Growing agitations threaten PIB’s milestone passage
Rather than elicit relief based on the prolonged challenges it is supposed to address in the oil and gas sector, the passage of the Petroleum Industry Bill has provoked agitations over the allocation of a “paltry” three per cent to oil-producing communities, JESUSEGUN ALAGBE writes
The passage of the Petroleum Industry Bill on July 1 after
about 13 years of legislative rigmarole may be likened to the invention of the
Rube Goldberg machine in the 1900s.
Named after American cartoonist Rube Goldberg, the machine
is a chain reaction system that was designed to perform a simple task – but in
an indirect and overly complicated way.
The Rube Goldberg machine consists of a series of simple
unrelated devices, the action of each triggering the initiation of the next,
before eventually resulting in achieving the stated output.
Over the years, the expression “Rube Goldberg machine” has
found its way into everyday use and expanded to mean a solution that rather
creates confusion because of its complicated elements or system.
Indeed, the passage of the PIB, Nigeria’s oil sector reform
bill, by the 9th National Assembly, was a notable moment for Africa’s top oil
producer which has seen this natural resource exploited by foreign oil
companies without much benefits to the local communities.
The PIB contains five chapters, including governance and
institutions, administration, host communities development, petroleum industry
fiscal framework, and miscellaneous provisions in 319 clauses and eight
schedules.
The National Assembly had in 2018 passed a harmonised
version of the bill, but the President, Major General Muhammadu Buhari (retd),
refused assent to it due to what he described as “legal and constitutional
reasons.”
The PIB passage aims to attract new foreign investments to
Nigeria’s petroleum sector and curb corruption in the industry.
Speaking of corruption in Nigeria’s oil sector, a recent
bribery investigation of a former employee of Swiss commodity trading company
Glencore by the United States resuscitated long-standing questions over
corruption in Nigeria’s oil sector.
According to Global Trade Review, a London-based
publication, details of an alleged bribery racket were revealed last week when
Anthony Stimler, a United Kingdom-based trader who worked on Glencore’s West Africa
desk until 2019, pleaded guilty to charges of money laundering and corruption.
As shown in New York District Court documents, Stimler was
arrested for his part in an alleged bribery scheme to pay “millions of dollars”
in bribes to officials in multiple countries, including Nigeria, in a bid to
win lucrative contracts and more favourable delivery terms for his company.
The exact timeframe for when the bribes took place was
unclear, but US authorities said the scheme was in operation from at least 2007
to 2018.
In one instance, prosecutors said Stimler and a
co-conspirator – one of the seven referred to in the documents – worked to
secure oil from the Nigerian National Petroleum Corporation, fully aware that
bribes could be used for potential political gain by Nigerian authorities.
Apart from the Glencore case, the NNPC has been dogged by
serious corruption allegations in the past decade.
In 2012, for instance, a $6.8bn fuel subsidy scandal
involving top officials erupted into public view.
A probe by the National Assembly claimed importing companies
were paid hundreds of millions of dollars to buy fuel that did not actually
exist.
Fresh concerns over three per cent to host communities
Although analysts believe the passage of the PIB will invoke
positive changes in the sector, fresh agitations over the “meagre” three per
cent allocated to host communities may signify impending trouble for the sector
and the country at large, some stakeholders have said.
The Partner & Head, Tax-Energy & Natural Resources
and Managed Services, KPMG in Nigeria, Mr Adewale Ajayi, noted that certain
clauses made the PIB’s objective of promoting a competitive oil industry
suspect.
Stating in a publication titled, ‘Petroleum Industry Bill
(PIB) 2021 – A Game changer?’ Ajayi wrote that addressing the clauses would go
a long way in reducing the constant agitation and restlessness in the Niger
Delta.
He said, “Given the introduction of the Petroleum Host
Community Fund, the question that has arisen is: What is the continued
relevance of the contribution to the Niger Delta Development Commission? The
PIB is not clear on whether the host community fund contribution will be
together with the three percent NDDC levy.
“If this is the case, then the objective of promoting a
competitive oil industry will be suspect, given that the industry is already
subject to multiple taxes. Of course, there is also the question as to whether
the three per cent of annual operating expenditure will be sufficient to secure
the buy-in of the host communities.
“Most importantly, accountability for the judicious use of
the funds is key. The hope, therefore, is that the trust fund shall be used for
the benefit of all the host communities as envisaged by the PIB. If this
happens, it will go a long way in reducing the constant agitation and
restlessness in the Niger Delta.”
Niger Delta groups reject bill
During its passage, Senate members engaged in a fierce
argument over the allocation of three per cent operating expenditure of oil
firms to host communities.
Analysts noted that unlike the 13 per cent of oil revenue
that usually go to communities through state governments, the three per cent
stated in the PIB would come from the oil company’s operating expenses to the
trust fund created for host communities.
The three per cent is, however, lower than the 10 per cent
allocation agitated for by the host communities at a recent public hearing.
This development has now resulted in new agitations by
people of the Niger Delta.
“What can three per cent do to cushion the effects of the
years of the degradation and despoliation of the ecosystem?” the National
President, Centre for Human Rights and Anti-Corruption Crusade, Mr Cleric
Alaowei, asked.
He said, “Members of the 9th Senate seem to have forgotten
so soon that the 10 per cent equity share for the host communities in the then
PIB was one of the reasons why the aggrieved Niger Delta people reluctantly
accepted the presidential amnesty.
“The Federal Government cannot renege on its promise now that
the region is peaceful. It’s ridiculous that the Senate approved in the bill a
whopping 30 per cent for the NNPC to explore oil across the country.
“Is the Senate more concerned about what has not been seen
than what we have? Should the host communities continue to suffer from the
environmental abuse occasioned by the oil exploratory activities without any
environmental remediation?
“Should the communities continue to suffer neglect and
marginalisation on the altar of national infrastructure development without
their interest being protected by the petroleum law?
“The House joint committee should look into the danger of
passing the PIB into law.”
Alaowei stressed, “The Niger Delta people need nothing less
than 10 per cent equity share as originally agreed. The National Assembly
should strive to consider the interest of the people who bear the brunt in
passing the PIB. Three per cent will surely resurrect agitations in the
region.”
Niger Delta youths under the aegis of the Niger Delta Youth
Council have also hinted of fresh agitations in the region over the ceding of a
“meagre” three per cent equity stake to host communities.
The National Coordinator, NDYC, Jator Abido, said the group
had rejected the move, seeing that a “whopping” 30 per cent of the NNPC revenue
had been allocated for the exploration of oil in the “frontier basins.”
He said, “The three per cent allocated to host communities
as an equity stake is grossly inadequate. Prior to the passage of the PIB, many
stakeholders appealed to the National Assembly to allocate five per cent profit
to the host communities.
“The earlier five per cent canvassed was bad. Reducing it to
three per cent is unimaginable and unacceptable. Communities that own these
resources and suffer the devastative effects of oil exploration and
exploitation deserve a better deal than three per cent.
“It is our belief that the members of the National Assembly
got it wrong at a point but should revisit the issue and make the necessary
adjustments.”
Abido said should the National Assembly fail to do the
needful, Buhari, “who has proven to be passionate about Niger Delta issues”
should review the three per cent to 10 per cent before signing the PIB into
law.
Also, the Chairman of the Edo State chapter of the Pan Niger
Delta Forum, Brig Gen Idada Ikponmwen (retd), said the three per cent
allocation to host communities was an open invitation to anarchy in light of
the fact that the Niger Delta region is the mainstay of the nation’s economy.
Ikponmwen, who is a former Provost Marshal of the Nigerian
Army Corps of Military Police, Lagos, said, “Deeply examined, it is an open
invitation to anarchy. This move cannot be acceptable to those who have borne
the brunt of oil exploration and exploitation of oil and gas in Niger Delta.”
Ikponmwen enjoined the President to reject the bill and have
it returned to the National Assembly for necessary adjustments.
Likewise, an energy analyst and environmentalist based in
Port Harcourt, Rivers State, Mrs Ebiowei Gladson, urged President Buhari to
slow down on signing the PIB and asked the National Assembly to amend it.
She said, “The PIB passage will do more harm than good if
signed into law by the President right now because it didn’t address the
concerns of the people of Niger Delta whose lives have for years been affected
by the activities of IOCs in the region.
“To make the people angrier, the PIB allocates 30 per cent
of NNPC revenue for the exploration of oil in the North. This is not a fair
situation and it may lead to more harm than good. The National Assembly should
withdraw the bill and review it before passing it over to the President for
assent. This is the ideal thing to do!”
Already, a militant group, Niger Delta Revolutionary
Crusaders, has threatened to resume hostilities over the three per cent
allocated to host communities in the PIB, describing it as unfavourable.
“For 56 years, the region has suffered desecration of its
sacred places like worship centres, lands, streams, lakes and severe
environmental degradation without remediation,” the group’s spokesperson Izon
Ebi said.
He further said, “While the government and people of Zamfara
State are allowed to control 100 per cent of their gold resource (fiscal
federalism applying in Zamfara State), what the people of the Niger Delta
region could get from their own natural resource is a paltry three per cent for
host communities and in contrast, a whopping 30 percent for exploration of
frontier basins.
“This is an economic coup against the people of the region;
it is an insult, a daylight robbery and betrayal by the Nigerian government.
The region embraced peace because it was the most civilised thing to do in
order to give way for proper dialogue, genuine government commitment and
re-idealogical construct about the Niger Delta region.”
To address the Niger Delta people’s grievances, the
Coordinator of the Delta State Chapter of the Committee for the Defence of
Human Rights, Peter Edariese, urged the Senate to increase the three per cent
approved for host communities.
“The government should not be one-sided but should observe
equity in making policies and implementations,” he added.
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