About a year ago, we wrote about the huge changes taking place in onshore oil production in the Niger Delta as International Oil Companies (IOCs) divest and sell their operations on, in the main, to Domestic Oil Companies (DOCs). A major concern was what would happen to the historic oil spill pollution left behind in communities, and whether these divestments would weaken the potential for clean-up.
On the same day that Shell reports record profits, new details are emerging around the upcoming court case in the UK brought by two communities in the Niger Delta (Ogale and Bille) against Shell, which could have significant ramifications for company liability for oil spill clean-up in the Niger Delta – and perhaps even for the just transition from fossil fuels to a green economy around the world.
Both the Guardian and Financial Times report that Shell intends to fight the case on the basis that it holds no legal liability to provide compensation or clean-up and restoration of the environment. Its arguments include that it cannot be brought to court for spills which took place more than five years ago; the related spills are a result of third-party damage to its infrastructure and it should not be held accountable for this; and even that the communities have no legal standing to be able to bring a case against Shell.
If Shell wins on this basis, this may set a precedent and pave the way for IOCs to divest from their operations, with no legally enforceable way to ensure they play their part in a full and proper clean-up of the Niger Delta.
But put aside the arguments that will be made in this case; can it really be right that IOCs could sell up after decades of profiting hugely from oil and gas production in the Niger Delta, and leave behind a region widely recognised to be one of the most polluted on earth, without a plan in place to play some sort of role in its large-scale restoration and simply seeking to shift the blame elsewhere? Companies have operated in the Niger Delta well below the standards that would be expected in other parts of the world for decades – is this kind of departure what a just transition should look like for IOCs in the Niger Delta?
It’s extremely positive that Ogale and Bille communities have the opportunity to have their case heard in the UK courts, given the difficulties in accessing justice through the Nigerian courts. However, in a region where it is estimated that there are 11,000 premature infant deaths a year as a result of oil spill pollution and many areas remain polluted, can it really be right that we are currently relying on the ability of communities to bring their cases to court, one by one, to seek redress?
Legal routes are vital, and surely bring the potential for environmental justice closer, but winning the legal argument is only the start of a complex process. When commitments for clean-up have been secured so far, these projects have often become bogged down in bureaucracy, misuse of funds, poor practice and conflict, and communities are still waiting for their environment to be properly restored.
Therefore, we need to start a bigger, more ambitious discussion about how to fully address the environmental disaster in the Niger Delta; one which doesn’t just apportion responsibility, but establishes what it will actually take to implement, and cooperate on, solutions that deliver a proper clean-up and restoration across the region. This will be a huge and complex undertaking, and it will require a level of cooperation, resources, political will and joined-up thinking well beyond anything we have seen to-date. However, communities in the Niger Delta cannot afford for the Nigerian government, oil and gas companies, the international community and civil society to lack the scale of ambition needed to fix this situation.
These are some of the key questions we will need to answer as part of this discussion:
What is the scale of the problem?
It is obvious to the residents of communities like Bille and Ogale that oil spill pollution is prevalent and it has not been cleaned up. UNEP’s Environmental Assessment of Ogoniland is all we have by way of large scale, systematic assessment of oil spill pollution, yet this region is only one small – though significant – part of the Niger Delta. This assessment showed that historic oil spill pollution had not been addressed and there were systematic problems with the quality of clean-up which had taken place. It would be naive to think this is not the case in other parts of the Niger Delta. The National Oil Spill Detection and Response Agency’s Oil Spill Monitor (originally built by SDN), might be a useful starting point to understand the likely distribution of pollution, but it’s not comprehensive (for example, a huge spill in Nembe towards the end of 2021 is yet to appear on the platform).
Who will pay for the clean-up and how much is it likely to cost?
Nigerian law states that the oil and gas companies are responsible for oil spill clean-up regardless of the cause. Oil companies argue they cannot be held responsible for spills caused by third parties.
No one is pretending the situation is easy, but it seems fanciful to suggest that they can be completely absolved of the responsibility to protect their infrastructure from damage, which results in the release of hydrocarbon pollution which is hazardous to human health and the environment. We do realise, however, that we need to work within the realm of what is politically possible, and it may ultimately take pressure – and resources – from the Nigerian government and international community, to leverage the resources of oil companies to ensure clean-up of the Niger Delta. It is possible there are funds already available (e.g. for decommissioning), which could be put towards this. In Ogoniland, in 2011, UNEP suggested an initial budget to commence clean-up of $1bn USD – with an expectation the final cost might be many times this. So we know we are likely to be talking about tens of billions of dollars.
Who will do the clean-up and how will it be managed?
We don’t yet seem to have found a model that works well in the Niger Delta. HYPREP – the government project charged with the Ogoniland clean-up – took years to commence action and even after the clean-up started in 2019, it is plagued by delays and concerns over its quality and misuse of funds. On the other hand, Shell Petroleum Development Company’s clean-up in Bodo (brought about through a mediated settlement in the UK courts) would appear to be adhering to higher standards of technical clean-up, but has been plagued by repeated conflicts within the community and between the community and Shell’s contractors. Years of animosity between communities and oil companies and all that has come before, do not provide an ideal environment for a smooth, peaceful clean-up to take place. As for wider oil spill clean-up efforts, anecdotal accounts are easy to find all around the Niger Delta, for example, of visible oil slicks on water, in locations supposedly cleaned-up. We need initiatives like the Bodo clean-up and HYPREP to succeed, but if we want a more timely, effective clean-up at scale, we need a new model, perhaps one where a third-party such as the UN is given direct responsibility for clean-up operations.
What’s the Federal Government’s plan to deal properly with the artisanal oil industry?
In 2022, oil theft hit epidemic levels, with official oil production dropping to around half of Nigeria’s production capacity, and talk of anywhere between 200,000 and 400,000 barrels of oil being stolen a day. We need to stop ongoing pollution for clean-up to be effective. This is a hugely complex problem, with complex interests, from the communities who have limited access to fuel and so depend on products illegally refined in the Niger Delta, to the high-level investors backing the industry. Tackling it is an unenviable task, but we need to start somewhere. Currently, the Federal Government’s main response is to increase local production of refined products through modular refineries, pay for expensive pipeline surveillance contracts, and to send in the military. These are not long-term solutions – at least not by themselves; for example, they don’t address the need for economic development and the lack of jobs in communities which drives some young people into the industry. A holistic national action plan, which spells out the different issues to be tackled (e.g. corruption and criminality, economic drivers, environmental pollution, access to energy) and who is responsible, would at least mean we have a place to start from and to engage with government, companies and all other stakeholders to get action. Some of the answers are already out there: SDN’s work with young people previously in the industry shows it is possible to support them into alternative work – but for this to work at scale and over the long-term, it needs to be accompanied by wider actions.
How will we ensure that the remaining oil and gas industry has better environmental performance and expedite a transition to green energy?
In 2018, a SDN report showed that relative to their size of operations, Domestic Oil Companies (DOCs) pollute more than IOCs (i.e. they spill more oil and flare more gas per barrel of oil they produce). IOCs often note that they have followed Nigerian law and regulatory systems, but it is clear these have allowed practice well below international standards. We need stronger regulation and enforcement from the Federal Government of Nigeria to improve practice, and this requires associated resources (for example, the National Oil Spill Detection and Response Agency does not have the ability to monitor offshore spills at present) and regulatory clout. There is, however, the bigger question: for how long should IOCs be selling on their assets – supposedly as part of their transition – to domestic companies that will continue to exploit these resources? Nigeria is making steps towards implementing an energy transition plan, but this is not coming quickly enough for communities experiencing the ongoing impacts of the oil and gas industry.
