March 2, 2024

The Grace Model – a Fresh and Viable Legal Option for Resolving Marine Environmental Oil Spills and Disputes

Dr Raphael Christopher, a senior member of EnuguBar

Energy. Oil. Environment.

Three words importing the foundational pillars of human society, shaping and impacting human society and Governments since time began.

Nations, businesses, homes, offices needs energy. Without energy virtually everything stands still. Oil has been a important means of producing the energy needs of the world and they are all carried out in the environment, the same environment that is the lifeblood of human existence.

It cannot be overstated how important these three areas of human activity are to our society and thus preventing of oil and chemicals spillages is a big issue for the major players in the industry and the Government with thousands of millions of naira currently being spent to address these.

However, most disputes are resolved by way of litigation. It is the case that civil litigation is still very much the norm in cases of the reported thousands of oil and chemical spills in the waters in and around Nigeria.

The problems with litigation are well documented and includes the unfortunate length of time it takes for a matter to be litigated before judgment is handed down and very often takes many many years to conclude and by the time it is concluded, the original parties are may have died and the entire community and environment much worse off than at the time of occurrence.

Further, litigation is a we versus them and very adversarial in nature which polarises the position of the parties making it difficult for a mutual agreement to be reached between the parties.

Another problem with litigation are its costs. Litigation, especially in marine oil spills are very costly and usually for those with deep pockets which the oil companies usually are as opposed to the victims and the community that has suffered that spill and who have little or no access to deep pockets and are marginalised.

The environmental consequences for the communities of oil spills are huge and devastating.

But should all oil explorations and drilling stop? The answer is that the demand for energy from every country in the world makes it impossible for oil explorations and drilling to stop.

Should the present unsatisfactory situation continue? The answer is no. Every party has to devise a way of sustainable oil exploration and drilling and maintenance of transportation that prevents oil leaks and spillages.

Are there technologies available to help the parties achieve this? Yes there is and they must be sourced and deployed.

In relation to disputes, what if there is another way, much less expensive that can conclude relatively quickly and lead to mutual satisfaction for both parties?

The answer is empathically yes. It lies in collaborative law and this includes mediation and arbitration.

But some may say this is not feasible. They say “You don’t know the deep divide and interests of both parties”. Some say “there are no trust between the parties”. Some say each party is only looking out for its own interests etc etc.

The answers to these questions are quite simple, but complex and complicated but can be untangled to its root.

Generally, the interests of the oil companies are to make profit for their shareholders and fulfill their mission and do so in a cost effective way. The interests of the community where the oil drillings taking place is for their community to live in a prosperous community, be gainfully employed and raise their family in their own ways and ancestral customs without damaging their environment because they want to be good stewards of their environment like their fathers and ancestors did before them.

The dilemma here is at first glance these interests seem diametrically opposed to each other. But, are they really opposed to each other?

I don’t think so.

I have considered many cases on this points and looked at several cases and analysed the statements and accounts of many parties in these matters and I can see certain clusters of facts which led me to develop a model of collaborative law that can be applied to swiftly resolve oil spills issues around the world.

I named this model “The Grace Model” after my late mother Grace who, though uneducated, possessed rare native intelligence, and whose teachings and principles instilled in me, still guides me.

Grace is an acronym meaning with the following embedded core values:

G : Genuine
R: Respect
A: Action
C: Cooperative
E: Engagement

The Grace Model is also a simple equation:

MI – CI – CI = SL

MI meaning: Mutual Interests
CI meaning : Competing interests
SL: solutions.

The principle is simple. Mutual interests minus competing interests of both parties will result in a mutually acceptable solution.

Now, the genesis of petroleum spills are various but essentially caused by nature, human errors and non nature factors such as sea vessels, drilling rigs, pipelines, terminals, tanker trucks, and service stations. But, whichever they are caused, they have one thing on common. They can cause varied and widespread long lasting damages to the environment, the community and the natural ecosystems of the area. They harm wildlife, destroy properties, contaminate the food chain, public water supplies and destroys the coastal waters and communities, decimates the local economy, harms tourism, trigger mental health problems depression increase in drinking of alcohol, domestic violence etc etc in the communities affected and these effects are present and may continue for years and decades to come.

We are all aware of the BP’s Deepwater Horizon spillages in 2010 which claimed 11 lives and was turned into a movie starring Hollywood stars, Mark Wahlberg Kurt Russell and Kate Hudson amongst others and the civil claim itself was settled for a total of $18.7 billion. The size of the settlement is indicative of the size of the problems for which such a huge amount of damages was considered the best way to dispose of it.

Could these spills been prevented? Yes and no. As previously intimated, there are spills that can not be prevented as they are naturally occurring in nature. But, these are few and far between and usually not of such a scale as to affect the community to a great extent. However, the spills caused by human errors, factors, mechanical failures, storage leaks, rusts, and accidents during handling, transportation, offshore drillings, maintenance and even road runoffs – it is these categories of spills that are the main causes of the problems and litigation bedevilling the petroleum industry.

Therefore, it is in the mutual interests of all parties to take stringent measures to ensure the prevention of oil spillages.

What about the current regulatory regime? Well, the current regulatory regime in Nigeria is made up of criminal penalties and fines for a range of specified offences connected with oil spillages and discharges of harmful wastes such as the Oil in Navigable Waters Act, and the Harmful Wastes (Special Criminal Provisions) Act, in addition to the general civil liabilities and common law principles of the torts of nuisance, trespass, negligence and strict liability that may be committed in addition to the criminal offences and other offences under the National Oil Spill Detection and Response Agency Act amongst others. The
Minister of Petroleum also has powers to revoke an authorisation or permit granted for oil exploration for failure to comply with all applicable laws, including the current environmental regulations, guidelines and standards for the Petroleum Industry in Nigeria.

Whilst there are laws and regulations that can be called upon for successful litigation, the Grace model which I have earlier proposed, if properly employed, will definitely ensure a better outcome for all parties than the current litigation model.

Using the Grace Model, both parties firstly will submit to arbitration and mediation as a first point of the dispute resolution model. Given the huge amounts and the personal interests involved, arbitration and mediations can often be able to provide a swift resolution and for that reasons, arbitration is always advisable. In every arbitration and mediation using the Grace Model, both parties need to be transparent with each other and lawyers and other experts working with both parties need to identify the mutual interests of both parties first and then go on to identify their competing interests and then take that away and convert them and transform them into mutual interests.

Let me give an example to illustrate the Grace Model effectiveness. For example, say The potential claimants communities are economically devastated by the actions of the defendant oil company, at first glance this might be a competing interest but the Grace Model posits the question: is it the intention of the defendant oil company to cause this? The answer is No.

Since this is a no. This can then be transformed into mutual interest of both parties to try to ameliorate the economic devastation by means of a agreed raft of palliative measures that are capable of having a short term boost and a long term benefit for the affected communities and is robust enough and flexible enough to adjust to problems occurring down the line.

The beauty of this Grace Model is that it can be rapidly deployed and can swiftly help a quick resolution which helps to reduce animosity, builds goodwill between the parties and avoids parties descending into small wars, generational intractable disputes and terrorism – at a much higher costs to everyone and to the national economy.

A starting point of the Grace Model is that there is an everpresent mutual interest common to both parties. This is the environment and the care for it. As we know the maintenance of our environment is of very critical importance to mankind and to every Government therefore any damages and destruction to the environment impacts us all because of its importance to all life on this earth itself therefore it is in the mutual interests of all parties and stakeholders to ensure minimal damages to the environment in which oil drilling and transportation are carried out.

Part of the Grace Model is to mandate and encourage every oil company to establish a committee comprising of senior representatives of the oil company and representatives of the local communities in which the oil exploration and drilling is to take place and where any transportation is to take place or pass through.

This is a very important part of the Grace Model as this will establish a mutual interest platform upon which informed cooperation can be fostered and which will help both parties. This means that environmental concerns and other mutual interests can be properly protected and any problems swiftly dealt with and resolved.

The oil industry is of one of great importance to our country. Therefore, the Grace Model also envisages the establishment of specialist Oil and Petroleum Tribunals comprising of Specialist Adjudicators well versed with that industry and therefore able to resolve most disputes quickly and at less costs to all parties.

But before involvement of the specialist Oil and Petroleum Tribunals, a mandatory requirement must be imposed that every potential claim must be referred to a specialist oil dispute resolution service which must be funded by companies operating in the oil industries as it is in their best interests to resolve potential claims quickly.

It is my sincere held belief that if the above raft of my proposals are given due consideration and enacted or followed, we will soon see a significant reduction in oil spills, damages to the environment, improved communities and oil companies relationships and a better profit for the oil industry and more income for the Government and ultimately the whole country benefits as well.

If these benefits can be achieved, at minimum costs and expense, it is no wonder that The Grace Model should be used by all stakeholders in Government, the Oil Industry and The affected host communities to ensure everyone interests are well protected and disputes kept to a minimum, resulting in reduction of tensions, and a better and fairer deal for all.

Given the current quagmire of problems, disputes, currently bedevilling the industry, Can anyone seriously object to the adoption of the Grace Model by the oil industry as a pragmatic way to achieve a realistic solution to oil disputes and protect our marine environment?

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