The recent passage of the Petroleum Industry Bill (PIB) by both chambers of the National Assembly has generated controversy across the country, especially in the oil-rich South South region. Given that the bill has been too long in the National Assembly, we had expected that the contentious areas would have been sorted out before being passed. But it has remained very controversial and this is unfortunate.
The bill has been with the National Assembly for 13 years. It was first introduced in 2008 by the late President Umaru Yar’Adua’s administration. Former President Goodluck Jonathan’s administration reintroduced it in 2012. The House of Representatives passed it then but the Senate did not. In 2018, the National Assembly passed it as the Petroleum Industry Governance Bill (PIG-B), but President Muhammadu Buhari refused to sign it into law.
The present bill was sent to the National Assembly in September 2020. It contains 319 clauses aimed at ensuring transparency and openness in the oil and gas industry. It also aims at transforming the Nigerian National Petroleum Corporation (NNPC) into an efficient profit-oriented company to be called the Nigerian National Petroleum Corporation Limited. Section 53 (7) (8) of the proposed law provides that NNPC Limited must declare dividends and also pay all fees, rents, royalties, profit oil share taxes and other requirements. Stakeholders say the bill, if signed into law, will drive investment into the nation’s oil sector.
However, there are certain hurdles that need to be crossed. One of them is the percentage of the operating expenditure that should go to the host communities. The communities had demanded 10 per cent. But the House of Representatives proposed five per cent while the Senate suggested three per cent. Host community here means any community where oil pipelines pass through, whether there is oil in that community or not.
This is not what the people of Niger Delta region had hoped for. On the face of it, three per cent looks big, but it pales into insignificance when compared to the neglect of and the damage to the environment of the oil-bearing communities as a result of oil exploration.
This is why major stakeholders have kicked against certain aspects of the bill. Southern governors rejected the 30 per cent set aside for oil prospecting in frontier basins. They also opposed three per cent share proposed for the host communities. The National Leader of the Pan-Niger Delta Forum (PANDEF) and Elder statesman, Chief Edwin Clark, described the three per cent share as unjust and provocative. He called for the reversal or review of the PIB to ensure that oil-bearing communities receive at least 10 per cent of the operating cost. If this is not done, he threatened, the Niger Delta people might be forced to take their destiny into their own hands.
The PANDEF also rejected the three per cent share for the development of host communities. Its National Publicity Secretary, Ken Robinson, said the region was the biggest victim of the fraudulent Nigerian Constitution and the lopsided structure of the country.
Frontier basin is another grey area in the PIB. From the original 20 per cent that was canvassed for exploration of oil in the frontier basins, the National Assembly increased it to 30 per cent. Some of the basins include the Benue Trough, Chad Basin and Sokoto Basin. According to the Chairman of the Senate Joint Committee that processed the bill, Sabo Muhammed Nakudu, “the Joint Committee’s recommendation recognises the need for the country to urgently and aggressively explore and develop the country’s Frontier Basins to take advantage of the foreseeable threats to the funding of fossil fuel projects across the world due to speedy shift from fossil fuel to other alternative energy sources.”
This sounds great. But it is high-power politics on display. Deploying huge amount of money for oil exploration in an era we are talking about developing alternative sources of income is curious. There must be justice and equity in the PIB. It is supposed to take away all the bottlenecks in the oil sector, but it has not. There is great need for thoroughness because oil is strategic to Nigeria’s economic development. It is a sector we cannot afford to toy with. There is no point rushing to sign the bill into law with all the contentious issues unsettled. The grey areas must be ironed out before signing it.
We advise the President to always be conscious of the legacies he would bequeath to Nigerians. PIB is very important. And it will not be nice if we had gone this far and still create more problems for ourselves. Though there are some good aspects in the bill, the controversial clauses have rendered it problematic.
It is imperative to note that the both chambers of the National Assembly have set up conference committees to harmonise the different versions of the bill. It is hoped that the committees will also look critically at the complaints of people and make amends before sending it to the President for his assent. There is no need to wait for 13 years for the bill only to go back to the drawing board. What is worth doing is worth doing well.