaker 2
It is it is going on. And again, it's going on in relation to all it's going on in relation to, to critical minerals. So many people are beginning to ask, we dealt with the resource curse. Are we also dealing with the renewable energy curse in which, in which case we are needing all of these critical minerals and we are not asking questions about where they are gotten, how they're gotten, how their mind.
Speaker 2
We saw that with the blood diamonds. You might have watched the movie.
Speaker 1
I was about to raise it precise the precise movie. And that's exactly what is coming to mind, because from my perspective, I think this was something that was highlighted for the first time from watching the movie, in all my naivety. And as you're talking throughout this podcast, I'm realizing that you know, what it was highlighting is still taking place.
Speaker 2
Absolutely. So the Blow diamond was really basically how illegal diamonds were being mined. And, you know, of course, there was the argument that maybe if we adopted a certification process, then maybe that would reduce the illegal mining and, you know, the Civil War basically that was going on. And so that led to the Kimberley Process certification, which meant only diamonds that where certified should be sold.
Speaker 2
But it didn't work. You know, people would buy a diamond irrespective of where they came from. So so these are the questions. So the heart of of the conversation, you know, law can do only so much. Yeah. You know, have a heart of it is you and I and everyone taking some responsibility, political will to say, you know, this has to stop.
Speaker 1
How can better laws or stronger regulation help reduce corruption and improve accountability?
Speaker 2
So I raised the point that, you know, I think Fiona Haines, with a fantastic work on what law can do and what law cannot do, and that would just be my previous point. So law can help strategically set out instruments that should share rights and duties to different stakeholders. But law cannot negotiate those deals for you. Yeah. So if you negotiate a bad deal and go in with your eyes closed, there will be consequences.
Speaker 2
So to that one point, law can also set up systems and regulation that encourages transparency. And we've seen that with the Extractive Industries Transparency Initiative, which see we've seen government domesticate that. We've seen that with different, you know, different arrangements like the publish what what you pay principle, all of those things. We've seen all of those efforts with the hope that if there is greater transparency, if people are aware of what you know, what is happening and what is being paid to government, and government is declaring what it's receiving, then there would be a greater sense of accountability and it would be difficult for money to get missing.
Speaker 2
But that doesn't work in isolation. It needs a very strong civil society that can hold government to account. It needs definitely needs the right institutions in place to even provide the information in a manner that everyone will understand. You know, fundamentally, because, you know, it's a very complex conversation. And so if you put it in a form people don't get, then you're just talking over people's heads.
Speaker 1
I completely understand that.
Speaker 2
Yeah. You know. Absolutely. So, you know, law can do all of those things. People need to be educated in order to understand, you know, that that information. We need to ask what what are the democratic principles within within that country? What are the political what's the political situation? Can people speak? Can people speak against government? Can people, you know, hold government to account?
Speaker 2
These are fundamental questions. So law might, you know, have an Extractive Industry Transparency Initiative act.
Speaker 1
Yeah.
Speaker 2
But all of the underlining things that needs that regime to work effectively is beyond what law can do.
Speaker 1
It's education. It's having responsibility.
Speaker 2
Absolutely.
Speaker 1
And holding accountability.
Speaker 2
Absolutely. So so you need that for for a transparency regime to be effective, law can require the establishment or the creation of sovereign wealth funds. But if people go in and deep in when they shouldn't and abuse that fund, then there's only so much law can do. So you could you could have legal instruments, you know, to solve any of these problems.
Speaker 2
And there has been efforts significantly. But, you know, there's a limit to how much law law can do. And then not talking of things of ownership, talking about things on the regulatory arrangements that have been used. There's a lot more can do, but there's still a lot more that is beyond law, and it's highly dependent on the political.
Speaker 1
What lessons should law students take away? What should they take away when thinking about natural resources and development?
Speaker 2
ID so we are seeing and this is fundamental. We have seen an increase in population and in the population of young people, particularly in the global South. And we take a country like Nigeria for example. By 2050 you're getting close to 400 full 50 million people.
Speaker 1
Wow. Right. In population terms.
Speaker 2
In population terms. And 60 to 70% of that will be young people, right? So you imagine with the experiences in a country like that, and the resource is continuing, at what level will such a society be right and what will be the consequences of a young population all busting with energy and do not have the benefit of their natural resources?
Speaker 1
Of course.,
Speaker 2
You know, you you can only imagine what that might look like. Yeah. And so the young people, the question we need to ask ourselves is law as an instrument of social engineering and lawyers. What is the function of law in in society being an instrument of social engineering? How can law be that instrument for positive change? And what would be my role is the same law that produce freezing clauses.
Speaker 2
Right. And we said, you know, that's unfair.
Speaker 1
Yeah.
Speaker 2
And yet it's the same law that produces renegotiation and balancing clauses. It means that law can do good and can do bad. Sure, if not used and channeled. Right. So fundamentally, we need to be asking ourselves, in this world of change and with the changes that are coming, the consequences that might be felt. Where do we stand in the use of legal instruments?
Speaker 2
Who are we negotiating for? And do we negotiate deals that we see that someone with a higher hand is taking advantage of the week? Because that's where historically, the resource curse is basically a function of very poor negotiation. And people start in the room to reach those deals and take advantage of other people and people starting in the room to feel, to to use legal instruments, to hold government to account, provide greater transparency, to ensure that the resources from wealth or resource wealth is channeled in the right, in the right direction.
Speaker 2
These are fundamental questions. And these these are the things that law lost are constantly thinking about. And I think, you know, having a podcast like this or a situation like this where we have these conversations and we do a lot of work here at the University of Dean, at the center for Energy Law. And a lot of my colleagues are fundamentally dealing with the same questions of what is the function of law in society and in relation to resource extraction, what law?
Speaker 2
What role is law fundamentally plain, and how can law be the instrument to ensure that there's greater accountability for the resources that are being extracted?
Speaker 1
Educating as many people as possible about the subject matter, the issues in hand? Yeah. Where it's headed with an enormous population is an example air of of Nigeria. Absolutely. Which you've seen firsthand growing up, the issues you know, at hand.
Speaker 2
Absolutely. Absolutely. And then it brings me, I mean, again, I leave with with this. And I remember growing up, you know, growing up as a child, one of the reasons why I studied law was living within the confines or the context of the resource case. Sure, I would travel home and I would see large fires in the distance, and when I asked questions, it would be there's there's an oil field exploded, you know, you know, failed pipelines.
Speaker 2
And I remember in 1995, I was just about ten, 11 years when the organic killings happened, the killings of the only nine who were basically asking for, you know, a share of their wealth. Yeah. And those were part of the things that inspired me to study law, because I said, this is just unfair. Yeah. And so when you ask the question of what lawyers are going to take away from this, it's fundamentally asking ourselves, what kind of world do we want to live in?
Speaker 1
Your passion on the subject is quite clear. Thank you for that. One last question. Anybody listening to the podcast and feeling inspired in what you've been talking about, what we've been discussing during the episode, what courses are on offer currently at the university that people might be interested in? How was it introduced into the curriculum?
Speaker 2
So if you, for example, did came in to do a master's in all Angus law, either with dissertation or professional skills? These are some of the conversations we'll be having. You would be doing things around the resource curse, transparency, resource governance, curse and all of those things on there models like state control and and you'll be dealing on contracting and gas contracting and negotiation on the models like and gas contracting as well.
Speaker 2
And that's if you're doing this additional professional skills. You could you could choose, but you'll also be dealing with the shift that is happening within the context of the energy transition and dealing with questions around critical minerals and sustainability. And you'll be doing that in, you know, under our energy transition LLM. But even if you are doing an undergrad in year 3 or 4, you have to deal with courses like contemporary issues in, in, in energy.
Speaker 2
And there again, we'll be having these sort of questions around critical minerals about the resource curse and how fundamental, you know, law, the role that law plays in ensuring that, you know, every side or every party is heard and a voice is given to to everyone, basically.
Speaker 1
I, for one, have learned so much from our conversation that's lasted just under an hour. Doctor Eddy Wifa, thank you so much for taking part in our podcast today.
Speaker 2
Thank you so much for having me. It's been fun.
Speaker 1
And there we have it, a chat all about the resource curse. I hope you enjoyed it as much as I did. I really did find it fascinating. And I thank Doctor Eddy Wifa, lecturer here at the University of Aberdeen, for his time. Coming soon. In an upcoming episode, we talk about deepfakes. How relevant is that right now? It's coming soon to the University of Aberdeen's School of Law podcast.
Speaker 1
My name is Neil Weightman. Until next time. Thank you and goodbye.