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Legal Change in Africa: evidence from oil-related litigation in Nigeria

Published online by Cambridge University Press:  28 July 2009

Jedrzej George Frynas
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Extract

There has been a significant rise in litigation between oil companies and those affected by oil operations in Nigerian courts. In the period 1981–86, 24 compensation claims against Shell went to court in Nigeria. In early 1998, Shell was reportedly involved in over 500 pending court cases in Nigeria, out of which 70 per cent, or roughly 350 cases, dealt with oil spills, the other 30 per cent, or 150 cases, dealt mostly with other types of damage from oil operations, contracts, employment and taxation. In the whole of the 1980s, Chevron reportedly had only up to c. 50 court cases in Nigeria. In early 1998, Chevron was involved in over 200 cases, of which 80–90 per cent, or roughly 160–180 cases, dealt with oil spills, other types of damage from oil operations or land acquisition for oil operations. This substantial increase cannot be solely ascribed to expanding oil operations. There are various indications that an increase in the quantity of oil-related litigation was accompanied by legal change. In the 1990s, a number of high profile cases have been won by the local people in the oil-producing areas, notably Shell v. Farah, in which c. 4.6 million Naira (c. US$210,000 according to the official exchange rate) was awarded as damages to the plaintiffs.

Type
Research Article
Information
Journal of African Law , Volume 43 , Issue 2 , Autumn 1999 , pp. 121 - 150
Copyright
Copyright © School of Oriental and African Studies 1999

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References

1 Adewale, Ombolaji. “Oil spill compensation claims in Nigeria: Principles, guidelines and criteria”, (1989) 33(1) J.A.L. 91 at 93.Google Scholar

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5 The official exchange rates in this article were derived from the IMF International Financial Statistics Yearbook, various years. The unofficial real exchange rates are considerably higher than the official exchange rate but the IMF figures, which go back to the early years of Nigeria's independence, allow for greater consistency in the comparison of damages awarded in Nigerian courts over time.

6 See, for instance, Adewale, Ombolaji, “Rylands v. Fletcher and the Nigerian petroleum industry”, (1987/1988) 8 & 9 Journal of Private and Property Law 37;Google Scholar Adewale, “Oil spill compensation claims Nigeria: Principles, guidelines and criteria”, op. cit.; and Adewale, , “Some legal aspects of community relations m the petroleum industry”, in Soremekun, Kayode (ed.), Perspectives on the Nigerian Oil Industry, Lagos, 1995.Google Scholar

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33 4 ECSLR 486.

34 The legal rule was expressed by the House of Lords in Rylands v. Fletcher (1868) I.R. 3 H.L. 330Google Scholar as follows:

“We think that the true rule of law is, that the person who for his own purposes brings on his lands and collects and keeps there anything likely to do mischief if it escapes, must keep it in at his peril, and if he does not do so is prima facie answerable for all the damage which is the natural consequence of its escape.”

The judgment in Rylands v. Fletcher laid down the rule for strict liability. Four conditions must be fulfilled for the rule to apply. First, the defendant must have brought the thing on his land for his/ her own use. Second, the thing must be likely to cause harm if it escapes. Third, the defendant's use of the land must be non-natural, for instance, sewage or gas come under the rule, while weeds or flood water are natural things and do not come under the rule. Fourth, the bmg must actually escape. On the principles of strict liability, see Baker, op. cit., ch. 16. An escape of crude oil or oily waste fulfils all the above four conditions. Accordingly, any dangerous incident involving crude oil can be potentially prosecuted. The defendant is strictly liable for damage, which removes the plaintiff's burden of proof. It is not necessary for the plaintiff to prove any negligence or breach of duty of care.

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38 See Kodilinye, op. cit. 117–121. An act of a stranger may also be called an “independent act of a third party” (on limitations of strict liability, see also Percy, op. cit., 855–866).

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42 This argument has been made in Frynas, , “Political instability and business: focus on Shell in Nigeria”, (1998) 19(3) Third World Quarterly 457 at 465.CrossRefGoogle Scholar

43 Cap. 320, Laws of the Federation of Nigeria, 1990.

44 Nigerian National Petroleum Corporation (NNPC) Act, 1977, Cap. 320. Laws of the Federation of Nigeria, 1990, 12(1).Google Scholar

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47 The problems of the latency period and scientific uncertainty in relation to court cases invoking environmental damage are briefly explained in general terms in Eggen, Jean Macchiaroli, Toxic Torts in a Nutshell. St Paul, MN, 1995, 5–8.Google Scholar

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60 These findings were, to a large extent, confirmed by a personal interview with Belgore, M. B., Chief Justice of the Federal High Court (Lagos, 03 1998).Google Scholar

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65 In that case, the court had to decide whether the applicant was entitled to apply for mandamus to compel private prosecution of certain persons. The Court of Appeal held that the applicant had no standing to sue as his legal rights had not been infringed. The Supreme Court set the ruling of the Court of Appeal aside and held that the locus standi had been broadened since section 342 of the Criminal Procedure Law of Lagos State vests in every person a right to initiate a private prosecution. Nnamani, J.S.C. stated: “It is my view that in these matters which are so interlined with the criminal law, our interpretation of section 6(6)(b) of the Constitution must be approached with a true liberal spirit in the interest of the society at large. The Appellant has locus standi as any person to make the application he has brought to court, and if all other conditions are fulfilled, to initiate criminal proceedings” (at 855). The controversy on the issue of locus standi has continued. Ogowewo argued that the ruling in Fawehinmi v. Akilu does not broaden the locus standi (Ogowewo, op. cit. 17). Owaboye, on the other hand, averred that the Akilu case broadens the locus standi and should be viewed as the locus classicus on the issue. See Owaboye, Wole, “Denial of justice and concept of locus standi in Nigeria”, in Owaboye, Wole (ed.). Fundamental Legal Issues in Nigeria, Lagos, 1995, 299.Google Scholar

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69 Several recent high-profile cases by litigants against oil companies from the 1990s can be cited: Geosource v. Biragbara (1997) 5 NWLR 607Google Scholar, Shell v. Tiebo VII (1996) 4 NWLR 657Google Scholar, Shell v. Farah (1995) 3 NWLR (Pt. 382) 148. In all of these cases, plaintiffs sued an oil company in a representative capacity, not as individuals.Google Scholar

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96 Personal interview with Belgore, M. B., Chief Justice of the Federal High Court (Lagos, 03 1998). Belgore largely confirmed our speculations that legal change was affected by the three factors: different approach to law by judicial officers, the increased professional ability of legal counsel working for those affected by oil operations, and the influence of changing social attitudes on judges. He also maintained that legal change could also be attributed to the increased frequency of accidents in the oil industry and the resulting legal disputes. It is possible that the increased frequency of litigation has accelerated the process of social learning among judges. But the quantity of litigation cannot explain per se why courts have changed their interpretation of legal rules.Google Scholar

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“The right to access to Court should not be impeded by a process giving special advantage t o the defendant for no other reason than that it is an organ or semi-organ of the Government. Any law putting it in such a position is certainly against the Constitution, void and invalid.”

Belgore, therefore, dismissed the NNPC's application and declared the aforementioned section of the NNPC Act, 1977, as unconstitutional.

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102 Under Common Law, statutes of limitation can limit the period within which a lawsuit can be brought to court. But legislation cannot limit the jurisdiction of courts to hear a tort case. Under some circumstances, courts may also override statutory limitations. On limitation of action, see Percy, op. cit., 199–230.

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118 A number of general, theoretical problems involved in introducing European legal concepts to Africa have been discussed in Kenneth Nunn, B., “Law as a eurocentric enterprise”, Paper presented at the Critical Legal Conference entitled “Contested Communities: Critical Legal Perspectives”, University of Edinburgh, 8–10 September, 1995.Google Scholar

119 (1992) 8 NWLR 335.Google Scholar

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