Petroleum, Natural Resources and Environmental Law Journal Nigerian Journal of Petroleum, Natural Resdurces and Environmental Law Cae Rae tid i} TTR Leia) 5 eM ay) ee ae ——_—_— oe e Gas Flaring: Legal and Environmental Posse ec} ee eh Na Ae ee Ce ea Ree eed CUO Sa en cision tence cise it emai ues 2 5 = C. U. Mmuozoba Liability For Compensation For Oil BTC oa Co Race C Act of Strangers/Third Parties Bee een fa eRe UCR eal Omer a etc eR rl ee Ca SD el Legal Framework of The Downstream Section of The Gas Industry: Were Sea oe tee re I Rela eae LR ESSt a a} ert ae tel) rs M0) eae)Petroleum, Natural Resources and Environmental Law Journad Nigerian Journal of Petroleum, Natural Resources and Environmental Law (4 quarterly journal) 1 aD Ng vol.1, No.1 (2009), This Journal should be cited as: NJPNREL vol. 1, No.1 (2009)Petroleum, Natural Resources and Environmental Law Journal Contents Consumer Protection and the Petroleum Industry in Nigeria -F. O, Ukwueze Gas Flaring: Legal and Environmental Perspectives -U. E. Nwanji Oil Economy, Corporate Social Responsibility and the Politics of Oil Pipeline Explosions: Are there Socio-legal Paradigms for Pipeline Integrity in Nigeria? -C.U, Mmuozoba Liability for Compensation for Oil Spillages Resulting From the Act of Strangers/Third Parties -B. A. Oloworaran . Application of Common Law Principles in Adjudicating Water Pollution Violation: A Rethink -E. Onyeabor. Legal Framework of the Downstream Sector of the Gas Industry- An Appraisat., -D. A. Ariyoosu Public Acquisition of Land and Issues in Compensation: A View -0.B. Akinola The Nigerian Bio-Fuel Policy and Incentives (2007): A Step towards Climate Change Mitigation? -P.K. Oniemola iiiAkinola: Publie Acquisition of Land énd Issues in Compensation: A view Public Acquisition of Land and Issues in Compensation: A View O.B, Akinola* 1. Introduction The law is an ass says the old adage. At times the ass may be used to acquire another person's property. It behoves on the acquiring authority saddled with riding on the ass to ensure thatthe wound inflicted by the usage of legislation to deprive a lawful and original owner of the property usually acquiréd by inheritance is assuaged. In most cases, the African heritage is tied to communal and family lands which determine the extent of their settlement and boundary, To therefore deny an heir. of his heritage without adequate and timely compensation may therefore be counter-productive for the acquiring authority, 2. Land Acquisition and Compensation Before delving deeply into land acquisition as a concept, it is apposite to anatomise the meaning of the key word which is acquisition, The word ‘Acquisition’ according to the Blacks Law Dictionary! is the gaining of possession or contro! over something. In essence, acquisition entails a gain on the part of the acquiring party (authority) which invariably may be a pain on the part of the party parting with the property. In this context, the law is being used as an instrument to acquire another person’s property. It is therefore apposite that the law makes provision for a timely compensation for the person whose property is acquired. This writer therefore frowns at a situation where the acquiring authority through the legal instrument acquire the real property of a party and uses all manner of delay tactics to frustrate the payment of compensation to the party parting with his property. Now the poser is: ‘what is compensation?’ again, the Blacks Law Dictionary” defines compensation as follows: * LL.M, Lecturer, Nigerian Law School, Enugu Campus. B. A. Gardner; Blacks Law Dictionary, 8" edn, (Dallas Texas: West publishing Co 2004) p.25 Ibid. 134Petroleum, Natural Resources and Environmental Law Journal’ Comperisation ‘is ‘just compensation; «a payment bythe government for property it fas taken: under! eminent domain usually the property's fairmerket value so that the ‘owner is theoretically no worse off, after the taking. This is also termed adequate compensation; land damages. It was therein stated further that itis remuneration and other benefits received in return for services rendered; especially salary and wages. The context. in this work is not in respect of salary and wages but in the light of public acquisition of lands either rural or urban for public purposes in accordance with section 28 of the Land Use Act 1978 and other statutes. 3. Public Acquisition and Compensation under the Land Use Act 1978 The Land use Act 1978 (hereinafter referred to as the Act) is a revolutionary legislation in the aspect of landholding in Nigeria. The Act emphasises the public purposes of protecting the rights of all Nigerians to the land of Nigeria.° The preamble of the Act states: whereas it is in the public interest that the right of all Nigerians to the land of Nigeria be asserted and protected by the law; and whereas it is also in the public interest that the rights of all Nigerians-to use and enjoy land in Nigeria and the natural fruits thereof in sufficient quantity to enable them to provide for the sustenance of themselves and their families should be assured protected and preserved. It is apposite ‘to state that the Land Use Act’ was based on four objectives namely: (a) To remove the bitter controversies; resulting at times in loss of livés.and limbs which.land is known to be generating. (b) To streamline and simplify the management and ownership of land in the country. (c) To assist the citizen, irrespective of his social'status to realise his ambition and- aspiration of owning the place where he and his family will live a secure and peaceful life. L.M.O. Adeleye, “Land Reform- Experience from Nigeria” 5" Regional Conference Accra, Ghana(2006) , available at:www.googlesearch.com, visiste on 05/03/08, p! 135Akinola: Public Acquisition of Land and {ssues it Compensation: A view (d) =To enable. the government to bring under control the uses to which: land..can, be put in all parts .of the .country and thus facilitate =planning: and =zoning, programmes. for particular purposes.” a ¢ According to a writer* the avowed purposes of the Land Reform Act are: ar (i) To make investment in agricultUre attractive by’ removing the uncertainty in the control over land; * (ii) To curb speculation in urban lands; (iii) To make opportunities to occupy land generally available to Nigerians throughout the country, thereby bringing about mobility of resources, especially, human resources; and (iv) To reallocate rural land to large scale farming. In.my view noné.,of the purposes cum objectives. operates to deny a person who owns land by inheritance, settlement or conquest his land and fail to. compensate him adequately and timeously for the acquisition based on public purposes. ee! . However, section .28(1),of the Act,states that, “It shall be lawful for the Government to revoke a right of occupancy for overriding public interest.” Sub ‘section: 2! of the «section under consideration provides further that overriding ‘public interest in the'case of aistatutory right of occupancy means: : . (a) The alienation by thé occupier by assignment. mortgage, transfer of possession, sublease or’otherwise of any right of occupancy or part thereof contrary to the provisions of this Act or of any regulations made thereunder - (b) The requirement of the land by, the government of the state or by a local government in the state, in either case for public purpose of the Federation. = (c) The tequirement of the land: for mining purposes: or oil pipeline or for any purpose connected therewith. According to. Babalakin,° what public purpose is is quite vexed under Nigerian law, Unlike advanced countries where the motive for Uchendu, Alienation of family property in Nigeria, (1980), quoted from Land Reform- Experience from Nigeria by M. Olayiwola and O. Adeleye 2006, p. W. Babalakin, “Key Constraints’ to Real Estate Development in Nigeris at: www. babalakinnandco.com visited on 16/02/2008. 136Petroleum, Natural Resources and Environmental Law Journal compulsory acquisition is hardly questioned, in Nigeria there is clearly a serious abuse of power in this regard. Section 51 of the Land Use Act states that public purpose includes: () exclusive government use or general public use. (ii) Use by body corporate directly established by law or under Companies and Allied Matters Act in which Government owns’shares, stock, debenture. (il) in connection with sanitary improvement of any kind. (iv) for controlling land contiguous to land that would be enhanced by the construction of railway, road, or other public work or convenience about to’ be undertaken by government. (v) for controlling land required for development of telecommunications, electricity or mining purposes. (vi) for controlling land required for planned urban or rural development of settlement. (vii) for controlling land for economic, industrial or agricultural development. (vii) for education and other sdcial services. It should be noted that the definition of public purposes made use of the word “includes” which suggests that the list is not exhaustive. Applying the ejusdem generis rule, the court has x-rayed this section in some cases. The Supreme Court in Osho v. Foreign Finance Corporation,” (despite not being the major issues before the court), states that any revocation for Public purpose outside the ones prescribed in section 51(1) of the Act even though for a related purpose is against the policy and intention of the Act.’ Als, the Court of Appeal in Olatunji v. Military Governor, Oyo State & ors® considered whether the compulsory acquisition of the land in issue is not a nullity taking into account that the appellant who was the owner or the person in effective possession was not served with a notice of revocation. The Oyo State government compulsorily acquired a parcel of land at Orita Ikereku Challenge Ibadan belonging (1991)4 NWLR (Pt184) p.157 In the opinion of this writer, acquisition for security purposes fails within the contemplation of the Act (1995) 5 NLR (Pt 397) p. 586 at 606 Paras B-C. 137Akinola: Public Acquisition of Land and Isses in Compensation: A view to the appellant without Notice to him but vide Oyo State Gazette No 10 in Volume 17 of 11" March, 1982 wherein the Certificate of Occupancy of the appellant was revoked and re-assigned to TAWA INVESTMENT (NIG) LTD. The appellant sued and the court categorically held that: ¥ Although the section opens with the words “public purpose includes” which words convey that the definition of public ~ purpose therein may not be exhaustive, it seems to me that other public purposes not stated under section 51 have to take their coloration or meaning from the public purposes stated therein Such other public purposes must be those similar to those stated in the section. It is therefore further submitted that the law should not be used as a cheap instrument-of divesting individual or communal land owners of their interest in other to satisfy political cronies. The implication of the above judicial authorities is that our Court has adopted a very restrictive meaning to public purpose which is well applauded. This is because it protects private owners and investors who have risked all their life savings and fortunes in an attempt to develop land in Nigeria, only for government to turn around and improperly acquire it. Babalakin wrote about one Chief J.H. Bassey whose land was acquired by the Federal Government in the 1980's. The acquisition was clearly illegal and while the matter was still being challenged: in Court, the then Federal Military Government promulgated a Decree specifically for Chief Bassey's land which it titled’ J.H. Bassey Acquisition of Properties Decree. Such is the naked abuse of power by government on compulsory land acquisition in Nigeria. It should however be noted that the Governor of a state may revoke a statutory right of occupancy on the ground of a bréach of any of the implied provisions which a certificate of occupancy is by section 10 of the Act deemed to contain; or for breach of terms contained in the Certificate of occupancy or in any special contract made under section 8; or for a refusal to accept and pay for a certificate issued in evidence of a right of occupancy but cancelled by the Governor under section 10 (3) of the Act.® ' 1.0. Smith, Practical Approach to law of real property in Nigeria (Lagos: Ecowatch Publications (Nig) Ltd, 1999) p.328. 138Petroleum, Natural Resources and Environmental Law Journal ' Before an analysis on the legal requiremérit for compensatin, there exists a procedure for. valid revocation Which ‘is sumbidtised under section 28 (6) and (7) thus:: a. Revocation must be! by a person ‘Who ‘has ‘the Power to revoke i.e. a public officer duly'authorised by the Governor. b. Notice shall be issued stating the ‘purpése of revocation as prestribed bythe Act, a Notice shall be served on the holder of the’ right of Occupancy and service must cohstitute good service in accordance with section 44 of the Act. da Notice must be proved to have come ‘to ‘the knowledge of the person concemed i.e. there must be receipt of such Notice. It should be noted that where a Parcel of land is not' properly acquired, for a public purpose, the’ acquisition is invalid notwithstanding that there was lapse of time between the date* of acquisition ahd the transfer of land to a third party or that the parcel’ of land was only a small portion of a larger portion of land also acquired. 'n this present dispensation'® the allocation policy of the various tiers of government appear most scandalous. This'is because the’ ‘Land Use Allocation Committees are no more than mere appendages of the various state governors and merely endorse lists approved by them. The avowed commitments to repeal or amend ‘the Act by various governments only catapulted them into allocating other People's land to friends, relatives and political Party faithfuls. Land became 'indéed’an item of political patronage, hence, allocation of land was rarely made to low income eamers as stated in the objectives’ of the Land' Use’ Act 1978. Land is now beyond the reach of the ordinary Nigerian but Within reach for affluent citizens. This is a misnomer for which if adequate Steps are not taken may soon result ina revolution. Another statute which provides for revocation of a tight! of occupancy is the Nigerian Urban and Regional Planning Deorée No &3 of 1992 which requires a holder of a tight of occupancy to’seek for Development Permit from the Development Control Department, for developmental purposes. However, some provisions of the! Decree have been declared unconstitutional by the Supreme Court’ in’A.G. et a 1999 — till date, 139Akinola: Public Acquisition of Land and Issues in Compensation: A view Lagos State v. A.G. Federation'' based on the hallowed principles of federalism. The Supreme Court stated that the provisions of the Decree are Constitutional only ta the extent that they apply to the Federal Government and the Federal Capital Territory but not if they relate to the states as they impose duties and responsibilities on the latter contrary to the principles of Federalism.'? Ih this case the Supreme Court settled the issue of whether the subject matter of urban and regional planning falls within the exclusive preserve of the National Assembly. The court held thus: iy < Therefore each government exists not as an appendage of another government but as autonomous entity in the sense of being able to exercise its own will in the conduct of its affairs, free from direction by another government. It follows, therefore, that the National Assembly cannot impose on the plaintiff in this case or determine for the plaintiff the types and levels of physical plans the plaintiff or any state of the federation should have. It is only in the context of Federal Capital Territory: that: the National Assembly can make such enactment by virtue of the provisions of ‘section '299' of the 1999. Constitution. Consequently, | hold that séction 120;of the: 1992 Act is unconstitutional, null and void ~ per. Uwais CN (as he then was) at pages 889-890 It should be pointed out that the Decree also conflicts with the Land Use Act in the sense that under section’75 (1) of the Decree a right of occupancy. can be: revoked, when it appears to the National Urban and Regional Planning Commission.(NURPC), created under the 1992 Decree: that it is necessary-to obtain land in connection with planned urban or rural development. The Decree states further under section 75 (2) that revocation under the Decree shall be in accordance with the Land Use Act, 1978. 4. Compensation for Compulsory Acquisition of Land The essence of revocation has been’stated to be for overriding public interest. The Land Use Act under section 29 states as follows: (2003) 14 NSCOR (PT11) p.834. Per M.L. Uwais CIN (as he them was) at page 905 of the Judgment, 140 tet sc tn 7 4Petroleum, Natural Resources and Environmental Law Journal (1) If a right of occupancy is revoked for the cause set out in paragraph (b) of subsection (2) of section 28 Of this Act or in paragraph (a) or (c) of subsection (3) of the same section, the holder and the occupier shall be entitled to compensation for the value at the date of revocation of their un-exhausted improvements. (2) If a right of occupancy is revoked for the cause set out in paragraph (c) of subsection (2) of section 28 of this Act or in paragraph (b) of subsection (3) of the same section the. holder of the certificate of occupancy shall be entitled to compensation under the appropriate provisions of the Minerals Act or the Minerals Oil Act or any legislation replacing the same.'> [tis important to note that the provision of section 29 of the Land Use Act on compensation only applies where revocation of a right of Occupancy is not penal. For instance, revocation of a right of occupancy on the grounds of unlawful alienation, breach of express or implied covenants in a certificate of occupancy will not attract compensation. This writer's focus is on those holders or occupiers under section 29 (1) and (2) who are lawfully entitled to compensation based. ‘on the revocation pursuant to section 28 of the-Land Use Act and other statutes. Hence those statutorily not entitied to ‘compensation based on penal provisions ought to comply with the terms and conditions of the certificate of occupancy issued to them. The issue of compensation happens to be a daily incident in Nigeria. For instance, a recent Guardian Newspaper" reported that some investors and traders in Lages suffered in the hands of Lagos State's Physical Planning and Development Authority (LAPPDA) officials. A firm;Messrs. Kwality Textile Industries Limited claimed that it duly obtained all the necessary development permits from the LAPPDA which still went ahead and pulled down its staff quarters on Jonah Ese Street, Mende Maryland, Lagos. Elsewhere at the popular Oshodi Market on the mainland, the location of a‘transit park for the Bus Rapid Transit (BRT) scheme has been the source of losses for traders who B 1“ E.g. Minerals and Mining Decree No 34 1999 now, Act No 34 Cap M 12 LFN 2004. The Guardian Newspapers of Monday April, 7, 2008 at page 31 captioned “Controversy trails Lagos demolitions, as textile firm traders seek compensation,” 141Akinola: Public Aéquisition of Land avid Issues in’ Compensation: A view until March 2008 had plied their trade in the market. The traders woke up one morning only to discover that their means of livelihood had been wiped off by the Lagos State Government officials. The affected parties are now seeking compensation from the Lagos State Government.'°. The question is “why compensation?” and “when will the Lagos State Government and other tiers of government accede to request for compensation under the requisite laws?” It is important to note that the process of acquisition though compulsory should not be made confiscatory. The acquiring body wilkbe required in all cases to justify its need for the land and to show why that need should outweigh the claim of the owner to remain there. It is further submitted that where a right of occupancy has been revoked, the acquiring authority should put the land to the purpose for which it was acquired within a reasonable tima.”® It is further submitted that issues as to adequacy of compensation ought not to be adjudicated upon by the Land Use Allocation Committee as stipulated in-section 30 of the Act but by virtue of section 39(1)(a)(b) and (2) of the Land Use Act. The said section 39 (1) (b) ought to read “Proceedings to determine any question as to the amount of and persons entitled to compensation payable for improvements on Land under this Act.” 5, Compensation in Other Statutes This provision” ought to be the preventive measure for the raging Niger Delta crisis because upon revocation of a right of occupancy on the ground that the land is required for mining purposes or oil pipelines or for any ‘purpose connected therewith, the holder and the occupier, shall be entitled to compensation under 'the appropriate: provisions of the Minerals ‘Act’? or any other legislation... The Niger Delta Development Commission’? cught to rely on the various legal instruments devised’ for the -benefit of its people and ensure: that legislations such as the Petroleum Act, Nigerian National Petroleum Corporation Act’ etc are exhausted to ensure adequate compensation a2 8 Ibid. “ C. Harpum; The Law of Real Property, 6" edn., (London: Sweet and Maxwell, 1999) p. 1359. G Cap M 12 LFN 2004. 3s Cap 226 LEN 1990. * ‘Niger Delta Development Commission Act No 2 1999 CAP N86 LFN 2004. _ Cap P7 LFN 2004. at Cap N 123 LFN 2004. 142Petroleum, Natural Resources and Environmental Law Journal for its people. Section 8 (3) of the Minerals and Mining Act 199922 buttresses this point when it provides that: A licensee or lessee who catises injury or damage to any area, tree or thing mentioned in subsection 123 of this section shall pay fair and adequate compensation to the Persons or communities affected by the injury or damage. In furtherance of the above, Pert IV and sections 6, 19 and 20 of the Oil Pipelines Act 1990" made provisions for compensation, its 6. Suggested Recommendations It is suggested that section 315 of the 1999 Constitution which made room for the Land Use Act should be expunged in accordance with ee ; 2 Supra. : = Section 8(1) provides that: No Person shall in the course of Prospecting or mining, dear out operations on, in or under any area held to be sacred er permit injury or destruction of any tree or other thing which isthe object of veneration, * Cap 07 LFN 2004, 1 Decree No 33 applicable in the federal Capital Territory. 143Akinola: Public Acquisition of Land and Issues in Compensation: A view automatically assume jurisdiction as to the adequacy of the amount Payable as compensation to the deprived owner, It is further suggested that the said compensation should be made ready before the Notice of Revocation is sent to the holder or occupier of a right of occupancy. This isto prevent incidental losses and cost of litigation usually borne by such holders when agitating or Frequesting to be compensated, Moreover, bureaucratic bottlenecks should be removed from, the Payment of compensation by the government. This can be made possible through the adoption of the various electronic payment devices. In furtherance of the above, any revocation that is outside the purview of section 28 (2) of the Act ought to be made a cogerit reason for the grant of an ex Parte application against the acquiring authority until compensation is paid. The practice whereby Peanuts and meagre sum is given to original land owners ought to be discountenanced by the various government agencies. Rather, the market value of the developed or unimproved land with other allowances for inconvenience or resettlement benefits ought to be the value payable to the Party whose Property is being compulsorily acquired. Also, the practice wherein the Governor or the Land Use Allocation Committee revokes Certificate of Occupancy only to reallocate same to their friends, relatives and political cronies should be criminalised and totally discouraged as it amounts to robbing Peter to pay Paul. The allocation policies of the various tiers of government ought to reflect the actual overriding public interest for which the right of occupancy of a holder is being revoked. ° “ 7. Conclusion Land as a universal phenomenon is cardinal and sensitive to the owners. To compulsorily acquire another person's land or a communal land without prompt and adequate compensation is to invite a revolution. Where there are mineral resources in form of oil and gas etc found in a particular’ land or some lands. required for developmental purpose by the government, compensation should be uppermost in the mind of the acquiring authority. Had it been this was done alongside requisite developmental projects, the escalated Niger Delta. crisis for which a percentage of the National budget is now devoted would have been averted. 144