Analysis of Nigeria's Oil Pollution Legislation

Abstract
Nigeria’s 1969 Petroleum Act lagged behind global best practices. The Act disappointed oil
producing countries. Protests against IOC activities and the introduction of intervention
organizations have failed to restore peace. Many oil-producing areas opposed the Act, which
created organizations to address the Niger Delta’s underdevelopment and environmental damage.
Since 1958, Nigeria has explored oil, this region exports sixth-most oil and third-most palm oil
(behind Malaysia and Indonesia, respectively). Since 1981, Niger Delta oil has provided 80% of
Nigeria’s earnings and 90% of its exports. Oil’s GDP contribution climbed from 84% to 97% in
2003. 2006: 1,481 wells and 159 oil fields in Niger Delta. Human activities and oil exploration
and extraction have been linked to biodiversity loss, erosion of riverbanks and coastlines,
flooding, noise pollution, sewage and wastewater pollution, land degradation, and deforestation.
To stop oil leaks, the Nigerian government has passed legislation.There is no standard procedure
for establishing, upholding, keeping track of, or guaranteeing compliance, and some of it takes
place under Acts that have nothing to do with the environment. This dissertation’s goal is to
analyze Nigeria’s current oil pollution legislation and offer suggestions for its improvement.
Massive oil spills and long-lasting environmental harm have been caused by oil exploration and
production in the Niger Delta. The legal and regulatory aspects of this issue are closely examined
in this essay. It examines the broad legal provisions controlling oil spills in the Niger Delta to
determine whether there are any loopholes or weaknesses in the current laws and practices that
contribute to or worsen oil spills in the area. The implementation and enforcement of the laws
are also examined, with a focus on the polluter-pays principle’s success or failure, the sufficiency
of funding for environmental remediation, issues with standard-setting and ministerial discretion,
as well as problems related to the security issues in the Niger Delta. The dissertation
simultaneously examines pertinent sections of the recently passed Petroleum Industry Act (PIA),
2021 to see if it provides suggestions for addressing the persistent issue of oil spills in the Niger
Delta.

INTRODUCTION
Background
In 1956, oil was found for the first time in the Niger Delta of Nigeria, and this discovery marked
the beginning of commercial exploration. The discovery sparked a flurry of onshore oil
exploration in Nigeria in 1961 by companies from across the world. Because of the growing
number of companies operating in Nigeria's upstream oil sector, the country's central government
enacted rules to control oil exploration and production. The first daily output from the Oloibiri
field was 5,100 barrels of crude oil. Production of oil from the field began in earnest in 1958.
Producing 2 million barrels per day in 1972, and topping out at 2.4 million barrels per day in
1979. In 1972, Nigeria was the sixth biggest oil production worldwide. At now, it ranks as the
world's sixth-largest oil production. It is predicted that 159 x 1023 cubic feet of natural gas is
stored in Nigeria. Natural gas production in the nation is routinely among the top 10 worldwide.
Nigeria burns over 40% of its natural gas production and recycles about 12% of it in order to
maximise oil recovery. The World Bank places the burden for 12.5% of the world's vented gas
on Nigeria. The federal government took action to curb gas flaring and fortify the petroleum
industry in the face of slow development. In spite of worries about sluggish development, these
laws were enacted. Some of the most important problems that needed solving were governance,
the infrastructure, and assigning blame. It was important to make changes across Nigeria's oil
industry. When rules and regulations are tightened up, investors should expect higher profits.
The Petroleum Industry Bill was signed into law in 2000 in response to a nationwide
mobilisation. Many attempts were made at that time to make the idea into legislation, but they
were all ultimately failed. Over the last decade, this has led to a loss of investment for Nigeria
estimated at roughly $50 billion. Petroleum Industry Act (PIA) 2021 was signed into law by
Nigerian President Muhammadu Buhari in January of this year. There had been continuing
attempts to modernise the country's oil and gas industry over the last two decades, and this event
marked its successful culmination. The Act was enacted to ease the process of expansion for the
business and address the problems experienced by the most impacted areas. Overall, the industry
has changed significantly both at home and abroad since the reforms were originally introduced.
Both the number of countries in the area and the number of American companies with oil-
production capabilities have grown. Although militancy has declined in oil-rich areas, it may still
exist in certain. There has been a global effort to reduce the use of fossil fuels in response to
climate change concerns. Because of this, a lot of different kinds of establishments have stopped
using oil and gas and other fossil fuels. To cope with the changing weather patterns, the country
with the highest oil production in Africa may use the PIA. Approximately 5.8 percent of
Nigeria's GDP, 95% of the country's earnings in foreign currency, and 80% of the country's
budgetary revenue came from the oil and gas industry in 2019. The law is not only complex to
explain, but also to fully grasp, since it touches on so many different areas. The PIA mandates a
national petroleum corporation that is profit-driven and business-focused; the codification of
transparency, good governance, and accountability in the administration of Nigeria's petroleum
resources; and the formation of a national petroleum company. If all of these procedures are
followed out with precision and zeal, the PIA has the potential to become the gold standard for
the management of natural resources. The key components of the act will be detailed, and after

that the obstacles that Nigeria's political and oil industry leaders will face will be discussed. The
PIA guarantees that the oil and gas industry's governance and rules are continually current. As a
result of this legislation, two new regulatory bodies will be created. It is composed of the
Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream
and Downstream Petroleum Regulatory Authority (NMDRA) (NMDPRA). Each industry's
regulators will be responsible for overseeing the commercial and technical elements of petroleum
operations. Additionally, they will have the legal right to acquire, keep, and dispose of property,
as well as to initiate and respond to legal actions. Under the proposed changes, the Nigerian
National Petroleum Corporation (NNPC), which is now state-owned but never turns a profit, will
be rebranded as NNPC Ltd. NNPC Ltd. will be a government-owned, quasi-commercial
business. The government's holdings will be managed by the Ministries of Finance and
Petroleum. The PIA indicates that the President of Nigeria would choose not only the President
of NNPC Ltd. but also the Head of the Regulatory Authorities and the Members of the
Regulatory Authorities. The petroleum minister will have a special position in government and
would be responsible for formulating and directing policies that are in line with the PIA. The
PIA claims that 30% of NNPC Ltd.'s revenues would be used to establish a new company that
will aid in the exploration of additional basins around the country, which is a considerable
allocation (Frontier Exploration Fund). Frontier Exploration also receives 10% of the rent paid
on oil mining leases and 10% of the rent paid on oil prospecting licences. Whether or not current
basins will be open to further exploration is unclear from the text. Flooding, pollution, land
subsidence, ecosystem degradation, and other related results are only some of the severe
environmental impacts that may result from the discovery and use of petroleum resources.
Despite this, others claim that the people who live in oil-affected areas more than make up for
the damage to the environment caused by the industry. It is still unclear whether or not the
people responsible for procuring and paying these compensations for damage to the environment
are doing so in the right way, and the compensations are inadequate to make up for the harm.
Challenges such as oil spills and gas flare pollution have arisen as a direct consequence of the
exploration for and use of petroleum resources in the NDRN. When oil is extracted, refined,
transported, and stored, it releases oil into the environment, which is a common cause of oil
spills. Oil spills may be caused by a number of different things. Other possible reasons include
accidents, poor equipment maintenance, and even deliberate activities like sabotage or
bunkering. Oil spills may be caused by a variety of different factors, including natural disasters
like earthquakes and hurricanes. As a result of the regularity of oil spills, a great deal of pollution
has seeped into the ecosystem around the NDRN. Since oil also contains heavy metals,
contamination from these sources is directly linked to the environmental damage brought on by
oil spills. Metallic elements with a history of adverse effects on human and environmental health
are sometimes referred to as "heavy metals." Their relative density is around five times that of
water. Furthermore, the effects of gas flares on the environment are of concern to people
everywhere. It has persisted throughout the years, leading to waste of billions of dollars,
worldwide issues with energy and the environment, and local and regional environmental
disasters. About 110 billion cubic metres of gas are thought to be wasted annually due to
combustion and released into the environment, according to a World Bank estimate. It has been
shown via research that gas venting and flaring significantly increase emissions of greenhouse