Models de latència

To develop a Framework for the determination of the compensable value of damages due to contamination to Wetlands in the Niger Delta, Nigeria.

1.5. Objectives:

• To ascertain from literature, the valuation of oil polluted land with natural resources, and the determination of the value of damages arising from pollution.

• To explore the valuation methods suitable for determining the value of damages on land with natural resources.

• To identify the stakeholders of contaminated wetlands and the methods adopted for valuing oil polluted natural resources and the factors usually considered in the process.

• To propose a framework for valuing contaminated wetlands in the Niger Delta region of Nigeria.

• To validate the proposed framework for determining the compensable value of damages due to contamination of wetlands in the Niger Delta region of Nigeria.

1.6. Research Questions:

Based on the background issues raised, the following research questions were raised: I. What constitutes contaminated land in the Niger Delta of Nigeria and what are the basis and determinants of damages paid for contamination?

II. What are the conventional methods of valuation used in assessing damages due to contamination of wetlands?

III. Who are the Stakeholders of contaminated wetlands in the Niger Delta and how do they influence the determination of damages process?

IV. What alternative valuation framework can be proposed for determining the compensable value of damages on contaminated wetlands in a deltaic region like the Niger Delta?

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V. How does the proposed framework improve the damage assessment process, the determination of compensable value, and the practice of valuation generally?

1.7. Contribution to Knowledge:

It is expected that this study will provide practising valuers, with a framework to adopt when determining the compensable value of damages to be paid as a result of any contaminating incident that impacts on land in the Niger Delta. It will provide a snap shot of the various processes to be followed in determining the compensable value of contaminated wetlands, and provide policy makers a yardstick for measuring the professionalism of valuers engaged in damage assessment projects and will enable students, researchers, practitioners and educators of conventional property valuation to learn from the techniques of environmental valuation. The proposed framework will aid land occupiers in negotiating appropriate compensation for damages suffered.

1.8. Research Rationale:

Every valuation presents a different problem (John Garmony of the Australian Institute of Valuers ant Land Economists cited by Kummerow (1997). This uniqueness of valuation/appraisal assignments was reinforced by Whipple (1995) when he stated that “each assignment is a special-purpose one-special to the particular problem, prevailing market condition, the availability of data, the skill of an appraiser, and a host of other factors”. These views emphasise the problem faced by valuers when valuing contaminated land to determine damages due to contamination in the Niger Delta of Nigeria.

The region’s economy is donated by the operations of the oil and gas sectors which are mostly operated by the International Oil Companies (IOCs). In the process of exploring and producing the oil and gas which provides the bulk of the nation’s revenue, the Niger Delta environment is constantly contaminated by oil pollution which necessitates the request for an assessment of the damages suffered as a result. The assessment is undertaken by valuers who are the only legally authorised professionals to place value of any kind on any property in Nigeria. In undertaking the valuation, each contaminated land poses a special problem that requires a special consideration in proffering a solution. In a typical rural contaminated land might exist both dry agricultural land and some wetlands with various species of crops and trees. The adjoining forests may be the habitat of different species of animals and birds and the wetlands may be useful for

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harvesting different types of fish and goods. These peculiar features differentiate such land from normal residential or industrial building lands in the urban area, which are frequently traded in the market. In most rural communities, land sales are rare and when there is need to value in such communities, there is hardly any market data available for comparison. Since the market is the only true test of value, it becomes very difficult to find data that may be used in such valuations. It is argued that the best way to know market prices is through market transactions and that since markets reveal prices through recent transactions for similar properties, the preferred way of knowing using any of the tradition approaches to value is inference from transactions.

Since property types differ so also do the valuation problems attending each type of property differ. Kummerow (1997) contends that the valuer needs to step into the shoes of space users to determine how well the property works for a particular use to be able to value it. In valuing a property, the valuer defines the value being sought. The definition of value will depend on the purpose of the valuation as an investor will seek a value reflecting his risk and return requirements, a compulsory acquisition valuation will require a statutorily defined value while a contamination valuation will require the valuer to estimate the value with and without the effect of the contamination to be able to determine any loss in value. This will call for a different definition of value from the usual market value definition frequently used by valuers. Kummerow (1997) argued that this stepping into the shoes of a potential buyer/user can lead to errors in identifying or choosing potential buyers/users, leading to mistakes in valuation methods applied as some value-adding use known to buyers/users may not be apparent to a valuer or a valuer may notice some positive or negative feature that the eventual buyer may not consider.

The Niger Delta is a wetland and according to Lambert (2003), wetlands as defined by the Ramsar Convention, cover a wide variety of habitat types, including rivers and lakes, coastal lagoons, mangroves, peat lands, and even coral reefs. In addition, there are human-made wetlands such as fish and shrimp ponds, farm ponds, irrigated agricultural land, salt pans, reservoirs, gravel pits, sewage farms, and canals. Wetlands are among the world’s most productive environments. They are cradles of biological diversity, providing the water and primary productivity upon which countless species of plants and animals depend for survival. They support high concentrations of birds, mammals, reptiles, amphibians, fish and invertebrate species. Of the 20,000 species of

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fish in the world, more than 40% live in fresh water. Wetlands are also important storehouses of plant genetic material and rice, for example, which is a common wetland plant, is the staple diet of more than half of humanity. He states that the interactions of physical, biological and chemical components of a wetland, such as soils, water, plants and animals, enable the wetland to perform many vital functions, like water storage; storm protection and flood mitigation; shoreline stabilization and erosion control; groundwater recharge (the movement of water from the wetland down into the underground aquifer); groundwater discharge (the movement of water upward to become surface water in a wetland); water purification through retention of nutrients, sediments, and pollutants; and stabilization of local climate conditions, particularly rainfall and temperature. Also that wetlands provide tremendous economic benefits, for example: water supply (quantity and quality); fisheries (over two thirds of the world’s fish harvest is linked to the health of coastal and inland wetland areas); agriculture, through the maintenance of water tables and nutrient retention in floodplains; timber production; energy resources, such as peat and plant matter; wildlife resources; transport; and recreation and tourism opportunities. While translating these values into economic terms is of high importance to any society where they occur, the valuation of wetlands has been the pre-occupation of Ecologists and Environmental Economists rather than Real Estate Valuers.

Expert valuers practicing in the Niger Delta have been trained in normative valuation models originating from the domain of Finance and have used the property-based valuation methods in tackling any valuation problem they tackle. DeLisle (1985) stated that appraisal (valuation) theory has stagnated and that the absence of a unified body of appraisal thought has widened the array of techniques and treatments from among which appraisers must choose and has helped professionals in other fields to intercept business from appraisers. He further contends that the absence of a fully integrated model exposes the industry to a range of external pressures in the form of legislative and judicial intervention in the appraisal process.

Many scholars have studied normative aspects of the appraisal process but there has arisen a trend in behavioural research into the decision-making processes of property experts, though as Black et al. (2003a) stated, almost all behavioural investigation into the problem solving of property experts has been focused on valuers and the research can be broken down into departures from normative models, comparable sale selection,

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valuation biases and client feedback. Not much research has been done on the appropriateness of the normative models to particular valuation problems. This research aims to contribute to filling this gap.

Generally, the traditional valuation techniques are limited in their assessment of damages due to contamination, especially when valuing real property subject to environmental contamination such that is prevalent in the Niger Delta. McLean David and Bill (1998) advanced certain reasons for this limitation to include: 1) there is often a contracted market for residential properties that have been exposed to short- or long- term contamination, including limited recent or even long- term sales history; 2) there is limited awareness or knowledge among prospective buyers of the extent of the contamination, its risks and current status; and 3) knowledge about such factors can spread unevenly throughout the population, influenced by many factors, and changes in property values reflecting contamination may occur unevenly over time.

Valuers have restricted their search for appropriate valuation methods to the normative property based methods avoiding any contribution from environmental or ecological economics. Since most of the goods and services derived from the Niger Delta are outside the definition of real property but constitute a component of the income of the property owners, it is reasonable to examine methods being used to value such goods and services with a view to adopting any that may complement the output of the property based methods in the assessment of damages due to contamination. The proposed framework will draw appropriate methods of valuation form wetland based and property based methods to determine any diminution in real property value that occurs as a result of contamination. Such diminution in value will constitute the compensation that should be paid to those who suffer damages as a result of any contamination. This research is therefore necessary to formulate a valuation framework that will be used in assessing damages to land due to contamination, especially in the Niger Delta wetlands. It is justified by the frequent pollution incidents which attend the oil exploration and production process and the incessant conflicts resulting from inadequate compensation paid to land owners in the wake of a contamination occurrence. There is also the need for such a study to enhance the professional competence of practicing valuers and valuation students in the region to bring them in line with current international best practices.

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1.9. Identification of Gap

Since professional valuers in Nigeria are the only professionals authorised by law to determine value of property (whether real or personal), of any definition, it follows that when a contamination occurs, they are usually consulted to determine the compensable value which usually equates to the damages suffered due to contamination. To date, valuers have relied on the property based methods of valuation that they have been trained especially, the valuation methods adopted for compulsory acquisition cases, and neglecting to borrow more robust valuation methods used by environmental or ecological economists. Given this situation, there appears to be no composite valuation framework that could be adopted by valuers trying to determine the compensable value of a contaminated wetland, which will equate to the damages due to contamination of the wetland. This study thus aims to fill this methodological gap that exists in valuation practice in the Niger Delta for the determination of the compensable value due to contamination of wetlands.