Corporate social responsibility, multinational corporations and the law in Nigeria: Controlling multinationals in host States

Journal of African Law

Volumn 52, Issue 1, 2008, Pages 89-113

  Amao, Olufemi O ^a  

^a NONE

Author keywords

[No Author keywords available]

Indexed keywords

EID: 70049098387     PISSN: 00218553     EISSN: 14643731     Source Type: Journal    
DOI: 10.1017/S0021855308000041     Document Type: Article

References (136)

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2. K Amaeshi and others "Corporate social responsibility in Nigeria: western mimicry or indigenous influence" (2006) 24 Journal of Corporate Citizenship 83 at 84.
3. See for examples: Shell Nigeria Annual Report 2006 "People and the environ ment" available at: ,http://www.shell.com/home/content/nigeria/ news-and-library/publications/annual-reports-archive.html. (last accessed 28 August 2007);
4. Shell's "General business principle" available at: ,http://www.shell.com/home/content/nigeria/about-shell/how-we-work/principles/ business-principles.html. (last accessed 23 August 2007);
5. Shell's "Approach to human rights" available at: ,http://www. shell.com/home/content/nigeria/about-shell/issues/human-rights/hum-rights.html. (last accessed 23 August 2007);
6. S Amadi, M Germiso and A Henriksen Statoil in Nigeria: Transparencyand LocalContentreportno1/2006(2006, Framtiden,Ivarehender)at19;
7. "The Chevron way" available at: ,http://www.chevron.com/about/ chevtex-way/. (last accessed 23 August 2007).
8. N Gunningham, R Kagan and D Thornton "Social licence and environmental protection: why businesses go beyond compliance" (2004) 29/2 Law & Social Inquiry 307 at 308;
9. C Parker "Meta-regulation: legal accountability for corporate social responsibility" in D McBarnet, A Voiculescu and T Campbell (eds) The New Corporate Accountability: Corporate Social Responsibility and the Law (2007, Cambridge University Press) at 207.
10. Amadi et al Statoil in Nigeria, above at note 2.
11. Idemudia and Ite "Corporate-community relations in Nigeria's oil industry", above at note 1 at 194.
12. MS Steyn "Oil politics in Ecuador and Nigeria: a perspective from environmental history on the struggles between ethnics minority and national governments" (PhD thesis submitted to the Faculty of Humanities (Department of History) University of the Free State, Bloemfontein, South Africa 2003) at 74 and 147.
13. Id at 148.
14. BO Nwabueze A Constitutional History of Nigeria (1982, C Hurst & Co) at 35-37.
15. JH Morrison "Early tin production and Nigerian labour on the Jos Plateau 1906-21" (1977) 11/2 Canada Journal of African Studies 205 at 205.
16. Id at 208.
17. Steyn "Oil politics in Ecuador and Nigeria", above at note 6 at 180.
18. It has however been noted that this provision resulted in a paradox as the first company ever toundertake oil explorationinNigeria (albeit unsuccessfully duetothe First World War)wasthe German Bitumen Company.See PD Okonmah"Right tocleanenvironment: the case for the people of oil-producing communities in Nigerian delta" (1997) 41/1 Journal of African Law 43 at 44;
19. B Manby The Price of Oil: Corporate Responsibility and Human Rights Violations in Nigeria's Oil Producing Communities (1999, Human Rights Watch, New York) at 27;
20. Y Omoregbe "The legal framework for the production of petroleum in Nigeria" (1987) 15 Journal of Energy and Natural Resources Law 273 at 274.
21. Manby The Price of Oil, above at note 12 at 25.
22. JG Frynas, MP Beck and K Mellahi "Maintaining corporate dominance after decolonization: the 'first mover advantage' of Shell-BP in Nigeria" (2000) 27/85 Review of African Political Economy 407 at 407-409
23. JG Frynas, MP Beck and K Mellahi "Maintaining corporate dominance after decolonization: the 'first mover advantage' of Shell-BP in Nigeria" (2000) 27/85 Review of African Political Economy 407 at 407-409. Ibid.
24. ibid..
25. B Onimode "Imperialism and multinational corporations: a case study of Nigeria" (1978) 9/2 Journal of Black Studies 207 at 210.
26. Cap 113, Laws of the Federation of Nigeria ("LFN") 1990.
27. Nigerian Immigration Act 1963, cap 171 LFN 1990.
28. The following civilian regime renamed it the Companies Act 1968.
29. Sec 54 Companies and Allied Matters Act, cap 59, LFN 1990.
30. TI Ogowewo "The shift to the classical theory of foreign investment: opening up the Nigerian market" (1995) 44/4 The International and Comparative Law Quarterly 915 at 916.
31. TI Ogowewo "The shift to the classical theory of foreign investment: opening up the Nigerian market" (1995) 44/4 The International and Comparative Law Quarterly 915, 916. Ibid.
32. See also V Akpotaire "The Nigerian indigenization laws as disincentives to foreign investments: the end of an era" (2005) 26/3 Business Law Review 62 at 62.
33. FC Beveridge "Taking control of foreign investment: a case study of indigenization in Nigeria" (1991) 40/2 The International and Comparative Law Quarterly 302 at 302-306
34. Id at 307.
35. Ibid..
36. Ogowewo "The shift to the classical theory of foreign investment", above at note 22 at 925.
37. Id at 924-925
38. This was followed by the Nigerian Enterprises (Issue of Non-voting Equity Shares) Act 1987.
39. Akpotaire "The Nigerian indigenization laws", above at note 23 at 66.
40. Public Enterprises (Privatization and Commercialization) Act 1999.
41. Manby The Price of Oil, above at note 12 at 6-10.
42. Primarily listed on the London Stock Exchange and the Amsterdam Stock Exchange.
43. For example, the Exxon Mobil subsidiary is owned by NNPC (60%) and Mobil Oil (40%). Shell Petroleum Development Corporation's shareholding structure comprises NNPC (55%), Shell International (30%), Elf Petroleum (10%) and Agip Oil (5%). Chevron Nigeria Limited is owned by NNPC (60%) and Chevron Texaco (40%). Nigeria Agip Oil Company is owned by NNPC (60%), Agip Oil (20%) and Phillips Petroleum (20%). Elf Nigeria Ltd is owned by the NNPC (60%) and TotalElfFina (40%). Texaco Overseas (Nigeria) Petroleum Company is owned by the NNPC (60%), Chevron (20%) and Texaco (20%). See ,http://www.nnpcgroup.com/ jvoperation.htm. (last accessed 6 June 2007).
44. JG Frynas "Legal change in Africa: evidence from oil-related litigation in Nigeria" (1999) 43/2 Journal of African Law 121 at 122-23.
45. NHD Foster and J Ball "Imperialism and accountability in corporate law: the limitations of incorporation as a regulatory mechanism" in S Macleod (ed) Global Governance and the Quest for Justice: Corporate Governance (2006, Hart Publishing, Oxford) 93 at 93-96.
46. JO Orojo Company Law in Nigeria (3rd ed, 1992, Mbeyi & Associates, Lagos) at 1.
47. Id at 17-18.
48. [1897] AC 22.
49. Orojo Company Law in Nigeria, above at note 37 at 17-18.
50. A Guobadia "Protecting minority and public interests in Nigerian company law: the corporate affairs commission as a corporations ombudsman" in F McMillan (ed) International Company Law Annual vol1 (2000, Hart Publishing) 81 at 81-83.
51. MT Kamminga "Holding multinational corporations accountable for human rights abuses: a challenge for the EC" in P Alston (ed) The EU and Human Rights (1999, Oxford University Press) 553 at 554.
52. N Jagers Corporate Human Rights Obligations: In Search of Accountability (2002, Intersentia) at 11.
53. J Dine Companies, International Trade and Human Rights (2005, Cambridge University Press) at 48.
54. See sec 691 of Companies Act 1985.
55. Ogowewo "The shift to the classical theory of foreign investment", above at note 22 at 925.
56. Mobil Producing (Nig) United v Monokpo (2003) 18 NWLR (Pt 852) 346 at 401.
57. This distinction was also employed by the Court of Appeal in granting an oil community a stay of execution of a judgment against Shell for gas flaring in Shell Petroleum Development Company (SPDC) of Nigeria v Dr Pere Ajuwa and Honourable Ingo Mac-Etteli Court of Appeal, Abuja division, no CA/A/209/06, 27 May 2007.
58. Okura & Co Ltd v Forsbacka Jernverks Aktiebolag (1914) 1 KB 715.
59. See also Offshore International SA v Federal Board of Inland Revenue (1976) 1NTC 385, where a Nigerian court held that a company incorporated in Panama, having its principal office in Texas and no place of business in Nigeria, was liable to pay tax for the operation of its business carried out through a subsidiary in Nigeria under the Nigerian Companies Income Tax Act.
60. See Kitchen Equip (WA) Ltd v Staines Catering Equip International Ltd suit no FCA/L/17182 OF 28/2/83;
61. Nigerian Bank for Commerce and Industry v Europa Traders (UK) Ltd (1990) 6 NWLR 36, 41 CA;
62. Ishola v Societe Generale Bank (Nig) Ltd (1997) 2 NWLR (pt 488) 406 SC;
63. UBN Plc v Jase Motors (Nig) Ltd (1997) 7 NWLR (pt 513) 387 CA;
64. Watanmal (Singapore) v Liz Olofin &Co (1998) 1 NWLR (pt 533) 311 CA;
65. Ritz & Co KG v Techno Ltd (1999) 4 NWLR (pt 598) 298 CA;
66. Saeby v Olaogun (2001) 11 WRN 179 SC.
67. MO Kanu & Sons v FBN Plc (1998) 11 NWLR (pt 572) 116 at 121.
68. Musa v Ehidiamhen (1994) 3 NWLR (pt 334) 554 CA.
69. Sec 338(5) CAMA.
70. Sec 338(1)(a) and (b) CAMA.
71. Sec 338(5)(b) CAMA.
72. See sec 345 CAMA;
73. see also DHN Food Distributors Ltd v London Borough of Tower Hamlets (1976) 3 All ER 462.
74. See Public Finance Securities Ltd v Jefia (1998) 3 NWLR (pt 543) 602, 604 CA.
75. Orojo Company Law in Nigeria, above at note 37 at 85.
76. Dine Companies, International Trade and Human Rights, above at note 44 at 49.
77. C Villiers Corporate Reporting and Company Law (2006, Cambridge University Press) at xi.
78. Id at xii.
79. SI 2005/1011 The Companies Act (Operating and Financial review and Directors' Report etc) Regulation 2005.
80. "Guidance on the changes to the directors' report requirements in the Companies Act 1985"availableat:,http://www.dti.gov.uk/files/file28384. doc.(lastaccessed12July2006).
81. Sec 332(1) CAMA.
82. Sec 344(2) CAMA.
83. Orojo Company Law in Nigeria, above at note 37 at 378.
84. Sec 342 CAMA.
85. GJ Rossouw "Business ethics and corporate governance in Africa" (2005) 44 Business & Society 94 at 97.
86. See for examples WiwavRoyal Dutch Petroleum Company226F.3d 88 (2dcir 2000), 532 US 941 (2001);
87. Bowoto v Chevron Texaco Corp, 312 F supp 2d 1229;
88. and Social and Economic Rights Action Centre ("SERAC") and The Centre for Economic and Social Rights v Nigeria (2001), communication no 155/96, (African Commission on Human and Peoples' Rights), online: University ofMinnesota Human Rights Library, available at:,http://www1.umn. edu/humanrts/africa/comcases/155-96b.html. (last accessed 29 August 2007).
89. See FM Edoho "Oil transnational corporations: corporate responsibility and environ mental sustainability" (2007) Corp Soc Responsib Environ Mgmt (forthcoming);
90. R Boele, H Fabig and D Wheeler "Shell, Nigeria and the Ogoni. A study in unsustainable development: 1. The story of Shell, Nigeria and the Ogoni people - environment, economy, relationships: conflict and prospects for resolution" (2001) 9 Sustainable Development 74 at 74-86;
91. R Boele, H Fabig and D Wheeler "Shell, Nigeria and the Ogoni. A study in unsustainable development: II. Corporate social responsibility and environmental management and stakeholder management versus a right-based approach to sustainable development" (2001) 9 Sustainable Development at 39 at 39-48;
92. Manby The Price of Oil, above at note 12;
93. H Fabig "The Body Shop and the Ogoni" in M Addo (ed) Human Rights Standardsand the Responsibilityof Transnational Corporations(1999, Kluwer,The Hague) 309 at 309-21;
94. MJ Watts "Righteous oil? Human rights, the oil complex, and corporate social responsibility" (2005) 30 Annu Rev Environ Resour 373 at 373 and 387.
95. Manby, The Price of Oil, above at note 12 at 4.
96. M Akpan "The 1979 Nigerian constitution and human rights" (1980) 2/2 Universal Human Rights 23 at 27-28.
97. M Akpan "The 1979 Nigerian constitution and human rights" (1980) 2/2 Universal Human Rights 23, 27-28. Ibid.
98. Chap IV of the Nigerian constitution 1999.
99. Sec 40(1) Nigerian constitution 1999.
100. See for example Okojie v AG Lagos State (1981) 2 NCLR 337.
101. [2002] 6 SC (pt 1) at 1.
102. The sections provide: 13: "It shall be the duty and responsibility of all organs of government, and of all authorities and persons, exercising legislative, executive or judicial powers, to conform to, observe and apply the provisions of this constitution". 15(5): "The State shall abolish all corrupt practices and abuse of power".
103. Grootboom & Ors v Oostenberg Municipality & Ors CCT 11/00, 4 October 2000; Grootboom v Oostenberg Municipality & Ors CCT38/00 (2000).
104. See also Port Elizabeth Municipality v Various Occupiers CCT53/03 (2004);
105. Minister of Health v Treatment Action Campaign CCT8/02 (2002);
106. and Khosa and Ors v Minister of Social Development CCT13/03 (2003).
107. (1981) 21 ILM 58.
108. Cap 10 vol1 LFN 1990.
109. Garba v Lagos State Attorney General Suit ID/599m/91 and Agbakoba v Director State Security Services (1994) 6 NWLR 475.
110. Nemi v The State (1994) 1 LRC 376 (Nigeria, SC).
111. See also F Viljoen "Application of the African Charter on Human and Peoples' Rights by domestic courts in Africa" (1999) 43 Journal of African Law 1-17.
112. (2000) 6 NWLR pt 660.
113. Jonah Gbemre v Shell Petroleum Development Corporation of Nigeria Ltd and Ors (suit no FHC/B/CS/53/05, Federal High Court, Benin Judicial Divison, 14 November 2005).
114. Friends of the Earth press release: "Shell fails to obey gas flaring order" (2007) available at: ,http://www.foe.co.uk/. (last accessed 14 August 2007);
115. Okonmah "Right to clean environment", above at note 12 at 51.
116. Omoregbe "The legal framework for the production of petroleum in Nigeria", above at note 12 at 284.
117. Omoregbe "The legal framework for the production of petroleum in Nigeria"
118. Amadi et al Statoil in Nigeria, above at note 2 at 19.
119. Friends of the Earth media briefing "Gas flaring in Nigeria" (2004), available at: ,http://www.foe.co.uk/. (last accessed 14 August 2007).
120. See also paras 6-17 of the sworn affidavit of the plaintiff in Gbemre v Shell, above at note 84, available at: ,http://www.climatelaw.org/cases/case- documents/nigeria/ni-pleadings.doc. (last accessed 9 December 2007).
121. Ibid..
122. Omoregbe "The legal framework for the production of petroleum in Nigeria", above at note 12 at 284.
123. See for example Oronto Douglas v Shell Petroleum Development Company Ltd and Ors (unreported suit no FHC/L/CS/573/93) where the plaintiff, among other things, sought a declaration that Shell Petroleum Development Company could not lawfully commission, carry out and operate liquefied natural gas projects without first complying with theEnvironmentalImpactAssessmentDecreeno86of1992. Thecourtstruckoutthesuit on the ground that the plaintiff lacked the necessary standing.
124. Cap 131 LFN 1990 (as amended).
125. Counsel to Shell and the NNPC had several times during the proceedings sought unsuccessfully to delay the action following which the court was constrained to foreclose further defence.
126. G Fortman "Adventurous judgments: a comparative exploration into human rights as a moral-political force in judicial law development" (2006) 2/2 Utrecht Law Review, available at: ,http://www.utrechtlawreview.org/. (last accessed 29 August 2007).
127. The African Commission on Human Rights held in the SERAC v Nigeria case (above at note 68) that the failure of the Nigerian government to prevent the escape of toxic waste from oil reserves violated the right to health (art 16) and the right to a clean environment (art 24) of the African Charter. The Nigerian government had argued that the rights are vague and incapable of legal enforcement.
128. Some of these limitations were discussed in JG Frynas "Legal change in Africa: evidence from oil-related litigation in Nigeria" (1999) 43/2 Journal of African Law 121-50.
129. JG Frynas "Problems of access to courts in Nigeria: results of a survey of legal practitioners" (2001) 10 Social Legal Studies 397 at 410.
130. See note 76 above.
131. I have distinguished between the US model of the company and the prevalent model in the EU and how they play out in the Nigerian context in O Amao "Reconstructing the role of the corporation: multinational corporations as public actors in Nigeria" (2007) 29 Dublin University Law Journal 312.
132. See sec 279 of the CAMA. See also Orojo Company Law in Nigeria, above at note 37 at 295-321. However, sec 38 of the CAMA, on powers of the company, allows the company to make donations except to a political party or political association.
133. See British Companies Act 2006.
134. See note 66 above.
135. See The Report of the Committee on Corporate Governance of Public Companies in Nigeria, April 2003, available at: ,http://sec.gov.ng/pdf/ Corperate%20Goverance%20itd.pdf. (last accessed 9 December 2007).
136. VO Nmehielle and ES Nwauche "External-internal standards in corporate governance in Nigeria" (The George Washington University Law School public law and legal theory working paper no 115, 2004).