How PIB will impact US Alien Tort Claims Act

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In the past two decades, plaintiffs’ lawyers have used the Alien Tort Claims Act (ATCA), to file lawsuits against multinational oil and gas corporations among other, alleging serious human rights abuses including environmental degradation. The ATCA Passed as part of the Judiciary Act of 1789, is a jurisdictional statute that creates no causes of action.

It grants the United States, US Federal Courts the right to accept private claims for a reasonable number of international law violations under Federal Common Law. The statute provides that “The district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the Law of Nations or a treaty of the United States.”

It is axiomatic that the human rights regime – as it relates to corporate responsibilities in Nigeria is somewhat rudimentary. For example, although globalization has provided massively profitable opportunities to oil companies in the Niger Delta region, and together with other multinationals, the opportunity to operate legally and abuse weak regulatory structure so as to maximize profit, the native inhabitants frequently continue to suffer.

The theory of corporate responsibility for human rights protection is now a seminal part of international law. Building upon the traditional notion whereby international law generally places duties on states, and more recently, individuals and corporations.

Although the United States and other developed countries recognize human rights protection due to corporate unethical activities, the Nigeria’s government continues to argue that the duty to protect against human rights violations by third parties rests with the state.

The government has frequently failed to meet its obligations to respect, and protect human rights in the Niger Delta, while providing security to the oil industry, because of its importance to the economy. Hitherto, the government and the courts have consistently discouraged the institution of these law suits, hence the filing of the much celebrated Nigerian case of Kiobel v. Royal Dutch Shell et al in the US Federal District Court of New York.

The Petitioners are Nigerians who were residents of Ogoni land, an area of 250 square miles located in the Niger Delta, and populated by roughly half a million people. Petitioners filed an ATCA action alleging that after concerned residents of Ogoni land began protesting the environmental effects of Shell’s practices, respondents enlisted the Nigerian Government to violently suppress the burgeoning demonstrations – beating, raping, killing, and arresting residents and destroying or looting properties.

Petitioners further allege that respondents aided and abetted these atrocities by, among other things, providing the Nigerian forces with food, transportation, and compensation as well as by allowing the Nigerian military to use respondents’ property as a staging ground for attacks.

The US Supreme Court in its decision held that the ATCA is generally presumed not to apply to conduct occurring in the territory of another country. However, the Court suggested that if the “claims touch and concern the territory of the United States … with sufficient force,” the presumption against extraterritorial application might be displaced. What claims may be brought under the ATCA after the Kiobel decision and legal remedies for potential claims against oil majors in Nigeria remain an open question.

Suffice it to state that the Kiobel decision has put a stop to ATCA actions by parties alleging human rights abuse in foreign countries such as Nigeria. Therefore, the remedy for these claims lies in local jurisprudence. Establishing a legal and regulatory framework requiring the regulation of corporations rather than states or individuals, is necessary to address the nature of corporations as actors in the human rights field.

In a nutshell, the draft Petroleum Industry Bill (PIB) before the National Assembly contains provisions that will address allegations raised in Kiobel. Consequently, a speedy passage of the PIB becomes absolutely necessary.

Sections 198 – 298 of the draft PIB provides for environmental protection in the Nigerian petroleum industry. These sections cover motley of assortment of global petroleum industry good practices including; protection of health, safety, environmental quality management, gas flaring penalties, financial contributions for remediation of environmental damages, pipeline safety, abandonment, decommissioning and disposal.

Specifically, section 198(1) provides that in the course of upstream operations, no person shall injure or destroy a tree which is of commercial value, or the object of veneration to the people resident in the area of the lease or license. If they do so (2) they are required to pay fair compensation to those directly affected.

Furthermore, Section 118 proposes the establishment of the Petroleum Host Community Fund – requiring a detailed and transparent financial distribution system to ensure that host communities benefit directly from petroleum activities. It provides for direct financial transfer of 10% net profit – adjusted profit less Nigerian hydrocarbon tax and company income tax, derived from upstream petroleum operations in onshore areas and shallow waters areas to the community and littoral states.

Even without the salutary lessons of several industry reforms, it is self-evident that the PIB however detailed, well intentioned or structured can effectively address the issues raised in Kiobel unless implemented fairly, transparently, and in the national interest.

The National Assembly should amend Section 118 to ensure that the10% of oil profits should include robust safeguards to ensure that all members of the community benefit. It will be readily apparent from the foregoing discussions that with the passage of the PIB, the need for the ATCA in the Nigerian context will become unnecessary.


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