N81b Damages: Will it Open Floodgates of Litigations from Oil Communities?

N82b Damages oil

An Abuja federal high court on Monday 21 June 2021 ordered oil giant, ExxonMobil and the Nigerian National Petroleum Corporation (NNPC), its Joint venture partner to pay a cumulative sum of N81.9 billion to Ibeno communities in Akwa Ibom as damages for oil spillage. This amount, according to the presiding judge, Justice Taiwo Taiwo must be paid within 14days, or there would be eight per cent accruals on the original sum monthly if the companies failed to pay the amount within the stipulated date.

In April 2012, the Ibeno communities led by Obong Effiong Archianga and other nine persons had sued the companies to court over claims of oil spillage in their community.

The issue of oil spillage is not a new challenge in Nigeria. Between 1979 and 1996, 1.89 million out of a total of 2.5 million barrels of petrol were spilt across the Niger Delta. About 13 million barrels have been spilt in the Niger Delta since 1958. In 2010, a catastrophic oil spill occurred in Niger Delta where oil spilt from about 20 to 25 miles from Mobil’s offshore platform. More than a million gallons of oil was spewed. So many conflicts have arisen in the Niger Delta community due to oil spillage and its consequences on inhabitants lives.

One of the major factors is pipeline and tanker accident. 50% of oil spill occurrences in Nigeria are caused by this factor. Oil spillage has become a major environmental challenge. Intensified exploration and production of petroleum on continental shelves and the use of supertankers have contributed significantly to oils spill. Initially, before strict shipping and environmental regulations were enacted, the greatest amount of oil spills were from damaged oil tankers.

Another factor is negligence on the part of industry players. Oftentimes, oil industries and unscrupulous individuals intentionally release used gasoline solvents and crankcase lubricants into the sea, thereby aggravating overall environmental problems. These sources add oil to the nations toxic continental waterways at the rate of 3.5 million to 6 million metric tons annually.

Theft and sabotage that occur during the illegal siphoning of oil has become a major challenge in the Niger Delta region. This has significantly contributed to the increase in oil spillage and environmental degradation. Most times pipelines that are damaged during theft may go unnoticed for a number of days and repairs of such pipelines takes even longer thereby worsening the oil spill.  

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Oil spill has a number of consequences on a country’s ecosystem. The Vegetation in the Niger Delta region consists of extensive mangrove forests, rainforests and swamp forests.  Mangroves are very important resources to Nigerians and organisms that inhabit them. The vicious, volatile and quick penetrating properties of petroleum can acidify the soil, cut short cellular respiration of plants, starve roots of oxygen leading to the eventual death of the entire vegetations. Any vegetation destroyed by petroleum is equally susceptible to other problems.  It affects not only animals and plants but humans as well. Mangrove forest is a major source of wood and subsistence livelihood for the indigenous people in the affected areas. This has raised a lot of concerns and political unrest in the country.

There are hopes that the mangrove forests still have a future. Local and international bodies have provided labour and funds to revive and restore the ruined mangrove vegetations in the region. Also, in 2000, the Nigerian Federal government established the Niger Delta Development Commission (NDDC) to control the ecological and environmental impacts of oil spill in the region. Non-governmental organizations and some global agencies have equally been devoted to using advanced technology to identify oil spill source and movement.

Oil spillage also leads to a depletion of aquacultures when groundwater and soils are contaminated. Fish is one of the major sources of protein and vitamins for the Nigerian populace. Aquaculture also provides jobs and sources of livelihood to the local people of Nigeria. The Niger River is home to nearly 250 species of fish but the population is dwindling due to oil contamination. Oil does not only affect the reproductive capacity of fishes or cause redundancy in growth, it also makes fishes unsafe for humans consumption.

The pollution in the marine environment needs to be reduced by enforcing laws and making oil companies accountable for the risks. This will enhance the diversity and productivity of the marine habitat.

Furthermore, the health of local people who are settled along the shores of the rivers and coasts are endangered through drinking and bathing with contaminated water. This leads to an increase in health issues and mortality rates. Oil spills also lead to deaths caused by explosion.

The political and ethnic conflicts that have arisen from oil spillage have led to several litigations. In the early 1990s, conflict in the Niger Delta rose sharply as a  result of deteriorating environmental conditions for the local people of the region which stems from petroleum extraction activities and major oil spills from foreign giant oil companies and their contractors. The affected Niger Delta areas, particularly the Ijaws and Ogoni people feel they are exploited as their ability to make livelihood is undermined. Several court rulings on the issues have identified oil spillage as a violation of human’s right to dignity.

The recent fine on NNPC and Mobil is not the first court ruling. In January 2013, a Dutch court ruled that Shell is responsible for the pollution and environmental degradation in the Niger Delta. However, in the last decade, Shell, in defending the scale of oil pollution claimed that majority of its oil spills are caused by theft and sabotage. Shell has also claimed that there were holes in the pipelines which have been drilled by unknown persons. Amnesty International on the other hand has refuted this claim, saying that Shell had not implemented effective measures to protect its infrastructure in the Niger Delta from vandals. The problem of vandalism has caused Shell about 65,000 barrels loss per day. To resolve the issue Shell in January 2015 agreed to pay a sum of 80 million dollars to the Ogoniland community of Bodo after being sued for two oils spills in 2008.

Due to unrest in the Niger-Delta Region, Shell was forced to realign her investment aspirations in the area, leading to total a pullout from the region. Continuous legal challenges on oil giants from communities were adversely affecting the reputation and businesses of the oil companies. It also poses a threat to future profitability. This may make more oil companies pull out of the country just as Shell did. The positive outcome from this could be that environmental hazards in the affected communities will be reduced and ecosystems will begin to flourish. On the other hand, the negative consequences will also be obvious.  Many workers in these companies will lose their jobs thereby increasing the rate of unemployment in the country. Also, the GDP and national revenue will be grossly affected; it will also have a significant impact on tax. All these effects will hamper the growth of the nation’s economy.

The government has been placed in difficult positions as they mediate and regulate the conflicting issues between oil companies and the Niger Delta inhabitants. It has been increasingly difficult to maintain neutrality and objectivity in these situations. For example, in 2019, President Buhari gave a directive that the Nigerian National Petroleum Corporation (NNPC) should take over the Ogoniland oil wells from Shell to ensure smooth operations. This action was protested by several NGOs and the Movement for the Survival of the Ogoni People.

Analysts have submitted that the relationship between Niger Delta people and oil-producing companies can only be smoothened and oppositions reduced if regular interaction and appropriate compensations are put in place. This will also check the possibility of litigations motivated by the success of the Ibeno people.  Compensations like this one for Ibeno people can be a form of motivation, critical to the well-being of the local people of Niger Delta although it may  negatively affect the bottom-line of oil-producing companies. 

Categories: Economy, Features