Sustainable Development and Nigeria’s Petroleum Industry: Offshore Litigation as a tool for achieving Sustainable Development by Dr. Dickson Omukoro

Sustainable development is the policy imperative to balance economic, social and environmental considerations to meet the needs of today’s generation without compromising the ability of future generations to meet their needs. The concept of sustainable development has been recommended as a central guiding principle for governments and private enterprises. Thus, the policies of governments will be aimed at sustainable and environmentally sound development.

The Nigerian government in 1989 (revised in 1999), through its National Policy on the Environment, embraced the concept of sustainable development by providing guidelines for the achievement of sustainable development in 14 critical sectors of the Nation’s economy. Energy Production, Mining, and Mineral Resources were amongst other sectors listed under the policy.

However, the numerous cases of oil spills in the Niger Delta have created some doubts if the Nigerian government is walking the talk on sustainable development. Like most countries, it could be argued that when all the noise on sustainable development is peeled from actual development planning and policy, it remains just that, noise.

Pollution resulting from oil and gas exploitation remains the major cause of environmental damage in Nigeria. The crisis of confidence in the Nigerian judiciary and its reluctance to move against the interest of the oil and gas companies has emboldened the oil and gas companies whose standard of operations fall short of international standards. As at today, there is nothing sustainable about the way and manner petroleum exploration and exploitation is carried out in Nigeria. The suing of multinational oil companies in domestic courts has been in existence right from the early days of the Nigerian petroleum industry, with little or no impact on the operations of the companies.

In recent times, there has been a growing trend of suing multinational oil companies in foreign courts or their home States for violation of human rights or environmental abuse. The threat of litigation as a consequence of negative social, environmental impacts and human rights abuse is now considered to be one of the significant risks factors for multinational oil companies. The implications of the outcome of such cases does not necessarily lie in the value of financial compensation but must also be viewed from the public pressure context.

However, in terms of the financial package, there is evidence to suggest that multinational oil companies are more likely to be willing to part with a substantial amount of money as compensation once the litigation is taking place in their home country or any other developed nation. The case between Bodo v Shell in a London court further illustrates this point. In the events following the Bodo oil spills, it was reported that despite knowing the amount of damage done to the environment and the people whose means of livelihood depends on it, Shell was only willing to pay a paltry £4,000 before the matter was brought to the United Kingdom.

The fact that Shell would later decide to pay out £55 million to the Bodo community is an indication that the company realises the damage that would have been done had the matter been allowed to carry on in the full glare of the international media.

Oil companies are more likely to employ sustainable means of developing Nigeria’s petroleum resources if the consequences of environmental damage resulting from petroleum operations were to be significantly higher than what is obtainable now. The refusal of the London court to assume jurisdiction in Okpabi v Royal Dutch Shell Plc represents a major blow for those who had hoped that the case would act as an important precedent on the jurisdiction, paving the way for other cases to be brought against UK based corporations for their actions abroad.

While this latest move by the London Court may still be upturned on appeal, as the permission for appeal has already been granted, the preference for a foreign court further highlights the lack of faith in the Nigeria judicial system for alleged victims of oil-related environmental damage. A successful appeal in Chief Okpabi is, therefore, likely to see an increase in similar cases in the future. Importantly, with the availability of Conditional Fee Agreements or CFA’s (such as the one offered by Leigh Day in the Chief Okpabi case), foreign litigation may have come to stay despite the huge cost associated with such actions.

However, the more recent judgment of the UK Supreme Court in Vedanta Resources Plc & another v Lungowe & others suggests that foreign litigation as a means of holding companies accountable may have come to stay. Sustainable development advocates and environmentalists must therefore actively consider foreign litigation as a means of putting pressure on both the government and oil and gas companies. But effectively utilising foreign litigation as a tool will require coordinated efforts and capacity building.

More fundamentally, the end game of such coordinated efforts must be to ensure that oil and gas operations are carried out in line with the concept of sustainable development and not necessarily the increased financial compensation that comes with successful foreign litigation.

Please share

Author: admin

Leave a Reply

Your email address will not be published. Required fields are marked *