In addressing the need for implementing and enforcing laws to regulate industrial pollution and hazardous waste activities in Nigeria, the Federal Government of Nigeria established the National Environmental Standards and Regulation Enforcement Agency (NESREA) in 2007 as a parastatal of the Federal Ministry of Environment. NESREA is charged with the responsibility of enforcing all environmental laws, regulations and standards and deterring people, industries and organisations from polluting and degrading the environment.
Under the NESREA Act, an environmental audit, i.e., the regulatory compliance audit, is mandatory to be conducted for all existing facilities after every three years. This is a standard established in the extant National Environmental Regulations of the Federal Republic of Nigeria and a violation attracts sanction.
In late 2021, NESREA issued a secular mandating all banks in Nigeria to carry out an environmental audit which is aimed at:
- assessing performance against a set of requirements or targets related to specific issues
- evaluating compliance with environmental legislation and corporate policies
- measuring performance against the requirements of an environmental management system standard and
- exploring the potential economic, social, and environmental benefits that improved performance can achieve.
Although this mandate on environmental audit had been in existence since NESREA’s inception in 2007, follow-up and enforcement didn’t quite happen. This exercise has been met with some resistance and hiccups from both industry and service providers. We try our best to list a few of these hiccups below:
- Compliance is low as many banks are desensitised to the relevance of the exercise and seek not to expend a valuable nest egg on certification and consultant fees
- While banks like Access Bank have commenced actions to audit their infrastructure, some are simply waiting for this wind to pass over or considering other avenues that help them to bypass the exercise whilst obtaining certification through insalubrious means
- The immediate consequences or action to be taken by NESREA upon failure to comply have not been clearly stated.
- NESREA has made it mandatory that only environmental service providers with NESREA certification may perform this audit, ignoring the fact that its overarching body, the Ministry of Environment, has certified partners with the same skill set.
In a low adherence and low enforcement context like Nigeria, there is validity to NESREA’s request for banks to produce environmental audit reports and management plans for all bank head offices, branches, and cash centres. In 2020, in a briefing to newsmen, Mr Elijah Udofia, the Southwest Zonal Director for NESREA noted that “it is worrisome to note that despite repeated sensitisation, some facilities and industries have refused to comply with the provisions of the environmental regulations. He further stated that “despite the series of Notification of Concern Letters and Abatement Notices issued to these industries and facilities to enable them to carry out their operations and activities in an environment-friendly and sustainable manner, some of them have refused to adhere”.
Clearly, NESREA may have to embark on more awareness and compliance programmes as well as promote research for the benefit of banking institutions on various aspects of environmental management as they may relate to degradation and pollution. They may also undertake aggressive advocacy at all levels to garner voluntary compliance to environmental policies and laws as a corporate civic duty to the country.
Banks’ boards of directors and senior management ought to maintain effective oversight over their organisations’ environmental risk portfolios, by including the policies and processes to assess, monitor and report risks. Banking associations such as the CBN-led Bankers Committee should have an industry-wide scorecard of the banking sector’s role in environmental risk management. The obvious benefits of these actions in enhancing banks’ reputations and promoting business longevity as they consciously limit negative impacts on society and the environment, cannot be quantified.
Do you have other thoughts about this exercise? Join this conversation by sending your opinion to info@csr-in-action.org.
Author ~ Nefertiti Nwachukwu