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Tag: Oil companies

  • FG tasks oil companies on corporate social responsibility to host communities

    FG tasks oil companies on corporate social responsibility to host communities

    The Federal Government has called on oil companies operating in Nigeria to demonstrate genuine commitment to the development of their host communities through effective implementation of corporate social responsibility (CSR) projects as provided for under the Petroleum Industry Act (PIA).

    Chairman of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Dr. Mohammed Bello Shehu, made the appeal during a mediation meeting between Sterling Oil Exploration and Energy Production Company (SEEPCO), Orient Petroleum, and their host communities in Anambra State.

     The session, which was witnessed by the Nigeria Upstream Petroleum Regulatory Commission (NUPRC), took place on Friday at the Commission’s headquarters in Abuja.

    According to a statement by the Head of Information and Public Relations Unit of RMAFC, Maryam Umar Yusuf, Shehu said the Commission is committed to ensuring that oil companies respect the rights and welfare of the communities where they operate.

    “This Commission will always stand for transparency and fairness. We expect oil companies to meet their obligations to the people in whose communities they operate,” he said, adding that the meeting was convened following allegations of neglect by some host communities.

    Chairman of the Investment Monitoring Committee (IMC) of the Commission, Hon. Ekene Enefe, who presided over the meeting, expressed concern over SEEPCO’s record in meeting CSR obligations.

    “Based on the facts before us with regard to CSR, what we see here is not satisfactory. SEEPCO still has a lot of jobs to do, and we would like to see real projects on the ground — roads, schools, hospitals, electricity, and jobs for the people in the host communities. This is the result we expect from the deductions made from operational costs,” he stated.

    Enefe directed SEEPCO to submit audited reports of its three per cent host community expenditure since the commencement of the PIA, adding that oversight visits would be conducted to verify compliance. “We would like to tally the projects executed with the reported deductions. Our committee will not hesitate to exercise its oversight function to ensure that host communities benefit as the law demands,” he said.

    Speaking on behalf of the communities of Ogwu Ikpele and Ogwu Aniocha in Anambra State, delegation leader Mr. Esumai Patrick lamented years of neglect.

    “Our people live without good roads, schools, or hospitals while companies drill oil on our land. We welcome investment, but what we ask is fairness. We want to see electricity, jobs for our youths, and real development projects that will touch lives in our communities,” Patrick said.

    Responding, SEEPCO’s representative, Barr. Emmanuel Ajang, assured that the company had commenced the implementation of its Host Community Development Trust and that identified projects would soon take off in line with the PIA.

    On his part, Engr. Ayke Akuwezumba, representing Orient Petroleum, explained that the company had shifted focus to gas production through a partnership with Cottonwooden Gas Refinery. “We are channeling our resources to compressed natural gas (CNG) and liquefied petroleum gas (LPG) production, which will serve industries and households in the region. This is a sustainable plan with long-term benefits for the economy,” he said.

    Executive Commissioner for Development and Production at the NUPRC, Mr. Enorense Amadasu, said the regulator was tracking the companies’ activities to ensure compliance. “We are reconciling their metering systems and ensuring that statutory obligations to the Federation are met. Community development projects under the Host Community Trust are also being tracked to guarantee compliance,” Amadasu stated.

  • FG, Oil companies chart framework for navigational services

    FG, Oil companies chart framework for navigational services

    The federal government, the International Oil Companies (IOCs), and Local Oil Companies (LOCs) under the aegis of the Oil Producers Trade Section (OPTS) have begun drafting a framework for navigational services.

    The framework would guide navigational services in the country ahead of the resumption of the collection of helicopter landing Levy.

    The federal government granted Messers NAEBI Dynamic Concept Ltd exclusive rights as a consultant to collect the levies.

    After the company was granted the rights, stakeholders expressed reservations about the appropriateness of the levees.

    Following concerns raised, the Minister of Aviation and Aerospace Development, Festus Keyamo announced the suspension of the collection of the levy.

    The suspension took effect from 30th May, 2024.

    Read Also: Fed govt deploys 10,000 agro rangers to boost food security

    The minister thereafter set up a committee with members from the Ministry of Aviation and Aerospace Development and its relevant agencies, Airline Operators of Nigeria (AON), International Oil Companies (IOCs), and Messers NAEBI Dynamic Concept Ltd.

    Members of the committee were charged to look into the issues raised by concerned stakeholders and submit a report on or before the end of June 2024.

    There are indications that the committee has submitted its report to the Minister.

    According to a source in the ministry who didn’t want to be named, the ministerial committee recommended the resumption of the collection of the helicopter landing levies.

    Ahead of the resumption, the oil companies, ministry officials, representatives of NAEBI Dynamic Concepts Limited, and aviation industry regulators in the Ministry of Aviation and Aerospace Development, were at a meeting focused on creating a framework for navigational services.

    The helicopter landing levies to be collected by NAEBI Dynamic Concepts Ltd are aeronautical revenues applied within the lower airspace, targeting IOCs and LOCs in line with global conventions and international best practices.

    The levies are expected to boost the country’s economy as the country currently loses millions of dollars due to poor regulation of the collection process.

    Besides revenue generation, the levies on oil fields, terminals, platforms, rigs, floating production storage and offloading (FPSO) units, helipads, airstrips, and aerodromes would also strengthen national security.

    The IOCs that attended the meeting physically and virtually are; the OPTS Oil Producers Trade Section, Agip, Shell, Total, Mobil, Elf, Chevron, and others.

  • Non-review of PSCs causes Nigeria $16b loss- NEITI

    A quantitative study by the Nigeria Extractive Industries Transparency Initiative (NEITI) has revealed that Nigeria lost at least $16b over a ten-year period (2008 – 2017) due to non-review of the 1993 Production Sharing Contracts (PSCs) with oil companies. 

    The study, which was done in conjunction with Open Oil (a Berlin-based extractive sector transparency group) indicates that the losses could be up to $28b if, after the review, the Federation were allowed to share profit oil from two additional licenses.

    In its latest publication titled, ‘‘1993 PSCs: The Steep Cost of Inaction’’, NEITI called for an urgent review of the PSCs to stem the huge revenue losses to the Federation. Such a review it said is particularly important for the federation because oil production from PSCs has surpassed production from JVs. Thus, productions from PSCs now contribute the largest share to federation revenue. 

    The Director of Communication, Dr. Orji Ogbonnaya Orji, who disclosed this in a statement yesterday quoted the study as saying that: “Between 1998 and 2005, total production by PSC companies was below 100,000,000 barrels per year while JV companies produced over 650,000,000 barrels per year’’. By 2017, total production by PSC companies was 305,800,000 barrels, which was 44.32% of total production. Total production by JV companies was 212,850,000 barrels, representing 30.84% of total production.” 

    NEITI in the policy brief stated that the Deep Offshore and Inland Basin Production Sharing Contracts provided for a review of the terms on two conditions: 

    The first review was to be triggered if oil prices exceeded $20 per barrel. Section 16 (1) of the Deep Offshore and Inland Basin Production Sharing Contracts specifies that: 

    “the provisions of the Act shall be subject to review to ensure that if the price of crude oil at any time exceeds $ 20 per barrel, real terms, the share of the Government of the Federation in the additional revenue shall be adjusted under the Production Sharing Contracts to such extent that the Production Sharing Contracts shall be economically beneficial to the Government of the Federation.”

    NEITI observed that this review should have been activated in 2004 when oil prices exceeded the $20 per barrel mark. Although the review was not done in 2004, the judgement of the Supreme Court in October 2018 had mandated the Attorney General of the Federation to work together with the governments of Akwa Ibom, Rivers and Bayelsa States to recover all lost revenues accruable to the Federation with effect from the respective times when the price of crude oil exceeded $20 per barrel. 

    The statement also noted that the second review was to be activated 15 years following commencement of the PSC Act.

    Section 16 (2) states that: “Notwithstanding the provisions of subsection (1) of this section, the provisions of this Decree shall be liable to review after a period of 15 years from the date of commencement and every 5 years thereafter”.

    It recalled that at  inception in 1993, the PSC terms were drawn up to incentivize and attract oil and gas companies to invest in the exploration and production of offshore fields considering the risks involved coupled with low oil prices. Thus the PSC contracts were supposedly more beneficial to the companies. 

    However, the Law anticipates that the companies would have recouped their investments when oil price increases and after many years of operations, hence the two trigger clauses in the Act. 

    Since the Supreme Court judgement has addressed the condition for the first review, this second review was the focus of NEITI’s Policy Brief. According to NEITI, this second review should have happened in 2008 and informed why it chose 2008 as the the start date for commencement of estimated losses in the model. 

    The statement reads in part: “NEITI explained that the analysis was conducted for the seven producing fields of the 1993 PSCs. These are: 

    i. Abo (OML 125): operated by Eni;

    ii. Agbami-Ekoli (OML 127 & OML 128): operated by Chevron;

    iii. Akpo & Egina (OML 130): operated by Total and South Atlantic Petroleum;

    iv. Bonga (OML 118): operated by Shell;

    v. Erha (OML 133): operated by ExxonMobil;

    vi. Okwori & Nda (OML 126): operated by Addax;

    vii. Usan (OML 133): operated by ExxonMobil. 

    “After compiling data from the seven offshore fields on oil production, oil prices, cost of development, operating costs, decommissioning costs, and the applicable fiscal regimes, NEITI explained that financial modeling, the standard methodology in the industry, was adopted to estimate revenue in the study. 

    “Putting the losses in project terms, NEITI reported that the lower threshold loss of $16.03bn to the Federation Account would have funded the Port Harcourt – Maiduguri rail line put at between $14bn to $15bn. Other projects that the lost revenue could have been used to fund include the “Mambila Power Plant of 3,050 MW at $5.72 billion, while the estimated cost of the Ibadan-Ilorin-Minna-Kano Standard Gauge Line is $6.1 billion. 

    “The combined cost of these projects is $11.82 billion, which is less than the lower threshold of estimated losses…. the Calabar-Lagos Railine ($11 billion), Fourth Mainland Bridge ($1.4 billion), Badagdry Deep Water Port Complex ($1.6 billion), and Lekki Deep Seaport ($1.2 billion)” the Publication revealed. 

    “Meanwhile, the higher threshold estimate of $28.61 billion can fund 99% of the proposed federal government budget for 2019.”

    NEITI recommended that the  FG through its appropriate agencies should commence urgent process to review the PSC agreement with oil companies now not later.

    It also asked that  the FG should note that the affected contractors have expressed willingness to negotiate these terms and therefore they and the state governments should be carried along in the review process. 

    The watchdog organization said that the NNPC should follow international best practices and make the contracts with oil companies public in other to ensure transparency and maximum government take, as Nigerians can properly scrutinize such contracts and draw attention to areas of improvement. 

    The publication by NEITI is consistent with its mandate of ensuring that it “Monitors and ensures that all payments due to the Federal Government from all extractive industry companies, including taxes, royalties, dividends, bonuses, penalties, levies and such like, are duly made”.

    The statement explained that the NEITI Policy Brief is one of the agency’s policy and advocacy instruments, designed to focus the attention of policy makers and citizens on important issues in the extractive sector, especially those requiring urgent attention.

  • Buhari directs release of fund for Ogoni clean up

    …FG to get blue print on Niger Delta development 

     

    President Muhammadu Buhari has directed that the Nigerian National Petroleum Corporation (NNPC) and oil companies release fund within a very short period for the clean-up of Ogoni community.

    The Minister of State, Petroleum Resources, Dr. Emmanuel Ibe Kachukwu made this disclosure Wednesday in the first part of an 8-Part Series Podcast that focuses on the Niger Delta and security. 

    He insisted that the president is committed to the success of the Ogoni clean up, noting that his ministry was working with the Ministry of Environment to continue the exercise. 

    His words: “The president is completely committed to the success of this. And we are working with the Ministry of Environment to continue the Ogoni clean up. The President has just directed that funds necessary for this must be released within a very short period of time so that this Ogoni clean up can actually move from the drawing board to actual practical reality. In fact, both the oil companies and NNPC to fund this sufficiently for us to move forward.”

    The minister added that the ministry has commenced a Programme to engage Ogoni in order to secure the community buy-in and participation when there is any problem. 

    The plan to make communities have faith in the government, according to him, is not restricted to Ogoni.

    Read Also:‘Ogoni people’ll never allow resumption of oil production, without broad discussion’

    Continuing, Kachikwu said that government is currently working on a framework for a community based participation in oil and gas pipelines and oil and gas assets. 

    Following the realization from inter-agencies researches that challenges were still lingering in the Niger Delta even as over $40billion had been spent in the region in 15 years, the ministry is working with the Office of the Vice President, the Ministry of Niger Delta, Niger Delta Development Commission and the corporation to do more of capacity building and economic empowerment, he said. 

    He said that from the reports, the ministry has seen the past expenditure and what is still available in the states of the region. 

    The minister said that he has set up technical committees in Edo, Delta and Imo States that are working with the governors as the chairmen to look at the volume of oil available and produced in the states, the opportunities, economic empowerment and the burning issues in the states.

    The committee, which has oil companies, the ministry and government agencies as members according to him, will also carry out the assessment in other oil producing states in order to develop a blueprint for engagement and intervention in the region. 

    He said that “If we succeed in doing that, for the first time, what we are going to have is a complete blueprint, complete local engagement, complete intervention and supervision of the Niger Delta Development module. And that is something that can be sustained for posterity.”

    The minister said that the ministry has approved the establishment of 10 modular refineries out of which two have begun construction. Kachikwu said that the two that sited in Kwale, Delta State and Ogbere , Rivers State will start yielding results within one year. 

  • Reps threaten warrant of arrest against recalcitrant oil company chiefs 

    The House of Representatives has threaten to issue warrant of arrest against Chief Executive officers (CEO) of some major oil companies for failing to honour it’s invitations.

    The oil companies that include Total Nigeria Plc, Mobil Nigeria, NIPCO, Forte Oil, Oando and MRS among others were being investigated for alleged huge debts and criminal acts of sabotage by oil marketers.

    Chairman, ad hoc committee mandated to carry out the investigation, Abdulahi Gaya Wednesday expressed concern over the attitude of the affected CEOs that have consistently failed to either honour the Committee’s invitation or failed to provide requested documents for the investigation.

    He said: “Before we started this investigation, what we did as a committee was to sit down to digest and see the best way out and fortunately for us, so far we have recovered a lot of money, huge amount of money.

    “We called PPMC to give us information on the outstanding of oil marketers and they came and told us. We then sent letters to 17 oil marketers to send in documents and tell us their own part, the outstanding.

    “We also requested that they come and defend it but instead of doing that, they are sending representatives. Why are sending persons that are not part of their organizations?”

    According to him, the investigation was to ascertain the veracity or otherwise of the claims of the Petroleum Product Marketing Company (PPMC) as well as the oil marketers who are the actors on the matter with a view to ensuring that the Nigerian government was not short-changed in anyway.

    Gaya, who revealed that 50 percent of the debts arising from default by  oil marketers has been recovered, however did not disclosed the actual amount recovered so far.

    While he noted that the amount was stipulated in the documents obtained from various stakeholders, the lawmaker expressed optimism that 80 percent of the money would be recovered by the end of the investigation.

  • Groups lament pollution by oil companies

    A group, the Environmental Rights Action /Friends of the Earth Nigeria (ERA/FoEN) and members of the civil society in Lagos State have condemned what they described as destructive pollution of the environment by multinational oil companies  in the country.

    To this effect, the groups staged a protest rally asking that the oil companies be kicked out of the climate talks holding in Marrakech, Morocco next month.

    In a statement signed by the Deputy Director  of ERA/ Foen, Mr Akinbode Oluwafemi said: “Today, the Environmental Rights Action /Friends of the Earth Nigeria (ERA/FoEN) joins hundreds  of groups rallying globally to demand delegates at next month’s climate talks in Marrakech, Morocco  take urgent action to protect the UN Climate Treaty meetings from fossil fuel industry intervention. Today’s action demands that leaders advance  the movement within the UN framework convention on climate Change (UNFOCCC) to protect its negotiations from the influence of the fossil fuel industry  and other dirty industries. Government leaders first raised the issue last May in Bonn, Germany.

    “Currently, the UNFOCCC permits access to business groups like the US Chamber of Commerce, Business Europe,  and the International Emissions Trading  Association  whose members include some of the largest  fossil fuel corporations in the world. Such groups could seek to delay , water down  or redirect  negotiations toward the interest of their members.

    “Yet, as negotiators pointed out at last meeting of the UNFCCC, the treaty has no policy for addressing such conflicts  of interest, leaving the entire process vulnerable to the lobbying might of fossil fuel interest  groups.

    At those meetings, for the first time in the UNFCCC history, countries representing nearly 70 percent of the world population banded together in support of a policy to address conflicts of interest. This year, the UNFCCC meetings in Marrakech will run parallel to meetings of the World Health Organisation’s Global Tobacco Treaty in India.”

  • FG loses $2bn to tax evasion by Oil Companies

    Oil companies  avoiding payment of compulsory fees have caused the Federal Government $2bn, the House of Representatives ad hoc committee mandated to investigate all oil prospecting licenses (OPLs) and Oil Mining Leases (OMLs) granted by the Federal Government said Thursday.

    Gideon Gwani, Chairman of the ad hoc committee, while addressing a press conference in Abuja said Oil companies are owing the government hundreds of millions of dollars thus compounding the problem, when they should have been the ones helping to salvage the situation of the country by prompt payment of their taxes.

    The situation is alarming and worrisome Gwani said, adding that “this is a dangerous trend that cannot be allowed to continue.”

    According to him, “It is estimated that the oil companies by their actions have either evade or avoided the payment of these compulsory fees which is presumed to have denied the Federal Government the sum of about two billion dollars.

    “At a time when the government is talking of obtaining loans for Infrastructural Development, such as roads, railways, powers plants, petroleum refineries, among others, oil blocs have been allocated to some companies so the Government could use the proceeds accruing from loyalties, signature bonuses etc, to fund these important projects,

    ” Yet,  several years after, these facilities are still in comatose with little or no new projects to show as approved.”

    The Chairman lamented that the Minister of Petroleum Resources Ibe Kachikwu and the Governor of Central Bank of Nigeria, (CBN), Godwin Emefiele are yet to respond to his committee’s request.

    He however said the committee would not to be intimidated to abandon its work “the committee “will go ahead with its investigative hearing on the matter,” he said.

  • Bayelsa knocks oil companies, content board

    Bayelsa knocks oil companies, content board

    Bayelsa State is not happy with oil companies operating in the state and the Niger Delta region. It could not hide its loathing for operational strategies of multinational oil companies when its Commissioner for Justice and Attorney-General, Mr. Wodu Kemasuode, led a team on Tuesday to the headquarters of the Nigeria Content Development  and Management Board (NCDMB) in Yenagoa, the state capital.

    Everybody thought that the commissioner and his team came for a courtesy visit, especially as the board has a new Executive Secretary, Mr. Denzel Kentebe, who hails from the state. He replaced the former administrator, Mr. Ernest Nwakpa.

    Kentebe also thought that it was a courtesy call. But it ended up being more than a familiarisation visit. Though the commissioner with his team after settling down in the exotic office of Kentebe congratulated him on his new portfolio, he wasted no time to spell out the grievances of the state against the board and the oil companies.

    First on his list was the recent sale of the Oil Mining Lease (OML) 29 and the Nembe Creek Trunkline by the Royal Dutch Shell Plc whose operational name in the country is Shell Petroleum Development Company (SPDC).

    Shell sold the oil facilities located in Nembe Local Government Area of the state to Aiteo Eastern E&P Co Ltd for about $1.7billion. But the state is angry at its exclusion from the transactions that led to the sale of OML 29.

    The commissioner said state’s expression of interest to acquire the oil assets was turned down by the multinational company. Kemasuode told Kentebe, that the interest of the state was not considered in the bidding that led to the sale.

    “Bayelsa State Government submitted its bid for OML 29 but we are not happy that our bid was not considered. We feel that the board did not consider the interest of the state in the bidding. Our interest was not protected,” he said.

    He said the state suffer greatly from all the environmental problems arising from oil exploitation and should have been considered first in the sale of the oil assets.

    Second on his list is the establishment of headquarters of oil companies outside their areas of operations in the state and the Niger Delta region. Undoubtedly, most companies who explore and exploit petroleum products in the state and the region have their headquarters outside  their operational areas. While some have their offices in Lagos, others operate from Abuja.

    But the commissioner said such practice account for the reasons why the states in the region have not developed to their full capacity. He demanded immediate relocation of oil companies’ head offices to oil-producing states including Bayelsa.

    He said the government was considering exploring legal options to compel oil companies to relocate their headquarters to the state. He said the absence of operational offices of the companies has adverse effects on the economy and environment of the state.

    He said: “What we suffer from the absence of these offices in the state cannot be enumerated, even in terms of taxation, the economy and real estate. Once these oil companies come here, so many other companies will follow them and this will boost our economy. Once they come, Bayelsa state will be something else.

    “So, we are suffering tremendously as a result of the absence of these companies. There is absolutely no basis not even issues of security. The place is secure enough for everyone. If it is so secured that these companies carry out their production, it should also be secured for them to bring their head offices here. The government is doing all its best to ensure that there is security and the government will still do more.”

    Without mincing words, the commissioner pointed out that the board is also guilty of what other oil companies are doing. He said the board has its most effective and efficient office outside the state.

    He said the board by so doing contravenes Section 71 of the Act establishing it which requires that it carries out its business and locate its headquarters within the oil-producing state. He said the board has reduced its Yenagoa office to a mere symbol while running most of its affairs in its Abuja office.

    He said against the spirits of the law, the board undertakes most of its activities in its Abuja office adding that if the board carries out its programmes in the state as envisaged by the act, they will improve the programme of the state.

    He said: “Then another major issue of concern to us as a state government is the fact that the board has in contravention of the Act, that is section 71 of the Act, established office outside the oil-producing state where mutual activities are carried out.

    “In the last programme that the board and the governor held last year, the governor did allude to that because I am aware that in the last regime, most of the activities took place there and that is to the detriment of the state because if you carry out your activities here as envisage by the act the economy of the state will improve.

    “The Act simply says you can have offices only in the oil-producing states. You should have your headquarters here then if you want branch offices you can build. As a goverment we are calling on the board to close that office in Abuja and carry out its businesses here.

    “The Abuja office of the board is illegal, it’s contrary to the provisions of the Act established by a particular section 71. These are serious legal issues and the state is quite serious serious about it.”

    Another issue bothering the state is the employment opportunities in the board. Kemasuode reminded Kentebe of the provision of the Federal Character in the Nigerian Constitution as it relates to employment. He said though the state lacks knowledge of composition of the board’s employees, there must an effective representation of indigenes of the state in the employment of the board.

    “For now we will call on the board to ensure that there is effective representation at all levels of indigenes of this state in the operations of the board not only at one level.

    “These are serious issues, which we have quietly talked about before coming to you.

    “We hope that these issues will be treated with the seriousness with which you would have been doing your work,”, he said.

    In his response, Kentebe said the board would look into the demands of the state and reschedule meetings to discuss them.

    He said: “I had thought that this was going to be a welcome courtesy visit, trying to welcome me to the state and trying to show me where the joints are, but from your presentation apart from being a welcome visit, you have also come with a lot of concerns.

    “I want to say that we will look into these issues. We have been here for five years and we have enjoyed the collaboration and support of the Bayelsa State government and we still continue to look forward to that.

    “These issues that you have brought up, we will look into them. We will schedule meetings to discuss them further with you, so we can continue to have that good relationship that we have had.

    “I can assure you that we are a very responsible board an we will not do anything contrary to the interest of the state of Bayelsa and most especially to contravene the Act that set us up in line with the constitution of the Federal Republic of Nigeria.”

  • ‘Why oil companies shy away from compensation’

    ‘Why oil companies shy away from compensation’

    Miss Yetunde Ogunremi, a Barrister at Law and Partner, O.J Bamgbose & Co, Oyo, Ibadan, in this interview with Tolulope Ogidan speaks on the position of the law in proven cases of willful destruction of property and remedies available, for oil-related pollution.

    What does the constitution says about the willful destruction of any place by an individual or organisation?
    The 1999 Constitution of the Federal Republic of Nigeria (as amended) provides for the environment under Chapter II; section 20 states: “The State shall protect and improve the environment and safeguard the water, air, land, forest and wildlife of Nigeria”.
    Section 17(2) (d) of the Constitution complements the aforestated provision by stating that:
    “Exploitation of human or natural resources in any form whatsoever for reasons other than the good of the community shall be prevented.”
    Though section 20 falls under the non-justiciable rights, the courts seemed to have made even the non-justiciable rights justiciable by relying on the domestication of the African Charter, a regional instrument on Human Rights.(section 12 of the constitution). All persons shall have the right to freedom from pollution, environmental degradation and activities that adversely affect the environment, threatening life, health, livelihood, well-being or sustainable development within, across or outside national boundaries.
    What form of compensation should be paid to the victims of such destruction?
    The payment of compensation is one of the intractable problems facing the oil industry in Nigeria. The internecine crisis between the oil firms, the host communities and the federal government could be traceable to the issue of neglect which is synonymous with the low compensation paid to the victims of negative externalities from the oil industry.
    These externalities are in form of oil pollution, gas flaring and other forms of environmental modification.
    Bearing in mind that it is difficult to engage in oil business without one form of environmental pollution, the framers of the 1969 Petroleum Act insisted that in an event of untoward modification of the environment, fair and adequate compensation should be paid to the victims. It is therefore a statutory obligation for oil firms to engage in best oil field practice to avoid polluting the environment.
    However, evidence on ground would seem to suggest that the issue of compensation is a thorny one. Opinions are divided on the adequacy or otherwise of the compensation paid by the oil firms to the victims of oil spillage. On the one hand, oil firms claim that they are paying adequate compensation. Indeed, it is asserted that they pay rates higher than the official ones. On the other hand, host communities insist that the rates paid by oil firms are not just enough and that the oil firms violate existing regulations in the payment of compensation.
    There are extant acts and statutory provisions that enjoin oil firms to pay one form of compensation or the other to victims of oil pollution. These includes: The Petroleum Act, 1969, Oil Pipeline Act, 1958, Petroleum (Drilling & Production) Regulations, 1969, Public Lands Acquisition Miscellaneous Provision Decree (1977) and later Land Use Act, 1978. In all, there are three strands under which victims of oil pollution may seek payment of compensation from the oil industry.
    But being a highly technical industry, it may be difficult to prove cases like this beyond reasonable doubt by the poor, “illiterate” and obligate fishermen. In other words, in most cases, compensations are not just paid by oil firms even when there is overwhelming evidence.
    They reluctantly pay after protracted negotiations and expensive law suits.
    But critical reviews of these laws reveal that there is no comprehensive statutory provision for compensation in respect of oil pollution in the petroleum industry in Nigeria.
    As a result of this there are lots of items that dispossessed claimants cannot be compensated. This leads to dissatisfaction among victims of oil pollution which, sometimes, results in crises and conflicts within the oil producing communities.
    What form of redress can they pursue if the company fails to comply?
    Oil pollution in Nigeria has been a consequence of the oil prospecting activities. The Niger Delta region of the country has witnessed the bulk of the degrading effects of oil pollution.
    Under Nigerian legal system, victims of oil pollution can seek judicial redress either under the statutes governing such pollution or under the common law torts.
    The Nigerian Constitution, which is the grundnorm, lacks an elaborate provision on environmental protection. Majority of the laws on environmental protection were enacted under the long duration of military rule in the country. Upon the adoption of the 1999 constitution, they were inherited as “existing laws” by virtue of section 315(1) of the Constitution.
    Although these laws exist, yet they have failed to adequately protect the environment and the victims from the deleterious consequences of oil pollution. Some of their shortcomings include the outdated penalty sections, the incapacitation of the enforcement officials, the attitude of prosecution lawyers with respect to environment pollution cases, the attitude of the courts, etc.