Ican 2026 Advanced Taxation Question 6

Environmental, Social, and Governance (ESG) considerations have become increasingly important in the business world due to growing concerns about the manner by which most companies treat ESG issues. For instance, as highlighted in a leading Africa-focused report, a disproportionate large number of companies operating oilfields in Nigeria have essentially ignored the greenhouse gas management guidelines instructed by the country’s Upstream Petroleum Regulatory Commission (NUPRC). While some companies have greenhouse gas emission reporting in place, most companies have not complied with this reporting practice. Social and human right concerns, like labour exploitation, lack of host community support, and corporate governance issues have stressed the need for businesses to behave responsibly. There are, however, various significant fines, penalties, litigation risks, and loss of operational licences, imposed on any company for failure to comply with the Federal Government’s directives on ESG matters. Companies that are alleged to have breached any of these directives are at liberty to seek redress in line with the provisions of the law. One of such provisions is the use of Alternate Dispute Resolution (ADR) mechanism by concerned parties.