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Environmental Protection in the Nigerian Oil and Gas Industry and Jonah Gbemre v. Shell PDC Nigeria Limited: Let the Plunder Continue?

Document Cited in Related
Vincent
DOI10.3366/ajicl.2019.0270
Published date01 May 2019
Pages225-245
Date01 May 2019
Author
INTRODUCTION

In Nigeria's economy, the oil and gas industry has always maintained its foremost place in revenue generation. Understandably, it will be difficult to relegate an industry that accounts for over 95 per cent of its foreign exchange earnings,1 and over 85 per cent of its gross domestic product (GDP).2 Even with the clamour that other means of income should be explored or other sectors should get equal attention, it is doubtful if the industry could be easily displaced. For investors, the discovery of rich natural resources has turned the continent of Africa into a hotspot for the exploration and production of oil and gas with Nigeria as one of the centre points.3 As elsewhere, the concern is how to reconcile exploration and production of such resources without depleting or destroying the environment. There has been a history of hostility against multinational oil companies who have been accused of corporate irresponsibility and carelessness in the conduct of their business by host communities. In Nigeria, the Niger Delta Region (NDR) where most exploration is carried out has always found itself embroiled in debates and conflicts which are predicated on environmental degradation that has resulted in the loss of income and destruction of ancestral homes by exploratory activities.

The NDR is situated in the South-South geo-political zone of Nigeria and covers an estimated area of about 70,000 square kilometres,4 with a population of more than 15 million residents.5 The zone is regarded as the largest wetland in Africa, and is renowned for its abundance of both renewable and conventional sources of energy.6 Since the discovery of oil in commercial quantities, the region is reported to have generated about US$600 billion from oil and gas.7 Unfortunately, the colossal revenue is also the reason why successive central governments have consistently paid lip service to other sectors. There has been a disproportionate reliance on oil and gas for economic development, thereby turning the economy of Nigeria into a monolithic economy8 inflicted with the ‘Dutch disease’.9

Ordinarily, when natural resources are discovered in any region, with proper management such discovery should be accompanied by economic development and significant progress in the region of discovery. The development in this regard is not measured by fiscal gain only but includes the protection and effective management of the area of discovery. Environmental protection will constitute an integral part of the development process. According to the Rio Declaration, ‘To achieve sustainable development and a higher quality of life for all people, States should reduce and eliminate unsustainable patterns of production and consumption and promote appropriate demographic policies.’10 However, in the case of Nigeria, it appears that that oil and gas exploration and governmental policies are oblivious of this international mandate.

Apparently, the NDR, for more than four decades of exploration and production operations, has experienced severe environmental degradation.11 Oil spills and gas flaring have been identified as the major sources of environmental problems in the region,12 with links to the oil multinational corporations (oil MNCs) as those responsible for over 95 per cent of the harm done to the region's environment.13 The social effect of these environmental problems in the region has taken the form of increased militant activities accompanied by incessant violence and conflict, civil unrest, poverty, exposure to health hazards and under-development of the region.14 These effects, particularly the activities of different militant groups, have had a major impact on the overall economy of Nigeria as the oil MNCs are sometimes forced to cut down production due to the insecurity of expatriates working for them in the region.

As a corollary to the issue of environmental degradation in the region, one would expect that with the world's attention being drawn to the Ogoni crisis,15 there would have been a sincere effort by the Nigerian government and the regulatory agencies to step into the fray by undertaking a holistic review of the current environmental regulatory framework in the industry. This is necessary because most of the issues associated with the problem of environmental degradation in the region are attributed to inadequate environmental regulations/laws in the oil and gas industry.16 Admittedly, the present government should be commended for taking a bold step to kick-start the implementation of the United Nations Environmental Programme (UNEP) Report on Ogoni land by launching a clean-up.17 However, there remain considerable uncertainties as to how the actual clean-up process will be achieved, particularly as no funds have been released and the necessary institutions needed to supervise the process are yet to be constituted. Again, the clean-up is related to only the Ogoni region and therefore fails to address the entire NDR. In this regard, it appears that the lack of political will on the part of various Nigerian governments might be responsible for this narrow and fragmentary approach.

The consistent lack of political will by successive Nigerian governments to show any form of commitment to the plight of the inhabitants of the NDR has led to the birth of several militant groups and court actions instituted by those who could afford to go to court against the oil MNCs. Most of the court actions against the oil MNCs have been pursued with the intention of obtaining financial compensation for loss suffered by the claimants while the problem persists.18 Unlike previous cases, the intention of plaintiffs in Jonah Gbemre v. Shell Petroleum Development Company of Nigeria Ltd19 (Gbemre's case) was to initiate a momentum which would address the relegation or outright neglect of environmental protection through the development of a robust regulatory framework. In other words, Gbemre presented the Nigerian government with an opportunity to address the problem of environmental degradation and possibly the reduction of militant activities in the region. Disappointingly, due to a seeming lack of understanding of the root causes of the crisis in the region, coupled with the desire for economic development at the expense of a safe and healthy environment, the landmark judgment in the Gbemre case was never enforced.

To safeguard the quality of life and the environment, the Constitution of the Federal Republic of Nigeria and the African Charter on Human and Peoples' Right Act impose a duty on the Nigerian government to ensure the protection and improvement of the environment in all parts of Nigeria.20 Regrettably, the constitutional provision of environmental protection falls under Chapter II of the Constitution which is non-justiciable.21 The implication of the non-justiciability of Chapter II is that no legal enforceable right is created by any person or organisation, therefore no one can approach the court to seek the observance of the environmental provision in Chapter II of the 1999 Constitution.

It is in this context that this article, which advocates the strengthening of the Nigerian environmental regulatory framework in the oil and gas industry, explores the gains that could have accrued from the decision in Gbemre had it been enforced. The enforcement of this decision would be beneficial and important in demonstrating the sincerity of the government in making real efforts towards addressing both the problem of environmental degradation and by extension stemming the recurrent militant activities in the NDR. The article starts by considering some of the environmental impacts associated with oil and gas operations in the NDR. This will be followed by a critical analysis of the decision in Gbemre. The article will argue that the pattern of reliefs sought by most of the litigants in several court actions against the oil MNCs should be discouraged as this has become a source of revenue for the litigants while the problem of environmental degradation persists. The article will then proceed to argue that the failure to enforce the judgment of the court was a missed opportunity to strengthen the Nigerian environmental regulatory framework as this has indirectly led to increased militant activities in the region. Next, the article discusses the roles of the relevant regulatory agencies in the protection of the environment. Lastly, the article concludes with some recommendations on measures that should be adopted to strengthen the Nigerian environmental regulatory framework in the oil and gas industry. Such regulatory strengthening will ensure an appropriate balance between oil and gas maximisation and environmental protection, thereby resolving concerns over possible conflicts of interest and regulatory compliance.

 IMPACTS OF OIL AND GAS OPERATIONS IN THE NDR

Before the discovery and production of oil began in the 1950s, Nigeria had a nearly pristine environment. The large amount of oil reserves and the successes recorded in the oil industry led to a complete neglect by the Nigerian government of the negative environmental impacts of the operations of the oil MNCs, as there were no Environmental Impact Assessments (EIAs) conducted despite daily operations.22 Environmental degradation in the NDR of Nigeria began almost in the same period that commercial exploration and production started.23 This fact could possibly explain why the problem of militancy and other conflict in the region has persisted in spite of efforts being made to address them.

As earlier noted, oil spills and gas flaring have been the major factors responsible for significant negative impacts on the environment of the NDR. As regards gas flaring, due to the cost of carrying out reinjection, the oil MNCs have always opted for the flaring of gas which is considered a cheaper alternative. Surprisingly, there is nothing novel about this practice. Lord Holme, the UK Secretary of...

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