An Appraisal of the Possibility of Customary Arbitration in Resolving Host Communities Trust Disputes Under the Petroleum Inustry Act 2021

Authors

  • Angela E. Obidimma Faculty of Law, Nnamdi Azikiwe University, Awka, Anambra State Nigeria
  • Abasiama Augustine Umohatah Faculty of Law, Nnamdi Azikiwe University, Awka; Barrister and Solicitor of the Supreme Court of Nigeria

Keywords:

Arbitration, Petroleum, Mediation, Host Communities, Customs

Abstract

The enactment of the Nigerian Petroleum Industry Act (PIA) in 2021 marked a significant shift from voluntary to
legally mandated community investment strategies for oil and gas companies in Nigeria. Previously, these companies
relied on elective community investment strategies, such as Memorandums of Understanding (MoUs), to address
conflicts with host communities and ensure uninterrupted operations. Chapter three of the PIA introduces the novel
host community’s development trust to address issues of marginalization, underdevelopment and environmental
injustice in these communities. These issues over the years have resulted in violence, acrimony, killings and litigations.
This paper aimed at evaluating the workability of customary arbitration as an effective mechanism in resolving host
communities’ issues under the PIA and its impact in community development. It adopts the analytical and doctrinal
research methodology. It also examines the relationship between multinationals and their host communities in
Nigeria’s oil-rich Niger Delta region. Furthermore, it also analyses the legal and structural framework of the Host
Communities Development Trust in the Act. It concludes that timely settlement of disputes between the oil producing
host communities and oil and gas companies is very crucial to stability and sustenance of commercial harmony, and
that customary arbitration if recognized, incorporated, fine-tuned and practised in the oil and gas industry in Nigeria
based on the legal regime of the PIA and regulations made pursuant to it, can benefit the host communities and fulfill
to a larger extent the intention of Chapter three of the PIA. It recommends that customary arbitration which today has
gained global acceptance should be encouraged and considered as the first port of call in dispute resolution in the
energy industry as opposed to the long-term bottleneck that parties face in litigation process.

Author Biographies

  • Angela E. Obidimma, Faculty of Law, Nnamdi Azikiwe University, Awka, Anambra State Nigeria

    Angela E. Obidimma, BA, LLB, BL, LLM, PhD, Professor of Laws, Faculty of Law, Nnamdi Azikiwe University,
    Awka, Anambra State Nigeria.

  • Abasiama Augustine Umohatah, Faculty of Law, Nnamdi Azikiwe University, Awka; Barrister and Solicitor of the Supreme Court of Nigeria

    Abasiama Augustine Umohatah, LLB (Uyo) BL, LL.M (Uyo), PhD Candidate, Faculty of Law, Nnamdi Azikiwe
    University, Awka; Barrister and Solicitor of the Supreme Court of Nigeria.

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Published

2024-08-31

Issue

Vol. 1 No. 1 (2024): JOURNAL OF CUSTOMARY AND RELIGIOUS LAW(JOCARL)

Section

Articles