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Oil Spill Compensation Claims in Nigeria: Principles, Guidelines and Criteria

Published online by Cambridge University Press:  28 July 2009

Ombolaji Adewale
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Extract

In recent times, compensation arising from oil spills has assumed a significant role in the Nigerian oil industry. The significance stems from the fact that, with petroleum operations spillage is inevitable. Oil spills have various effects on the health of the populace as well as the economic and scenic value of the environment. Thus there is the need to minimise the effect of the occurrence of oil spill. One way of achieving this objective is through compensation. The essence of compensation is to make amends for the loss suffered by the victims. In making these amends, the loss experienced by the victim must be recompensed otherwise the compensation cannot be said to be adequate or equivalent to the compulsory sacrifice.

Victims of oil spill have claimed that the compensation paid to them is unreasonable and cannot be said to be recompense for their loss. Oil companies on the other hand claim that the compensation paid to the victims is adequate and that they operate within the parameter approved by the Inspectorate Division of the Nigerian National Petroleum Corporation or the State Ministry of Lands. Apart from this, many claims made by the communities are not honoured by the oil companies on the grounds that they are spurious and speculative. Even when the claims are genuine the oil companies may not pay if the spillage occurred as a result of acts of sabotage.

Type
Articles
Information
Journal of African Law , Volume 33 , Issue 1 , Spring 1989 , pp. 91 - 104
Copyright
Copyright © School of Oriental and African Studies 1989

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References

1 Causes of oil spill include engineering error, natural causes, accidents, equipment failure, and lack of maintenance.

2 Uchegbu, A., “Legal framework for oil spill clean-up Liability and Compensation in Nigeria” in Proceeding of the 1983 International Seminar of the Petroleum Industry and the Nigerian Environment, Lagos, P. 33Google Scholar

3 Lord Scott in Horn v. Sunderland [1941] 2 K.B. 26.Google Scholar

4 Land Use Act 1978, section 29(2).Google Scholar

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8 No. 6 of 1978.

9 No. 51 of 1969 Schedule 3.

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11 Section 77.

12 (1976) 9 & 10 S.C. 101.

13 Section 2 of the Minerals Act.

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18 Paragraph 20.

19 1886 L.R. 265.

20 These figures were obtained from Shell Petroleum Development Company.

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32 1976 4 S.C. 85

33 Farmgate price is the cost of the crop on the farm.

34 1974 2 R.S.L.R. 93.

35 Supra.

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55 N.A.O.C. Agricultural Project and Shell Community Development Project in Port Harcourt, Rivers State.