Cui Oil Multinationals in Nigeria: Human Rights, Sustainable Development and the Law

1. Auflage 2015
ISBN: 978-3-95489-869-5
Verlag: Anchor Academic Publishing
Format: PDF
Kopierschutz: 0 - No protection

E-Book, Englisch, 65 Seiten

Decades of irresponsible oil exploitation in the Niger Delta have caused a water and air pollution which does not have many comparisons anywhere else. In an already fragile country as Nigeria, characterised by weak democratic institutions and poor economic governance, this situation has led to increasing discontent and violence towards both the government and the oil multinationals. These two actors co-operate for the maximisation of oil profits and revenues while, at the same time, excluding local host communities from the participation in the oil development projects, preventing them from achieving a sustainable development, violating their human rights, and compromising their livelihoods.

This book analyses the legal framework of Nigeria in the oil sector and the peculiarities of the country in order to provide a critical overview of the issues, demonstrating that the amendment of the domestic Acts dealing with the topic, as well as the remediation to the damages caused by oil multinationals, are no longer deferrable. The final aim is to suggest a pattern to sustainable oil development which, by means of applying the concepts of Corporate Social Responsibility, would help to quell the conflict, to improve the local people’s standards of life, and to make Nigeria emerge as a socio-environmentally responsible African resource-rich country.

Autoren/Hrsg.

Cui, Roberto

Fachgebiete

• Rechtswissenschaften Ausländisches Recht Afrika (außer Südafrika)
• Wirtschaftswissenschaften Volkswirtschaftslehre Internationale Wirtschaft Entwicklungsökonomie & Emerging Markets
• Sozialwissenschaften Politikwissenschaft Politische Kultur Menschenrechte, Bürgerrechte
• Wirtschaftswissenschaften Wirtschaftssektoren & Branchen Energie- & Versorgungswirtschaft Öl- und Gasindustrie

Leseproben

Text Sample:

Chapter 1. The Nigerian legal regulation of the oil industry:

This chapter will focus on the analysis of the main Nigerian Acts relating to the oil sector. The aim is to offer a critical overview of the legislative and regulatory framework in the country. Beside the national law, attention will be also paid to the international law instruments on human rights and environmental issues, as well as related to the control of multinational enterprises: oil exploration and production affect the environment in the Niger Delta and the livelihoods of the resident communities, which is tantamount to a violation of human rights.
The significance of studying the legal scheme lies in the fact that, as regards developing countries and especially Nigeria, the reasons behind the harmful consequences of a major industry’s activities (like oil development) can be found, first of all, exactly in the contradictions and loopholes of domestic Acts and Regulations. As a result, a better understanding of the law will help in considering how CSR can improve the legal standards and not only be regulated by them.
Chapter 1. 1. National legislation:

Chapter 1.1.1., The Land Use Act (LUA) 1978:

The Land Use Act (LUA) is the pillar of the Nigerian legal structure related to the management of land. It has a remarkable impact in the regulation of oil
activities, given the characteristics of this sector.
Emerging from the scrutiny of the LUA, it is possible to say that it systemically transfers the land rights from the local communities and state governments to the federal state: this has led to a situation in which oil multinationals take advantage of the national low standards in the field of compensation, thus avoiding to comply with the standards set at the international level.
To be more precise, the reference, here, is to Section 28, which states that land may be appropriated from the federal State for “overriding public interest”, and provides that the central government can require the land “for mining purposes and oil pipelines or for any purpose connected therewith.”
Ako demonstrates how the historical evolution of the Nigerian nation has led to a subtraction of land’s rights from those communities who were traditionally entitled of the ownership and use of the lands and resources, by the federal government. According to the author, vesting all rights to lands and natural resources in the government is equivalent to a subtraction of the communities’ environmental rights. As also argued by Atsegbua, indeed: “the denial of the existence of environmental rights is primarily responsible for the under-development of the Niger Delta area.”
The 2003 WAC Global Services Report, entitled “Peace and Security in the Niger Delta”, recognises that the main cause of conflict is not represented by the corporate policies, but by the actual practices. Nonetheless, the same report also states that “aspects of current policies (land acquisition, oil spill compensation, hiring and contracting) may feed into, or even create conflict.” (Emphasis added).
The subtraction of the land from the local communities to the benefit of the oil sector constitutes one of the main reasons at the basis of the Nigerian environmental disaster, as well as the main cause of discontent and instability in the Niger Delta region.
The main outcome of the above discussion is that, although the MNCs claim their compliance to the law, this is not sufficient to identify corporate good practices, based on justice and equity grounds.
Chapter 1.1.2., The Oil Pipelines Act (OPA) 1956 and the Petroleum (Drilling and Production) Regulations 1969:

Beside the misappropriation of rights to land and resources, it is appropriate to consider the compensation problem. The domestic Nigerian law is set in order to avoid the payment of fair and adequate compensation for the losses deriving from oil activities, both related to land acquisition and to environmental pollution.
When analysing the Nigerian legal framework in the oil sector, it could often appear that the provisions concerning this particular issue are clear enough to solve any dispute arising from eventual pipelines leakage or from any hazardous activity related to the oil industry.
In particular, Section 11(5) of the Oil Pipelines Act prescribes:

“The holder of a licence shall pay compensation to any person whose land or interest in land […] is injuriously affected by the exercise of the rights conferred by the licence […]; and to any person suffering damage by reason of any neglect on the part of the holder or his agents, servants or workmen to protect, maintain or repair any work structure or thing executed under the licence […]; and to any person suffering for any damage (other than on account of his own default or on account of the malicious act of a third person) as a consequence of any breakage of or leakage from the pipeline or an ancillary installation.”
However, the actual practices regarding compensation work in the opposite direction, since it is not always easy to achieve the agreement on the compensation amount, which is required by the OPA in order to avoid the issue to be brought to court. Sections 21(2) and 23 of the Petroleum (Drilling and Production) Regulations 1969 – set in accordance with the Petroleum Act 1956 – contemplate the payment of “fair and adequate compensation”, respectively to the owners of economic trees in the event that these are cut or taken off for oil development purposes, and to fishermen, if the owner of a license unreasonably interferes with the exercise of their fishing rights.
As argued by various authors, the legal framework on compensation represents an easy viable avenue for oil companies who want to escape liability for harmful consequences arising from oil activities.
According to Ebeku, the onus probandi, placed by Sections 21(2) and 23, on farmers and/or fishermen who actually suffer from these damages, turns to appear overwhelming for the claimants: this is an avenue through which “an oil operator [might] escape liability.”
Ebeku concludes that the wording of this provision “virtually robs the statute of its substance”.
Frynas maintains that “[in] Nigeria, oil companies have often alleged that damage from oil operations is due to sabotage, which is considered an act of a stranger.” The strategy adopted by the multinational companies operating in the country and sued for oil pollution consists in rebutting charges by claiming that the spills have been caused “by the malicious act of third persons.” Multinationals are allowed to do so by the already mentioned Section 11(5)(c) of the OPA, that obliges oil operators to pay compensation for damage resulting from oil spills, unless it occurred on “account of [the suffering person’s] own default or […] the malicious act of a third person.” This provision, if not amended, deprives the clause contained in the Environmental Guidelines and Standards for the Petroleum Industry in Nigeria (EGASPIN) – according to which “operators incur responsibility for the containment and recovery for any spill discovered in their area, whether or not its source is known” – of its significance.
The Guidelines state that MNCs have the duty to implement actions to remedy to the oil spillage no matter the cause. But, they are no more than soft law, and, as such, not enforceable.
Hence, the liability for damages, arising from oil operations, and, as a consequence, the obligation to pay compensation, according to the Nigerian domestic framework, is not strict – being the claimant “required to prove negligence on the part of the operator.”
If the common corporate practice, consisting in avoiding negotiation and mediation in order to set the disputes against local claimants in courts or in arbitral tribunals, is also taken into account, it is possible to argue that the burden of proof pending on the plaintiffs is actually unbearable.
Local communities and people’s interests are not taken into account in the decision to use their land to the purpose of devoting it to oil development, nor in the phase of compensation for eventual harmful consequences arising from oil operations (by means of mediation and negotiation between MNCs and communities themselves): the want of commitment by MNCs to make the local communities participate in the development of their own territory can be regarded as a want of corporate best practices.

Über Autor(innen)

Roberto Cui was born in Iglesias, Italy, in 1987.
After a bachelor degree in Political Sciences and a Master Degree in International Relations at the University of Cagliari, he obtained a Master of Law Degree in International Energy Law and Policy at the University of Stirling, Scotland.
His research interests consist in the analysis of international dynamics as concerns the relationship between big powers and developing countries. In particular, he stresses the importance of energy in defining the global and regional assets of power. In this regard, he has specialised in the study of the oil Multinational enterprises’ interference in the human rights performance of least developed, resource-rich countries. Moreover, his study method is characterised by a constant quest for the avenues through which such countries can possibly amend their legal structure and achieve a sustainable energy resources development.