Laws and Employment in the Nigerian Extraction Sector

1 LAWS AND EMPLOYMENT IN THE NIGERIAN EXTRACTION SECTOR Aderonke E. Adegbite 2 LAWS AND EMPLOYMENT IN THE NIGERIAN EXTRACTION SECTOR Aderonke E. Adegbite LLB (OAU), BL., LLM (UI), PhD (UI), PGD Social Work (LCU), ACIArb Associate Professor of Law Head of Department of Private and Business Law and Sub Dean Faculty of Law Lead City University, Ibadan, Nigeria 3 LAWS AND EMPLOYMENT IN THE NIGERIAN EXTRACTION SECTOR Copyright (c) 2025 Aderonke E. Adegbite ISBN: 978-978-694-006-9 All rights reserved. No part of this publication may be reproduced, stored in a database or retrieval system, distributed, or transmitted in any form or by any means, electronic, mechanical, photocopying, scanning, recording, or otherwise without the prior written consent or permission of the author. A catalogue of this book is available in the National Library of Nigeria Published in Nigeria by: OGE Business School Publisher 15, Isheri Road, Avis Bus Stop, Aguda, Ogba, Lagos [email protected]; www.ogeprofessionals.com +234-8033737184, +234-8132445878 Printed in Nigeria by: Taolak Nigeria Enterprise No 17, Ibadan Street Ilupeju, Lagos, Nigeria [email protected]; 07088753375 4 LAWS AND EMPLOYMENT IN THE NIGERIAN EXTRACTION SECTOR For more information about the book and order, please contact: Aderonke E. Adegbite Tel.: 08034432735 5 ABOUT THE BOOK aws and Employment in Nigeria’s Extractive Sector is written to provide students, lecturers, policymakers, and legal practitioners with a clear and comprehensive understanding of the legal and institutional frameworks governing labour relations within Nigeria’s oil and gas industry. The book bridges the gap between theory and practice by offering an in-depth analysis of statutes, case law, and international conventions that shape employment standards in the extractive sector. In accessible and engaging language, this work unpacks complex legal ideas and industrial realities, making it particularly useful to readers new to labour law or resource governance. Each chapter is structured to enhance learning through illustrations, reflective questions, and applied examples drawn from the Nigerian experience. The book examines key areas such as contracts of employment, labour standards, workplace safety, dispute resolution, corporate social responsibility, and the gendered dimensions of work in extractive communities. It also explores contemporary issues such as digitalization of labour, casualization, local content policies, and the blue economy. Designed as both a teaching text and a research guide, the book aligns with the Nigerian Labour Act, the Petroleum Industry Act (PIA), and relevant international labour instruments. It provides practical direction for understanding how employment relations in the extractive sector affect governance, social justice, and sustainable development. Ultimately, the book serves as an essential companion for anyone interested in the intersection between law, work, and development in one of Nigeria’s most economically significant sectors. L 6 ABOUT THE AUTHOR Dr. (Mrs.) Aderonke Esther ADEGBITE LLB (OAU), BL., LLM (UI), PhD (UI), PGD Social Work (LCU), ACIArb Dr. Aderonke E. Adegbite is an accomplished legal scholar and academic administrator currently serving as the Head of the Department of Private and Business Law and Sub-Dean, Faculty of Law at Lead City University, Ibadan. She obtained her LL.B (Hons) from the Faculty of Law, Obafemi Awolowo University, Ile-Ife in 2007 and was called to the Nigerian Bar in 2008. Her research interests span Vulnerable Persons, Inclusion, African Customary Law, Community Development, and Employment Law, with a growing focus on Yoruba living philosophies, particularly traditional conceptions of the Supreme Divinity and deities. In 2019, Dr. Adegbite was a Visiting Fellow at the African Studies Centre Leiden, The Netherlands, where she deepened her engagement in African legal and socio-cultural scholarship. She is also a United Nations Online Volunteer, contributing to projects on children’s rights and inclusive development, and a Signatory to the Kigali Declaration on Climate Change (2023). Dr. Adegbite is an active member of numerous professional and academic associations, including the African Network of Constitutional Lawyers, Law and Society Association, African Studies Association Women’s Caucus, Future Earth Community Network, Institute of Chartered Arbitrators (UK), Nigerian Bar Association (NBA), and the Nigerian Association of Law Teachers (NALT). She is also affiliated with the Ibadan School of Government and Public Policy (ISGPP), the Ibadan Bossom Sisters Club (affiliated with the Central Council of Ibadan Indigenes), and the Young Scholars Initiative, Institute for New Economic Thinking (INET), among others. An active mentor and advocate for social inclusion, Dr. Adegbite is the Lead and Coordinator of Finlay House of Inclusion, a platform that 7 provides legal counsel, research, and community outreach focusing on vulnerable persons, inclusion, and fair employment relations. She collaborates with children’s rights NGOs and serves in advisory capacities across private, corporate, and faith-based institutions. As an academic, she teaches Jurisprudence, Labour Law, Family Law, and Commercial Law at both undergraduate and postgraduate levels. Her teaching philosophy integrates critical engagement with indigenous and universal legal systems, emphasizing their shared aspirations for development and human rights. Dr. Adegbite has received several research grants and has presented papers at international, continental, and national conferences. Her scholarly works cover topics such as children’s care, vulnerable persons, indigenous governance, inclusion, employment relations, community development, extraction, and Ifa philosophy. She is currently pursuing post-doctoral research on Indigenous Governance Structures and Inclusive Development in Africa, focusing on how vulnerable groups can be meaningfully integrated into African energy governance systems. Her research continues to be inspired by the intersections and tensions between foreign and indigenous jurisprudence, as she advocates for an inclusive and contextually grounded approach to law and development in Africa. 8 PREFACE Nigeria’s extractive sector, particularly its oil and gas industry, is a central pillar of the national economy, driving revenue generation, employment creation, and foreign investment. Yet, the employment relations within this sector are governed by a complex web of legal, institutional, and policy frameworks that continue to evolve in response to domestic and international demands. This book examines employment laws as they apply to the extractive industry in Nigeria, with particular focus on labor standards, contractual relationships, working conditions, and regulatory oversight. The extractive sector possesses unique employment challenges due to its high-risk operations, fluctuating market dynamics, and historical tendencies toward labor exploitation and casualization. These challenges underscore the urgent need for legal reforms and institutional accountability to ensure the protection of workers’ rights, equitable participation of host communities, and the promotion of decent work in line with both national labor laws and international labor standards. This book explains the legal architecture that governs employment in Nigeria’s extractive industries, drawing upon the Labour Act, constitutional provisions, judicial interpretations, and sector-specific regulations. It interrogates the role of law in shaping recruitment practices, employment contracts, workplace safety, minimum wage, dispute resolution, and the rights of vulnerable groups, especially women, youth, and local community members within the employment hierarchy. Further, it analyzes how key policy instruments such as local content laws, 15 IPIECA – International Petroleum Industry Environmental Conservation Association IUCN – International Union for Conservation of Nature JVC – Joint Venture Contract LFN – Laws of the Federation of Nigeria LGA – Local Government Area LUPA – Land Use Planning Act LNG - Liquified Natural Gas MLC – Maritime Labour Convention MNC – Multinational Corporation MOU – Memorandum of Understanding MW – Minimum Wage NAPIMS – National Petroleum Investment Management Services NCDMB – Nigerian Content Development and Monitoring Board NDDC – Niger Delta Development Commission NEITI – Nigeria Extractive Industries Transparency Initiative NESREA – National Environmental Standards and Regulations Enforcement Agency NERC – Nigerian Electricity Regulatory Commission NICN – National Industrial Court of Nigeria NIMASA – Nigerian Maritime Administration and Safety Agency NNPC – Nigerian National Petroleum Company Limited NOGICD Act – Nigerian Oil and Gas Industry Content Development Act 2010 NOSDRA – National Oil Spill Detection and Response Agency NUPENG – Nigeria Union of Petroleum and Natural Gas Workers NUPRC – Nigerian Upstream Petroleum Regulatory Commission NUPRC Act – Petroleum Industry Act 2021 (formerly DPR functions) OAU – Organization of African Unity OHS – Occupational Health and Safety OPEC – Organization of Petroleum Exporting Countries OPS – Organized Private Sector PAYE – Pay As You Earn PENGASSAN – Petroleum and Natural Gas Senior Staff Association of Nigeria PIA – Petroleum Industry Act 2021 PIB – Petroleum Industry Bill PSC – Production Sharing Contract PPP – Public-Private Partnership ROV-Remotely Operated Vehicles 16 R&D – Research and Development RMAFC – Revenue Mobilisation Allocation and Fiscal Commission SC – Supreme Court SCNJ – Supreme Court of Nigeria Judgments SLR – Statutory Law Report SMEDAN – Small and Medium Enterprises Development Agency of Nigeria SON – Standards Organisation of Nigeria SOP – Standard Operating Procedure TAT – Tax Appeal Tribunal TCN – Transmission Company of Nigeria TUC – Trade Union Congress TVET – Technical and Vocational Education and Training UBE – Universal Basic Education UN – United Nations UNDP – United Nations Development Programme UNEP – United Nations Environment Programme UNESCO – United Nations Educational, Scientific and Cultural Organization UNGC – United Nations Global Compact UNIDO – United Nations Industrial Development Organization UNPRI – United Nations Principles for Responsible Investment WACSOF – West African Civil Society Forum WHO – World Health Organization WTO – World Trade Organization Common Legal Citation Abbreviations CA – Court of Appeal SC – Supreme Court NWLR – Nigerian Weekly Law Reports LPELR – Law Pavilion Electronic Law Report FWLR – Federation Weekly Law Reports All NLR – All Nigeria Law Reports NLR – Nigeria Law Reports NICN – National Industrial Court of Nigeria 17 LAWS AND EMPLOYMENT IN THE NIGERIAN EXTRACTION SECTOR 18 CONTENTS Preface 8 Foreword 10 Dedication 12 Acknowledgements 13 List of Abbreviations 14 PART ONE: NIGERIAN EXTRACTION SECTOR: LEGAL AND REGULATORY FRAMEWORKS CHAPTER ONE: INTRODUCTION TO NIGERIA’S EXTRACTIVE SECTOR (23) 1.1. Historical Overview of Nigeria’s Extractive Industry (23) 1.2. Stages and Processes in the Oil and Gas Sector and Employment Impact (28) 1.3. Employment Significance of Nigeria’s Extractive Sector (39) CHAPTER TWO: LEGAL FRAMEWORKS GOVERNING NATURAL RESOURCE MANAGEMENT IN NIGERIA (44) 2.1. National Laws and Regulations (45) 2.2. International Legal Instruments and Institutions on Resource Governance in Nigeria (107) CHAPTER THREE: GOVERNANCE STRUCTURES, INSTITUTIONAL FRAMEWORKS, AND REGULATORY COMPLIANCE (120) 3.1. Regulatory Authorities in the Nigerian Extraction Sector (121) 3.2. Enforcement and Oversight Agencies for Employment Relations in the Extractive Sector (140) 3.3. Application of Treaties in the Nigerian Extractive Sector (145) CHAPTER FOUR: ENFORCEMENT CHALLENGES IN NIGERIAN EXTRACTIVE SECTOR (150) 19 4,1 Water and Soil Contamination in Nigeria’s Extraction Sector (150) 4.2 Oil Spill and Gas Flaring in Nigeria’s Extraction Sector (152) 4.3 Weak Environmental Regulation in Nigeria’s Extraction Sector (155) 4.4 Weak Institutional Capacity (157) 4.5 Corruption and Political Interference (159) 4.6 Inadequate Monitoring and Surveillance (160) 4.7 Deforestation and Land Degradation as Challenges for Regulatory Enforcement in Nigeria’s Extraction Sector (161) 4.8 Conflict and Community Resistance (163) PART TWO: EMPLOYMENT RELATIONS IN THE NIGERIAN EXTRACTIVE SECTOR CHAPTER FIVE: LABOR REGULATIONS IN THE NIGERIAN EXTRACTIVE INDUSTRY (166) CHAPTER SIX: CONTRACTUAL RIGHTS AND OBLIGATIONS (176) 6.1. Employers' Obligations (177) 6.2. Employees' Obligations (200) 6.3. Employees' Rights(208) 6.4. Whistleblower Protections and Reporting Mechanisms (213) CHAPTER SEVEN: EMPLOYMENT CONTRACTS AND LABOR STANDARDS IN THE EXTRACTIVE INDUSTRY (219) 7.1. Types of Employment in the Extractive Sector (219) 7.2. Contracts Of Employment and Contracts for Service In Nigeria's Extractive Sector (224) 7.3. Contracts for Exploration and Production In Nigeria: Implications for Employment (233) 7.4. Training in the Nigerian Oil Sector (243) 7.5. Minimum Wage and Working Hours in the Extractive Industry (245) 20 7.6. Working Hours in the Extractive Industry (248) 7.7. Leave Entitlements and Rest Periods in the Extractive Industry (249) 7.8. Workplace Protections and Occupational Safety (255) 7.9. Termination and Redundancy in the Extractive Industry (258) 7.10. Termination of Employment with Statutory Flavor (269) CHAPTER EIGHT: CAPACITY TO ENTER INTO CONTRACT OF EMPLOYMENT IN THE EXTRACTION INDUSTRY (291) CHAPTER NINE: DISPUTE RESOLUTION, CONFLICT MANAGEMENT AND INDUSTRIAL RELATIONS (297) 9.1. Understanding Conflict in Industrial Relations (297) 9.2 . Mechanisms Of Dispute Resolution in Industrial Relations (299) 9.3. Labor Disputes and Industrial Actions in Nigeria’s Extractive Industry (316) CHAPTER TEN: WORKERS' AND EMPLOYERS' ORGANIZATIONS (327) 10.1. Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) (328) 10.2. Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) (329) 10.3. Employers' Organizations (330) CHAPTER ELEVEN: LITIGATION IN THE NIGERIAN EXTRACTIVE INDUSTRY: THE ROLE OF NATIONAL INDUSTRIAL COURT (331) CHAPTER TWELVE: EMERGING TRENDS IN INDUSTRIAL RELATIONS AND CONFLICT MANAGEMENT (341) 12.1. Digitalization of Labor Relations (342) 12.2. The Gig Economy and Industrial Relations (344) 12.3. Corporate Social Responsibility (CSR) and Industrial Harmony (346) CHAPTER THIRTEEN: LABOUR ISSUES AND CHALLENGES IN THE NIGERIAN EXTRACTIVE SECTOR (351) 13.1. Lack of Social Protection (351) 13.2. Outsourcing and Staffing Abuse (353) 13.3. Casualization of labour (355) 13.4. Poor Health and Safety Practices (357) 21 13.5. Wage Inequality and Delayed Payments (358) 13.6. Union Suppression and Weak Collective Bargaining (361) 13.7. Industrial Disputes and Frequent Strikes (363) 13.8. Politicization of the Labour Movement (365) CHAPTER FOURTEEN: STATE POLICY, LOCAL EMPOWERMENT AND EMPLOYMENT DYNAMICS IN THE EXTRACTIVE INDUSTRY (368) 14.1. Privatization And Employment in Nigeria’s Extractive Sector (369) 14.2. Nationalization And Employment in Nigeria’s Extractive Sector (371) 14.3. Local Content Compliance (372) 14.4. The Blue Economy and Employment in the Extractive Sector (376) CHAPTER FIFTEEN: FISCAL MATTERS IN THE EXTRACTIVE SECTOR AND THEIR IMPACT ON EMPLOYMENT IN NIGERIA (383) 15.1. Interest and Percentage Sharing in Extractive Contracts (383) 15.2. Taxes and Royalties(387) 15.3. Bonuses and Rent Payments (388) CHAPTER SIXTEEN: LEGAL FRAMEWORKS THE EMPLOYMENT OF VULNERABLE PERSONS IN NIGERIA’S EXTRACTIVE INDUSTRY (390) CHAPTER SEVENTEEN: GENDERED PARTICIPATION IN NIGERIA’S OIL INDUSTRY: TRENDS AND REALITIES (393) 16.1. Legal Frameworks: The Labour Act and Gender Bias (393) 16.2. Constitutional Rights and International Commitments (396) 16.3. Inequality in Wages, Roles, and Working Conditions (397) 16.4. Legal and Social Exclusion of LGBTI Persons (398)