DOWNSTREAM OIL THEFT

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Downstream Oil Theft: Global Modalities, Trends, and Remedies Illegally refined diesel tranported on the Niger Delta, in Nigeria, in November 2012. Photo credit: Stakeholder Democracy/Flickr. Government proposals to require global positioning system (GPS) trackers on all fuel trucks have been met with skepticism; according to some observers, when a similar strategy was attempted in the past, drivers simply tampered with trackers to conceal their locations. As one industry insider observed, without stiff penalties to deter tampering, tracking devices will be ineffective. 117 Certainly, trucks play a key role in the illicit hydrocarbons market. In June 2016, the Nigerian newspaper the Vanguard, following up on a 2012 International Monetary Fund (IMF) report indicating that 80 percent of the fuel in Benin was smuggled from Nigeria, confirmed that at least thirty tanker trucks per week were smuggling fuel across the border while Nigeria was in the throes of a shortage. 118 The JTF 117 “Nigeria to Track Trucks as Fuel Stolen During Shortages,” Bloomberg, April 25, 2016, http://www.bloomberg.com/news/ articles/2016-04-25/nigeria-plans-to-track-trucks-as-fuelstolen-during-shortages. 118 “Nigerian Navy Smashes Petroleum Smuggling Gang, Intensifies Patrols around Badagry,” Vanguard, June 28, 2016, http://www.vanguardngr.com/2016/06/nigerian-navy-smashes- reported that in the Rivers, Bayelsa, and Delta States it seized 187 tanker trucks in 2012 alone. Most of those trucks were probably carrying diesel or petrol rather than crude. 119 Given the JTF’s reputation for extorting rent from illicit operators in the region, and for outright collusion, it is not unreasonable to suspect that those 187 trucks represented a fraction of the hydrocarbons being smuggled on wheels. How many tanker trucks eventually crossed borders themselves or supplied border operators as opposed to supplying seagoing vessels or local distributors is unclear. Piracy and Armed Robbery at Sea While Somali piracy has been made famous by media attention and Hollywood films, there has not been a reported hijacking of a commercial ship off the Horn of Africa since May 2012. Ships in the Gulf of Guinea, on the other hand, remain under constant threat. Though less well-known, West African piracy is hardly a new phenomenon. The first resolution of the International petroleum-smuggling-gang-intensifies-land-sea-patrol-aroundbadagry/. 119 Katsouris and Sayne, Nigeria’s Criminal Crude, 19, n.35. ATLANTIC COUNCIL 21
Downstream Oil Theft: Global Modalities, Trends, and Remedies “Nigeria’s success close to its own shores has created problems farther out at sea.” Maritime Organization (IMO) that focused on piracy was actually aimed at Gulf of Guinea piracy in 1983. 120 In recent years, piracy and armed robbery at sea in the Gulf of Guinea have reemerged as major issues. Indeed, evidence indicates the volume of illicit activity in the waters of West and Central Africa has more than overtaken that experienced in the Horn of Africa, the Straits of Malacca, and the South China Sea. While pirates operating in the Gulf of Aden off the coast of Somalia have engaged mainly in kidnap for ransom, criminals operating off West Africa, particularly in the early years, have almost exclusively attacked tankers carrying hydrocarbons. These groups will commandeer a tanker ship, disable its tracking devices, and transfer its cargo to smaller vessels for distribution on the black market. Significantly, the most sought-after cargoes are downstream products: petrol, fuel oil, and aviation fuel. Hijacking a tanker for the purpose of hydrocarbons theft is no simple matter: anyone undertaking such an act must have not only considerable skill and logistical support but also connections with illicit networks that can facilitate the distribution of the stolen product. The operation itself requires careful planning, familiarity with the layout and workings of the target vessel, and reliable information on the vessel’s whereabouts. Given the difficulty of accessing information about shipping schedules and routes, it would seem that few such thefts could work without collusion from industry insiders or security forces. Whereas the United Nations (UN) Security Council Resolutions allowed for international forces to counter piracy all the way to the Somali coastline and for commercial vessels to embark armed guards for protection throughout the troubled waters, neither such approach has been possible in West Africa. The sovereign states of the region have maintained legal control of their territorial waters, meaning that warships cannot enter and commercial ships cannot be armed within twelve miles of the coast. Until 2016, those territorial seas, in which such prohibitions persist, have also been the locus of the majority of attacks. Legally considered armed robbery at sea and not piracy if perpetrated within twelve miles, such attacks fall within the sovereign responsibility of the coastal forces. In other words, the attacks along the coast of Nigeria have been under the jurisdiction of the Nigerian Navy and maritime agencies—all of which have been heavily implicated in oil theft, as discussed above. Since taking power in May 2015, the Buhari government has cracked down on hydrocarbons crime, largely to lift potential investors’ confidence in Nigeria. The Nigerian Navy has subsequently shown far more vigorous efforts at mitigation within Nigeria’s territorial waters. According to one authority on maritime security, recently appointed Naval Chief of Staff Ibok Ekwe Ibas has also succeeded in at least disrupting the coordination between corrupt naval personnel and criminal networks. As a result, the criminals have begun to resort to more daring operations on the high seas, including kidnap for ransom and hijacking tankers in international, or at least non-Nigerian, waters. In this sense, Nigeria’s success close to its own shores has created problems farther out at sea. The International Maritime Bureau noted that in the first quarter of 2016, two out of three ship hijackings and all the recorded hostage-taking worldwide occurred in the Gulf of Guinea. 121 The case of the M/T Maximus reveals how far Nigerian pirates are now willing to range. In February 2016, the Maximus, which was loaded with 4,700 tons of diesel, was hijacked by Nigerian nationals off the coast of Côte d’Ivoire, but the navies of Ghana, Togo, Benin, and Nigeria, together with the United States and France, managed to track the vessel to the waters of São Tomé and Principe and eventually intercept it, even after it had unloaded part of its fuel via a ship-to-ship transfer. With the blessing of the São Toméan government, Nigerian Navy special forces performed an opposed boarding of the Maximus. The pirates were arrested (though one was shot and killed), the Maximus crew were freed, and the cargo recovered. 122 120 A.545(XIII) Measures to prevent and suppress piracy and armed robbery against ships. (Deriving from Sweden’s submission to the Council in Document C50/25 and Maritime Safety Committee Meeting 48/23/4 regarding concerns about attacks on ships in West Africa). Any other business: Piracy. Note by the Government of Sweden, IMO MCS, March 10, 1983. 121 “Violent Attacks Worsen in Seas Off West Africa Despite Global Piracy Downturn,” IMB Reports, Commercial Crime Services, April 27, 2016, https://icc-ccs.org/news/1179-violentattacks-worsen-in-seas-off-west-africa-despite-global-piracydownturn-imb-reports. 122 “MT Maximus Hijacking,” Piracy Report, 2016, http:// piracyreport.co.za/MT_Maximus_Hijacking.html. 22 ATLANTIC COUNCIL
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PART III Stakeholders and Recommend
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Atlantic Council Board of Directors
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DOWNSTREAM OIL THEFT

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