Environmental Protection and Cost Internalisation: Implementing the Polluter-Pays Principle in the Nigerian Oil and Gas Sector

Join us to hear Kevin Udungeri, PhD Candidate at the School of Law, discuss the legal and social risk factors involved in the oil spill clean-up in Nigeria.


Kevin Udungeri, PhD Candidate, School of Law, University of Leeds


This seminar looks at critical legal and social risk factors involved in oil spill clean-up in Nigeria, which cause strain to the public purse due to the neglect of the operators bear the cost. It argues that policy and regulations must be designed to capture financial security requirements (FSRs) for operators to internalise the cost of their operations. In this context, this regulatory mechanism requires that operators demonstrate the ability to pay for oil spill cleanup ensuing from their operations. Although several academic scholarships on the National Oil Spill Detection and Response Agency Act 2006 exist in great depth, its FSRs function has not been subjected to the same scholarly scrutiny. This seminar which is part of an ongoing PhD thesis, is the first to test the principal oil and gas framework (NOSDRA ACT 2006) workability to advance the value of cost internalisation of the polluter pays principle debate in Nigeria. The thorny issue confronting this environmental legislation is the difficulty in internalising the cost of oil pollution, ideally a shared responsibility of cost by operators and government who operate as partners under the Joint Venture Agreement (JVA) and Production Sharing Contract (PSC).

This regulatory framework creates a critical risk for the environment and public finance. First, the civil and criminal liability approaches adopted to implement the polluter pays are inappropriate for internalising external costs. This allows environmental impacts and protection questions to be formulated as optimal tort problems. Thus, making the application necessary for the monetary valuation of damages a remedy open only to the victims of traditional damage. Secondly, the absence of FSR is likely to heighten environmental degradation involving oil pollution without remedy of any sort available to the environment. The government and victims (citizens) of oil pollution are meant to fund the restoration of the environment at the taxpayers' expense. Therefore the framing of policies and regulations requires legal and institutional adjustment in line with global trends.

This may be useful for Nigeria, which currently lacks FSRs to fund the cleanup of oil spills caused by operators. To rightly advance the value of cost internalisation in the environment debate in Nigeria, the Polluter Pays Principle must be discussed in the precise characterisation of the OECD framework, including the guidelines for implementation. The seminar is followed by policy recommendations on designing the regulations to include the FSRs to enable appropriate government intervention, including market-based regulation.

Joining details

This one-hour online seminar will be conducted via Zoom. It is free to all, but prior registration is required via the Eventbrite link below. It will be moderated by Dr Colin Mackie, University of Leeds.