An Assessment of Variation in Oil Spill Compensation Valuations in Rivers State, Nigeria

Abstract

Valuation is the basis upon which compensation for damage caused by oil spill should be determined. When huge variation occurs in such valuations, a lot of questions arise as to whether these valuations can serve as proxy for compensation claims of those affected by oil spill. This study examined the extent of variation in oil spill compensation valuations in Rivers State of Nigeria. Data for the study were collected from estate surveying and valuation firms in the study area through a structured questionnaire and interview, using purposive sampling technique. Data used for the surrogate valuations were obtained from the interview of farmers and fishermen. Median Absolute Percentage Difference (MAPD) was adopted in determining the extent of variation amongst the valuers’ opinion of values. Relative Importance Index (RII) was used to rank the factors that cause valuation variance in oil spill compensation valuations in the study area. Findings indicate a variation of 22.36% and 37.49% in the valuations of fishing rights and economic trees respectively. Lack of databank, lack of uniform compensation rates and clients’ influence on reported values were the most predominant causes of variation in oil spill compensation valuations.