The Petroleum Industry Bill (PIB), which has been in the works, since the tenure of President Olusegun Obasanjo, finally became law last week under President Muhammadu Buhari. The PIB which has been flaunted as the solution to the myriad of problems that has stunted the growth of the Nigerian petroleum industry could not become law until now, because our nation’s fault lines undermined its emergence in the national assembly.
Of note, since the passage of the bill, while some stakeholders are full of praise for the government for mustering the political will to pass the much anticipated bill, some others contend that certain provisions of the act are illegal and unconstitutional, even as some others accuse President Buhari and the leadership of the senate of robbing the oil producing states, to pay the non-oil producing states.
For the Niger-Delta activists, the most painful provision of the act is the reduction in the allocation due to the Community Trust Fund, which after harmonisation by the two arms of the National Assembly was pegged at 3% instead of the preferred 5% of the annual operating expenditure of the oil companies, the previous year. While this column believes that only the federalization of the national economy, will guarantee the much desired peaceful development of Nigeria, it agrees that even the 3% will make a huge impact on the host communities, if it is applied to their wellbeing.
No doubt, one of the major causes of the underdevelopment in the Niger Delta, is the corrupt diversion of the resources of the region both by government officials and the leaders of the affected communities. The corruption amongst the traditional elites of the host communities, is so endemic that even the crumbs that falls from the master’s table, instead of being used to feed the hungry and disposed, are gobbled by the indigenous elites. So for now, the main worry should be whether the 3% will be allowed to trickle down to the host communities.
There is therefore the need for government officials at the three tiers of government, to ensure a structured independent framework, within the host communities to monitor the managers of the 3% income, if the money would not become an albatross for the beleaguered people of the host communities. Another benefiting aspect of the law for host communities, is the creation of the Environmental Remediation Fund and the Decommissioning/Abandonment Fund, which again if well utilised will ameliorate the tragedy of the environmental degradation of the region, which fuels the restiveness in the Niger Delta.
Any fair minded person, who has been to the Niger Delta or even read about the degradation caused by oil spillage, made worse by the carcasses of abandoned oil fields, would sympathise with the youths of the region who are willing to lay down their lives, to extract a fairer deal from the rapacious Oil Exploration Companies and their collaborating Nigerian government. So, if the policy of environmental remediation and the decommissioning of abandoned sites are implemented, the people and the aquatic life in the region will live longer and become healthier.
A complement of the law in the gas sector, is the provision to use gas flare penalties for environmental remediation of the affected host communities. Again, if that policy is effectively implemented, it will start to clean the soot that indiscriminate gas flaring has plastered on the integrity of Nigerian leaders who have been very unfair to the people of region. Such dangerous phenomenon as acid rain, polluted waters, dead fishes and contaminated farmlands, which have been the hallmarks of the host communities, would begin to give way to the normalcy that other Nigerians enjoy.
For this column, it is most unconscionable that politicians in faraway Abuja sit in their cosy environment, to spend monies raised as penalties from gas flaring, while the impacted communities live in the squalor and nightmare of poisonous perpetual daylight. When the oppressed is pushed to the wall, they are bound to react, as has been the case across the Niger Delta region in the recent decades. And the costs associated with the intermittent uprisings, are much higher than the penalties that will now be channelled to the host communities.
One of the most maligned aspect of the PIB is the Frontier Exploration Fund, which has been interpreted to mean that a whopping 30% as against 3% (for Niger Delta) of a certain income will be spent to explore for oil in the northern region. While such assertion is not correct, as the frontier fund will cover all the inland basins in the country, the real challenge will come from the governor’s forum which have already frowned at such a hug deduction from the NNPC’s account that will further deplete the income due for the federation account.
So, there is the likelihood that in future the governors may approach the Supreme Court to determine the legality of the aspect of the PIB that seem to derogate from the provision of section 162(1) of the 1999 constitution (as amended). The section provides that the federation shall maintain a special account to be called “the Federation Account” into which shall be paid all revenues collected by the government of the federation; with a few exceptions.
Those who argue that the PIB overreached that provision of the constitution may put a clog in the wheel of the PIB. There are also those who are up in arms against the act for daring to give the oil bearing communities 3% as against 30% for oil exploration, which is perceived as a waste by many stakeholders. They are not excited that the Frontier Exploration Fund is geared to advance potential oil reserve for the entire country, while the 3% will go to improving the welfare of host communities.
To show the determination of the federal government to see the new PIB through, the president has set up a committee headed by the Minister for Petroleum Resources Chief Timipre Silva, to ensure a speedy implementation of the new law. Of course, those opposed to the law are accusing the president of undue haste because of the provisions of 30% of the profit of the NNPC for oil exploration in the northern part of the country, which as I have stated above is not entirely correct.
With the International Oil Companies, and other international players in the industry hailing the federal government for passing the PIB, there is the hope that there will be an increase in Foreign Direct Investments in that sector. So overall, the PIB has a lot of positive provisions, especially for the host communities, even with all the controversies. Going forward, there is hope, as key players in the making of the PIB have promised an amendment to cure the defects in the act. Culled from The Nation
