EFFECTS OF DECOMMISSIONING AND ABANDONMENT ON HOST COMMUNITIES' RIGHTS UNDER THE PETROLEUM INDUSTRY ACT 2021

Abstract

The Niger Delta region has endured decades of environmental degradation from petroleum extraction. The cessation of operations has frequently left communities with abandoned installations, contaminated land and polluted water bodies, with little or no remediation. This problem was rooted in the absence of a legal framework for decommissioning and abandonment. The Petroleum Industry Act 2021 (PIA) appeared to change that. For the first time, the PIA introduced a statutory framework covering planning obligations, regulatory approval, environmental restoration and a ring-fenced funding mechanism for decommissioning and abandonment. This article therefore examines the effects of decommissioning and abandonment on host communities’ rights under the PIA 2021. The aim is to determine whether the PIA confers enforceable substantive and procedural rights on host communities in relation to decommissioning and abandonment, and whether the framework adequately protects those communities from the environmental and socio-economic consequences of asset cessation and divestment. A doctrinal legal research methodology is adopted, involving systematic analysis of statutes, regulations, judicial decisions and regulatory guidelines. A comparative methodology is also employed, referring to the regimes of the United Kingdom and Norway to benchmark Nigerian law against tested international practice. This paper is concerned that the PIA does not seem to confer sustainable enforceable substantive rights on host communities. It simply imposes obligations on licensees as duties owed to the regulator, leaving communities with no direct legal pathway to compel compliance or seek remediation. Besides, the Act does not effectively hold divesting international oil companies (IOCs) accountable for decommissioning and abandonment liabilities after asset transfers. The paper thus argues that, unless the law is amended to create an express statutory right of action for host communities to enforce decommissioning and abandonment obligations and introduce joint and several liability for assignors and assignees in divestment transactions to prevent liability dumping and ensure that outgoing operators remain accountable for legacy pollution, the negated impacts of decommissioning and abandonment on host communities may remain unabated in Nigeria.