The Niger Delta is home to Nigeria’s oil industry. For over 60 years, international oil companies and the Nigerian Federal Government have rushed to extract billions of barrels of oil from the Niger Delta with scant regard for the consequences.
The historic and continued activities of the oil industry have fuelled an environmental emergency, a silent health crisis, and deep economic hardship. This overwhelming tide of oil contamination has turned the Niger Delta – home to some of the planet’s largest mangroves and freshwater swamps, forests, and Africa’s largest wetlands – into one of the most polluted places on Earth.1 As much as 40 percent of the mangrove forests have been lost.2
The human impact has been just as devastating. One study estimates that in 2012 alone, oil spills in Nigeria, and predominantly in the Niger Delta resulted in over 16,000 additional neonatal deaths.3 Community after community has seen their livelihoods damaged by oil contamination.
Few places have suffered more than the state of Bayelsa, which sits at the heart of the Niger Delta. Despite being one of the Nigerian Federation’s smallest, poorest, and least populous states, it plays a central role in the country’s oil industry. Home to Nigeria’s first commercial oil well, Oloibiri, Bayelsa accounts for about 18-20 percent of Nigeria’s oil production.4
Between 1970 and 2014, Nigeria earned an estimated trillion dollars in oil revenue.5 Since 2006, oil produced in Bayelsa generated over US $150 billion for the Federal Government and billions for the international oil companies that operate its wells.6 On average, oil produced in Bayelsa is responsible for approximately US $10 billion in government revenues per year.7
This Commission’s findings shine light on the pollution catastrophe engulfing the state and its underlying causes. Chief among them are the systemic failings of international oil company operators with the complicity of Nigeria’s political classes and a dysfunctional Nigerian regulatory state. While the state accounts for only slightly over 1 percent of Nigeria’s total population, it is estimated to have suffered over a quarter of total recorded instances of oil pollution. The environmental, ecological and health consequences on the Niger Delta as a whole and on the people of Bayelsa have been catastrophic. They have suffered in silence for too long.
The report sets out a proposal to end decades-long cycles of contamination and neglect by the oil and gas industry. Safer and cleaner oil company operations will not be enough to end Bayelsa’s pollution nightmare. The fossil fuel generated climate crisis has also destroyed Bayelsa's ecosystems. The Commission recommends concerted international action to generate and invest at least US $12 billion over the course of 12 years to repair, remediate and restore the environmental and public health damage caused by oil and gas and to lay the foundations for Bayelsa’s just transition towards renewable energy and opportunities for alternative livelihoods.
The last three decades have generated many high-visibility reports, commissions, regulatory initiatives such as the EITI, scholarly research and sustained civil society advocacy. These have brought the plight of the people of Bayelsa to the world’s attention but done little to fundamentally alter their situation. In a fast-evolving geo-political landscape where there are renewed appetites for oil and gas, the Commission’s ambitious, forward-looking recommendations may appear counter-intuitive. They will only be achieved with concerted local, national and international action, leadership, solidarity and dedicated support. Now is the time to act.
Almost all of the country’s onshore oil output comes from the Niger Delta. The region is a 40,000 km2 labyrinth of wetlands, mangroves, marshland, swamp forests, creeks and farmlands, dotted with over 5,000 oil wells and criss-crossed by over 21,000 km of oil pipelines.8
Much of the Delta’s oil production comes from the state of Bayelsa, one of nine states in the region. Although smaller than Connecticut in the US, Bayelsa accounts for almost a fifth of Nigeria’s total petroleum output.
Nigeria’s oil wells are operated primarily by large International Oil and Gas Companies (IOCs) rather than by the state-owned national oil company, the Nigeria National Petroleum Company (NNPC). The five main IOCs – Shell, Chevron, Total, Exxon-Mobil and Eni (Agip) – NAOC (Eni operates through its subsidiary known as the Nigerian Agip Oil Company locally referred to as Agip, which is the former name of Eni) – working through a mix of wholly-owned subsidiaries and joint ventures with NNPC, together account for c.75 percent of the oil extracted in Nigeria.9
Over the years, Nigeria’s oil and gas resources have generated massive revenues for the IOCs that operate the wells and for the Federal Government, which owns all oil reserves and has rights to auction and tax these under the terms of the Constitution.10 The oil producers – with the acquiescence of the federal government – have externalised many of the costs and risks of production. It is not an accident that despite the logistical and security challenges it presents, Nigeria is seen as a low cost, high profitability jurisdiction for the oil majors. For instance, in a Shell Group annual report, the company states that it makes a higher profit per barrel and incurs lower production costs in the country than in virtually any other region of the world in which it operates.11
However, this oil bonanza has brought limited benefits to Bayelsa and has come at a terrible cost to the state and its people.
The figures are even higher for some parts of Bayelsa, with, for instance, as many as six barrels of oil spilled for every person in Southern Ijaw Local Government Area (LGA).13
The devastating effects have unleashed an environmental and human catastrophe on an enormous scale. Irreversible damage has already been done and so many lives have been blighted or cut short as a result. Time is running out to secure justice for those who have suffered, to mitigate the damage that has already been done, and to prevent further harm in the future.
That is why the Government of Bayelsa State established the Bayelsa State Oil and Environmental Commission (BSOEC) in March 2019. The Commission is chaired by the former Archbishop of York, The Rt Revd and Rt Hon the Lord Sentamu PhD (Cantab), PC, and is made up of an international panel of experts drawn from a range of academic disciplines. Its purpose is to establish the environmental, human and economic impact of oil pollution on Bayelsa, and to develop a rigorous set of recommendations to address the damage done by the pollution that has already occurred and to prevent further pollution in the future. Over the course of four years, the Commission has undertaken extensive work to uncover the true scope and scale of the catastrophic environmental pollution that has befallen Bayelsa.
As well as reviewing the extensive body of research that already exists, the BSOEC has undertaken a series of scientific field studies into the effects of oil pollution in Bayelsa, working with leading academic authorities to build up a unique picture of the scale and effects of oil pollution across the state.
It has complemented these studies with site visits and detailed research on specific cases. In addition, it has conducted over 500 interviews with diverse stakeholders, technical experts, and those with extensive, on-the-ground experience.
Throughout its investigation, the BSOEC has sought to listen to the voices of those who have suffered most, holding evidence-gathering sessions in affected communities across the state.
However, independent studies estimate that between at least 9-13 million barrels of oil have been spilled in the Niger Delta between 1958 and 2010.14 There is evidence that the true figure may be much, much higher. For instance, analysis of data from the NNPC’s own Annual Statistical Reports reveals that it lost almost 34 million barrels of ‘petroleum products’ from its pipelines in the period 2005-2018 alone.15
Assuming that the more conservative figures cited above are valid, they describe an almost unprecedented level of oil pollution.
Although state-level data is hard to come by, according to our calculations,
This overwhelming tide of oil contamination and associated activities such as dredging, mangrove and swamp forest clearance, and artisanal refining has turned the Niger Delta – home to some of the planet’s largest mangrove and freshwater swamps, forests, and Africa’s largest wetlands – into one of the most polluted places on Earth.17 Bayelsa is one of the states most affected within the Niger Delta. Other highly polluting activities, such as the flaring of around 14 million cubic metres of natural gas a day at 17 facilities across the state, have added to the damage, elevating levels of particulate matter (air pollutants) to over ten times the WHO limits in some communities and causing acid rain that kills crops and leaches into the soil.18
The results of both reports are stark. They show that toxins from oil pollution are present at often dangerous levels across the state and have infiltrated the food chain, ending up in the bloodstreams of those tested in affected communities.
Given this alarming profile of environmental contamination, it is not surprising that the Commission’s sampling confirmed existing studies that showed high levels of toxins in many of the animal and fish species that form a key part of the diet of Bayelsa’s communities.21
*A Joint Investigation Visit (JIV) is part of an oil spill investigation process whereby when an oil spill occurs, a joint investigation team (JIT) is mobilised to visit the spill site. The JIT includes representatives of regulatory agencies, the oil company, and the local community. JIV forms, which are to be signed by the JIT, capture data on the cause of the spill, the volume spilt and the area affected.
**550 = $1. Exchange rate as at February 2022.
Our analysis has found that not every single oil spill in every part of Bayelsa is the fault of the oil companies or of the Government of Nigeria. Third party interference can play a role. However, oil companies and the Government of Nigeria are both to blame for creating the conditions for the systemic crisis of oil pollution in Bayelsa - which results from a toxic cocktail of oil producer intransigence, failed regulation, dysfunctional politics, and a lack of international scrutiny.
The Commission’s analysis suggests that blame for the ongoing oil pollution catastrophe engulfing the Niger Delta communities must rest in the first instance at the door of the international oil company operators. Failures by the IOCs at every step of the process have fuelled the pollution crisis that Bayelsa faces today.32
The four failures the Commission has identified are:
The historical neglect of Niger Delta communities by international companies dates back to the period of the trans-Atlantic slave trade when people from the hinterland were violently caught and sold as slaves. In the 19th century, when the region was known as ‘Oil Rivers’, due to its links with palm oil production, international trading companies were also responsible for significant environmental damage. More recently, ongoing oil spills and flaring of associated gas by IOCs and local operators have perpetuated the exploitation and neglect of Bayelsa and its people. This has occurred by design and is the intentional result of oil companies’ operating strategy and actions; actions which continue after Nigerian courts ordered an end to the practice of gas flaring over a decade ago.33 Although gas flaring is banned or heavily restricted in many other jurisdictions, oil operators persist with the practice in Nigeria, including in Bayelsa.34 The figures are stark; Canada flares 8 percent of its gases whilst international oil producers in Nigeria flare up to 90 percent of associated gas, releasing carbon dioxide and contributing to climate change.35
Recent court judgements suggest that Bayelsa’s pollution problem is not the result of accidents, but is rather a problem that has grown by design.36
*Royal Dutch Shell is known as Shell plc as of 2022 but this report refers to Royal Dutch Shell for historic accuracy and consistency.
Many of the spills reflect a failure to properly invest in, maintain, manage and protect pipelines and facilities to minimise the risk of spills. The rate at which oil pipelines and facilities develop leaks in Nigeria is unparalleled when compared to other major oil producing countries.
The IOCs often publicly attribute this spill rate to sabotage. But in the recent Dutch Court of Appeal’s landmark ruling against Royal Dutch Shell plc, the court ordered Shell to install a leak detection system in the pipelines in Nigeria, as it does in its European pipelines. This highlights the IOCs' responsibilities to protect the environment and local communities from leaks regardless of the cause of an oil spill. It seems clear that in many cases oil producers are not taking sufficient steps to ensure that the risk of leaks is minimised. The IOCs do not appear to be instituting measures they would undertake as a matter of course in other countries to ensure the integrity of their pipelines.
Detailed independent studies also paint a very different picture to the IOC claims of sabotage. One recent analysis of specific spill incidents on the borders of Bayelsa suggests that production and corrosion errors may account for as much as 60 percent of all spills.39
International standards for inspection, repair and corrosion-proofing of pipelines do not appear to be observed. Much of the oil infrastructure is nearing the end of its operational life.
Furthermore, while sabotage remains a serious issue, evidence suggests that the IOCs are not fully implementing best practice measures to monitor and prevent it. 262 spills were reported down the 92 km length of the Tebidaba-Brass pipeline in Bayelsa between 2014 and 2017,41 with its operator, Eni (Agip), attributing all but two of them to sabotage. Yet despite that, the regulators had warned Eni (Agip) to improve surveillance on the pipeline on no less than 162 separate occasions before action was taken.42
Once a pollution incident has occurred, IOCs are often slow to respond, compounding the damage done. By law, oil companies are meant to report all spills within 24 hours.
Yet, to take just one example, Shell met this requirement in only 26 percent of cases during the period 2014-2017. And occasionally these delays can be even more extreme; Amnesty International reported a case where it took Eni (Agip) 430 days to respond to a leak in a flow line in Bayelsa.44
Analysis shows that delays are often not linked to site accessibility, with some of the leaks that take the longest to address being within easy reach. Systematic variation in response times between IOCs also point to operational failures rather than external factors as the primary cause of slow responses. For instance, between 2014 and 2017, it took Shell seven days on average to respond to a spill versus just two days for Eni (Agip).47
IOCs as the operators, even if they operate as part of joint ventures, are responsible for remediating environmental damage associated with their infrastructure and operations. However, all too often, the IOCs take little action to clean up the pollution they have created and to remediate the affected site. An independent analysis of official data relating to over 6,300 spills between 2010 and 2015 showed that remediation work was only undertaken in 4 percent of cases and that in 90 percent of spills there was no post clean-up assessment.48 For instance, from 2014-2017, 262 spills occurred at Eni (Agip) sites in Bayelsa.49 A majority of these sites are yet to be remediated, and even where remediation is undertaken, it rarely meets accepted international standards.50 Even where large remediation initiatives are apparently carried out, all too often little actual recovery or restoration work occurs. For instance, in Ogoni, in neighbouring Rivers State, despite an international report published over a decade ago by the United Nations Environment Programme (UNEP), physical remediation is still yet to begin at scale.51 The Bodo Mediation Initiative, also in Ogoni, Rivers State, is one example of post oil spill mangrove restoration, the largest ever undertaken in Africa. It began in 2015 and was only undertaken as a result of successful legal action, and the threat of it, by Bodo communities against Shell in the English courts.52
As well as failing to address the immediate need for physical rehabilitation of the environment, IOC remediation efforts often fail to adequately address immediate humanitarian and social needs once the damage has been done, including the immediate closure of polluted sites and provision of basic urgent access to clean drinking water.
Underpinning much of this is a flawed approach to community engagement which not only lacks transparency, but blurs the lines between what IOC responsibilities are, under Nigerian law, for physical clean-up and remediation and social investments provided by IOCs to secure their social licence to operate in given communities. IOC community engagement in this context itself becomes a source of community conflict. The lack of physical clean-up and remediation to acceptable international standards, poorly planned provision of compensation, and the award of security contracts to favoured community stakeholders, fuels both substandard clean-up and substandard remediation practices, as well as intense competition for resources and social instability. Cycles of conflict resulting in death and destruction of communities as well as forced migration, have become systemic in many parts of Bayelsa. These conflicts also create incentives for sabotage and oil theft.
To date, the bodies charged with enforcing environmental standards and the regulatory regime that underpins them, have lacked capacity, independence and influence. They have simply not been fit for purpose.
While this report was in preparation, the Nigerian government introduced the new Petroleum Industry Act (PIA) on 16 August 2021.55 The new law makes changes to the governance and regulatory architecture and introduces new rules for oil companies’ community development interventions. Highlights of the new regime include the reshaping of the Nigerian National Petroleum Corporation (NNPC) into a commercial entity, the Nigeria National Petroleum Company Limited (NNPC Limited). With the PIA coming into effect, the Department of Petroleum Resources (DPR), an arm of the old NNPC that was responsible for regulating the petroleum industry, has been replaced with two new regulatory bodies, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Regulatory Authority (NMDPRA), responsible for the upstream and midstream/downstream sectors, respectively.
Like the now defunct DPR, the new Commission and Authority will be responsible for granting licences to companies and ensuring the profitability of the petroleum business as their primary mandate. However, the PIA also gives the new agencies powers relating to environmental regulation that potentially conflict with their commercial duties and undermine other federal agencies like the Federal Ministry of Environment and National Oil Spill Detection and Response Agency (NOSDRA).56 Concerns over the effectiveness of the new governance structure for the oil sector are further heightened by sections of the PIA that could be interpreted as granting the Commission and Authority powers to override other federal agencies and prioritise the oil industry’s profitability above all other considerations.57
The PIA has also not adequately addressed conflicting and overlapping roles of different regulatory bodies which would, in particular, continue to hamstring effective environmental regulation. For instance NOSDRA, which sits within the Ministry of the Environment, has traditionally held responsibility for overseeing oil spill preparedness, detection and response, but has not had the power to shut down operations or enforce fines. The DPR, housed within the Ministry of Petroleum Resources, had the power to impose sanctions, though it operated to a different set of standards to NOSDRA and rarely used its powers to discipline oil producers. The standards laid out in DPR’s updated “Environmental Guidelines and Standards for the Petroleum Industry in Nigeria” (EGASPIN)58 are less rigorous in many respects than those mandated by NOSDRA and in many areas do not reflect accepted international practice.59
These weaknesses of institutional design and standards have traditionally been compounded by a lack of capacity. For instance, NOSDRA still lacks the powers and capabilities to supervise the IOCs and is reliant on the IOCs to facilitate its access to pollution sites. This not only limits NOSDRA’s independence and effectiveness, but also creates a further layer of conflicts of interest. As a result, much of the regulatory process inherently serves and is compromised and captured by the interests of the very companies it is meant to police.
While the Nigerian federal government works out the modalities for the new institutions, our analysis of the failures of the regulatory regime, which we present in detail in the chapters that follow, remain valid as the PIA fails to address the issue of responsibility for historical oil pollution, and the institutional shortcomings that enable the scale of oil industry pollution and societal upheaval as experienced in Bayelsa and elsewhere.
Many aspects of Nigeria’s legal framework allow polluters to escape scrutiny and accountability. In most advanced industrialised countries, two basic principles - ‘polluter pays’ and ‘no fault liability’ - form the cornerstone of the legal regime for regulating extractive industries. Taken together, they mean that those that own and operate facilities are responsible for the damage caused by their pollution even if they are not at fault.
Unfortunately, both of these concepts are at least partially absent from the body of Nigerian law. Consequently, oil companies currently assert that if they can show that a leak was not their fault, they presume that they are not responsible for paying compensation. Perhaps then, it is not surprising that the oil companies claim that almost 90 percent of leaks are due to sabotage, a finding they believe frees them of liability for compensating the victim.60 However, despite this general perception, Nigerian laws do not in fact give oil companies absolute immunity from liability in all instances of sabotage. Where an oil company has been negligent and failed to take ‘reasonable measures to prevent’ foreseeable sabotage, they are still legally liable to pay compensation.61
This process is reinforced by inconsistency and other weaknesses in the legal framework, including a lack of legislation reflecting international standards on regulating asset integrity, none of which is suitably addressed by PIA legislation.
Moreover, some of the fines laid out in statute for breaches of key elements of legislation have not been updated for many years and, as a result, are sometimes too low to act as a disincentive to poor behaviour by oil producers.62 Furthermore, unlike other jurisdictions, such as the UK, where regulators can impose administrative fines and other sanctions, this is not so in Nigeria, where the decision by the Court of Appeal prevents regulators imposing fines unless they have a court order, a process which in practice could take years.
The problems posed by the legal framework are further compounded by the huge challenges individuals and communities face in accessing justice.63 There are no fast-track avenues for gaining compensation and plaintiffs often lack the resources required to pursue action through the courts. It is often the case that well-funded IOC defendants are simply able to bog down proceedings on an almost indefinite basis to prevent any unfavourable rulings.64 However, the NUPRC may now determine compensation under section 101 of the PIA. If effectively applied, this section may mean that compensation may be determined by the regulators instead of the courts.
The Nigerian constitution reserves the right for licensing and regulation of the oil sector to the Federal Government, and courts have interpreted this to include pollution matters. While the states bear the brunt of the human, environmental and economic cost of oil pollution, they are essentially sidelined in the regulatory framework and have a very limited role to ensure effective clean-up following pollution incidents.66 However, states have some scope to exercise some power over the regulation of the sector under the Land Use Act which grants the state government authority over the administration of all land in any given state including use and sale. State government powers also give them control over the granting of rights of way for oil pipelines and oil mining leases.67 However, narrow interpretations of relevant constitutional provisions by the courts, and fears about real and perceived risk of obstruction by federal agencies, also mean that state governments are reluctant to and rarely use their limited powers to police the sector’s environmental impacts. Although the new PIA maintains the provisions of the Land Use Act with respect to the midstream and downstream sectors, it is silent on the role and responsibility of state governments in regulatory matters pertaining to environmental pollution by the oil and gas industry.68 It remains to be seen whether this omission will be clarified in the guidance regulations flowing from the adoption of the Act.
Many of the flaws in the current regulatory regime have their ultimate origin in the mutually beneficial relationships and resultant complicity linking IOCs, politicians and the bureaucracies at federal, state and local government level.69 Provisions to promote greater transparency outlined in the new PIA, in terms of Commissioner appointments, board appointments, and National Assembly oversight over budget and expenditure statements, do not mean that these relationships between the Nigerian political class and the oil industry have been fundamentally addressed.
The PIA affords the new Upstream Commission authority to nominally challenge contribution levels to the environmental fund and the decommissioning fund set by IOCs based on their own internal audits. The PIA also gives the Commission the nominal right to commercialise gas that IOCs continue to flare on sites leased to them. Yet in practice, power asymmetries between the IOCs and the Nigerian state, underpinned by the enmeshing of regulatory and commercial functions in bodies set up to regulate the industry, make it highly unlikely that even the newly established Upstream Commission will change previous patterns of behaviour. All of these actors, in particular at the federal level, have strong incentives to keep oil flowing. Unimpeded oil production provides not just a stream of profits to the IOCs, but is also the primary source of revenues to the Federal Government. It is these revenues that finance the bulk of state, local and federal government budgets. They also provide the main pool of public funds from which rents linked to public office can be misappropriated.70
This resource provisioning pact is the fundamental foundation from which many of the problems of oil pollution stem. The reality of climate change is impacting Bayelsa on a daily basis, with rising sea levels and annual floods on scales hitherto unseen a regular occurrence since 2015. Compounded by gas flaring and the destruction of mangrove forests associated with the pollution crisis, this ‘resource provisioning pact’ remains a serious impediment to addressing systemic pollution and preparing for the post-oil transition in Bayelsa. Until this pact is dismantled, a post oil future remains elusive. At both federal and state levels, a future without oil is not yet a realistic option for many.
The failures in the Nigerian system are further compounded by the failure of international law, international institutions and the home jurisdictions of IOCs to effectively scrutinise and hold the companies accountable for the harms resulting from their activities. While the same jurisdictions and processes have established a fail-safe system to inoculate investors from risks to their investments in the host countries, there are no similar protections for local citizens from the harmful effects of investor activities. Existing international mechanisms to which Nigeria is committed, such as the Nigeria Extractive Industry Transparency Initiative (NEITI), have, despite their good intentions, failed to rein in poor behaviour by the IOCs or rent-seeking by politicians. In addition, until more recent standards were adopted, ecological costs were never integrated into NEITI analyses. NEITI is part of the EITI - a transnational initiative of influence in setting standards for transparency in the sector. As such, NEITI is focused primarily on transparency in revenue payments and anti-corruption rather than in operational practice. NEITI could further its reputation for setting a high international bar for EITI national implementation but Nigeria could set a leading example by incorporating obligations to report on both environmental and health standards as well as financial transparency.71 Similarly, while some countries are increasingly enforcing anti-corruption standards on their companies worldwide through measures such as the UK’s Bribery Act, they have yet to take the same approach to minimum environmental standards.72
In a global context that is increasingly hostile to continued hydrocarbon development, IOCs have scaled up their investments in renewables and are the new champions of zero emissions.73 A new approach to minimum environmental standards is now more urgently needed than ever to ensure that IOCs cannot opt in to climate action and opt out of historical liabilities for environmental pollution. Climate change is indeed a reality in communities that have borne the brunt of over 60 years of oil and gas production activity and whose traditional livelihoods have been destroyed while their economies remain inextricably intertwined with a systematically polluting oil and gas industry. International action is needed to support Bayelsa’s post-oil transition, which means supporting Nigeria’s overall efforts to transition away from oil and gas.
Ongoing price volatility in global oil markets, compounded by the COVID pandemic and the Russian invasion of Ukraine, point to the urgent need for Bayelsa to seek productive economic alternatives away from dependence on oil extraction and export. The devastating impacts of climate change – visible in recent flood disasters in Bayelsa – and global demands for the transition from fossil fuel-driven economies further underline the urgency of this need for economic diversification and food sovereignty.74 As such, recommendations three and four in this report contemplate an economic development fund to support a post-oil future for Bayelsa which could include renewables (e.g. wind and solar projects along with local agricultural processing facilities).
