a review of the existing legal regime on exploitation of oil and the protection of the environment...

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This article was downloaded by: [University of Delaware] On: 06 October 2014, At: 00:41 Publisher: Routledge Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK Commonwealth Law Bulletin Publication details, including instructions for authors and subscription information: http://www.tandfonline.com/loi/rclb20 A review of the existing legal regime on exploitation of oil and the protection of the environment in Nigeria Kingsley Edu Published online: 21 Sep 2011. To cite this article: Kingsley Edu (2011) A review of the existing legal regime on exploitation of oil and the protection of the environment in Nigeria, Commonwealth Law Bulletin, 37:2, 307-327, DOI: 10.1080/03050718.2011.572637 To link to this article: http://dx.doi.org/10.1080/03050718.2011.572637 PLEASE SCROLL DOWN FOR ARTICLE Taylor & Francis makes every effort to ensure the accuracy of all the information (the “Content”) contained in the publications on our platform. However, Taylor & Francis, our agents, and our licensors make no representations or warranties whatsoever as to the accuracy, completeness, or suitability for any purpose of the Content. Any opinions and views expressed in this publication are the opinions and views of the authors, and are not the views of or endorsed by Taylor & Francis. The accuracy of the Content should not be relied upon and should be independently verified with primary sources of information. Taylor and Francis shall not be liable for any losses, actions, claims, proceedings, demands, costs, expenses, damages, and other liabilities whatsoever or howsoever caused arising directly or indirectly in connection with, in relation to or arising out of the use of the Content. This article may be used for research, teaching, and private study purposes. Any substantial or systematic reproduction, redistribution, reselling, loan, sub- licensing, systematic supply, or distribution in any form to anyone is expressly

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Page 1: A review of the existing legal regime on exploitation of oil and the protection of the environment in Nigeria

This article was downloaded by: [University of Delaware]On: 06 October 2014, At: 00:41Publisher: RoutledgeInforma Ltd Registered in England and Wales Registered Number: 1072954Registered office: Mortimer House, 37-41 Mortimer Street, London W1T 3JH,UK

Commonwealth Law BulletinPublication details, including instructions for authorsand subscription information:http://www.tandfonline.com/loi/rclb20

A review of the existing legalregime on exploitation of oiland the protection of theenvironment in NigeriaKingsley EduPublished online: 21 Sep 2011.

To cite this article: Kingsley Edu (2011) A review of the existing legal regime onexploitation of oil and the protection of the environment in Nigeria, CommonwealthLaw Bulletin, 37:2, 307-327, DOI: 10.1080/03050718.2011.572637

To link to this article: http://dx.doi.org/10.1080/03050718.2011.572637

PLEASE SCROLL DOWN FOR ARTICLE

Taylor & Francis makes every effort to ensure the accuracy of all theinformation (the “Content”) contained in the publications on our platform.However, Taylor & Francis, our agents, and our licensors make norepresentations or warranties whatsoever as to the accuracy, completeness, orsuitability for any purpose of the Content. Any opinions and views expressedin this publication are the opinions and views of the authors, and are not theviews of or endorsed by Taylor & Francis. The accuracy of the Content shouldnot be relied upon and should be independently verified with primary sourcesof information. Taylor and Francis shall not be liable for any losses, actions,claims, proceedings, demands, costs, expenses, damages, and other liabilitieswhatsoever or howsoever caused arising directly or indirectly in connectionwith, in relation to or arising out of the use of the Content.

This article may be used for research, teaching, and private study purposes.Any substantial or systematic reproduction, redistribution, reselling, loan, sub-licensing, systematic supply, or distribution in any form to anyone is expressly

Page 2: A review of the existing legal regime on exploitation of oil and the protection of the environment in Nigeria

forbidden. Terms & Conditions of access and use can be found at http://www.tandfonline.com/page/terms-and-conditions

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Page 3: A review of the existing legal regime on exploitation of oil and the protection of the environment in Nigeria

A review of the existing legal regime on exploitation of oil andthe protection of the environment in Nigeria

Kingsley Edu*

Since the discovery of oil in commercial quantities in Oloibiri town in the presentday Bayelsa State of Nigeria in 1956, the Nigerian government has encouragedthe development and growth of the oil industry. The government, being consciousof the concomitant effects of the exploration and production of oil on the envi-ronment, enacted laws to regulate the exploitation of the oil and the protection ofthe Nigerian environment. This article examines the legal regime in this respect.It is the view of the writer that some of the laws regulating the protection of theenvironment are archaic, especially the penalty sections with small fines whichdo not serve as a deterrent to the oil companies or encourage them to adopt highstandards. It is also the view of the writer that the laws regulating the oil industryshould be amended to confer standing on citizens groups. The writer suggeststhat a strict liability regime should be made to apply to the oil industry, and thatrelated laws should be duly enforced by the government agencies charged withresponsibility of overseeing the oil industry. Finally, it is the view of the writerthat the oil-bearing communities of the Niger Delta should be systematicallydeveloped by the Nigeria government so that there can be peace in the region.

Introduction

Since the discovery of oil in commercial quantities in Oloibiri town in thepresent day Bayelsa State of Nigeria in 1956 by Shell BP, the Nigerian govern-ment has encouraged the development and growth of the oil industry. However,oil exploration and production has had devastating effects on the environment ofthe oil producing communities, as well as on the livelihoods and health of thepeople.

The Niger Delta (where most of the oil-bearing communities are located) isthe most environmentally stressed region in Nigeria today. This is because of thegreat vigour and pace at which exploration and exploitation of oil has beenundertaken by the Nigerian government. Intensive and extensive exploration andexploitation of oil in the Niger Delta has left in its wake monumental environ-mental degradation and damage to the livelihoods and health of the people. Thisis in spite of laws put in place to regulate the exploitation of oil and to protect

*Email: [email protected] (EDSU) BL. Notary Public For Nigeria and Senior Lecturer in Law Delta StateUniversity Abraka (Oleh Campus), Delta State

Commonwealth Law BulletinAquatic InsectsVol. 37, No. 2, June 2011, 307–327

ISSN 0305-0718 print/ISSN 1750-5976 online� 2011 Commonwealth SecretariatDOI: 10.1080/03050718.2011.572637http://www.informaworld.com

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the environment. The Niger Delta is currently in crisis; it has little or nothing toshow for the stupendous oil proceeds that the Nigerian government has realisedover the years. The region is undeveloped, backward and poverty-ridden. Thisstate of affairs has led to the emergence of militant groups who have resorted tothe kidnapping of oil workers, vandalising oil installations and other unlawfulactivities.

This paper analyses the legal regime for the exploitation of oil and protectionof the environment, identifies the shortcomings in the laws, and offers sugges-tions and recommendations which if implemented will make the oil companiesadopt high environmental standards, as well as ameliorate the plight of the inhab-itants of the oil-bearing states.

Existing legal regime

A regime is a system of rules, regulations or government.1 A legal regime is aset of rules, policies and norms of behaviour that cover any legal issue and thatfacilitate substantive or procedural arrangements for deciding that issue.2 Theexisting legal regime on the exploitation of oil and the protection of the environ-ment in Nigeria relates to those extant laws, rules, regulations and policies whichregulate the oil industry and protect the environment. These laws are discussedbelow.

The Petroleum Act

The Petroleum Act3 is the major law that regulates the exploration, exploitationof oil in Nigeria. Under section 2 (1) of the Act, the Minister of PetroleumResources is empowered to grant licences for the exploration and prospecting forpetroleum, as well as the issuing of leases for the mining of petroleum.4 Section 9of the Act empowers the Minister of Petroleum Resources to make regulationson a wide range of issues including ‘the prevention of pollution of water coursesand the atmosphere’. The Act also empowers the minister to revoke an oil min-ing lease if, in his opinion, the lessee ‘is not conducting operations continuouslyand in a vigorous and businesslike manner and in accordance with the basicwork programme approved for the licensee or lessee in accordance with good oilfield practice.5 The Act does not provide a definition of the term ‘good oil fieldpractice’, which has been interpreted in various ways depending on the stand-point of the interpreter. For instance, to oil producing companies ‘good oil fieldpractice’ might mean minimising economic cost of production without regard to

1AG Garner, (ed.) Black’s Law Dictionary (7th edition) (St Paul, Minn: West Group,1999) p. 1286.2Ibid.3Cap. p10 Laws of the Federation of Nigeria (LFN) 2004.4Petroleum under the Act means ‘mineral oil (or any related hydrocarbon) or natural gasas it exists in its natural state in strata, and does not include coal or bituminous shales orother stratified deposits from which oil can be extracted by destructive distillation’. Thusunder Nigerian law petroleum includes crude oil and natural gas.5Schedule 1, paragraph 25 (1).

308 K. Edu

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safety or environmental care. There is, however, a comparable concept under sec-tion 7 of the Mineral Oils (Safety) Regulations.6 The section provides that:

Where no specific provision is made by these Regulations in respect thereof, alldrilling, production, and other operations necessary for the production and subse-quent handling of crude oil and natural gas shall conform with good oilfield prac-tice which for the purpose of this Regulations shall be considered to be adequatelycovered by the appropriate current Institute of Petroleum Safely Codes the AmericaPetroleum Institute Code or the American Society of Mechanical Engineers Code.

It is suggested that the term should incorporate an obligation to ensure minimalenvironmental harm.7 It should be noted that breach of good oil field practicealone may not warrant a revocation of a licence or lease under the PetroleumAct. Other requirements for continuous operations conducted in a vigorous andbusinesslike manner must also be satisfied. Several regulations have been enactedpursuant to the Petroleum Act. Some of these may now be considered.

The Petroleum (Drilling and Production) Regulations

Regulation 25 of the Petroleum (Drilling and Production) Regulations8 providesthus:

The licensee or lessee shall adopt all practicable precautions including the provisionof up to date equipment approved by the Director of Petroleum Resources to pre-vent the pollution of inland waters, rivers, water courses, the territorial water ofNigeria or the high seas by oil, mud or other fluids or substances which might con-taminate the water banks, or shore line or which might cause harm or destructionto fresh water or marine life and where any such pollution occurs or has occurredshall take prompt steps to control and if possible end it.

Furthermore Regulation 37 provides that:

The licensee or lessee shall maintain all apparatus and appliances in use in hisoperations, and all boreholes and wells capable of producing petroleum, in goodrepair and condition, and shall carry out all his operations in a proper and work-man-like manner in accordance with these and other relevant regulations and meth-ods and practices accepted by the Director of Petroleum Resources as good oilfield practice, and take all steps practicable:

(d) to prevent the escape of petroleum into any water, well, spring, stream, river,lakes, reservoir, estuary or harbour;

(e) to cause as little damage as possible to the surface of the relevant area and tothe trees, crops, building, structures and other property thereon.

Commonwealth Law Bulletin 309

6Cap. p10 LFN 2004 schedule 4, paragraph 4.7AOO Ekpu ‘Environmental Impact of Oil on Water: A Comparative Overview of theLaw and Policy in the United States and Nigeria (1995) in Denver Journal of Interna-tional Law and Policy at 78.8Published as Legal Notice 69 of 1969.

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The regulations also require the operator to pay adequate compensation to anyperson whose fishing rights are interfered with by the unreasonable exercise ofthe operator’s rights.9

It is submitted with respect that the requirement that a victim would not beentitled to compensation unless it is established that the operator exercised itsrights unreasonably is unsatisfactory. This would be placing too much burden onthe fishermen in the riparian communities of Nigeria, who are mostly poor andilliterate. It is suggested that a regime of strict liability should be put in place inorder to make a claimant’s burden of proof lighter. The operator should be com-pelled to pay compensation once it is established that there is an interferencewith fishing rights and such interference caused damage or loss to the victim.

Under paragraph 37 of the First Schedule to the Petroleum Act, it is providedthat:

The holder of an oil exploration licence or oil mining lease shall, or in addition toany liability for compensation to which he may be subject under any other provi-sion of this Act, be liable to pay fair and adequate compensation for the distur-bance of surface or other rights to any person who owns or is in lawful occupationof the licensed or leased land.

Despite this provision, the oil companies make unfulfilled promises concerningpayment of compensation to the indigenes of the oil producing communitieswhose ancestral lands have been allocated to the oil companies by the FederalGovernment of Nigeria without consultation with the communities. The localpeople, realising that they have been cheated and deceived by the oil companies,resort to unlawful acts like occupying company sites, preventing staff from work-ing or even kidnapping oil workers. The oil companies in turn hire thugs or callin the government, who sends in troops to chase away the protesters. In the pro-cess violence ensues and this develops into a crisis.10

Fekumo11 believes that paragraph 37 of the First Schedule to the PetroleumAct imposes a strict liability for any damage caused entitling the victim to com-pensation apart from the general power vested in the Minister of PetroleumResources to revoke a licence for non-compliance with or for breach of thePetroleum Act or any regulations made thereunder.12 The directory and generalnature of the provisions make compliance difficult and in turn make the imposi-tion of the sanction of revocation of licence not feasible.13

310 K. Edu

9Ibid. Regulation 23.10L Mitee, ‘Natural Resources, National Unity: The linkage and the Divide’ being a paperpresented at the Annual Conference of the Nigerian Bar Association, Jos, August 2005:Manby B., ‘The Price of Oil: Corporate Responsibility and Human Rights Violations inNigeria’s Oil Producing Communities (2005) 1 Environmental and Planning Law Review(EPLR (2) p. 14.11JF Fekumo, ‘Civil Liability for Discharge caused by Oil Pollution’ in EnvironmentalLaws in Nigeria Omotola, J.A., (ed.) 1990 p45.12Paragraph 24 Schedule 1 to the Petroleum Act.13O Akanle, ‘Pollution Control Regulation in the Nigerian Oil Industry’ Nigerian Instituteof Advanced Legal Studies Occasional Paper 16 (1991).

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The Petroleum Refining Regulations

Regulation 43(3) of the Petroleum Refining Regulations14 stipulates that the man-ager of a refinery shall adopt all practicable precautions including the provision ofup-to-date equipment, as may be specified from time to time by the Director ofPetroleum Resources to prevent the pollution of the environment by petroleum orpetroleum products. If actual pollution occurs, it is provided that the managershall take steps to control it and if possible end it. Furthermore, Regulation 43(1)provides that in the drainage and disposal of refinery effluent the manager shallconform ‘to good refining practice’. Failure to conform to approved effluent speci-fication is an offence punishable by a fine of 100.00 naira (₦) or six monthsimprisonment.15 Regulation 27 provides for the disposal of residues, sludge, rustsand other similar matters from tanks which may have contained leaded petroleumproducts to ‘good refining practices and only to such places as have beenapproved by the Director’. It is also provided in the Regulations16 that any unpro-grammed spillage of crude, products or chemicals inside a refinery shall immedi-ately be notified to an inspector and within seven days of the spillage, a fullwritten report shall be forwarded. This report shall, among other things, contain adescription of the cause and nature of the spillage, the quantity spilled, the quan-tity recovered, hazard prevention taken and measures adopted or to be adopted toprevent such spillage in future.

Multinational oil companies operating in Nigeria hardly comply with theseprovisions and often the regulations are flouted with impunity. Instead of the ratespillage reducing, it is increasing. Similarly, the oil companies operating in Nige-ria hardly observe international standards in their operations. Their main focus isto maximise profit and the Nigerian government seems to be playing along withthe multinational oil companies in this regard. Regulation 7 provides that whereno specific provision is made by the Regulations for any aspect of the construc-tion, operation and maintenance of a refinery, practices conforming with interna-tional standards shall be observed subject to the approval of the director.

Unfortunately, the punishment for the breach of the Regulations is the impo-sition of ₦100.00 fine or six months imprisonment.17 This ridiculously inade-quate sanction is more likely to encourage the observance of the statute in thebreach. A paltry sum of ₦100.00 fine or six months imprisonment cannot serveas a deterrent to oil companies in Nigeria. The Regulations therefore offer littleprotection to the environment.

Mineral Oils (Safety) Regulations

The Mineral Oils (Safety) Regulations18 were made pursuant to the Mineral OilsAct, which was repealed by the Petroleum Act. Even though the Act has beenrepealed, its Regulations were saved by and deemed reconfirmed under section 9of the Petroleum Act. The Regulations in general deal with safety concerns in the

Commonwealth Law Bulletin 311

14Legal Notice 45, 1974.15Ibid. Regulation 43 (4).16Ibid. Regulation 38.17Ibid. Regulation 45.18Cap. P10 Schedule 4, Legal Notice 45, 1963.

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oil field. For instance, Regulation 7 stipulates that in all facets of oil productionand subsequent handling of crude oil, the operator must conform with ‘good oilfield practice’ and in a marked departure from the Petroleum Act, the Regulationsdefine good oil field practice to mean ‘Current Institute of Petroleum SafetyCodes, the American Petroleum Institute Codes or the American Society ofMechanical Engineers Codes’. In addition, the Regulations require bulk storagetanks to have provisions made concerning any leakage to prevent oil contaminat-ing the water where located above water.19

These provisions are hardly enforced by the Department of PetroleumResources (DPR). The DPR is the body that is charged with the enforcement ofthe laws regulating the petroleum industry in Nigeria. The DPR is not adequatelystaffed and is poorly funded. It also lacks the logistics of enforcing the rules.The sanction for the violations of these provisions is a ₦100.00 fine or sixmonths imprisonment or both.20 Again, the punishment provision makes mock-ery of the Regulations.

Salu21 captured the state of Nigerian law in this regard when she wrote:

. . .even though most of these laws exist in our statute books; they do not ade-quately protect the environment. Some of these laws are archaic, especially thepenalty sections which makes a mockery of the law itself. It therefore offers verylittle protection to the environment.

The Oil in Navigable Waters Act

The Oil in Navigable Waters Act22 provides in general for prevention of pollu-tion of water by marine vessels. It is an offence under the Act for a Nigerianship to discharge oil into part of the sea designated as ‘prohibited sea area’.23

An infraction of this provision attracts a fine for the owner or master of the shipnot exceeding ₦2,000 on summary trial.24 Prohibited sea areas are listed in aschedule contained in the Act and essentially cover all sea areas within 50 milesfrom land and outside the territorial waters of Nigeria. It is an offence under sec-tion 3 of the Act to discharge oil from any vessel from any place on land, orfrom any apparatus used for transferring oil from or to a vessel into the ‘wholeof the sea within the seaward limits of the territorial waters of Nigeria’ and otherwaters within close limits including inland waters which are ‘navigable by sea-going ships’.25 The Act contains so many defences that it may be difficult tosecure a conviction under it. For example, it is a complete defence to establishthat the discharge from vessel occurred for the purpose of securing the safety ofany vessel; for the purpose of preventing damage to any vessel or cargo; for thepurpose of saving life; as a consequence of damage to the vessel or by reason of

312 K. Edu

19Regulation 16 (2) (c).20Ibid. Regulation 27.21AO Salu, ‘Can Laws Protect the Environmental in Nigeria’ Modern Practice Journal ofFinance and Investment Law (MPJFIL), Vol. 2 No. 2 (1998) p. 140.22Cap. 06 L.F.N. 2004.23Ibid. section 1.24Ibid. section 6.25Ibid. section 3 (1) and (2).

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leakage if the leakage was not due to any want of reasonable care.26 Otherdefences include sabotage,27 absence of negligence28 and showing that oil wascontained in an effluent product from a refinery.29

Another severe limitation to the effectiveness of the Act is the stipulationcontained in section 12 that no action can be brought under the Act except withthe consent of the Attorney-General of the Federation. The Attorney-General inNigeria is not enthusiastic about the prosecution of oil operators who fall foul ofthe law in Nigeria. There has not been a single case in Nigeria where the Attor-ney-General has sued any multinational oil company for violation of the law.Nor has the Attorney-General given any person consent for the prosecution ofany violator of the regulatory regimes as far as the petroleum industry is con-cerned.

The scope of the Act is highly restricted. The Act seems to have been delib-erately drafted in such a way as to provide a way for the refineries in Nigeria toescape the liability they ordinarily ought to bear.30 At the same time, the Actseems not to have provided a remedy for the victims of the adverse effects of oilexploitation. The various escape provisions are such that they render the provi-sions of the Act meaningless.31 The Act, which was enacted in order to giveeffect to the International Convention for the Prevention of Pollution of thesea,32 also has a major lacuna; its provisions apply only to Nigerian ships andexcludes foreign ships. This is a major loophole, as foreign-owned ships mayalso be responsible for oil spillage in the country’s territorial waters. The AmocoCadiz ship, which spilled oil along the French coast of Ushant on 16 March1978 was technically owned by a Liberian company, but was in practice ownedby Amoco International Oil Company in Chicago, USA.33

The Oil Pipelines Act

Pipelines are the cheapest means of transporting crude oil through long distancesbetween the wellhead and the point of exportation or refining. The Oil PipelinesAct34 makes provision for licences to be granted for the establishment and mainte-nance of pipeline incidental and supplementary to oilfields and oil mining, and for

Commonwealth Law Bulletin 313

26Ibid. section 5 (1) and (2).27Ibid. section 4 (4).28Ibid section 4 (3).29Ibid. section 4 (5). This provision provides a protection for the discharge of oil and oil-bearing effluent from the refining of oil.30ME Ojukwu-Ogba, ‘Economic Development Versus Environmental Regulation: TheNiger Delta ‘(2005) 8(2) University of Benin law Journal (UBLJ) p. 57.31O Akanle, ‘Pollution Control Regulation in the Nigerian Oil Industry’ Nigerian Instituteof Advanced Legal Studies Occasional Paper 16 (1991).32The Convention was adopted on 12th May 1954 in London and entered into force on20th July 1958. Nigeria accepted the Convention on 22nd April 1968.33O Olopade, ‘Reflections or some International Treaties on Oil Pollution’ MPJFIL Vol. 5No.1 (2001) p. 59.34Cap. 07 LFN 2004.

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purposes ancillary to such pipelines.35 The Oil Pipelines Act is the most detailedlegislation dealing with compensation for oil spillage. It provides in section 11:

1.(5) The holder of a licence shall pay compensation:

(b) (a) to any person whose land or interest in land(whether or not it is land in respect of which licence is granted) isinjuriously affected by the exercise of the rights conferred by thelicence, for any such injurious affection not otherwise made good.

(b) to any person suffering damage (other than account of his owndefault or an account of the malicious act of a third person) as aconsequence of any breakage from the pipeline or an ancillaryinstallation for any such damage not otherwise made good.

The section further provides that if the amount of compensation is not agreedbetween any such person and the holder, it shall be fixed in accordance with PartIV of the Act. Claimants have a fairly good chance of success under this provi-sion, for it does not require them to establish negligence on the part of the pipe-line licence holder. Indeed, the provision creates a strict liability offence.36 InIkpede v Shell BP Petroleum Development Company of Nigeria it was the judgewho suo motu resorted to it after determining that the tort of negligence and therule in Rylands v Fletcher relied upon by the plaintiff were inapplicable.

However, the Act contains some provisions which are very unfavourable tovictims of oil exploration and exploitation. Section 20(4) of the Act provides that‘no compensation shall be awarded in respect of unoccupied land as defined inthe Land Use Act except to the extent and in the circumstances specified in thatAct’. Section 20 (5) of the Act provides that:

In determining compensation in accordance with the provisions of this section, thecourt shall apply the provisions of the Land Use Act so far as they are applicableand not in conflict with anything in this Act as if the land or interest concernedwhere land or interest acquired by the President for a public purpose.37

Compulsory acquisition of property for the public interest may not be wrongsince the interest of the state is always paramount. Even though the Nigeriangovernment controls a substantial part of the joint venture through the NigeriaNational Petroleum Corporation (NNPC), the fact remains the Nigerian govern-ment operates joint ventures with the oil companies and the joint ventures arecompletely profit motivated, with dividends accruing in favour of the investingshareholders and their joint venture partners. The Nigerian government and thejoint ventures partners do not pay the people of the oil-bearing communities,

314 K. Edu

35Preamble to the Oil Pipelines Act. Section 11(2) of the Act defines an oil pipeline thus: apipeline means a pipeline for the conveyance of mineral oils, natural gas and any of theirderivatives or components, and also any substance (including steam and water) used orintended to be used in the production or refining or conveying of mineral oils natural gasand any of their derivatives or components.36Ikpede v Shell BP Petroleum Development Company of Nigeria Ltd (1973) MWSJp. 61.37Underlining supplied for emphasis.

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from whom such lands are divested, the commercial value of the land acquiredfor the purpose of the joint ventures. This is because by virtue of section 1 ofthe Land Use Act 197838 all land in the territory of each state in Nigeria isvested in the governor of each state, who holds the land in trust for the use andcommon benefit of all Nigerians. The section provides thus:

Subject to the provision of this Act, all land (sic) comprised in the territory of eachstate in the Federation and hereby vested in the Governor of that state and suchland shall be held in trust and administered for the use and common benefit of allNigerians in accordance with the provisions of this Act.

Section 29(2) of the Land Use Act provides thus:

If a right of occupancy is revoked for the cause set out in paragraph 1 of subsec-tion (2) of section 28 of this Act or in paragraph (b) of subsection (3) of the samesection the holder and the occupier shall be entitled to compensation under theappropriate provision of the Minerals and Mining Act or the Petroleum Act or anylegislation replacing same

Section 28 (1) of the Land Use Act provides that it shall be lawful for the gover-nor to revoke a right of occupancy for providing public interest. Section 28 (3)states that overriding public interest in the case of a customary right of occu-pancy means:

(a) (b) the requirement of the land for mining or oil pipelines or for anypurpose connected therewith

The Petroleum Act defines petroleum thus:

Mineral oil (or any related hydrocarbons) or natural gas as it exists in its naturalstate in strata, and does not include coal or bituminous shales or other stratifieddeposits from which oil can be extracted by destructive distillation.

The Mineral and Mining Act defines in section 259 mineral as excluding mineraloil. The Mineral and Mining Act and the Petroleum Act are thus mutually exclu-sive legislation. Section 95 of the Mineral and Mining Act makes provision forcompensation for disturbance of the surface right of the owner or occupier and fordamage done to the surface of the land on which prospecting or mining is carriedout. But there is no corresponding provision for compensation for the disturbanceof the surface right of the owner or occupier for land acquired for oil purposes. ThePetroleum Act makes no provision for compensation of land. There is therefore agap in the law as to the right to compensation for the land itself, as opposed to themineral oil contained therein. Thus the oil companies and the government do notpay compensation for bare land acquired for the purpose of petroleum developmentexcept where improvement has been made on the land. The current compensation

Commonwealth Law Bulletin 315

38Cap L5 Laws of the Federation Nigeria, 2004.

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rate paid for crops is low. For example, the rate of a mango tree is 25k39 (this is just0.165 American cents).

Further, section 9(1) of the Oil Pipelines Act provides that:

Any person whose land or interest in land may be injuriously affected by the grantof a licence may within the period specified for objections lodge verbally or inwriting at one of the specified addresses notice of objection stating the interest ofthe objector and the grounds of objection.

Subsection 2 of section 9 states that ‘matters relating to question of compensa-tion shall not be material grounds to include (sic) a notice of objection under thissection’. The oil wells in the Niger Delta are mostly in the rural areas. People inthe rural areas of the Niger Delta are illiterates, poor and lack basic amenitieslike electricity and so cannot access the media. The practice in Nigeria is that thepeople whose land or interest in land is affected by acquisition are only givensix weeks to lodge objection. To require illiterate and native villagers who donot have access to newspapers in their areas of remote geographical location tolodge objections within the period specified in the gazette is to indirectly divestthem of their land without payment of compensation.

The National Environmental Protection (Effluent Limitation) Regulations andThe National Environmental Protection (Pollution Abatement in Industriesand Facilities Generating Wastes) Regulations

These regulations were made pursuant to the Federal Environmental ProtectionAgency Act. The Act itself has been repealed.40 However, the Regulations madepursuant to the Act have not been repealed. The regulations relevant to thepetroleum industry are the National Environmental Protection (Effluent Limitation)Regulations41 and the National Environmental Protection (Pollution Abatement inIndustries and Facilities Generating Wastes) Regulations.42 The former allows anoil and grease content in brine and other production wastes of 10mg/litre fordischarge into inland waters.43 An infraction of this provision attracts a fine of₦20, 000.00 or two years imprisonment or both. If the offence is committed by acorporation, the fine is ₦500,000.00.44 The National Environmental Protection (Pol-lution Abatement in Industries and Facilities Generating Wastes) Regulations pro-vides for an outright ban on the discharge of oil into specified water sources.Regulation 15(2) provides that ‘no oil in any form shall be discharged into publicdrains, rivers, lakes, seas or underground injection without a permit issued by FEPAor any organisation designated by it.

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39A Babajide lead paper at the 1996 Annual International Conference of the Nigeria Soci-ety of Petroleum Engineers (Warri) pp. 14-15.40Section 36 of the National Environmental Standards and Regulations EnforcementAgency (Establishment) Act, 2007.41Statutory Instrument (S.I.) No.8 of 1991.42S.I No. 9 of 1991.43Schedule 3.44Regulation 5.

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It is submitted that in view of the danger which oil poses to humans, propertyand the environment, there should be an outright been on the discharge of oilinto inland waters. Many states in the Niger Delta region have enacted environ-mental protection laws.45 Section 44 of the Rivers State Environmental Protec-tion Law of 199446 stipulates that:

(1) Except where the owner or operator of a vessel or an onshore or offshore facil-ity can prove that a waste or spillage was caused solely by a natural disaster oran act of war or by sabotage, such owner or operator of any vessel or onshorefacility or offshore facility from which the waste discharged emanates in contra-vention of this law, shall in addition to the penalty specified in this law be lia-ble for:

(a) any cost incurred by the State or Local Government or agents in the abatementor removal of the discharge;

(b) any cost incurred by the State or Local Government in replacing any damagedfacility or in restoring the ecology;

(c) costs of third parties in the form of reparation, restoration, restitution or com-pensation as may be determined by the Agency from time to time;

(2) The owner or operator referred to in subsection (1) of this section shall, uponthe occurrence of the discharge:

(a) promptly take steps to mitigate any damage caused by the discharge;(b) give immediate notice to the Agency of the occurrence of the discharge;(c) promptly commence clean up operation by using the most effective and efficient

methods at his disposal; and(d) promptly comply with such directions as the Agency may give.

The ‘Agency’ referred to in this law is the Rivers State Environmental ProtectionAgency. Claimants under this law have a fairly good chance of success since itcreates a strict liability regime.47

Etikerentse has argued that the Federal Government has no legislative compe-tence to legislate on the environment.48 He asserts that ‘environment’ is notincluded either in the Exclusive Legislative List or in the Concurrent LegislativeList as a subject or an item. He therefore, submits that the subject of ‘environ-ment’ is a residual matter in respect of which under the Federal System of gover-nance, only states (as against the central or federal legislature) can make laws. Itis submitted with the greatest respect that the submission of the learned authoroverlooks the provisions of section 4(4) (b) of the Constitution of the FederalRepublic of Nigeria, 1999, which provides that the National Assembly has thepower to legislate on any matter with respect to which it is empowered to makelaw in accordance with the provisions of the Constitution. Section 20 of the Con-stitution states that the State shall protect and improve the environment and safe-guard the water, air and land, forest and wild life of Nigeria. Section 4(2) of theNigeria constitution provides as fellows:

Commonwealth Law Bulletin 317

45The States include Akwa Ibom, Bayelsa, Delta and Rivers.46Rivers State Environmental Protection Agency Law (No. 12) of 1994.47Section 48 of the Bayelsa State Environmental and Development Planning AuthorityLaw of 1998 contains similar provisions as section 44 of the Rivers State EnvironmentalProtection Law.48Etikerentse, Op. Cit. pp. 152–153.

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The National Assembly shall have power to make laws for the peace, order andgood government of the Federation or any part thereof with respect to any matterincluded in the Exclusive legislative list set out in part 1 of the second schedule tothis Constitution.

Item 60 on the Exclusive Legislative list of the Nigerian Constitution state that:

The establishment and regulation of authorities for the Federation or any partthereof -

(a) to promote and enforce the observance of the Fundamental Objectives andDirective Principles contained in this Constitution.

The combined provisions of item 60(a) under the Exclusive Legislative List andSection 4(2) of the Constitution provide that the National Assembly has powerto make laws for the peace, order and good government of the federation or anypart thereof. It therefore follows that National Assembly has the power to legis-late on the environment.

It is further submitted that the power of the National Assembly is not residualunder the Constitution, but concurrent with the powers of states House ofAssembly.49

The National Environmental Standards and Regulations Enforcement Agency

The National Environmental Standards and Regulations Enforcement Agencywas enacted in July 2009.50 The Agency has the responsibility for the protec-tion and development of the environment, biodiversity, conservation and sus-tainable development of Nigeria’s natural resources in general andenvironmental technology, including co-ordination and liaison with relevantstakeholders within and outside Nigeria on matters of enforcement of environ-mental standards, regulations, laws, policies and guidelines. It is, however, sadto note that the functions of the Agency do not extend to the petroleum indus-try. Indeed the Act specifically excludes the oil and gas sector from the purviewof its operation, even though it purports to legislate on the environment. Sec-tion 7 (9) of the Act provides that the Agency shall ensure compliance withregulations on the importation, exportation, production, distribution, storage,sale, use, handling, disposal of hazardous chemicals and waste other than in theoil and gas sector. The operation of the oil and gas companies in the NigerDelta which impact negatively on the environment cannot be divorced from theenvironment. The activities of oil and gas companies are inextricably tied to theenvironment. The Act has in effect restricted safe environmental standards forhazardous chemicals from applying to the oil and gas sector and thus given theoil companies a carte blanche to pollute the Niger Delta environment.

318 K. Edu

49Attorney–General of Ondo State v Attorney of the Federation.50The National Oil Spill Detection and Response Agency (Establishment) Act 2006,section 1.

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The National Oil Spill Detection and Response Agency (Establishment) Act

The National Oil Spills and Response Agency was established in 2006.51 TheAgency is charged with the responsibility for preparedness, detection andresponse to all oil spillages in Nigeria. Section 6 of the Act provides that theAgency shall be responsible for surveillance and ensure compliance with allexisting environmental legislation and the detection of oil spills in the petroleumsector; receive reports of oil spillages and co-ordinate oil spill response activitiesthroughout Nigeria; co-ordinate the implementation of the National Oil SpillContingency Plan for Nigeria for the removal of hazardous substances as may beissued by the Federal Government and perform such other functions as may berequired to achieve the aims and objectives of the Agency or any plan as may beformulated by the Federal Government of Nigeria pursuant to the Act. Failure toreport an oil spill to the Agency within 24 hours after the occurrence of the spillconstitutes an offence and the penalty is ₦500,000.00 for each day of failure toreport the occurrence.52 Any organisation responsible for an oil spill is expectedto clean up and carry out remedial measures on the impacted site. Hence it isprovided that failure to clean up the impacted site to all practical extent,including remediation shall attract a further fine of one million naira(₦1,000,000.00).53

The Act has placed lofty objectives and functions on the Agency, which theAgency can hardly live up to. There have been many cases of oil spills in theNiger Delta since the creation of the Agency. The responses of the Agency tothese spillages have been poor. This is not surprising; the Agency lacks thewherewithal and necessary staff to perform the various functions placed upon itby the Act. The provisions of the Act are commendable, but the implementationof the provisions, like most laws regulating the petroleum industry with respectto the environment, leaves much to be desired. It was only recently that theAgency in collaboration with the United Nations Development Programme(UNDP) put up advertisement requesting for experts and consultants to produceRegulations for Oil Spill and Oil Wastes Management and Guideline for Oil SpillRecovery, Clean up, Remediation and Damage Assessment.

The Criminal Code Act

Section 245 of the Criminal Code Act54 imposes a jail term of six months for‘any person who corrupts, fouls the water of any spring, stream, well, tank orplace so as to render it less fit for the purpose for which it is ordinarily used’.Similarly, section 247 states that any person who ‘vitiates’ the atmosphere in anyplace so as to make it noxious to the health of persons or who does any actwhich is and which he knows or has reason to believe to be, likely, to spread theinfection of any disease dangerous to life whether human or animal is guilty of

Commonwealth Law Bulletin 319

51Ibid. section 6 (2).52Ibid. section 6 (3).53Ajakaiye, BA, ‘Issues and Response to Oil spill management being a paper presented aWorkshop organised by Niger Delta Re-Orientation Project in Warri on the 3rd August2009.54Cap. C 38 LFN 2004.

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an offence punishable with six months imprisonment. These are laudable provi-sions. However, the Attorney-General is not keen in prosecuting officers of oilcompanies who violate this law. Little wonder that there has not been any prose-cution of any official of oil companies in Nigeria since commercial drillingstarted in 1956. Further, the courts in Nigeria are not enthusiastic in grantinglocus standi to individuals who are interested in bringing relator actions.

The Associated Gas Re-injection Act

Under section 3 of the Associated Gas Re-Injection Act55, no company was toflare gas after 1 January 1984 and the penalty prescribed was the forfeiture of allconcessions granted in respect of the particular field or fields.56 However, theAct empowers the Minister of Petroleum Resources to issue a certificate to anyoil company when he is ‘satisfied’ that the utilisation or reinjection of the pro-duced gas is not appropriate or feasible in a particular field or fields and toimpose a penalty for gas so flared.

It is submitted that the continued flaring of gas constitutes a grave danger tothe fauna and flora of the Niger Delta, as well as the health of the inhabitants ofthe area. The fine realised from defaulting oil companies is paid to the FederalGovernment coffers instead of giving recompense to those who are directly andadversely affected. It is further submitted that this law needs to be amended sothat the money realised is channelled towards the development of the affectedareas. This suggestion has become imperative since the Federal Governmentseems not to be serious about the several deadlines given to the oil companies tostop flaring gas. The deadline which was shifted to 200857 has now beendeclared to be unrealistic by the Federal Government. It is quite clear that thegovernment is not serious in stopping gas flaring in Nigeria.

Environmental Impact Assessment Act

The Environmental Impact Assessment Act58 makes it mandatory for an Environ-mental Impact Assessment (EIA) study of a project to be prepared at the earlystage of the project before the project is undertaken.59 The requirement of theAct for an environmental impact assessment is a structured process for gatheringinformation about the potential impacts on the environment of a proposed projectand using the information, to decide whether such project should proceed, eitheras proposed or with modifications or otherwise.60 The environmental impactassessment is required to be administered by an agency, the Federal Environmen-tal Protection Agency (FEPA). Where in the opinion of FEPA the project islikely to cause significant adverse environmental effects that may not be mitiga-ble, the agency shall not permit such project to be carried out, but where the

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55Cap. A 25 LFN 2004.56Ibid. section 4.57This day Newspaper 25 July 2002, front page.58Cap E 12, LFN 2004.59Ibid. Section 2.60RT Okonkwo, The Law of Environmental Liability (Lagos: AEDE 2003) p. 2.

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effects of such projects are mitigable then the proponents of such projects areexpected to comply with all measures stipulated by the Agency to mitigate theeffects.61 It is worthy of note that FEPA shall allow the public to participate atany significant stage of a project and assures the public of information on projectrequiring assessment.62 However, the right to comment does not carry with it thecompetence or standing to seek a judicial review of a decision of the Agency onan environment impact assessment. In Oronto Douglas v Shell Petroleum Devel-opment Co. of Nigeria Ltd63 it was held that the right to comment does not carrywith it the competence or standing to seek a judicial review of a decision of theFederal Environmental Protection Agency on an environmental impact assess-ment. This is a major drawback of the law, as it hinders the public from chal-lenging the decision of the Agency. This is unlike what obtains in othercountries, like the United States.64

Other Laws

Some rules of international law have been introduced to check pollution and toprovide compensation to victims of environmental pollution. One such rule is theInternational Convention of Civil Liability for Oil Pollution Damage 1957, asamended in 1967 and 1969 and adopted in 1969. The rule places strict liabilityon ship owners. The purpose of the Convention is to provide uniform interna-tional rules and procedures for determining questions of liability and providingadequate compensation for persons who suffer damage caused by pollutionresulting from escape or discharge of oil from ships. Under the convention, theonus rests on the owner of the ship to prove that any of the exceptions shouldoperate.65 The exceptions relate to such matters as acts of war, natural phenome-non of an exceptional, inevitable and irresistible character, malicious act of thirdparties and negligence of the victim and failure by the authorities to maintainlights and navigational aids.66 There is also the 1971 Convention on the Estab-lishment of an International Fund for Compensation for Oil Pollution Damage(IOPC FUND). The IOPC FUND is made of contributions by oil importers andenables further compensation to be paid when the limits of compensation payableunder the 1969 Convention have been reached. The Convention came into forcein 1977. A protocol substantially increasing compensation available was adoptedin 1984.67 Nigeria is a signatory to the two Conventions but sad enough, there

Commonwealth Law Bulletin 321

61Environmental Impact Assessment Act Cap E122 L.F.N 2004 Section 3.62Ibid. sections 7, 8, 9, 22, (5)25,39 and 57.63Oronto Douglas v Shell Petroleum Development Company of Nigeria Ltd & Ors.(Unreported, suit No. FHC/L/SC/573/93, ruling of the Federal High Court, Lagos, deliv-ered on February 17, 1997.64US v Students Challenging Regulatory Agency Procedure 412 U.S. 669 (1973).65Article 3.66Article 2.67AO Popoola, ‘International Law and the Protection of the Marine Environment: Prob-lems and Challenge for Africa in the 21st Century’ being a paper presented at the Interna-tional Conference in Environmental Law and Policy, Lagos State University inCollaboration with the Shell Petroleum Development Company Nigeria Ltd, 19–21 March1997.

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has not been any domestic legislation promulgated to make the provisions of theConventions enforceable internally as required by section 12 of the Constitutionof the Federal Republic of Nigeria, 1999. The result of this failure is that proto-cols and the Conventions provisions have no force of law in Nigeria. TheNational Assembly is hereby urged to enact laws to make the provisions of theConventions enforceable so that the country can benefit from the provisions inthe Conventions which make for a wide spectrum of causes of damages andhigher levels of compensation. This is because the provisions cover not just pol-lution by or from ships, but also operations from offshore facilities and pipelineswhich are major sources of marine pollution. The implementation of the provi-sions in the Conventions would also be in furtherance of the requirements ofArticle 194 (3) of the United Nations Convention on the Law of the Sea(UNCLOS) which requires that States should take measures for combating allsources of pollution including:

Pollution from installations and devices used in the exploration or exploitation ofthe natural resources of the seabed and subsoil in particular measures for prevent-ing accidents and dealing with emergencies, ensuring the safety of operations atsea and regulating the design, construction, equipment, operations and manning ofsuch installation or devices.

The issue of Locus Standi

Locus standi is the legal capacity to institute proceedings in a court of law. It isthe right or competence to initiate proceedings in a court of law for redress orassertion of a right enforceable at law.68 Where a party has no locus standi orstanding, the proceedings – however ably conducted by a court of competentjurisdiction – will be a nullity. The concept of locus standi applies both in crimi-nal prosecution and in civil proceedings.69 In countries where the law permits,citizen groups resort to litigation where there are violations, actual or threatened,to demand compliance. One serious drawback of statutory regimes governing theexploration and exploitation of oil rights in Nigeria is the lack of any mechanismfor private enforcement of the statutes and regulations. Although the Environ-mental Impact Assessment Act makes provisions for public participations inmany sections70 it stops short of conferring a private right of action.71

In contrast to Nigeria almost all major federal environmental legislation in theUnited States have provisions for citizens suits, permitting private right of action tohelp enforce the law. For example, although Natural Resource Damages are not

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68Ladejobi v Oguntayo (2004) All F.W.L.R. (pt 231) p. 1209.69N Tobi, ‘Judicial Environment of Environmental Laws in Nigeria’ Environmental &Planning Law Review (EPLR (2) ISSN: 1597-4553 p. 90.70Sections, 9(3) 22(3), 25, 39, 41 and 57 of the Environmental Impact Assessment Act.71Oronto Douglas v Shell Petroleum Development Co. of Nigeria Ltd Unreported, suit No.FHC/L/CS/573/93, ruling of the Federal High Court, Lagos, delivered on February 17,1997.

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compensable to individuals under the American Oil Pollution Act of 1990, citizenscan file suit to compel a federal agency to fulfill its role as a natural resource trus-tee.72 The strict rules relating to locus standi has also been relaxed in Britain73 andIndia.74

The Petroleum Industry Bill

The Petroleum Industry Bill (PIB) aims to inject new vigour into the NNPC byreforming its octopus-like structure to create discrete units to handle task such asexploration and production, regulation and research. Presently the NNPC has ele-ven subsidiary companies.

To douse the tension in the Niger Delta, of the Nigerian government has pro-posed to give 10% equity in the joint ventures between the Nigerian governmentand the multinational oil companies to the oil-bearing communities of the NigerDelta of Nigeria. The bill compels oil and gas companies to employ host com-munity persons in their employment and contract awards, especially on commu-nity-related development projects.

The petroleum industry bill addresses environmental degradation as a resultof the activities of the oil companies. This issue is addressed under the corporatesocial responsibility section of the bill, which spells out the roles and responsibil-ities of companies and what constitutes corporate social responsibilities to theirhost communities.

The bill also spells out stiff penalties for any act of environmental pollution bycompanies. Oil companies are required to present a well-articulated sustainablecommunity development plan consistent with the PIB guidelines for effectiveengagement programme. The bill proposes the incorporation of the NigerianNational Petroleum Company Limited. The Nigerian National Petroleum Companyshall be the holding company and successor to the assets and liabilities of theNNPC.

The new company will still be wholly owned by the Federal government.The only difference is that it will be given the opportunity to transform itself intoa reliable and self-sufficient company. Therefore it will have to finance its projectfrom the profit it makes in place of the present practice where government con-tributes to its budgets.

The PIB provides for the current Department of Petroleum Resources (DPR)to transform into the National Petroleum Inspectorate (NPI), a regulatory body tobe empowered with financial and operational independence to regulate the activi-ties in the up-stream sector.

The bill proposes that within 12 months from the commencement of the Act,limited liability companies shall be incorporated for each of the joint venturesfor the exploration and production of petroleum. The bill states that the objectiveof the incorporation of joint ventures is to create an independent entity that iscapable of being self-sufficient.

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72J Boyd, ‘Global Compensation for Oil Pollution Damages: The Innovations of theAmerica Oil Pollution Act’ (2005) 1 EPLR (2) ISSN: 1597-4553 p. 21.73IRC Vs. National Federation of Self-Employed and Small Business (1981) 2 All ELR93 at pages 103–104.74Peoples Union for Democratic Rights Vs. Minister of Home Affairs (1986) LRC 547.

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The bill proposes in respect of incorporated joint ventures ‘with effect fromthe commencement of this Act, the interests held by the NNPC in respect of thejoint ventures for the exploration and production of petroleum in Nigeria shall bevested in the Agency’.

The bill also intends to promote local content. It provides that where anycontract for work or services is considered to be within the capabilities of Nige-rian companies in accordance with any law relating to Nigerian content, the ten-der list shall be restricted to Nigeria companies.

Observations

It is clear from the foregoing examination of the existing legal regime on exploi-tation of oil rights and the regulation of the environment in Nigeria that the regu-latory framework is not addressing the problems of the oil-bearing communitiesin Nigeria adequately. Frustrated with the poverty, environmental degradationand under-development, citizens of oil-producing communities are forced toresort to unlawful acts such as confiscating the equipment of oil companies, shut-ting down flow stations, kidnapping oil workers etc. to express their disenchant-ment with the government and the oil companies.75 The oil companies then hirelocal thugs or call in the government, who sends in troops to ensure that produc-tion of oil is not disturbed. However, militant organisations such as the Move-ment for the Emancipation of the Niger Delta Force (MEND) usually engage thepolice or military, and in the process production of oil has been halted.76 Disrup-tion of exploration and production of oil in Nigeria not only affects the nationaleconomy, but sometimes the World price of oil as well.

Recently the Federal Government of Nigeria announced an amnesty packagefor the militants in the Niger Delta to surrender their arms. Most of the militantssurrendered their arms with the hope that the Government of Nigeria would liveup to its promise to develop the undeveloped, backward and poverty-strickenNiger Delta, as well as abrogate or amend some obsolete laws regulating theexploitation of oil and the protection of the environment in Nigeria. It must benoted that unless the government of Nigeria duly enforces the laws regulatingthe exploitation of oil and the protection of the environment, the fragile peaceexisting in the Niger Delta will evaporate.

The government must act decisively. The Nigerian government in recenttimes has made some efforts to develop the Niger Delta region. One of sucheffort is the establishment of the Niger Delta development commission (Estab-lishment etc.) Act No.6 of 2000. The Act is really a replica of the defunct oilmineral producing development commission Act of 1992. The explanatory noteto the Act states thus:

An Act to provide for the repeal of Oil Mineral Producing Areas CommissionDecree and among other things, establish a new Commission with a re-organisedmanagement and administrative structure for more effectiveness and for the use ofthe sums received from the allocation of the Federation Account for tackling

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75Manby, Op. Cit. p. 14.76L Mitee, ‘Natural Resources, National Unity: The Linking and the Divine’ being apaper at the Annual Conference of the Nigeria Bar Association, Jos August, 2005.

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ecological problems which arise from the exploitation of oil minerals in the NigerDelta Area and for connected purpose

The function and powers of the commission are stated in section 7 of the Act toinclude:

(a) Formulate policies and guidelines for the development of the Niger Deltaareas;

(b) Conceive plan and implement in accordance with set rules and regulationsprojects and programmes for the sustainable development of the NigerDelta area in the field of transportation, including roads, jetties and water-ways, health education, employment, industrialisation, agriculture and fish-eries, housing and urban development water supply, electricity andtelecommunication

(c) Prepare master plans and schemes designed to promote the physical devel-opment of Niger Delta area and the estimates of the costs of implementingsuch master plans and schemes; and

(d) Tackle ecological and environmental problems that arise from the explora-tion of oil minerals in Niger Delta area and advise the Federal Govern-ment and member states on the prevention and control of oil spillages,gas flaring and environmental pollution.

The sources of fund for the Commission’s programmes are:

(a) The Federal Government-15 percent of the total monthly statutory alloca-tion due to member states of the Commission from the FederationAccounts

(b) Oil producing companies-3 percent of the total annual budget of any oilproducing company operating onshore or offshore, in the Niger Delta areaincluding gas processing companies;

(c) Member state-50 percent of monies due to member states of the Commis-sion, from the Ecological Fund;

(d) Such monies as may from time to time, be granted or let to or depositedwith the Commission by the Federal or State Government, any other bodyor institution whether local or foreign;

(e) All monies raised for the purpose of the Commission by way of gifts,loans, grants-in-aid testamentary disposition or otherwise to the Commis-sion,

(f) Proceeds from all other assets that may arise from time to time accrue tothe Commission.

Recommendations

The bane of Nigerian legislation is inadequate enforcement of that legislation bythose charged with it. Environmental legislation is no exception. Failure toadminister and enforce regulations should be seriously and urgently addressed bythe government. This is necessary so as not to create the impression that the gov-ernment itself is not serious with enforcing environmental legislation, but onlyplaying politics with it. Corrupt and inefficient officials should be weeded out ofthe system.

Commonwealth Law Bulletin 325

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Standards should also be set by the government for design, construction andequipment of oil installations, on and offshore.77 Installations should bedesigned, constructed and equipped in accordance with best available technologyso as to avoid intentional or unintentional operational discharge, leakage or spill-age onto sea or land at any time during pumping, piping or extracting.

The Department of Petroleum Resources should be adequately funded so thatthere can be adequate monitoring of standards. Victims of oil exploration andproduction activities should be adequately compensated under a system based onstrict liability. Strict liability is fast gaining acceptance internationally and innational schemes, as the rule rather than the exception. It is therefore suggested astatutory provision to apply strict liability. The only defences should be acts ofwar or natural disaster of exceptional and inevitable character. An oil companythat is held strictly liable is under the greatest obligation to be careful in its oper-ations. Third party liability should be no defence; the operator should still beheld liable. The burden of proving any defence should be on the operator.

In addition, there should be an outright ban or discharges of oil, its productsand wastes into inland waters in view of the uses to which these waters are putby many oil-bearing communities in Nigeria. Legislation should not merely leavethe donee with the power to make regulations.78 It should set a special time, saynine months within which such power are exercised. There should be set dead-lines for compliance with regulations and such deadlines should not be shiftedbecause of parochial interest.

At the same time, it is imperative that the law should raise the liability ofpolluters to include civil or administrative penalties and damages for loss forsubsistence, including impairment of earning capacity. Adequate provision shouldbe made by both the government and the oil companies for the development ofthe oil producing areas.

Most of the legislation in Nigeria contains inadequate sanctions. Hence statu-tory provisions enabling private right of actions should be incorporated in all leg-islation. This is especially imperative in Nigeria, where monetary considerationscan influence the powers that be not to enforce relevant legislation against pollut-ers.79

The Nigerian judiciary should view the problem of environmental pollutionmore seriously and award punitive damages in deserving cases. There is also theneed to adopt a liberal approach as regards the question of locus standi.

Finally there should be a statutory time limit for the settlement of claims byoil companies. It is suggested that a period of two months would be ideal. ThePIB has addressed some of the problems raised in this article. It is recommendedthat a bill should be passed into law without further delay by the Nigerian gov-ernment. The Nigerian judiciary should also endeavour to deal expeditiously withenvironmental claims.

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77RO Ojikutu, ‘Major Issues for Consideration in Regulation of Oil Pollution in Nigeria’in the Petroleum Industry and the Nigerian Environment- Proceedings of 1983 Interna-tional Seminar.78The statutory provision usually state as follows: ‘The Minister may make regula-tions. . .’ For example, section 5 of the Oil in Navigable Waters Act.79AI Chukwuemrie, ‘The Law on Petroleum Pollution in Nigeria: Agenda for Reform’(2005) MPJFIL vol 9. p. 179.

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Conclusion

This paper has analysed the various regulatory regimes in the oil industry as theyrelate to the protection of the environment in Nigeria and has also identifiedshortcomings in the various laws. It has also discussed the effects of oil explora-tion and production on the lives of the inhabitants of the oil-bearing communi-ties, as well as on the environment. It has equally made suggestions andrecommendations, which if implemented would guarantee a safer environmentfor the oil-bearing communities in Nigeria and enhance the exploitation and pro-duction of oil.

Notes on contributorK. Edu, LL.B (Hons) LL.M, BL, Senior lecturer and Head of Department, Jurisprudenceand International Law, Delta State University, (Oleh Campus) Abraka, Nigeria, LegalConsultant and Notary Public for Nigeria.

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