Bone of the land: The search for oil shapes politics in this corner of Nagaland

Soren Tung answers questions with a slow smile and few words. But eventually he admits it. He moved to Changpang in 1994 because of its oil wells. He had hoped to find work as a contractor with the Oil and Natural Gas Corporation, which had been prospecting in this tiny village on the Assam-Nagaland border.

The original village of Changpang, of about 600 people, lies high on a hillside. People began to move to the bottom of the hill around the late-1970s, residents say. When oil extraction started there in 1981, it triggered two developments. Protests brewed, led by the Naga Students’ Federation and backed by the National Socialist Council of Nagalim (Isak-Muivah faction), a militant group, which demanded an embargo on the exploration. The company did not have the right to extract natural resources that belonged to Nagas, they argued, especially when the benefits did not go to the community.

At the same time, people began to move down in greater numbers. To do business with the oil company, they say. The new settlement at the bottom of the hill took its name from the oil company. Changpang ONGC, it is called locally.

The ONGC years

In 1973, the Nagaland government gave the Oil and Natural Gas Corporation a permit to explore oil and draw a limited amount on a trial basis. But in 1981, it started full-scale extraction in the villages of Changpang and Old Tssori.

According to estimates by Lotha tribal organisations, between 1981 and 1994, it drew 1.02 million metric tonnes of oil. Nagaland Chief Minister Zeliang later said the amount was 1.5 million metric tonnes. The village did not even have a meter gauge to measure the amount of oil extracted, says John Kikon, who heads the Oil and Gas Bearing Landowners’ Union and is secretary of the Naga People’s Front’s youth wing. Landowners had not been consulted before exploration began, he said.

The Nagaland government earned only Rs 33 crore as royalty for the oil extracted. Locally, landowners agitated for a share in the profits or at least compensation for the damage to the land and environment. After years, they received a total of Rs 67 lakh as royalty.

From the early 1990s, protests by armed groups and student bodies intensified. In 1994, the year Tung arrived in Changpang ONGC, the NSCN(IM) reportedly gave an ultimatum to the company: pay Rs 10 million for exploring and extracting a scarce Naga resource.

The oil company fled in May 1994, without decommissioning its wells or following proper abandonment procedures. No company would arrive to explore for oil for another 20 years.

Changpang ONGC became a graveyard of oil wells, half destroyed by the ooze that seeps into the surrounding land every summer. The machines once used to draw oil now spire into the sky, encrusted with dried black sludge.

In the rest of Nagaland, the oil fields of Changpang ONGC have died out of political conversations. But in this forgotten borderland, it seems to be the driving factor behind voting choices. The state goes to polls on February 27. “Most people will be voting on the assurance that our candidate will help us resolve the oil issue,” said Odyou.

The desire to get a response from government, to be kept in the loop when decisions affecting the community are made also propelled John Kikon into politics. “We are now participating in the political process to guide government,” he said.

Oil country

Once exploration stopped, Tung adapted and became quietly successful. He opened a small saw mill and a coal depot that received supplies from the rat hole mines up in the hills. He also started a tea garden, though he reckons the yield is 50% less than what it would have been before the oil seeped into the land.

Not everyone managed so well. The family of Benrithung Kinghen, now constable at the Changpang village station, left after the exploration stopped. They moved to Wokha town, which is also the district headquarters. His father had been chairman of the landowners’ union. He now opened a small shop selling books and lost elections twice as a Naga People’s Front candidate.

Those who stayed behind went back to cultivation. But not much would grow. The traditional method of jhooming, or shifting cultivation, where the land is burnt as the farmer moves to another plot, was not possible any longer. With the leaking oil wells around, it could set off a massive blaze, Kikon said. “Even ploughing or terrace cultivation or fisher could not be practised,” he added. A landowner with an oil head on his plot, Kikon had moved to Delhi and Chandigarh in search of better opportunities before settling down in Dimapur.

“Further, safe drinking water could not be drawn in and around the house anymore,” said Kikon. Kinghen said that when he first moved back to Changpang, he would only drink bottled water. Then he found a stream uphill and laid a pipeline to carry water to his house.

After successive attempts at exploration failed, the government seemed to lose interest in Changpang. Apart from water and electricity problems, the only road connecting the village to the rest of Nagaland runs through Assam. Perhaps the government would rather look away from this volatile borderland, where state boundaries have not been demarcated. Said Kinghen cheerfully, pointing to an animal standing by the road, “Beyond that goat is Assam.”

The residents of Changpang ONGC now find themselves stranded in the land that once held the promise of wealth. “The affected landowners are desperate,” said Kikon. “Why can’t the state government figure out something good for the landowners?”

They are not against exploration, landowners say, provided they are party to the agreement that is finally signed by the government and the oil company. “I do not agree that any decision taken by the state government and the Centre should be imposed,” said Kikon.

A new contract

Fabulous tales tales are told about the mineral wealth that lies buried beneath the ground in Nagaland. “Scientists have made us believe the oil could go on for 400, 500 years, even ships could ply in it,” said P Ngullie, a leader of the Lotha Hoho, the apex body of the Naga tribe that lives in Wokha.

The oil belt stretches across a large part of Nagaland, travelling north east from Wokha towards Mon district. Wokha is believed to have a rich vein of deposits in Changpang, Tssori and the Baghty Valley, Ngullie said. According to some estimates, there are 20 million tonnes of crude oil in Changpang.

In 2014, the state government gave a permit to a newcomer called the Metropolitan Oil and Gas Private Limited. This time, the negotiations took place under the Nagaland Petroleum and Natural Gas Rules, 2012. Once again, landowners and tribal bodies say, their proposals for how contracts should be structured were not taken on board.

Protests began once more, led by tribal student groups. The day the exploration started, the state government imposed Section 144 and beat up demonstrators.

The immediate object of anger was Metropolitan. In handing the contract to it, the government seemed to have violated its own regulations, laid out in the 2012 rules. “As per government criteria, the company should have experience in drilling, and in the oil and petroleum business,” said Jonas Yanthan, vice-chairman of the Kohima Lotha Hoho. “It has to be a recognised company and has to have a history of success stories.”

Metropolitan was incorporated in September 2012, about four months before the state government invited an expression of interest from companies. In its application, Metropolitan had reportedly claimed that its promoters, Spice Energy, SRM Energy and Cals Refineries, had experience in oil operations. All three companies are part of the Spice Energy Group, according to the Securities and Exchange Board of India. At least two companies in this group, including Cals Refineries, have been indicted for fraud. In 2013, the Securities and Exchange Board banned Cals Refineries from issuing equity shares for eight years.

The state, Lotha bodies claimed, had favoured Metropolitan. It was also noted that TR Zeliang, now chief minister of Nagaland, had been part of the ministerial group which decided on the contract. Zeliang subsequently denied the allegations and claimed the company had offered the highest revenue share: 18% of the proceeds.

But the problem went beyond a single company or contract. In 2014, the Kohima Lotha Hoho filed a public interest litigation against Metropolitan, but the court asked for a fresh petition. This was filed by the Lotha Hoho, the apex body of the tribe. It did not target the oil company but the state government for the controversial 2012 Rules.

In an order dated October 8, 2015, the Gauhati High Court stayed oil exploration in Changpang and questioned the legal soundness of the rules which governed it.

The constitutional tangle

From the start, the Nagaland Petroleum and Natural Gas Rules have been entangled in questions of locus standi: who has the right to make laws on how the state’s natural resources should be used and how the benefits distributed?

The Nagaland government cites Article 371A of the Constitution, which grants special rights and protections to the state. Among other things, the provision says that no act of Parliament which deals with the transfer and ownership of land and its resources will apply to Nagaland unless ratified by the state assembly. In 2010, the state assembly passed a resolution giving itself rights to exploit natural resources.

But before Nagaland was formed in 1963, the Centre had already enacted laws which gave it these powers. In its 2015 order, the Gauhati High Court noted that the power to regulate and develop oil fields, mineral resources and petroleum fell under the Union list, which meant they were the “exclusive domain” of the Centre.

The Centre had already waded in. In 2013, then Union Petroleum Minister Veerappa Moily had shot off a letter to the state government. It cited the Minerals Regulation and Development Act, 1957, which put oil and gas excavation under the purview of the Centre, and called the 2010 assembly resolution “null and void”.

“Parliament does not have jurisdiction, it is a total betrayal of Article 371A,” fumed Imkong L Imchen, a minister in the Naga People’s Front government.

Bone of the land

With tribal groups in Nagaland, the state government clashed on a fundamental question: who owns the land and its resources? Wokha district is Lotha country. According to customary laws, land here is owned collectively by the tribe as well as the respective villages and clans, not just by the individual landowner. “What lies underneath also belong to us,” said Ngullie. He remembered an old Naga phrase: “the bone of the land”. It referred to natural resources that the land could yield, and which were factored into customary transactions.

But in the 2012 rules, the state government is also listed as an owner. Customary laws of ownership, Ngullie felt, were disrupted by the proposal to draw “revenue” from oil exploration. The hoho wanted “royalty” be given directly by the company to landowners.

Royalties, he explained, would be a more secure model for the community. “People feel that once government takes it as revenue and shares it, they have to run from pillar to post [to get the money]. The government can stop giving revenue; people can hold on to royalty.”

Under the 2012 rules, the oil company would pay not less than 16% of the proceeds to the government, which would then parcel it out. For every Rs 100 of crude oil produced, the government would keep Rs 8, while Rs 2 went to the individual landowner, Rs 4 to the village and Rs 2 to the district planning board. “What we are saying is the money shouldn’t be given to the district administration but to the apex tribal body,” said Yanthan.

The Lotha Hoho deserved a share, according to Ngullie, because the oil would be drawn from Lotha tribal land. But other anxieties are also in play. “There is an apprehension that we will become victims of exploitation, that one day, all the oil will be extracted and people will become day labourers,” Ngullie said.

Waiting for oil

But in Changpang, there are fewer qualms about exploration. When protests drove Metropolitan away in 2014, they took no part in them, says Jerry Odyou, chairman of the Changpang Landowners’ Union.

“We were ok with it,” Odyou said of the Metropolitan contract. “With that agreement, we would receive all the benefits. It’s up to the government and the Lotha Hoho whether they will allow it to be implemented.”

Like the tribal bodies, landowners also feel the contract should respect customary law. But interpretations vary. “Under customary law, everything belongs to the landowner,” Kinghen said.

But determining individual ownership is not easy in Changpang ONGC either. “In the beginning, this was no-man’s land,” said Kinghen. When people started settling in the area, it seems to have been a free for all. “How much land you can cultivate, that is yours,” Kinghen said. Later, fences were put up to section off one plot from the other. But in these areas ruled by customary law, there are no land deeds, Odyou said.

Still, if the modalities were ironed out and exploration began, landowners hope, other benefits and services would follow oil. The company might provide drinking water or build roads, for instance.

Entering politics

Landowners seem to pin their hopes on companies because government has not been responsive to local concerns. Certainly, Imchen dismisses the Lotha Hoho’s legal battle as “small-time litigation”. He also denies allegations that the government had not taken suggestions from the the community. “We have consulted so many [stakeholders] and done comparative studies. Only after that we have legislated the oil and gas rules,” he claimed.

He then dismissed Lotha demands for royalties, not revenue, calling it a mere quibble over terms. “Royalty is revenue,” he declared.

The local legislator, Mmhonlumo Kikon, had won the 2013 elections as part of the Nationalist Congress Party but joined the Bharatiya Janata Party the next year. Before he joined politics, he headed Dice Foundation, a Kohima-based non-governmental organisation which had taken up the fight for Changpang landowners.

In 2009, he had filed a petition in the Gauhati High Court against the Oil and Natural Gas Corporation as well as government officials. It demanded that Rs 1,000 crore be paid as compensation to the landowners and that the oil spill be cleared up.

“The court gave a judgment saying ONGC should clear up the mess and directed the state government to work with ONGC to fence oil field areas. ONGC gave Rs 75 lakh to the government,” the legislator said.

The upshot was the oil wells were girded by cement walls, a project carried out by the local landowners’ union.

But the leaks continued. The case languishes in court. Mmhonlumo Kikon, now co-convenor of the BJP in Nagaland, has turned his attention to other matters. There are four other parties in the fray for the Bhandari assembly seat, where Changpang is located: the Naga People’s Front, the Congress, the Janata Dal (United) and the National People’s Party. According to Kinghen, only the Naga People’s Front candidate has gone to campaign in Changpang ONGC so far.

Oil is such a sensitive issue that most parties would rather stay away from it, said John Kikon of the landowners’ union.