Combating Pollution on Nigeria’s Waterways

The impact of environnent pollution especially on waterways is unimaginable putting human and the acquatic life into grievous risks. Gilbert Ekugbe writes on the benefits of the recently signed concession agreement by the federal government through NIMASA to establish an Offshore Waste Reception Facility project

It is no longer news that the Federal Government of Nigeria acting through NIMASA has signed a concession agreement with XPO Marine Services Limited to provide Offshore Waste Reception Facility (OWRF) in the country’s Eastern Zone. The concession agreement according to both parties seeks to fulfill International Convention for the Prevention of Pollution from Ships – MARPOL 73/78, and Nigeria’s Laws providing for the operation of Ship Generated Marine Waste Reception Facilities, which requires the provision of waste reception facilities to cater for waste and pollutants generated at sea.

The move is apt considering the fact that the provision of offshore reception facilities in Nigerian waters is well overdue as Nigeria is currently failing in its obligations to comply with international treaties and conventions with the failure putting Nigeria’s membership position in the IMO at risk. There is no gain saying that Nigeria is one country that enjoys a higher number of offshore terminals in the world, these terminals are in a very difficult environment and there is very little international experience in Offshore Reception Facilities.

Meanwhile, the International Maritime Organisation (IMO) has recognized that provision of reception facilities is crucial for effective MARPOL implementation, and the Marine Environment Protection Committee (MEPC) has strongly encouraged Member States, particularly those Parties to MARPOL as port States, to fulfill their treaty obligations on providing adequate reception facilities.

Causes of Environmental Pollution

The main causes of environmental pollution in Nigeria results from the activities of corporations dealing with oil extraction, transporting, import, and export. In likewise manner, oil production is the main source of revenue in Nigeria and most of the Nigerian oil is extracted on the shelf of the Gulf of Guinea. Nigeria exports crude oil, and imports refined petroleum products and thus the pollution from these activities have significant impact on the ecology of the Gulf of Guinea.

Some sea pollution also come from oil tankers, chemical and gas carriers that are prone to normal sea risk such as collision, grounding, explosion or fire. The exploration, exploitation and transportation of oil, gas and their derivatives could result in a number of catastrophic accidents. Other sources are accidental spillage during offshore terminal loading as result of the malfunctioning of pumps and valves, rupture of pipes or operational error. Therefore, aquatic life suffers from the toxins along with garbage which deplete the oxygen content of the water thus making it impossible for many life forms including bigger species like whales, dolphins, penguins, shark, iguana and seals to survive. In the same vein, an excess of oxygen depleting chemicals in the water causes aquatic hypoxia, that is, inadequate supply of oxygen and the creation of a dead zone.

Benefits of Offshore Waste Reception Facility

An Offshore Waste Facility is needed to cater such pollution that are generated at sea and MARPOL 73/78 has defined the facility as any fixed, floating or mobile facility capable of receiving MARPOL residues/wastes from ships at offshore terminals including offshore oil installation and fit for that purpose.

The need to satisfy international obligation as well as contributing to preservation of aquatic life makes for the establishment of an offshore facility an imperative, a facility that will handle inspections for verification of compliance and assessment of service requirements, collection/reception of ship generated waste, waste processing and safe recycling and disposal. Therefore, it is expected that pollution will be minimised by providing for waste collection, recycling, reusing and careful managed disposal

With the upcoming deep seaport project by the State and Federal Governments in Nigeria, a strategic step towards the development of Nigeria into a global maritime hub, it is a known fact that Nigeria is located within 853kilometres from coastline, which lies at a significant point in the Atlantic Ocean and as the maritime activities increases, it is expected that pollution will rise in tandem because of the positive correlation between human activities and pollution.

The Offshore Waste Facility has the capacity to receive residues/wastes such as oil, oily waste, oily mixtures, oily bilge water, slops, sludge, oily tank washings, oily cargo residues, ballast water containing oily mixtures; tank washings and cargo residues containing Noxious Liquid Substances (NLS) sewage; garbage including cargo residues; cargo-associated waste such as dunnage and packaging as well as ozone-depleting substances and exhaust gas cleaning residues.

The facility when built will be in line with Federal Government of Nigeria’s policy as stated in the Medium-Term Expenditure Framework and Fiscal Strategy Paper (“METF/FSP”) 2020-2022 to increase the Nigerian infrastructure stock through the private sector participation, by way of public-private partnerships. The investment in the offshore waste facility will be carried in four phases at a total cost of $72.2 million.

The project is posed to close the identified infrastructural gap and galvanise material and managerial expertise in the sector. The investment will enable the NIMASA fulfill the federal government’s obligation under the MARPOL 73/78 convention.

Revenue Generation

The revenue hitherto loss will now accrue to the federal government of Nigeria. The revenue projections of the project exposed the unmined earnings that has been untapped by the government, as the economic managers has lost additional revenue worth billions of Naira as a result of lack of a structured Offshore Waste Reception Facility.

The revenue loss within the last five years from managing the oil and gas by products waste and other water pollutants is estimated to the tune of $149,953,243.00 into the economy while the Federal Government had lost an estimated sum of $64,265,675.00 for the same period which could have been a good source of revenue generation for the government as computed in the Full Business Case for the project

Transfer of asset to government at zero cost

Ordinarily, the federal government and the agency would have incurred the cost of undertaking this enormous project. This project will relieve the federal government of the cost and thereby less pressure on budgetary allocation, thus enabling the federal government to redirect the funds to execute other competing socioeconomic needs of the country. Also, the burden of navigating through associated risk, operational challenges and teething problems of the project has been transferred to the Concessionaire. The government will at the end of the project concession period own the assets at no cost.

Employment opportunities

The project is expected to create jobs and employment opportunities for the host community and other regions of the country of up to 1,200 direct jobs and another 2,000 indirect and ancillary jobs as the execution of the project will require the deployment of human capital of different ranks. In addition, it creates an opportunity for maritime student and scholar to sharpen their knowledge through easy of data collection, investigation and analysis for the benefits skill acquisition/ training of human capacity development.

Economic activities

The project will not only project Nigeria in a positive light but will also attract partnerships and more investment opportunities from businesses, governments and other stakeholders in other neighbouring countries, contribute to the improvement of the marine environment and allow for the ultimate disposal/discharge of ships’ and installations’ waste to take place in an environmentally appropriate approach.

Risks

The cons on this project are contingencies matters. The events of likelihood of an event occurring. The other risk factors have been careful analysed and mitigated in the Full Business Case. However, based on the duration of the project and its complex nature, it is impossible to capture all contingencies that may arise overtime. However, the Concessionaire has established mechanisms for rapidly address any unanticipated contingencies as its bears all the financial and operational risks of the facility. It is only regulatory risk the Agency is sharing with the Concessionaire.

It is worthy to note that the Design, Finance, Build, Operate, Maintain and Transfer (“DFBOMT”) mode of the PPP strategy for this project ensures that from start to finish, government funds are not involved, government will have the opportunity to share from the revenue, government will meet its obligation of compliance of the international maritime convention, create additional jobs immediately the project commences; positive external economic activities will be created and above all, the asset of the Facility will revert to the government upon expiration of the concession period.