Urhobo Historical Society

Supreme Court's Verdict On Resource Control:
The Political Imperatives


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Sunday, May 5, 2002.


The Supreme Court, as its name suggests, is a court of last resort. Its judgment is supreme as it carries the weight of finality. This fact was instructively underscored by Justice Hugo Black of the United States Supreme Court, when he declared that, "We are not final because we are infallible. We are infallible because we are final." Accordingly, it is difficult, if not impossible, to accept its recent verdict on Resource Control as final, because the Justices have proved once again that they are, indeed, not infallible as, their pronouncements are replete with contradictions. 

It is now common knowledge that the issue brought before the Supreme Court by the Federal Attorney General was simply the "determination of the seaward boundary of a littoral state within the Federal Republic of Nigeria...." This discourse intends to examine this issue in six steps, beginning with some contradictory pronouncements, an historical view, boundary determination, revenue allocation, the United States experience and then, the way forward.

Contradictory Pronouncements

Justice Ogundare in his lead judgment opined that:

"In my humble view and as I shall presently show, the seaward boundary of a littoral state as we are called upon to determine in this case is a matter of law. What becomes factual and on which evidence will be required to prove, is the actual location of that boundary. The latter situation is not the issue before us."

At another instance, the same Justice went further to state as follows:

"What then is the position in law, as Chief Williams relies on law? As I have found earlier in this judgment, the southern boundaries of the littoral states of Nigeria are the sea. This makes them riparian owners. And as riparian owners, the seaward extent of their land territory, at common law, is the low-water mark or the seaward limit of their internal waters. This is so, because at common law, the sea shore or foreshore (both mean the same thing) belongs to the Crown. See: Hales, De Jure Maris (Hargrave's Tracts, pp 12, 25 & 26) where it is written." 

It is necessary to place on record at this juncture that the Communal lands in Delta State and in particular Sapele and Warri Local Government Areas are vested in Trustees under the Communal Lands (Vesting in Trustees) Law 1958 of the Western Region. Arising from the aforesaid enactment, these lands remain vested in the Community as owners because they are entitled to a statutory right of occupancy under the Land Use Act of 1978.

The rights of the indigenous local community to the communal lands was further confirmed by the Supreme Court judgment in the case of Ojeme vs. Momodu in which the rights of the various communities to the use of their communal lands as owners under common law was upheld.

Neither the States nor the Federal Government are owners of freehold interests in land in southern Nigeria except in the former colony of Lagos. 

From Justice I. L. Kutigi are the following pronouncements which are contradictory to the arguments of Justice Ogundare: 

"In further support of its case, the plaintiff has also called in aid some foreign decisions of the Supreme Court of the USA, the Supreme Court of Canada and the High Court of Australia. I will say in short that reliance on these decisions is misplaced. The cases addressed their own peculiar positions, which in no way resembles the position in Nigeria. The Constitutions are different. 

"I have read through the three enactments (that is, the Territorial Waters Act, the Sea Fisheries Act and the Exclusive Economic Zone Act) referred to above, and I am unable to find anything expressly in any of them which shows that the seaward boundary of Nigeria or indeed the littoral component states therein, is the low water mark, or the seaward limit of inland waters." 

However, the contradictions do not end with the above pronouncements. In its ruling on the 11 July 2001, the Supreme Court had said that: 

"There cannot be a boundary dispute between the Federation and individual states, whether littoral or otherwise, since the boundaries are the same."

It may be interesting to remind their lordships of the case of Orku Sowa and Senabor of Opu Degema v. Chief Jim George Amachree of New Calabar decided in 1933, where J. Berkeley, C.J. Kingdom and J. Webber noted that, "It is impossible to make a declaration of title without a plan to which such declaration can be tied". One must ask if the Supreme Court is sufficiently equipped to engage in this self-inflicted assignment.

It is now necessary to piece through the aforesaid judgment to establish the fundamentals upon which the Court grounded its verdict on 5 April 2002. An Historical View

Ogundare J.S.C., no time in the legal and constitutional history of Nigeria at which Nigeria acquired an existence, or right which was not contingent on a previously existing entity. The transfer of power from the British Crown to the Government of the Federation of Nigeria in 1960 was only "political" as the various treaties between the component sovereign states and Kingdoms which made up Nigeria commencing from the Berlin Conference in 1884-85 through the Royal Niger Company, the Oil Rivers Protectorates, the Protectorate of Southern Nigeria, and the subsequent amalgamation of the Southern and Northern Nigeria (1914) did not confer any freehold interest in land in Southern Nigeria except in the Colony of Lagos which was ceded to the British Crown in 1861 by King Dosunmu of Lagos.

Boundary Determination

The case before the Supreme Court was the determination of the seaward boundary of the littoral or coastal states vis-à-vis the federation. The Justices had earlier on 11 July 2001 decided categorically that this issue could not be inquired into because, "there cannot be a boundary dispute between the Federation and individual states, whether littoral or otherwise, since the boundaries are the same". This position was forgotten when the Justices decided this time around that the determination of the seaward boundary of the littoral or coastal States was the subject of proper inquiry by the Plaintiff and, of which they could pronounce upon without an enabling law, constitutional provision, survey maps, etc. 

Interestingly, Kutigi J.S.C., having examined the Plaintiff's case, its arguments and reliance on some foreign decisions of the Supreme Court of the United States of America, the Supreme Court of Canada and the High Court of Australia, came to the conclusion that "reliance on those decisions is misplaced". He went further to state that; 

"The cases addressed their own peculiar positions, which in no way resemble the position in Nigeria. The Constitutions are different. There is no dispute here in Nigeria with regard to the right of the Federal Government to the entire property in, and control over all minerals, mineral oils and natural gas in, under or upon any land in Nigeria or in, under or over the territorial waters and the Exclusive Economic Zone of Nigeria (see Section 44(3) of the Constitution). The only dispute here is whether or not the natural resources are derived from littoral States for the purpose of enjoying the benefits of Section 162(2) of the Constitution. The foreign decisions are clearly in my view not of any assistance here. The historical factors and or colonial circumstances of these countries are quite different from ours."

In considering the Territorial Waters Act 1971, the Sea Fisheries Act 1971, the Exclusive Economic Zones Act 1978 the learned Justice had this to say: 

"I have read through the three enactment referred to above and I am unable to find anything expressly in any of them which show that the seaward boundary of the Nigerian State or indeed the component States therein, is the low water mark or the seaward limits of inland waters." 

It is indeed very curious that Justice Kutigi had said that the Plaintiff was calling upon the Supreme Court to make:

"...an inference that the seaward boundary of a littoral State is the low water mark or seaward limits of inland waters, simply because the three enactments referred to above all have their boundaries starting from the same low water mark or seaward limits of inland waters and that it is only the Federal Government that is vested exclusively with powers over the areas or zones under these enactments."

He now concluded and quite rightly in my humble view, that: 

"Speaking for myself, I think in the absence of any express enactment, it will be unsafe and indeed dangerous to make the inference urged on the Court by the Plaintiff. I believe "boundaries" must be expressly provided for or defined and must not be left to inferences. In other words, what is required is an express authority." 

How then did our learned Justice come to the same conclusion he was avoiding in the first place, especially considering the fact that he had admitted that, 

"The Plaintiff has undoubtedly failed to show us any provision of the 1999 Constitution or any law or enactment for that matter which expressly provides for the seaward boundary of a littoral State which this Court is required to interpret. In other words the Plaintiff has not identified any law which the Court is to interpret."

Justice Kutigi had to undertake a voyage of discovery to exhume dead statutes in the annals of the nations legal history. He dug up and dusted THE NORTHERN REGION, WESTERN REGION AND EASTERN REGION (DEFINITION OF BOUNDARIES) PROCLAMATION, 1954, Laws of the Federation of Nigeria and Lagos, 1958, Volume XI and, found that in the Second and Third Schedules to that proclamation, the southern boundaries of the Western and Eastern Regions were respectively defined as "South. The sea." Similarly, the southern boundary of Lagos was defined in the Lagos Local Government (Delimitation of Town) Order in Council, 1953, Laws of the Federation of Nigeria and Lagos 1958 Volume VIII was defined in the schedule to the Order-in-Council, as "On the South - The Sea." Upon these dead authorities, Kutigi J.S.C. found the southern boundary of the littoral Nigerian States to be simply The Sea, or the Atlantic Ocean.

Justice Kutigi explains further:

"What I am saying in short is that the seaward boundary of a littoral State is co-extensive with the seaward boundary of the Nigerian State itself." 

Now since these Proclamations did not state expressly at which point of "the Sea" or "Atlantic Ocean" is the exact boundary of the littoral state, there was need to be innovative. Otherwise, the littoral states can argue that the entire Atlantic Ocean south of Nigeria forms part of their territory. He found no difficulty in holding that, 

"Nigeria exercises sovereign power over its territorial waters as well as the Exclusive Economic Zone only as a result of treaties and conventions it had entered into and not because the area or areas form part of Nigeria in the first place." 

Admittedly, this is very ingenious. Perhaps, he was simply stating the dry bones of the law. Upon a critical examination, it would be realised that this law is bloodless, lacking the merit of equity and justice, especially to the littoral states of the Federation of Nigeria. True, the rights to the territorial waters and the Exclusive Economic Zone are conferred by international law on the Federal Republic of Nigeria. The Federal Republic of Nigeria includes the littoral States as a subject of international law. The rights and powers so vested in Nigeria (including the littoral states) are further predicated on the fact of the littoral States being contiguous to these maritime zones. In any event, there cannot be Nigeria with maritime boundaries without the littoral States, whose land territories are contiguous to the maritime zones. In the Grisbadarna case (See Hudson, Cases and Other Materials on International Law (1929), 407, 408, the Permanent Court of Arbitration stated that, it was "in accordance with the fundamental principles of the law of nations, both old and new," that "the maritime territory is a necessary dependence of the land territory." This fact would still have to be emphasised. 

The imperial enactments that were exhumed by Kutigi J.S.C. were actually omitted from the Laws of the Federation of Nigeria, 1990. As he observed, this was:

"...because by the Revised Edition (Authorised Omissions) Order, 1990, the Law Revision Committee was empowered to omit all imperial enactments or statutes or subsidiary matters pertaining to them which are no longer relevant to Nigeria as contained in Parts I, II and III of schedule 1 to the Order." 

So what Justice Kutigi has done is to rely on irrelevant imperial Orders. This fact notwithstanding, he actually expresses a preference for their continued printing "until such a time that any of them is expressly or by necessary implication repealed by Nigerians themselves." If we can dig up dead and irrelevant imperial Orders on the ground that they had not been expressly or implicitly repealed, why should we not dig up Treaties entered into between the South-South Kingdoms and Great Britain of Old? After all, these treaties, unlike the imperial orders are still in force. Is what is good for the goose no longer good for the gander? 

On the vexed issue of Nigeria exercising sovereign power over its territorial waters as well as the Exclusive Economic Zone, the question to ask is: on what authority did Nigeria begin to exercise such power? It is on the authority of international law, which recognition is based on the fact that Nigeria's southern territory (more particularly the littoral states) is contiguous to these maritime zones. The implication of these is that without these littoral states being within the Federation of Nigeria, international law could not have recognised Nigeria's sovereignty over these maritime zones. At any rate is there anything that is necessarily contrary to Nigeria's sovereignty over the territorial waters and Exclusive Economic Zone if these areas were part of the littoral states, which are part of Nigeria? Is it impracticable especially when there is no express municipal law as in the United States that clearly delineates the boundaries of the littoral states from those of the Federal Government? Certainly not as, we shall see in the case of the United States of America. But before then, let us examine how the Supreme Court misdirected itself on the issue of revenue allocation.

Revenue Allocation

The issue before the Supreme Court was not revenue allocation per se, but territory (land and water). The Supreme Court was being called upon to determine the seaward boundary of the Littoral State within the Federal Republic of Nigeria. The reason for such determination was said to be "for the purpose of calculating the amount of revenue accruing to the Federation Account directly from any natural resources derived from that State pursuant to the proviso to section 162(2) of the Constitution of the Federal Republic of Nigeria 1999." This was the purpose of the claim as opposed to the claim. But, it was nevertheless important for the Supreme Court to bear this purpose in mind so much so that the ancillary purpose (revenue) became of equal relevance with the major issue (claim). This is revealed in the lead judgment of Justice Ogundare, who by his judgment gives preference to Decree No. 106 of 1992 over the provisions of the 1999 Constitution.

The 1999 Constitution clearly provides in Section 313 that:

"Pending any Act of the National Assembly for the provision of a system of revenue allocation between the Federation and the States, among the States, between the States and local government councils and among the local government councils in the States, the system of revenue allocation in existence for the financial year beginning from 1st January 1998 and ending on 31st December 1998 shall, subject to the provisions of this Constitution and as from the date when this section comes into force, continue to apply."

The proviso to this section which is itself significant is what Ogundare J.S.C dismissed in his lead judgment in the following words, "The proviso to this section is unnecessary for our purpose; it is, therefore, omitted here." However, Section 1(1) of the Constitution proclaims its supremacy. Section 1(3) now provides that any other provision in any law inconsistent with the provisions of the Constitution shall be null and void to the extent of its inconsistency. Accordingly, it would appear that the voyage of discovery into Decree No. 106 of 1992 becomes irrelevant. 

Nevertheless, after considering Decree No. 106 of 1992, the learned Justice Ogundare opined that:

"Given the zig-zag history of revenue allocation vis-à-vis the derivation principle since, at least, 1960 to date, it cannot be said that the Plaintiff at any time admitted that the area of the sea beyond the low-water mark belonged to the coastal Regions or States contiguous to it." (Emphasis supplied).

What of the area of land beyond the low-water mark? Could not the Plaintiff be taken to have admitted at some point in the constitutional historical development of the Nigerian federation that this area, referred to as "continental shelf" belonged to the Coastal Regions or States contiguous to it? It would be recalled that both the 1960 and 1963 Constitutions actually recognised that the continental shelf was part of the Regions. The 1963 Constitution states that, for the purpose of revenue allocation the territory of a State or region shall include the continental shelf. 

It is necessary to recall that during the lifetime of this administration, various Finance Acts have been passed by the Plaintiff in which the abolition of the onshore/offshore dichotomy was maintained, notwithstanding the existence of Decree No. 106 of 1992 and the passing of the Niger Delta Development Commission Act 2001. Needless to stress that, it has been well established by law that the principle of estoppel by conduct is binding on the Plaintiff as enunciated by Lord Denning in the High Trees Case. Should not the Plaintiff have been estopped from denying that, the area of the sea beyond the low-water mark belonged to the coastal Regions or States contiguous to it?

Justice Ogundare would also seem to have eroded the powers of Local Government Councils in Nigeria. This is both undesirable and inexpedient as, the Local Governments are the third-tier of government within the Federation. We must enhance rather than diminish their powers so as not to concentrate too much powers in the States. M. E. Ogundare J.S.C. is concerned that:

"...a local government council only participates with the State Government in its provision and maintenance of primary education.

Nothing can be further from the truth. Meanwhile, Section 7(5) of the Constitution clearly provides that:

"The functions to be conferred by law upon local government councils shall include those set out in the fourth Schedule to this Constitution."

Paragraph 2 of the Fourth Schedule then reads in part:

"2. The functions of a local government council shall include participation of each council of the Government of a State as respects the following matters -

(a) the provision and maintenance of primary, adult and vocational education.

(b) The Constitution clearly grants concurrent powers to both State and Local Governments in respect of the provision of primary, adult and vocational education. Nowhere in the Constitution was it stated that the role of Local Governments in this regard is only secondary to that of the States, nor is there any provision requiring the payment of moneys representing the share of Local Governments in the Federation Account to be made to the States or into a joint account between Local Governments and States. Yet by maintaining that the "function obviously remains with the State Government", Justice Ogundare has circumscribed the powers of Local Governments.

At any rate, what was before the Supreme Court and, what we are talking about is the ownership of land as enshrined in Section 44(1) of the 1999 Constitution. The point has been made and will be made again that, without the southern States, Nigeria would have had no access to the Sea or Atlantic Ocean. There is no justice, if we say that the lands and people through whom Nigeria became an important oil producer are left stranded in the market place with nothing they could call their own.

The United States Experience

The first question would be "why the United States?" The United States of America is critical to our experience because like Nigeria, it is a federation of States, albeit an older federation. Nigeria has a lot to learn from the U.S., a fact that underscored our decision during the Constituent Assembly preceding the second republic to opt for the Presidential system of government, modelled after the U.S. system. 

In the United States, the Outer Continental Shelf (OCS) has been the source of an enormous oil and gas revenue. Consequently, it has continued to attract public and private interests, so much so that the 105th and 106th Congresses visited the OCS and introduced bills seeking funding for the coastal state impacts, land and water conservation fund (LWCF), and wild life programmes. Legislation introduced in the 106th Congress seeks to capture half of the oil and gas revenues from the OCS for coastal states.

The question might, perforce arise, "what is the Outer Continental Shelf?" The OCS is the federal portion of the continental shelf, extending outward from three nautical miles offshore to 200 miles territorial limit. Offshore lands within three nautical miles belong to the states, except for Western Florida and Texas, where state lands extend to the 9 nautical mile line. 

In the United States the Outer Continental Shelf Lands Act (OCSLA) was enacted in 1953 as a response to the increasing interests in developing OCS oil and gas resources. OCSLA as amended is intended to provide for orderly leasing of those mining rights, while affording protection for the environment and ensuring that the federal and state governments each receive a fair value from the resulting production. The OCS programme is carried out by the Minerals Management Services (MMS) of the Department of the Interior.

Determining an acceptable division of revenue from the OCS between adjacent coastal states and the federal government has proven to be a difficult problem. Although, the OCS is federal territory, coastal states argue that they bear the brunt of remediating environmental impact and infrastructural wear-and-tear accompanying OCS, oil and gas activity. These states also harbour concern about rapid development in shore side communities possibly needed to support offshore activity, concerns that are equally at the root cause of the current agitation by the South-South States of Nigeria to control their resources. It is hoped that since, they know exactly where and how it pinches, they would be better placed to address these problems. At any rate, they do not need to be reminded that the current situation in which the Federal Government is both a key player in oil and gas leasing/mining as well as a referee has never augured well for them in terms of the environmental and developmental concerns.

The history of disputes between the U.S Federal Government and States over the OCS revenues and the reluctance of Congress to appropriate authorised funds led to the introduction of legislation in the 105th Congress to allocate half of the OCS rents, royalties and bonuses to coastal states. This allocation has a parallel in the on-shore revenue programme for production from federal lands. Even with on-shore revenues, 50% is allocated to the state in which the lease is located, and 40% is earmarked for the Reclamation Fund. Only 10% goes to the Treasury. While it is not being suggested that only 10% of offshore revenues should actually go to the Federal Government of Nigeria, the U.S. situation must necessarily be contrasted with ours. The Federal Government collects ALL and disburses less than 13% to the states from which the resources are derived, or as it pleases. In the case of offshore lands, by the recent Supreme Court decision, the Federal Government now takes EVERYTHING and, the coastal states are entitled, to NOTHING, not even for ecological impact, or infrastructural wear-and-tear, or coastal communities' development. 

What lessons can we then draw from the U.S. experience? It is clear that, in the U.S., in order to enable the Federal Government have a fair share of leasing in offshore waters and territory, Congress had to specifically pass the Outer Continental Shelf Lands Act 1953 as amended. The essence of this enactment was to reserve some offshore territory exclusively to itself. This is understandable as the law protects vested interests and rights, which can only be extinguished by very clear and unambiguous statutes. In Nigeria, the reverse is the case despite the fact that both the U.S. and Nigeria are generally regarded as common law jurisdictions. Here, the Federal Government simply assumes it has exclusive proprietary right over offshore lands. This overly confident assumption and posturing without the due process, or necessary legal backing, has now been given uncritical recognition by the Supreme Court of Nigeria.

In the U.S., the OCSLA 1953 as amended delineates the seaward boundary of the coastal states, vis-à-vis that of the Federal Government. The coastal states have an exclusive territorial jurisdiction or competence within the 3 nautical miles offshore (as opposed to the low water mark in the case of Nigeria). In fact, in Texas and Western Florida, the limit is 9 nautical miles. There are, in fact, areas of overlapping jurisdiction between both coastal States and the Federal Government. These are between 9 to 12 nautical miles and 3 to 5 nautical miles depending on the category to which the State falls. On the contrary, there is no law in Nigeria that clearly delineates the offshore boundary between the coastal states and federal government. While Justice Ogundare of the Nigerian Supreme Court opines that the boundary of the littoral States of Nigerian federation ends at the "low-water mark", his colleague Justice says it ends at the Sea. Now, between the "low-water mark" and the "sea", where should we place the exact boundary as in the United States of America?

In the United States, even though the Outer Continental Shelf areas have been declared to be Federal Lands, by the 106th Congress, the coastal states receive 50% of all revenues from licenses, leases, royalties, etc. This is in recognition of their proximity to these fragile ecological zones and, the infrastructural implications of this, not least, the development of the coastal communities.

This sort of equitable sharing formula does not exist in Nigeria, nor can we deduce its possibility, however remote, from the recent Supreme Court judgment. Indeed, by its recent verdict, even the 13% derivation recognised under the constitution has been whittled down by the Supreme Court's introduction of the "offshore" and "onshore" dichotomy, which was abolished by Decree 106 of 1992 and, was never introduced by the 1979, 1985 and 1999 Constitutions. Now this is very strange, indeed. 

The Way Forward

This Supreme Court ruling on Resource Control is truly a watershed in our legal, economic and constitutional history. It should stimulate our resolve to establish a legal framework through a constitutional conference for the purpose of achieving sustainable economic and political development throughout the federation for the benefit of both present and future generations of Nigerians. The fact does not have to be overemphasised that this would be the basis of promoting peace, unity and progress in the area, so as to attract the much- desired foreign investments. 

All the parties to the suit did not abide by the principles of resource control, which are enunciated hereunder:

a) Resource control is a basic political theory grounded on the fact that land, labour, capital and entrepreneurship are factors of production owned by individuals, and should therefore be controlled by them. In so doing, the rewards derived from such factors of production should be passed to those who own them. Adam Smith, an early economist, analysed this in his ' Wealth of Nations, 1776".

b) Rent is a return for the use of the original and indestructible properties of the soil. Whoever owns land expects some form of compensation from those hiring this very important factor of production. The clamour for resource control is a clamour for adequate compensation, a cry for redistribution of the revenue allocation formula, and nothing more. The only thing a government should do is to impose tax to be used for the welfare of the community.

c) Resources of production are of two types:

i Renewable Resources; and

ii Non-Renewable Resources

The renewable resources consist of Groundnuts, Cocoa, Rubber, Palm Oil and Kernels and Timber. The non-renewable resources consist of Petroleum, Gas, Bitumen and solid minerals. The control of the non-renewable resources in Nigeria is in the hands of the Multi-national Oil Companies, who own the capital and the entrepreneurship while the Traditional Rulers and the local communities own the land on which the people live. 

There is need therefore to control the level of exploitation and exploration of the mineral resources of this country and employ the benefits derived therefrom in the rehabilitation and education of the human capital that inhabit the areas. This country must learn from the mistakes of the past, for the failure to do so has led to the devastating effect of the exploitation of tin and columbite in Plateau State. 

To conclude the way forward, we shall take some inspiration from the autobiography of Sir Ahmadu Bello, the late Sardauna of Sokoto, when he said:

"No nation should sacrifice its valuable resources for the sake of short-term monetary benefits. By extracting oil without regard to the side effects of the quality of citizens' health and longevity, the nation does not improve either its social or its economic sectors; instead, a declining trend will be onset. Those who may feel that the problems of oil producing areas are not in their backyard, and who may feel a safe distance from the oil communities, should be reminded that Nigeria is an entity within one environment; a decay in part will ultimately affect the rest of the nation. The fate of the mineral producing communities should be a concern for us all. When ordinary people and their environment become victims of disruptive economic expansion without adequate protection or provision of alternative means to improve their social and economic circumstances, they will remain vulnerable. Therefore, the need to broaden the social responsibility and performance of the oil industry in order to maintain economic progress with environmental balance should be a matter of compulsion."

In Nigeria, today, contrary to the wise counsel of late Sir Ahmadu Bello, those who are denied the benefits of oil and gas exploration and development are exclusively shouldered with the burden.


It is not in the national interest for the Supreme Court to be court of first instance. Admittedly, this has helped to shorten the length of time it takes to settle or resolve contentious constitutional disputes between the Federation and the States, or between States, or Local Governments. But, as a court of first instance, any mistake it makes would be inimical to the peace and security of the nation. This nation must learn from the United States of America, where each State has its own Supreme Court.

There is need as a matter of urgency to put in place the relevant statutes as the political and economic future of some of the States is now in jeopardy.

We as Nigerians must now all understand that we now have no alternative to a national conference since the judgment will necessarily involve an amendment to the Constitution.