Environment: Nigeria

A Q&A guide to environment law in Nigeria. This Q&A is part of the PLC multi-jurisdictional guide to environment. For a full list of jurisdictional Q&As visit www.practicallaw.com/environmenthandbook.

Soji Awogbade and Sina Sipasi, ǼLEX

Regulatory framework

1. Please briefly set out the key environmental legislation and regulatory authorities in your jurisdiction.

The key environmental legislation in Nigeria is:

  • The National Environmental Standards and Regulations Enforcement Agency Act 2007 (NESREA Act). This act repealed the Federal Environmental Protection Agency Act (FEPA Act). However, the subsidiary legislation under the FEPA Act is still in force. This includes:

    • the National Environmental Protection (NEP) (Effluent Limitation) Regulations;

    • the NEP (Pollution Abatement in Industries and Facilities Generating Waste) Regulations;

    • the NEP (Management of Solid and Hazardous Waste) Regulations.

  • The Environmental Impact Assessment Act (EIA Act).

  • The National Oil Spill Detection and Response Agency Act 2005 (NOSDRA Act).

  • Harmful Wastes (Special Criminal Provisions) Act of 1988 (Harmful Wastes Act).

The regulatory authorities are the (see box, The regulatory authorities):

  • Federal Ministry of Environment, Housing and Urban Development (FMEHUD).

  • National Environmental Standards and Regulations Enforcement Agency (NESREA).

  • Department of Petroleum Resources (DPR).

  • National Oils Spill Detection and Response Agency (NOSDRA).

  • Ministry of Water Resources.

  • State environmental protection agencies (SEPAs).

NESREA is responsible for enforcing all environmental laws, guidelines, policies, standards and regulations (except for the petroleum industry). The FMEHUD is responsible for monitoring and certifying environmental assessment on projects.

The DPR sets guidelines and standards for the petroleum industry. The NOSDRA is responsible for co-ordinating and implementing the National Oil Spill Contingency Plan and establishing the mechanism to monitor and assist, or where appropriate, to direct the response, including the capability to:

  • Mobilise the necessary resources to save lives.

  • Protect threatened environments.

  • Clean up, to the best practical extent, the impacted site.

The Ministry of Water Resources regulates the pollution of watercourses and underground waters.

SEPAs are also involved in environmental regulation and monitoring in the states, in their area of competence under the Constitution.

 
2. To what extent are environmental requirements enforced by regulators in your jurisdiction?

A breach of any environmental regulation results in criminal proceedings, if the breach constitutes a criminal offence under existing laws. Individuals or a corporate body who violate environmental regulations can:

  • Be fined or imprisoned.

  • Have their facilities in violation of the regulation closed down.

  • Be required to restore the environment polluted or pay for its restoration.

 
3. To what extent are environmental non-governmental organisations (NGOs) and other pressure groups active in your jurisdiction?

NGOs and pressure groups are usually consulted when the government formulates and implements environmental policies. They act as enforcement watchdogs, ensuring regulatory agencies carry out their functions, and that all operators comply with regulations. They also assist indigent communities in enforcing their rights against environmental pollution.

 

Emissions

4. Is there an integrated permitting regime or are there separate environmental regimes for different types of emissions? Can companies apply for a single environmental permit for all activities on a site or do they have to apply for separate permits?

There is no integrated permitting regime for emissions. A company is required to apply for separate permits depending on the activities being carried out by the company.

 
5. If there is an integrated permitting regime, please provide a brief overview of it, in particular:
  • What permits are needed and which regulator issues them?

  • How long do permits last?

  • Are there restrictions on transferring permits?

  • What are the penalties for non-compliance?

Not applicable (see Question 4).

 
6. Please summarise the regulatory regime for water pollution (whether part of an integrated regime or separate). In particular:
  • What permits or other authorisations are required and which regulator issues them?

  • Are any activities prohibited (such as causing or failing to prevent water pollution)?

  • Can the regulator require a polluter to clean up or pay compensation for water pollution?

  • What are the penalties for non-compliance?

Industries and facilities generating waste must obtain a permit for discharge of effluents beyond the permissible limit into surface or underground waters.

The NESREA Act, EGASPIN and the Harmful Waste (Special Criminal Provision) Act prohibit discharge in harmful quantities of any hazardous substance into any of Nigeria's territorial waters, contiguous zones, exclusive economic zone and inland waterways. The minister in charge of water resources can prohibit or regulate any activities on land or water likely to interfere with the quantity or quality of any water in any watercourse or groundwater (Water Resources Act).

A polluter can also be liable to pay damages and compensation to a third party where polluting activities cause damage to underground water.

Non-compliance with the regulations can incur criminal sanctions. It is illegal to discharge any hazardous waste into water resources and any individual found guilty can, on conviction, be sentenced to life imprisonment (Harmful Waste (Special Criminal Provision) Act)).

 
7. Please summarise the regulatory regime for air pollution (whether part of an integrated regime or separate). In particular:
  • What permits or other authorisations are required and which regulator issues them?

  • Are any activities prohibited (such as discharging certain substances into the air without a permit or causing air pollution)?

  • Can the regulator require the polluter to clean up or pay compensation for air pollution?

  • What are the penalties for non-compliance?

Industries or individuals generating gaseous waste must obtain permits for their operations.

The NESREA Act and its subsidiary regulations prohibit the discharge of hazardous substances into the air. No industry or individual can release any gaseous waste into the atmosphere without proper monitoring and authorisation from the relevant government agencies responsible for environmental protection. These industries must install anti-pollution equipment for detoxification of their gaseous effluent and chemical discharges. The anti-pollution equipment installed must meet the best available technology (BAT), or best practical technology (BPT) or the uniform effluent standards (UES).

It is an offence to pollute the atmosphere in a way that makes it noxious to the health of individuals in general dwellings or carrying on business in the neighbourhood. It is an offence to carry, deposit, dump, transport, import, sell or offer for sale, buy or deal in any harmful waste, that may damage the atmosphere (Harmful Waste (Special Criminal Provisions) Act). Any individual convicted under the NESREA Act can incur criminal penalties, including a fine and/or imprisonment for a maximum term of one year. Liability under the Harmful Waste (Special Criminal Provisions) Act involves a sentence for life imprisonment on conviction without the option of a fine.

A polluter can also be liable to:

  • Civil penalties or damages.

  • Compensation.

  • Restitution.

  • Reparation to a third party.

He can also be liable to repair, replace and restore the polluted environment area to an acceptable level, as approved by the federal or state environmental protection authorities.

 

Climate change

8. Please provide a brief overview of emissions trading schemes in your jurisdiction, including any national targets and carbon allowances systems. Is your jurisdiction party to international agreements on this issue and how have they been implemented into your national law?

Nigeria has no emission trading scheme in operation.

Nigeria ratified the Kyoto Protocol in December 2004. As a non annex-I country, it has made no specific commitment other than to co-operate with the process by assisting with the monitoring and measuring of greenhouse emissions. Under the framework of the Kyoto Protocol, the Nigerian Government has set up the Presidential Implementation Committee on CDM (PIC-CDM) to create awareness among project developers and other stakeholders on the effects of climate change, and the benefits of adopting clean technologies in their projects and processes.

 
9. Are there targets to reduce greenhouse gas emissions from buildings in your jurisdiction? Is there legislation requiring buildings to meet certain minimum energy efficiency criteria? If yes, please give brief details.

As a non-Annex I Party under the Kyoto Protocol, Nigeria does not have any greenhouse gas emission limits. There is no legislation requiring buildings to meet any energy efficiency criteria in Nigeria.

 

Environmental impact assessments

10. Please provide a brief overview of the requirements to carry out environmental impact assessments (EIAs) for certain projects (for example, construction of an oil and gas facility). In particular:
  • What type of projects and impacts are covered?

  • Are permits or other documents required before the project can start and which regulator issues them?

  • What are the penalties for non-compliance?

The EIA Act prohibits the undertaking or the authorisation of any project without prior consideration, at an early stage, of its environmental effects. A project means any physical work or activity that a party proposes to construct, operate, modify, decommission, abandon or otherwise carry out. The schedule to the EIA Act lists certain projects for which an EIA is mandatory. They include:

  • Land development schemes.

  • Airport development.

  • Logging.

  • Mining.

  • Petroleum exploration and production.

  • Transportation.

  • Power generation and transmission.

An approved environmental assessment constitutes a permit to execute the project. The FMEHUD grants approvals for EIAs.

 

Waste

11. Please provide a brief overview of the regulatory regime for waste. In particular:
  • What permits or other authorisations are required and which regulator issues them?

  • What activities are prohibited (such as storing or disposing of waste without a permit)?

  • Do operators need to meet certain criteria (such as having sufficient financial means to operate landfills and other waste disposal sites)?

  • Are there special rules for certain types of waste (such as hazardous waste or electrical equipment)?

  • What are the penalties for non-compliance?

The types of waste that are regulated are:

  • Gaseous.

  • Particulate.

  • Liquid waste.

  • Solid waste.

Industries or persons generating waste must obtain permits for their operations. Any individual who produces or stores hazardous waste must obtain a permit from the FMEHUD authorising him to store, treat or deposit the waste. In addition, they must report on their waste management and disposal methods.

No person can, without a permit, carry, deposit, dump, import, transport, sell or offer for sale, buy or otherwise cause to be carried, deposit or dump or possess any harmful waste on land or in any territorial waters.

There are more stringent controls over the storage and disposal of toxic, hazardous and radioactive wastes.

Non-compliance can incur criminal sanctions. In addition to this, the polluter can be liable to civil penalties of damages and compensation to a third party. He can also be liable for the repair and restoration of the polluted area to levels as prescribed by the regulatory authorities.

 

Asbestos

12. Please provide a brief overview of the regulatory regime for asbestos in buildings. In particular:
  • What activities are prohibited?

  • What are the main obligations (such as investigating the presence of asbestos and risk assessments for employees) and who is liable to carry them out?

  • What permits or other authorisations are required and which regulator issues them?

  • What are the penalties for non-compliance?

Nigeria has no legislation regulating the use of asbestos. Legislation regulating the management, release and disposal of hazardous or toxic substances, may, however be triggered, if the use of asbestos constitutes a danger to the environment and therefore all necessary permits must be obtained.

 

Contaminated land

13. Please provide a brief overview of the regulatory regime for contaminated land. In particular:
  • Which regulator is responsible and which legislation applies?

  • In what circumstances can a regulator require the investigation and clean-up of contaminated land?

  • What are the penalties for non-compliance?

The NESREA Act prohibits the discharge, in harmful quantities, of any hazardous substance on any land, except where the discharge is permitted or authorised by law. No industry or facility can release hazardous or toxic substances on any land beyond limits approved by NESREA (NEP (Pollution Abatement in Industries and Facilities Generating Waste) Regulations). The Environmental Guidelines and Standards for the Petroleum Industry in Nigeria (EGASPIN) impose obligations on operators in the industry in relation to managing and remediating contaminated land.

If the contamination is from the specific breach of an environmental permit, a regulator may direct clean-up of the contaminated land. Investigation of contaminated land is at the discretion of the waste generator or regulator.

A polluter can be required to restore, remedy or clean up the affected area to its original state, or to such standards as prescribed by the regulator.

 
14. In relation to liability for contaminated land:
  • Which party is liable for carrying out or paying for environmental investigation and clean-up?

  • Can an owner or occupier who has not caused contamination be liable for investigation and clean-up of contamination on their land?

  • Can previous owners or occupiers be liable for contamination they have caused in the past?

  • Are there limits on liability or ways for a party to limit its liability?

From the polluter pays principle, the party responsible for contamination is responsible for the cost of removing discharges and clean-ups, and the costs of third parties through reparation, restoration, restitution or compensation.

An owner/occupier is liable for any investigation and clean−up of contamination on their land. This comes from the owner/occupier principle. However, liability can be avoided where the owner/occupier can establish, with proof, that the contamination was caused solely by one of the following:

  • An act of God.

  • An act of war.

  • A natural disaster.

  • The sabotage of a third party.

General contractual principles regulate the transfer of liability for prior contamination on land. A previous occupier can transfer clean−up obligations to the buyer on the parties' agreement. Without an express transfer provision, a previous owner/occupier is found liable where it is proved he caused the contamination.

 
15. Can a lender incur liability for contaminated land and is it common for a lender to incur such liability? What steps do lenders commonly take to minimise such liability?

A lender cannot incur liability for contamination of land, except for liability imposed by legislation. There is currently no legislation to this effect in Nigeria.

 
16. Can a private individual bring legal action against a polluter, owner or occupier (for example, for damage caused by the movement of contamination onto his land)?

A breach of environmental law can constitute grounds for a civil claim under general tort law. To establish causation, there must be a causal link to the damage.

 

Transactions

17. In what circumstances can a buyer inherit pre-acquisition environmental liability in:
  • An asset sale?

  • The sale of a company (share sale)?

Asset sale

Environmental liability is based on the owner/occupier principle. If a buyer acquires an asset without conducting proper due diligence and without contractually allocating the pre-acquisition liability to the seller, he inherits pre-acquisition environmental liability for the asset. However, the buyer can bring a private action against the seller seeking indemnity for pre-acquisition liability.

Share sale

Based on the limited liability principle, a buyer in a share sale is not personally liable for the pre-acquisition environmental liability of the company. The directors and officers of the company may however be liable.

 
18. In what circumstances can a seller retain environmental liability after disposal in:
  • An asset sale?

  • A share sale?

Asset sale

A seller does not generally retain environmental liability after disposal, except if the parties have made retention of environmental liability a contractual condition.

Share sale

The limited liability principle limits a shareholder's personal liability to the extent of his shareholding. Therefore, a seller does not retain environmental liability once the shares have been disposed of.

 
19. Does a seller have to disclose environmental information to the buyer in:
  • An asset sale?

  • A share sale?

Asset sale

A seller is under no obligation to disclose any information concerning environmental violations that have not been specifically requested. A buyer, under the caveat emptor principle, must conduct due diligence before entering into a transaction. A seller's liability only arises if there has been a misrepresentation.

Share sale

See above, Asset sale.

 
20. Is environmental due diligence common in an asset sale or a share sale? If yes:
  • What areas are usually covered?

  • What types of environmental assessments are available?

  • Are environmental consultants usually used? If so, what issues should be covered in an engagement letter (for example, limit on consultant's liability)?

Areas covered

The areas covered in environmental due diligence include:

  • Inspection of the company's records relating to environmental issues.

  • Ensuring the company is fully complying with all environmental obligations.

  • Determining whether the company has been submitting reports on its environmental activities to the relevant agencies.

  • Ensuring that the property owned by the company or the asset being purchased is not contaminated.

  • Search in the registry of courts for claims against the company.

Environmental assessments

See Question 10.

Environmental consultants

Environmental consultants are usually used. Issues covered in an engagement letter include:

  • Identification of the site to be assessed.

  • Description of the scope of work to be carried out.

  • Provision for access to the site.

  • Time lines for completion of the work and submission of report.

  • Payment terms.

  • Confidentiality provisions.

  • Standard of care and indemnification for any loss incurred as a result of the consultant’s failure to meet the standard.

 
21. When are environmental warranties and indemnities usually given and what issues do they usually cover in:
  • An asset sale?

  • A share sale?

Asset sale

A seller normally grants the following types of environmental warranties in an asset sale:

  • The business has all environmental permits necessary to operate the business.

  • The business has obtained and complied with applicable environmental laws and permits.

  • The business is not the subject of any environmental proceedings, claims, investigations or complaints.

  • So far as the seller is aware, there is no contamination or pollution present on any of the asset's or the business' properties.

  • All environmental reports relating to the business or the properties are disclosed.

Share sale

Similar warranties and indemnities to an asset sale are usually agreed in a share sale (see above, Asset sale). Since the target company being transferred to the buyer retains all liabilities and potential liabilities relating to historic operations of the business, additional warranties and indemnities may be obtained.

 
22. Are there usually limits on environmental warranties and indemnities, for example, time limits or financial caps?

There is usually no limit on environmental warranties and indemnities but parties are free to contractually limit their liabilities.

 

Reporting and auditing

23. Do regulators keep public registers of environmental information (for example, of environmental permits or contaminated properties)? What is the procedure for a third party to search those registers?

NESREA is mandated under the NESREA Act to collect and make available, through publications and other appropriate means (and in co-operation with public and private organisations), information relating to environmental standards and basic scientific data. The EIA Act also provides for establishing and maintaining a public registry for records of environmental statements submitted to the regulatory agency. The registry also keeps records of EIA reports submitted, comments by the public and records prepared by the FMEHUD for referral purposes for the report to the review panel.

 
24. Do companies have to carry out environmental auditing? Do companies have to report information to the regulators and the public about environmental performance?

Each facility operator must undertake regular environmental audits every two to three years. The DPR also carries out regular environmental audits of oil and gas installations, stations, depots, and so on.

 
25. Do companies have to report information to the regulators and the public about environmental incidents (such as water pollution and soil contamination)?

Each individual who intentionally or accidentally, spills or discharges (or causes to be spilled or discharged) any dangerous quantity of dangerous waste or hazardous substances, detrimental to public health must notify the nearest state Environmental Protection Agency and local government of the area of the spillage within 24 hours.

 
26. What powers do environmental regulators have to access a company's documents, inspect sites, interview employees and so on?

A NESREA officer can, at any reasonable time (provided he has a search warrant issued by a court, and produces his certificate of designation, if required), enter and search any premises, land vehicle, tent, vessels or floating craft (except maritime tankers, barges, FPSOs and oil and gas facilities) to inspect, search, and take samples for analysis (NESREA Act). They can also:

  • Detain any article they believe contravenes environmental regulations.

  • Obtain court orders to suspend activities.

  • Seal and close down premises.

 

Insurance

27. What types of insurance cover are available for environmental damage or liability and what risks are usually covered? How easy is it to obtain environmental insurance and is it usually obtained in practice?

Environmental liability is usually covered under general liability insurance.

 

Tax

28. What are the main environmental taxes in your jurisdiction (for example, tax on waste disposal, carbon tax and tax breaks for carrying out clean-up of contaminated land)? For each tax, please briefly state how it is calculated, who pays it and the tax rates.

There are no environmental taxes in Nigeria.

 

Reform

29. Please summarise any proposals for reform and state whether they are likely to come into force and, if so, when.

The FMEHUD recently began a review of the EIA Act. Part of the review included reviewing existing EIA sectoral guidelines and developing new guidelines for the sectors of the economy not covered by the existing guidelines. The FMEHUD has received reports from consultants engaged for the review of national environmental policy. The report is in the process of being implemented. The Environmental Management Bill is before the National Assembly. When the bill is passed into law, it will be the principal legislation regulating environmental matters in Nigeria

 

The regulatory authorities

Federal Ministry of Environment Housing and Urban Development (FMEHUD)

Main responsibilties. This is the major cross-sectoral regulator of the environment in Nigeria.

W www.fmhud.gov.ng

National Environmental Standards and Regulations Enforcement Agency (NESREA)

Main responsibilities. NESREA is responsible for enforcing environmental standards for all sectors, except the petroleum sector.

W www.nesrea.org

Department of Petroleum Resources (DPR)

Main responsibilities. The DPR sets guidelines and standards for the petroleum industry.

W www.dprnigeria.com

National Oil Spill Detection and Response Agency (NOSDRA)

Main responsibilities. NOSDRA is responsible for co-ordinating and implementing the National Oil Spill Contingency Plan and establishing the mechanism to monitor and assist, or where necessary, directing the response.

W www.nosdra.org


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