Oil & Gas
Unfortunately, the signing of the PIB into law in the face of obvious criticisms from stakeholders, industry experts and the Nigeria Governors Forum once again shows the huge trust deficit between the people and the political class. Like the NGF noted, the new petroleum law is a recipe for disaster.
By Goddy Ikeh
RECENT events in the country, especially the passage of the Petroleum Industry Bill and the signing of the bill into law by President Muhammadu Buhari have further demonstrated the quality of representation by the country’s lawmakers or better still the huge trust deficit between the lawmakers, the Presidency and the rest of the population. It was obvious that in passing the bill, the lawmakers did not bother about the widespread criticisms that trailed the provisions of the approved bill, especially the paltry 3% provision for oil bearing communities. And the decision of the President to assent to the bill into law when he was still observing the Covid-19 protocol after his UK trip.
While some Nigerians were still pondering and agonizing on the signing of the PIB into law, the President of the Senate, Ahmad Lawan on August 18, 2021 proudly said that “Members of the National Assembly had taken the passage of this bill to be one legacy this Ninth National Assembly should leave by the time we complete our tenure.”
“Everyone knows that the Petroleum Industry Bill suffered a lot of hiccups in the National Assembly previously, but when we came in in 2019, both Chambers identified the passage of the PIB as one very strong, fundamental, critical and strategic bill that we must pass within the life cycle of this ninth National Assembly.
“And by the Grace of God we redefined the way to go about it because we would have learned from the mistakes of the past on the issue. And what we emphasised and that worked for us to achieve what we did was to ensure that we work very closely with the executive arm of government right from the conception of the bill itself.
“So our oil and gas related committees started working with agencies of government that handle the oil and gas industry. And we had this interaction continuously up to the point that the bill was finally presented to the National Assembly,” the statement by the media adviser to Senate President, Ola Awoniyi, said.
Unfortunately, this brief remarks from Lawan on the making of the new petroleum law showed that the final bill was a reflection of the interests of some government officials and politicians other than the national interest. And after signing the PIB into law, Buhari stated that previous administrations lacked the political will to pass the PIB and that the country lost about $50 billion worth of investments in 10 years as a result of non-passage of the PIB.
It was therefore not surprising the reactions of Nigerians to the signing of the PIB into law. Although some Nigerians who have accepted the unofficial, but often applied half measures in executing official policies, were quick to applaud the signing of the PIB into law, saying that a defective petroleum law is better than no petroleum law at all and that the law can still be amended in future. But some experts and stakeholders, however, expressed their disappointment over the decision of the president to sign the bill into law.
For instance, Bismarck Rewane, an economist, faulted the three percent allocated for oil-producing communities in the new Petroleum Industry Act, PIA, saying that it is not the ideal compensation.
“Is the three percent the ideal, optimal compensation for the host communities? I will say ‘No’ because I come from there, but at the same time, what is more important for the oil communities is the transparency of the money that is spent and the impact it has rather than having a tea party,” Rewane, the Managing Director of Financial Derivatives Company Limited, told Channels Television in a recent interview.
In the same vein, Mike Ozekhome, SAN, described the new petroleum law as ‘robbing Peter to pay Paul”. Reacting to the new law, Ozekhome said that it was a mere ruse, a monstrosity, an artifice and device, carefully crafted, incubated and delivered, to actually do irretrievable violence to Nigeria’s progress and juris corpus. “The Act constitutes a direct assault on age-long cherished principles of federalism and the doctrine of separation of powers, most ably propounded in 1748 by Baron de Montesquie, a great French philosopher,” he said.
According to him, the PIB Act seeks to frontally attack the provisions of section 162 of the 1999 Constitution, which state that all revenues accruing to the Federation shall be paid into a Federation account from which sharing shall be made amongst the three tiers of government – the federal, government, the 36 states and the 774 Local Government Areas of Nigeria. No expenditure can be made by the Federal Government outside the provisions of section 162. Nor can any monies be expended without going through an Appropriation Bill through submission of budgetary proposals. See sections 80- 84 of the Constitution.
“To the extent that the Act seeks to redesign the provisions of the Constitution (the fons et origo, grundnorm, Oba, Eze and Emir of all our laws), to that extent is the Act unconstitutional. It must therefore be struck down with the constitutional sledge hammer of section 1(3) of the 1999 Constitution of Nigeria,” he said.
Reacting to the new petroleum law, the opposition Peoples Democratic Party, PDP, advised President Buhari to immediately forward an amendment bill to the new Petroleum Industry Act to the National Assembly. The party in a statement by its spokesman, Kola Ologbondiyan, on Monday, August 16, 2021, said that the amendment bill to the National Assembly should reflect the true wishes and aspirations of every segment of the Nigerian society.
The party expressed surprise that Buhari ignored the criticisms by Nigerians on the bill, claiming that it amounts to “endorsement of imposition, lack of respect for the people and the tenets of democracy as a system of government’’.
According to the PDP, signing the bill into law was not in the interest of oil-producing communities, particularly in the face of the challenges they faced due to oil exploration.
“Our party fears that the new law cannot guarantee the desired stability and development in the oil and gas sector as well as respite in the Niger Delta region,” the statement said.
The party called for calm across the country, particularly the South-South geo-political zone, urging the lawmakers elected on the PDP platform to be alert “even as preparation must be in full swing for an urgent amendment to the law”.
In addition, the Pan-Niger Delta Forum, PANDEF, Host Communities of Nigeria Producing Oil and Gas, HOSTCOM, and other stakeholders of Niger-Delta have rejected the President’s plea to accept the three percent, saying it was too small, and lambasted the minister of state for petroleum resources for insisting that the three percent provision for Host Communities Development Trust Fund, HCDTF, is a fair deal for the Niger Delta.
In his reaction, the Chairman of the Nigeria Governors’ Forum, Kayode Fayemi, expressed reservations on some aspects of the new law. Speaking on behalf of his colleagues on the new PIA, Fayemi described the new law as a recipe for disaster and that the governors would be seeking an amendment to the law. He explained that the NNPC is jointly owned by the federal government and sub-nationals, and that the interests of those who own 46% should have been taken into consideration before the bill was signed into law.
However, it was gathered that the Nigerian governors, who described the law as a recipe for disaster, had identified six unfavourable areas in a letter dated August 10 to the president. According to local media reports, the governors had pleaded with the president to withhold his assent to enable the National Assembly take another look at the bill along the lines of their observations. Despite the request for a stay of action, President Buhari was advised to sign the bill on his return from the UK.
The NGF is worried among others that the PIB conferred on the federal government alone the sole ownership of all the shares of the commercialised NNPC Limited and the sole beneficiary of the proceeds of the NNPC and totally excluded state governments from owning a stake or enjoying from the proceeds that would accrue from the business operations of the NNPC.
But the new petroleum law was hailed by the ruling All Progressives Congress, APC, the minister of information and culture, Lai Mohammed and the Progressive Governors Forum, PGF. For the information minister, the new petroleum law will ensure transparency and accountability in the industry and attract investors. The minister also said that he was glad with the news that the president had inaugurated a steering committee for the implementation of the new petroleum law.
The APC governors were not left out in the league of groups throwing their weights behind the signing of the PIB into law by President Buhari. The governors in a statement signed by their chairman and governor of Kebbi State, Abubakar Bagudu, said that the president’s action was a demonstration of the party’s commitment to economic restructuring. “With the coming into law of the new Petroleum Industry Act, our party under the leadership of President Buhari has demonstrated unwavering commitment to change Nigeria democratically.
“After more than two decades of endless national debates and stalemate, there is today a new Petroleum Industry Act in the country, which has provided six months transition for the emergence of new institutional framework for the operations of oil and gas industry in the country.
“The Progressive Governors Forum PGF commends the President for this historic feat of moving the nation forward to a new democratic era of governance and business management of the oil and gas industry,” the governors said in the statement.
Apart from the few contentious areas of the new law, the details of the entire law remain sketchy. But the statement by presidential spokesman Femi Adesina quoted President Buhari as saying that “The Petroleum Industry Act 2021 creates a regulatory environment that would ensure efficiency and accountability across the oil and gas value chain and reposition NNPC to a commercially-driven National Petroleum Company that is accountable to the Federation.”
In an apparent reaction to the criticisms that has trailed his signing of the PIB into law, Buhari said: “The Act also provides for a direct benefit framework that will enable sustainable development of host communities. I appeal to the host communities to look carefully at the contents of the bill which its implementation will bring real and lasting benefits to them.”
According to the statement, the assent of the new petroleum law marks the end of decades of uncertainty and under-investment in the petroleum industry.
Meanwhile, President Buhari has given approval for the inauguration of the implementation steering committee on the PIA, led by the minister of state for petroleum, Timipre Sylva and lamented the slow progress made so far in the Nigerian oil industry.
“This lack of progress has stagnated the growth of the industry and the prosperity of our economy. In the past ten years, Nigeria has lost an estimated $50 billion worth of investments due to uncertainty created by the non-passage of the PIB,” he said.
According o him, the presidential assent to the bill marked the beginning of the journey towards a competitive and resilient petroleum industry that would attract investments to support the nation’s Economic Recovery and Growth Plan, ERGP.
He explained that the Petroleum Industry Act 2021 creates a regulatory environment that would ensure efficiency and accountability across the oil and gas value chain and reposition NNPC to a commercially driven National Petroleum Company that is accountable to the federation.
“The Act also provides for a direct benefit framework that will enable sustainable development of Host Communities. I appeal to the host communities to look carefully at the contents of the Bill which its implementation will bring real and lasting benefits to them.
“Furthermore, the Act provides for deliberate end to gas flaring which would facilitate the attainment of Nigeria’s Nationally Determined Contributions of the Paris Agreement through a funding mechanism to support gas flare out project in host communities,’’ Buhari said.
He demanded immediate implementation of the framework for the Petroleum Industry Act and directed all the relevant stakeholders to comply and reposition for full activation within 12 months.
Perhaps, this 12-month window will enable the National Assembly to correct some of the anomalies detected in the new law by the NGF, oil producing communities and other stakeholders to avert any protests and disruption of oil production activities in the Niger Delta region.
– Aug. 23, 2021 @ 10:39 GMT |
A.I
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