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What preliminary environmental authorisations are required before commencing oil and gas-related activities?
The Environmental Impact Assessment Act requires all project proponents that intend to embark on an activity which could impact the environment to prepare an environmental impact assessment report setting out the activity’s potential environmental impact and plans for preventing or mitigating this impact. Reports must be approved by the Federal Ministry of Environment. The Environmental Guidelines and Standards for the Petroleum Industry in Nigeria also require operators embarking on petroleum projects to produce environmental impact assessment reports on their proposed activities for Department of Petroleum Resources approval.
What environmental protection requirements apply to the operation of oil and gas facilities?
Under the Environmental Guidelines and Standards for the Petroleum Industry in Nigeria, operators must obtain permits for all aspects of oil-related effluent discharges from all point sources (ie, gaseous, liquid and solid) and oil-related project development.
In relation to gas operations, the Associated Gas Re-injection Act requires operators to obtain the minister of petroleum’s permission before flaring gas produced in association with oil.
The Oil and Gas Pipelines Regulations require a pipeline licensee to implement emergency plans to ensure prompt and remedial action for protecting the environment.
The Petroleum (Drilling and Production) Regulations require licensees and lessees to adopt precautions to prevent pollution and dispose of waste from petroleum operations in accordance with applicable regulations, as may be approved by the Department of Petroleum Resources.
What are the consequences of failure to observe the relevant environmental regulations and to what extent can operators be held liable for environmental damage?
Some of the consequences for breaches of key environmental laws are as follows:
- Under the Oil in Navigable Waters Act, it is a finable offence for any person to discharge oil from a ship. It is also a criminal offence, punishable by life imprisonment under the Harmful Wastes (Special Criminal Provisions) Act, for any person to dump harmful waste in Nigerian territory. Any device used to commit the offence will also be forfeited to the government. Where the offence is committed by a corporate body, its officers could be found severally guilty of the offence.
- Any party that fails to comply with the provisions of the Environmental Impact Assessment Act is liable on conviction to:
- a fine of N100,000 or five years’ imprisonment in the case of an individual; and
- a fine of between N50,000 and N1,000,000 in the case of a corporation.
Under the National Oil Spill Detection and Response Agency Act, a party that fails to report an oil spillage to the National Oil Spill Detection and Response Agency within 24 hours is liable to a daily penalty of N500,000. Further, failure to clean up the impacted site can result in a penalty of N1,000,000.
The minister of petroleum has powers to revoke an authorisation for failure to comply with applicable laws, including environmental regulations. The Environmental Guidelines and Standards for the Petroleum Industry in Nigeria also impose fines for various environmental infractions and the obligation to pay compensation to affected persons and remediate any environmental damage.
In addition to applicable federal legislation, a number of Nigerian states have enacted environmental laws that impose penalties on erring operators.
Nigerian courts have also awarded special, exemplary and general damages in actions arising from environmental pollution. These actions are brought under the common law principles of the torts of nuisance, trespass, negligence and strict liability.
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