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Claiming compensation

November 2019-April 2020

Graphic of farmland polluted by a pipeline spill of oil

Summary

This project seeks to update our existing research on the current challenges communities living in the Niger Delta face claiming—and receiving—fair compensation for oil spills impacting their land and livelihoods. Communities living in the Niger Delta often face a long and unclear path to redress for having their environment—which is often also a source of food, water, and income—damaged by oil spills. This project will review the current oil spill compensation regime, assess barriers to changing it, and identify a set of practical policy recommendations to help the Nigerian government address the gaps and inconsistencies in oil spill compensation, while also future-proofing it in the context of expected new investment.

Aims

The project aims to improve awareness of the challenges facing communities claiming their right to compensation if they are impacted by oil spills. The project also aims to make recommendations to improve how compensation claims are dealt with, and develop a network of key individuals who can work together to implement those recommendations.

Key activities

  • Update our existing research on the current reality of claiming compensation for damage to land and livelihoods from oil spills in Nigeria.
  • Develop and share practical recommendations to improve the current oil spills compensation regime.
  • Engage with key stakeholders to increase their understanding of the challenges to communities claiming—and receiving—compensation from oil spills impacting them.

Context

The Niger Delta region is a key source of wealth for Nigeria, with international and indigenous oil companies producing around 2 million barrels of crude oil per day in 2019. However, the region is one of the most polluted natural environments in the world. This stems from a combination of badly maintained infrastructure, weak regulation and regulators, and the development of an artisanal oil industry which operates outside any formal environmental protection standards. Hundreds of oil spills each year have had a major environmental impact.

Many of the Niger Delta’s inhabitants rely on fishing and farming for their livelihoods, so they are particularly vulnerable to pollution affecting land and water sources, while emerging research suggests a potentially disturbing effect on human health.

Communities living in the Niger Delta often face a long and unclear path to redress for having their environment, livelihoods, property, and health damaged by oil spills. This contributes to the view that the benefits of Nigerian oil industry operating in the Niger Delta are mainly enjoyed outside the region, whilst communities local to the industry bear the sometimes ruinous consequences, often without compensation. The perception that social and environmental issues have not been addressed in the region is a core grievance in some impacted communities, a source of unrest, and ultimately reflects very real concerns over violations of the rights of Nigerians to a clean and healthy environment.

In theory, Nigerian regulation provides for those affected by oil spills to receive financial compensation, most obviously when the cause of a spill is determined to be operational error as a result of oil company equipment failure. However, prior research has documented the inconsistent application of regulations in Nigeria, which can also be based on irrelevant or out-of-date concerns.  For example, compensation rates do not adequately take into consideration the value of lost productivity resulting from polluted land or crops, or damaged buildings. Instead, they are often based on the historic Land Use Act, which considers compensation based on the value of land acquired by compulsory purchase.

Different attempts have been made to address these challenges by various agencies has further worsened the situation, with conflicting positions and confusion surrounding what policies applies, when. This, in turn, leads to frequent, drawn-out, and complicated litigation, a source of frustration for all involved.

Icon of computer and files

Project resources

Funders and Partners

Published: 06.03.2020