When the idea of the Petroleum Industry Bill (PIB) was mooted in 2000, it was on the conviction that Nigeria’s oil and gas sector needed a major reform to transform the economy into one of the world’s most industrialised by the year 2020.
The absence of effective regulatory laws for the industry is believed to have given an impetus to wanton sabotage and fraudulent activities in oil and gas sector, the result of which is huge revenue loss for government.
At an Abuja forum, tagged, “Exploring Credibility and Transparency in Governance: The Nigeria Outlook,” speaker after speaker lamented the non-passage of the PIB, describing it as an obstacle to integrity in government and effective management of national resources. This forum also deposed that the delay in passing the PIB would engender enhanced revenue accruals to Nigeria, protect the country’s resources and secure the industry for sustainable growth and development.
Recall that the Nigerian economy has, over the years, been monolithic, a situation, which, according to analysts, necessitates urgent reform to engender efficiency and transparent management of a sector that provides the bulk of the revenue.
But there are several versions of the PIB in circulation, thus raising questions regarding the authenticity, or otherwise, of the entire document.
The National Assembly is currently considering the PIB, which was submitted to President Goodluck Jonathan on June 29, 2012 by the Minister of Petroleum Resources, Mrs. Allison Diezani Madueke. There is no doubt, however, that this version from Mr. President remains the authentic bill.
According to the Coordinator, Mr. Samuel Ajai, Nigerians and the international community are waiting in earnest for the day the economic and political landscape of the country will embrace fully, the virtues of transparency and accountability. These two critical qualities seriously engender economic growth in many advanced societies.
It is for this reason “that majority of Nigerians have continued to wonder why deliberations on the passage of the bill has generated yet unnecessary controversies. With ecclesiastic tenacity, critics of the PIB have raised a lot of dust in the country‘s polity, as they speak and write tendentiously to stop it from scaling through legislation.
“Often times, contentions raised against the bill are leased with brazen mendacities, all with the intent to undermine its potentials to the country’s crippling economy”, Ajai said.
But he adds that the current administration is working relentlessly to fix the problems. The PIB, a product of a Presidential Oil and Gas Reform Implementation Committee (OGIC), has weathered the storm, while navigating dangerously through the ebb and flow of legislative tide, hoping that the entire process would turn to its favour.
The said Bill was set up by the Federal Government to carry out a comprehensive review of the industry, with the underlying purpose of obtaining better ways of effectively managing the nation’s oil wealth for the overall growth of the economy.
Otive Igbuzor, Head of African Centre for Leadership, Strategy and Development (ACLSD), said, one good thing about the proposed legislation for the oil/gas industry remains in the fact that initiators of the PIB had thought it wise to design a legislation in such manner that seeks to strengthen the capacity of indigenous firms to be able to compete favourably with foreign companies.
During a recent protest against delay in passing the Bill, Otive noted, “every nation involved in the extraction of oil has put relevant laws in place to ensure transparency and accountability. In his calculation, harbingers of the country’s doom are scavenging Nigeria’s economic dustbins to lay their hands on scaremongering issues just to beat the Jonathan-led administration’s logic of the bill.”
It is still widely believed that, with the passage of the PIB, government’s programme, which tends to encourage full private sector participation, can better be achieved. The proposed Bill, which pushes to limit government’s exposure to oil/gas exploration and production through joint venture agreements, also places priority on privatisation and commercialisation in a way that retains government’s interest only as shareholder.
Sharon Gidanwaya, coordinator of the Northern Women Advancement Society (NOWAS), said the inherent benefits of the proposed legislation notwithstanding, “the planned establishment of the Host Community Fund (this is a provision contained in the bill for addition of 10 per cent of the profit of all oil and gas companies to the Niger Delta States and communities within the producing areas) is disadvantageous to other parts of the country”, a position which has pitched Northern lawmakers against their Southern counterparts. This appears to be reasons behind the tailbacks in passing the PIB.
She, however, imagined that relative peace in Niger Delta host communities would benefit the entire country in terms of volumes of daily crude oil production.
Another controversial provision, according to Gidanwaya, is the supposed powers that the PIB seeks to confer on the Petroleum Minister, the fact that the Bill, if passed into law, would become a legislation that would transcend the present administration, “stakeholders have been advised to reason it away from empowering the present Minister.”
Earlier, Ajai said, most International Oil Companies (IOCs) that have also expressed serious concern regarding high charges on deep offshore oil projects need to understand clearly that, apart from Nigeria’s interest of opening up the sector, government’s desire is to create a competitive market in the industry with taxes remaining within reasonable limits at all times. These foreign companies have a role to play to ensure that now that the Bill has successfully passed the second reading at the red chamber of the National Assembly, it is pertinently handled.
For the Nigerian Extractive Industry Transparency Initiative NEITI, the federal legislature must ensure that, in its consideration of the PIB, nothing but Nigeria’s overriding national interest, including optimisation of revenue flows to Nigeria, protection of the operational environment, transparency, accountability and inter-generational equity, is held supreme. NEITI has every reason to believe that some of these values are in danger of being sacrificed on the altar of provincial interests.
Having sailed through the second reading in the House of Representatives, the Bill has been referred to the committee on Petroleum (upstream and downstream), Gas and Judiciary, Human Rights and Legal Matters with a period of six weeks deadline to organise public hearing and report back to members.
Already, the Speaker of the House of Representatives, Aminu Tambuwal, has set up a 23-man ad-hoc committee to carry out legislative action on the PIB, while the upper chamber is expected to resume committee work on the proposed legislation soon.
Recall that Senate President, David Mark, at the inauguration of the Senate Committee on petroleum (downstream) in 2011, said, “The PIB is like the Bible for the industry and if we are to build the sector, we have to get the Bill off the ground. Since the entire economy of the country depends on the petroleum industry, if we don’t get it right in the sector, then the much-talked-about Vision 2020-20 would remain a dream.”
While others feel that President Goodluck Jonathan also has a role to play, by stepping up action in intensifying the lobby for the Bill to ensure its quick passage by both chambers of the National Assembly, “he must be seen as pursuing an agenda which carries with it overriding national interest rather than the misunderstanding that he is championing a regional course,” considering that he is from the South-South region, supposedly favoured by the Bill.
While harping on the overriding need for stringent regulatory framework to curtail and possibly eliminate inconsistencies in the country’s oil and gas sector, many analysts think that the sector needs far-reaching changes addressing the fundamental elements of funding, environment concerns, accountability, transparency and efficiency in the administration and management of Nigeria’s naturally-endowed wealth.