Hold hearing on Nigeria’s investment treaty risks now, Policy Alert tells National Assembly

A civil society organisation, Policy Alert, has called on the relevant Senate and House of Representatives committees to convene a joint hearing on Nigeria’s exposure to international investment treaty disputes, warning that long-term petroleum commitments could constrain future regulation and expose public finances to legal risks.

The organisation made the call on Wednesday in Uyo, Akwa Ibom State, during the launch of its report, Investment Protection and Nigeria’s Energy Transition: Implications for Environmental Accountability and Regulatory Space.

It asked the National Assembly to exercise its oversight responsibility over Nigeria’s investment treaty framework, the findings of a federal committee established in November 2024 to review bilateral investment treaties, and recent fiscal incentives for offshore petroleum investments.

Policy Alert said Nigeria was attracting foreign investment without adequately assessing the long-term implications for public revenue, environmental accountability and the government’s ability to change policies in the public interest.

The report comes as Nigeria seeks to attract fresh capital into offshore petroleum production and expand gas infrastructure under its Decade of Gas initiative.

For the Niger Delta, where oil-producing communities have endured decades of pollution, gas flaring and damage to livelihoods, the organisation said the central question was whether investment agreements would preserve the government’s ability to hold investors accountable for environmental harm.

Treaty disputes, regulatory risks

The report examines how bilateral investment treaties and investor-state dispute settlement (ISDS) provisions could affect Nigeria’s energy policies and environmental enforcement.

ISDS allows qualifying foreign investors to bring claims against host governments before international arbitration tribunals over alleged breaches of investment protections.

Policy Alert identified three major concerns: the potential cost of future policy changes, insufficient evidence of the long-term public benefits of fiscal incentives and gas projects, and unequal access to international remedies for foreign investors and affected communities.

The organisation cited two investment arbitration proceedings involving Shell-related entities and Nigeria, initiated in 2007 and 2021 under the Nigeria-Netherlands bilateral investment treaty. Both cases were discontinued without a liability determination.

The cases show that parties have invoked treaty arbitration in disputes involving Nigerian petroleum investments, although neither proved that Nigeria breached its treaty obligations.

The report also cited the pending Jupiter Lithium arbitration as evidence that Nigeria’s exposure to investment disputes extends beyond the petroleum industry to critical minerals.

PREMIUM TIMES recently reported that 89 civil society organisations have asked the federal government of Nigeria to publish the country’s investment treaty review.

Policy Alert warned that treaty protections, including provisions on fair and equitable treatment and expropriation, could become relevant when future government decisions affect qualifying foreign investments.

It cautioned that such provisions could make environmental regulation, tax reforms and stronger methane controls more contentious or expensive.

The organisation, however, acknowledged that its research had not proven that ISDS had directly caused Nigeria to abandon any specific environmental reform.

It said its concern was that the possibility of expensive arbitration could discourage governments from introducing measures intended to protect the public interest.

Offshore incentives, gas expansion

The report raised questions about Nigeria’s offshore investment strategy, including the development of Bonga North, Bonga South West/Aparo, and Ima Gas.

It also examined the deep-offshore incentive framework introduced in August 2026, which is projected to unlock up to $50 billion in investment.

Policy Alert said the projected investment figure should not, on its own, be treated as evidence of economic value for Nigeria.

It called for transparent assessments of revenue forgone through incentives, expected public benefits and the implications of long-term commitments for future regulation.

The organisation raised similar concerns about the Decade of Gas initiative, arguing that increased production would not necessarily translate into affordable domestic energy, industrial development or sustained demand.

It cited a 2026 assessment by the Natural Resource Governance Institute, which identified gaps between gas production ambitions and projected delivery, weaknesses in domestic gas markets and uncertainty over future international demand.

According to Policy Alert, committing to long-term gas infrastructure without credible demand assessments could increase Nigeria’s fiscal and legal exposure while leaving the country with assets of uncertain future value.

The organisation said the government must assess whether the economic benefits of major projects justify the incentives and obligations attached to them.

Call for publication of treaty review

Policy Alert’s recommendations include publishing the findings of the federal committee established by the Attorney-General of the Federation, Lateef Fagbemi, to review Nigeria’s bilateral investment treaties and the Nigerian Investment Promotion Commission Act.

The committee was inaugurated on 8 November 2024 as part of efforts to update the country’s investment framework and balance investor protection with national interests.

Policy Alert asked the Federal Ministry of Justice to disclose the review’s status, identify treaties requiring renegotiation and publish a timetable for implementing its recommendations.

It proposed an annual Investment Treaty Accountability Scorecard, to be developed by civil society organisations, to monitor treaty reforms, arbitration developments, fiscal transparency, legislative oversight and environmental safeguards.

Investment versus accountability

The organisation’s executive director, Tijah Bolton-Akpan, said Nigeria needed to assess foreign investment not only by the capital it attracted but also by the obligations it created and the regulatory authority the country retained.

Policy Alert said it did not oppose foreign investment, stressing that Nigeria needed productive capital and that investors were entitled to fair treatment.

It maintained, however, that investment promotion should not jeopardise public revenue, environmental protection or the government’s capacity to pursue a just energy transition.

The organisation said a more accountable investment framework would allow Nigeria to attract capital while preserving its ability to enforce environmental obligations and protect communities affected by extractive activities.