Oil Spill
Oil Spill

The judgment of the Court of Appeal frowning at the powers of regulatory agencies to impose fines on the organisations they regulate is an opportunity to take the right to fair hearing seriously, Davidson Iriekpen writes

The Court of Appeal in Calabar penultimate week clipped the wings of the National Oil Spill Detection and Response Agency (NOSDRA) when it struck down the powers of regulatory agencies to impose fines without recourse to the courts. In its judgment in favour of Mobil Producing Nigeria Unlimited (MPN) in an appeal filed by the agency against the decision of the Justice Ijeoma Ojukwu of the Federal High Court in Uyo, the appellate court struck down section 6(3) of the NOSDRA Act empowering it to impose fines on organisations it is regulating, saying it is in clear violation of the 1999 Constitution.

NOSDRA was established through an Act of the National Assembly in 2006. It was established with responsibility for preparedness, detection and response to oil spillages in Nigeria. The agency was established as an institutional framework to co-ordinate the implementation of the National Oil Spill Contingency Plan (NOSCP) for Nigeria in accordance with the International Convention on Oil Pollution Preparedness, Response and Cooperation (OPRC 90) to which Nigeria is a signatory.

It embarks on joint investigation visits, ensures the remediation of impacted sites and monitors oil spill drill exercises and facilities inspection. It has offices in Port Harcourt, Warri, and Uyo all in the Niger-Delta region where much of oil exploration and production in Nigeria is carried out and liaising with relevant stakeholders in the Nigerian oil and gas industry to evolve practical methods of environmental management to cope with the dynamics of the petroleum sector.

The agency in 2015 instituted a suit at the Federal High Court in Uyo vide a writ of summons and statement of claim dated November 10, 2016 against Mobil claiming among others, the sum of N10,000,000 as fine for the alleged contravention of its Act and regulations. The alleged contravention was in respect of the oil spill incident of June 29, 2014, at MPN’s oil facility situated at the Qua Iboe Terminal, in Ibeno Local Government Area of Akwa Ibom State.

The crux of the NOSDRA’s claim was that the clean-up exercise following the oil spill at the defendant’s oil facility was not carried out in compliance with Section 6(3) of its Act, Section 6(a) of Regulation 25 of the Oil Spill Recovery, Clean-Up, Remediation and Damage Assessment Regulation, 2011, Sections 10 (1-4) and 37 (1-2) of S.I. No. 26 of the Oil Spill and Oily Waste Management Regulations, 2011, among others.

Mobil upon receiving the originating processes, entered a conditional appearance and filed its statement of defence and accompanying court processes dated December 14, 2016 in opposition to the plaintiff’s originating process. The crux of its defence was to the effect that upon observing the small amount of oil released from its facilities, it immediately shut down the affected tanks operations and activated its emergency response procedure in order to contain the spread of the spilled oil which it immediately contained and cleaned up. It pleaded documents exhibiting the facts of its emergency response procedure and the joint investigation conducted by a team comprising of representatives of the agency, Department of Petroleum Resources (DPR), other relevant regulatory authorities, host community and local government area representatives.

Mobil also averred in its statement of defence that the clean-up, remediation and assessment exercise of the impacted site was indeed in line with the stipulated standards of the NOSDRA Act, 2006 and its regulations. It also pleaded the plaintiff’s report rating the clean-up exercise as satisfactory.

In line with the above, Mobil submitted that there was no basis for the penalty levied against it as the clean-up exercise done on its Qua Iboe Facility was indeed in line with the NOSDRA Act and regulations. Further to this, the defendant also filed a preliminary objection dated January 11, 2017 challenging the jurisdiction of the court to hear the suit. It asked the court to determine among others, whether the plaintiff has the inherent power to levy penalties on it.

Its counsel, Prof. Fabian Ajogwu SAN, in his arguments as canvassed by Prof. Fabian Ajogwu (SAN), as canvassed by Mr. Ituah Imhanze of Kenna Partners, argued among others, that the plaintiff had violated the rules of fair hearing in levying the penalty against it. The crux of its argument in this respect centred on the fact that the plaintiff has no inherent power to impose the penalty/fine levied against it without the legality or otherwise of the act complained of (alleged non-compliance with the NOSDRA Act and Regulations) having first been adjudicated upon and decided by a court of law. It argued that to allow such imposition of fines would be to allow the plaintiff become a judge in its own case, a clear violation of the principles of fair hearing.

On May 16, 2017, Justice Ijeoma L. Ojukwu in her ruling, struck out the suit in its entirety and held that the plaintiff acted ultra vires its power by imposing fines on the defendant. The court stated that the power to impose fines is a judicial or quasi-judicial power which an administrative body like the plaintiff cannot exercise. It also confirmed that the failure of the plaintiff to create a platform for aggrieved persons to object to the imposition of fines was against the rules of justice and fairness amounting to a violation of the right to fair hearing of the defendant.

Dissatisfied with the judgment, NOSDRA appealed the decision. But upholding the submissions of Mobil and affirming the ruling of the lower court, the Court of Appeal in Calabar in a unanimous decision, held that by imposing penalty on Mobil without due recourse to the courts, NOSDRA “acted in a judicial capacity which they are not imbued with” under the 1999 Constitution.

In the lead judgment delivered by Justice Chioma Nwosu-Iheme, she held that by fining Mobil, NOSDRA constituteditself into a court with judicial or quasi-judicial powers, when in fact the law creating it did not donate such jurisdiction to it. She noted that the federal agency by imposing fine on Mobil, became the complainant as well as the judge in its own cause.

Justice Nwosu-Iheme submitted that penalties or fines are imposed as punishment for an offence or violation of the law, adding that the power as well as competence to come to that finding belong to the courts and that NOSDRA is not clothed with the power to properly exercise that function in view of the law creating it. She held that since Section 6(6) of the Constitution in Section vests judicial powers on the courts, sentence can safely be pronounced after a conviction for an offence has been made by a court of competent jurisdiction.

“Penalties or fines are imposed as punishment for an offence or violation of the law. The power as well as competence to come to that finding belong to the courts and the appellant is not clothed with the power to properly exercise that function in view of the law creating the appellant. The same constitution in Section 6(6) vests judicial powers on the courts. A sentence can safely be pronounced after a conviction for an offence has been made by a court of competent jurisdiction.”

Further submitting that it is very well known in law that a fine is a criminal sanction, the Appeal Court judge cited the judgment delivered by Justice Abba Aji of the same court in the Abdullahi vs. Kano State (2015) LPELR – 25928 where he defined fine “as a payment of money ordered by a court from a person who has been found guilty of violating law, it may be specified as the punishment for an offender, usually a minor offence, but could also be specified and used as an option to imprisonment for major crimes or a complement to other punishments specified for such crimes. I must here underline the fact that awarding a fine is a judicial act and it is the sole prerogative of a court of law under Section 6 of the 1999 Constitution of the Federal Republic of Nigeria 1999 (as amended). No other organizations or bodies can usurp that power. Any law that would consign to anybody other than the courts the power to award fine is unconstitutional.”

She held that the courts would not allow any authority to act ultra vires its powers under the Constitution, adding that Sections 1 and 6 of the 1999 Constitution empowers the courts to declare any Act of the National Assembly inconsistent with the provisions of the Constitution, null and void. The panel consequently, restated the power of the courts under the constitution to declare any Act of the National Assembly that is inconsistent with the constitution as null and void and pronounced that the offending provisions of the NOSDRA Act which provided the basis for the arbitrary imposition of fine by the federal agency constitutes a lacuna in the NOSDRA Act.

“By the provisions of Sections 1(1) and (3) of the 1999 Constitution, the Constitution is supreme and its provisions are binding on all authorities and persons in Nigeria. Therefore, if any law is inconsistent with any provisions of the constitution, the constitution shall prevail and the other law shall to the extent of that inconsistency be void,” Justice Nwosu-Iheme held.

Lately, federal and state government agencies have been arbitrarily imposing fines on organsiations they regulate. The judgment by the Court of Appeal not only show how seriously the courts take the issue of right to fair hearing, but a way of cautioning regulatory agencies against acting in a judicial capacity which they are not imbued with under the 1999 Constitution.