‘Niger Delta degradation: Oil, gas companies must reevaluate risk management processes’

Damilola Olawuyi is a Professor of Law and Director, Institute for Oil, Gas, Energy, Environment and Sustainable Development (OGEES Institute), Afe Babalola University, Ado Ekiti, Nigeria. He is also Vice-Chair, International Law Association. In this interview with KINGSLEY JEREMIAH, the Senior Advocate of Nigeria raised concerns about the continuous environmental challenges resulting from oil exploration in the Niger Delta region and proposes better ways of resolving them.

What is your assessment of the environmental concerns in the Niger Delta region?
ENVIRONMENTAL problems in the Niger Delta are undoubtedly justice concerns. Environmental justice is achieved when everyone enjoys the same degree of protection from environmental and health hazards, and equal access to decision-making processes.

As documented by the United Nations Report of 2011, the environment of the Niger Delta is so polluted that it could take 25 to 30 years to reverse the associated sustainability consequences of the pollution. It is now 10 years since that report was released and the search for environmental justice in the region continues. Not only have we had a new oil spill and gas flaring cases since then, the fair and meaningful participation of the people of the region in decision-making processes, in line with international best practices, is another component of environmental justice that is still fundamentally lacking in the region.

For instance, access to environmental information is a prerequisite for informed public participation in decision-making and monitoring the activities of government with regard to the environment. On the other hand, environmental justice requires fair and timely access of the public to remedies and compensation in cases of pollution. So, you see that without a justice and human right approach to environmental regulation in the Niger Delta, the search for environmental justice may remain elusive.

The Federal High Court in Abuja recently ordered Mobil Producing Nigeria and its joint venture partner, Nigerian National Petroleum Corporation (NNPC) to, within 14 days, pay N81.9billion to a number of communities in Ibeno Local Government Area of Akwa Ibom State, affected by oil spills between 2000 and 2010. What do you think the implications of this judgement will be in the sector, especially from the oil communities?
Nearly all cases of conflict over environmental harm arising from projects executed without proper consultations with the local communities. These communities are not generally opposed to oil and gas investments or projects, but they know and insist upon their rights to live in a safe, healthy and sustainable environment. This is a right that has been increasingly elaborated in international, regional and domestic laws, especially those relating to business and human rights. To avoid legal and litigation risks arising from oil and gas production, oil and gas companies must immediately reevaluate their corporate risk management processes to ensure safe and environmentally responsible development across the entire value chain of their operations. The incorporation of human rights standards and requirements into the design, approval, financing and implementation of oil and gas investments and projects could foster a more amicable relationship between host communities and oil and gas companies, while also reducing their exposure to legal and human rights risks.

President Muhammadu Buhari promised to carry out clean-ups in some affected communities, especially Ogoni land. Vice President Yemi Osinbajo even went on a tour of some of the communities, assuring locals of prompt action. Do you think the government has lived up to this promise?
Through the innovative programs of the Hydrocarbon Pollution Remediation Project (HYPREP), a lot of progress has been made by the Government to clean up and restore polluted lands across the Niger Delta. However, considering the sensitive nature of the affected lands and ecosystems, and the several years of eroded trust and adverse socio-economic impacts in affected communities, time is of the essence. Ongoing remediation efforts will need to proceed faster and in a more ambitious manner in order to ensure timely and effective intervention that will instil confidence in affected communities. Many of these communities have coped with pollution and environmental injustice for many years, and therefore understandably desire the urgent restoration of their lands and livelihoods so they live life to the fullest.
Would you say there are concrete strategies/laws/policy by operators and the Federal Government, especially the regulatory bodies to address the environmental issues sustainably?

Environmental justice is not about governments and regulators alone. All over the world, there has been a renewed emphasis on the need for greater corporate accountability for environmental harm, especially when operating transnationally. For example, why is it that some multinational oil and gas companies operating in Nigeria are able to get away with operational leaks, gas flaring and safety violations that they are not able to get away within their home jurisdictions? This raises the urgent need for Nigeria to join other leading countries in elaborating the human rights responsibilities of business enterprises, especially those operating in the oil and gas sector. For example, you have the Swiss Responsible Business Initiative and French Vigilance Law, which clearly outline regulatory expectations in terms of environmental justice. The African Union’s Resolution on a Human Rights-Based Approach to Natural Resources Governance of 2012 also calls on all African countries to ensure respect for human rights in all matters of natural resources exploration, extraction, development, management and governance. Without a comprehensive legal framework that defines corporate accountability requirements and criteria relating to the environment in Nigeria, many of the key issues of exclusions, discrimination, lack of compliance and limited stakeholder engagement in actions and responses may remain fundamentally unaddressed or unprotected.

Are you optimistic of changes to IOCs practices if the Petroleum Industry Bill becomes law?
The Petroleum Industry Bill is a significant development as it addresses many of the fiscal and structural elements that can advance transparency, accountability and good governance in the oil and gas industry. Not only does it update some of the archaic provisions of existing laws that have hindered industry best practices, but it also provides a clearer framework for institutional coordination and coherence in the supervision of oil and gas development in Nigeria. The establishment of the Host Communities Development Trust Fund, and the Environmental Remediation Fund, which is specifically for the rehabilitation or management of negative environmental impact with oil exploration and production activities, can go a long way in providing important financial assurance that funding will be available for socio-economic development of the region, as well as for the rehabilitation, remediation and clean up operations in cases of pollution. The PIB also outlines some of the responsibilities of oil and gas companies as settlers in the oil-producing communities.

These are all important aspects of delivering environmental justice to oil and gas producing communities. However, as it is with many legislations, the most important aspect is the implementation. Many of the problems facing the oil and gas industry have not been solely due to lack of updated laws, but most times, due to lack of coherent and proactive implementation of extant laws. The political will to pass the bill into law must be matched with an unalloyed commitment by all stakeholders to ensure its coherent implementation. For example, providing funding for implementation agencies to acquire needed equipment and patrol vehicles that will enhance their monitoring and surveillance of oil fields, as well as providing them with the right international training, capacity development, and digitalisation tools needed to enhance their active engagement with local communities. Without addressing such preexisting practical gaps to implementation, then passing a new law will not make as much difference on the ground.

As seen with recent court judgements, what advise will you give host communities in dealing with regulatory lapses?
The recent court judgements show that host communities can actually seek and obtain remedies for environmental harm in our domestic courts with adequate preparation. Many of the procedural delays that result in protracted environmental litigation have been due to a lack of compelling documentation of direct and indirect harm suffered as a result of clear cases of pollution. So host communities should work with seasoned senior environmental lawyers that understand the essential requirements of moving their grievances to the appropriate fora in a timely and meticulous manner.

Furthermore, in many cases, host communities are unable to afford legal representation, which raises the need for international and domestic organisations to support local NGOs and research institutes that can help host communities to prepare their cases and to review impact benefit agreements and other contracts that may significantly impact their environmental rights. Host communities will benefit significantly from pooling resources and efforts together through local cooperatives in order to access legal representation and advance awareness across the entire petroleum operations value chain, ranging from stakeholder engagement and consultation meetings to settlement negotiation, impact and benefit agreements and communities sensitisation on environmental rights matters.

What are your concerns on aspects that fall below expectations in the bill?
While the PIB contains detailed provisions on good governance and accountability, matters of environmental justice could have been more detailed. A number of reports and studies have shown the limits of the Environmental Guidelines and Standards for the Petroleum Industry in Nigeria (EGASPIN) in terms of advancing environmental justice in the Nigerian petroleum industry. It will therefore be great for the new law, or its regulations, to address such defects and gaps in a comprehensive manner. Let me briefly highlight three pertinent points.

First, achieving environmental justice in pollution impacted communities goes beyond having a restoration fund. There is a need for an anticipatory approach that integrates human rights impacts assessment into the project approval processes so as to ensure that petroleum operations do not adversely impact the social, economic and political rights of local communities. A safe, healthy and good environment is a fundamental right of local communities. This is why many countries have moved beyond pollution response and traditional environmental impact assessments, to provide a detailed framework that examines the human rights impacts of petroleum operations.

I would therefore like to see the introduction of a detailed business and human rights regulation under the new law, which will clearly and comprehensively spell out what responsible business enterprises should do to anticipate, mitigate and redress human rights and environmental harm in their operations. Corporate obligations relating to human rights and the environment require both positive and negative actions. First among these is the positive obligations of corporations to proactively ensure the protection of a safe, clean, healthy and sustainable environment in all their spheres of operations. This includes investing in clean technologies and production methods, promoting energy and water efficiency, complying with effluent discharge standards, ensuring transparent climate and environment reporting, and adopting green supply chain management and environmentally based procurement preferences across the entire business value chain. Second is the negative obligations of business enterprises to anticipate, mitigate and redress all sources of environmental pollution and harm in their activities and projects. Environmental pollution resulting from resource exploitation and other industrial activities must be proactively addressed across the entire business value chain.

Secondly, there is a need to avoid establishing too many institutions as contemplated under the bill, as this could again result in procedural challenges and red-tape in decision-making processes. Similarly, there is a need to address the roles of the various existing agencies and parastatals that currently have environmental functions relating to the petroleum industry. Furthermore, the current situation whereby the DPR issues petroleum licenses and also oversees environmental standards is an aberration. The international best practice is to designate an independent environmental regulator for the oil sector that will be at arm’s length from the DPR and tasked with harmonising and administering all laws applicable to the sector, ranging from those relating to EIA, access to land, water use, requests to drill a well, and requests to build a pipeline, to those governing land and surface reclamation. Such a single environmental regulator could also help address some of the current overlaps between the functions of the DPR, NOSDRA, and other regulatory agencies in the industry.

To achieve independent supervision of environmental risks in the oil sector, a comprehensive piece of environmental legislation for the oil sector must be put in place. EGASPIN can be updated and expanded to provide specific and clear policy guidance around oil pollution detection, responses, and remediation to manage the cumulative impacts. Some of the provisions of EGASPIN may be merged with the NOSDRA Act to achieve a more consistent and coherent environmental regulation for the oil sector. Similarly, such a law should address gaps in EGASPIN’s intervention values.

Thirdly, the Bill does not clearly articulate the need for greater gender equality and representation in the heavily male-dominated Nigerian oil and gas industry. Women in oil-producing communities, whose lands are often targeted for petroleum operations, face double vulnerabilities because their farmlands end up being massively affected, and secondly, because they may not have the education to participate in decision-making processes. Environmental justice, therefore, has a gender justice component, especially the need to provide more opportunities for women to hold executive positions, and to participate actively in decision-making processes. The new law should therefore clearly include a provision on ensuring gender representation in all aspects of petroleum operations, from planning, training to day-to-day implementation. Without such a gender justice perspective, petroleum operations risk exacerbating gender-based marginalisation in the industry.