“The polluter is strangely in charge of the regulators.”

Photo: Royal Dutch Shell PLC

That’s a perfect line to sum up the oil industry in Nigeria.

Day two of the general strike and ongoing sectarian violence have pushed news of the Bonga field oil spill to the back pages, but in the end it’s all about oil. Whether it’s pollution on the beach, corruption or violence, the source of Nigeria’s malaise is oil.

But back to that line, “The polluter is strangely in charge of the regulators.” That’s from an editorial that appeared on January 9th in the Nigerian Compass.

It’s a strong piece that succinctly summarizes the problems of a country that has placed oil industry oversight in the hands of the oil companies themselves.

Here’s the editorial:

“LATE last year, one of the three Bonga Offshore Offloading Risers (BOOR), spilled 40,000 barrels into the Atlantic Ocean fringes in Bayelsa and Dela States. The effects have been devastating. Oil spillage remains an environmental challenge in Nigeria’s oil and gas sector.

“For the local communities, their livelihoods and very existence are once again under threat from thick slicks of crude oil, seeping into sea, rivers and shorelines destroying marine life and vegetation. The fishing communities have cried out about the spillage killing off fish stocks in the coastline areas. Environmental activists have criticised what was deemed to be the tardy response of the oil multinational to the spillage.

“On its part, Shell explained that it had stepped up its clean-up interventions and pointed out that a third party oil spill also contributed to the disaster. While the efforts of the polluter are noted, we query the cleaning process of oil spillages in Nigeria. For instance, should a polluter lead the response to its oil spillages? The polluter is strangely in charge of the regulators.

“According to media reports, the regulators do not have helicopters, vessels, dispersants, booms and the expertise to manage oil spill response. In other words, the process was conducted according to the dictates, as it were, of the polluter. Such institutional inadequacies hinder the regulatory bodies from rising up to challenges of oil spill whenever it occurs or even prevent same.

“In the interest of transparency and independent monitoring, we call for the regulatory agency, Nigerian Oil Spill Detection and Response Agency (NOSDRA), to be well-funded and strengthened. Nigeria must also explore how to build capacity for the oil and gas sector in resolving issues of spillage. The event however calls for a review of environmental laws relating to oil spills.

“It is also time to know what post-spill management infra-structure is in place to manage the effect on such victim countries like Nigeria, on whose Coastline and Continental Shelf, the oil fields are located. How much duty of care do Concessionaries owe Nigeria? What are their rights and liabilities, when spillage occurs? How are erring parties to the concession brought to book? And how may Nigeria enforce relevant international laws and treaties to deter future spills through heavy sanctions or tax?

“Oil explorations and productions in all the jurisdictions of the World, are subject to international laws regulating Continental Shelves, especially when they are off shore. Oil Prospecting Licences (OPL) granted for exploration often transmits into Oil Mining Lease(OML) subsequently granted for production. Each contains relevant clauses with regards to observance of respective rules and treaties. Common law rule as stated in the classicus case of Ryland Vs Fletcher is that anyone who collects and keeps anything capable of doing mischief upon its escape does so at his own risk and if he does not, he is prima facie liable for the consequence of such a mischief except he is able to establish an act of God.

“There is no doubt, therefore, that in any Mining Lease, the Leasee is prima facie liable until the contrary is proved. Enforcing these laws in Nigeria’s municipal jurisdiction, may pose little or no problems, if relevant agencies exercised their statutory powers to prevent such breaches.There is no better time to call for such bodies to be more proactive than now.

“Oil spills must not go without appropriate sanctions being meted out. Such laxities have the potential of sparking off anger and violence which Nigeria can well do without. Sanctions must, then, translate into huge income for government as penalty and substantial restitution for damages, caused in the affected communities. To prevent spills due to carelessness on the part of oil companies and their terrible effects, Nigeria must ensure that global best practices in the oil and gas sector are strictly adhered to by operators in the country.”

***

I will only add that my research to date indicates that without strong laws regulating an industry and the willingness of the government to enforce those laws, “global best practices in the oil and gas sector” is a fairly hollow notion.

This entry was posted on Tuesday, January 10th, 2012 at 8:17 pm.