Rethinking the Petroleum Industry Bill

Rather than do that, they are running to town with the rumour they have heard and have since engaged their listeners to half truths and contorted lies. They have succeeded in fanning embers of base emotions and are even calling for the head of the “oil man,” Rilwanu Lukman who, at a time, was the […]

Rather than do that, they are running to town with the rumour they have heard and have since engaged their listeners to half truths and contorted lies. They have succeeded in fanning embers of base emotions and are even calling for the head of the “oil man,” Rilwanu Lukman who, at a time, was the head of OPEC-the world body on matters that concerned petroleum globally.  Thankfully, those who have found time to study the bill have thrown their weight behind the man and his mission. Even a cursory look at the bill shows that it means well for the host communities and the rest of the country. The bill wants the nation to benefit more from the activities of oil multinationals instead of them getting away with what they dare not do elsewhere in the world.

If any one should know, it has to be Dr.Lukman, our minister of petroleum. He knows how these things work around the globe. Digging into history, Dr Lukman has noted that the laws guiding the oil sector have become rusty as no one has bothered to subject them to needed reviews. Clearly, most of the hiccups experienced over the years have been because of the absence of proper laws for the industry. Thus, apart from the inconsistencies in policies over the years, the lack of efficient legislation has robbed host communities of their access to the goodies derived from the resources. What is wrong with proper legislation, anyway? Why should any one knock the idea of improving the lot of Nigerians? Why, indeed, should Dr. Lukman be demonized for courageously identifying a problem that many have ignored over the years? He did not only locate the challenge. He proffered clear cut solutions.

According to Lukman “oil and gas production in Nigeria commenced in 1958 after the first discovery two years earlier was made in Oloibiri, which is now in Bayelsa state. Over the years, the laws regulating this very important industry have not been comprehensively reviewed. The main laws are the Petroleum Act 1969 (as amended) and the Petroleum Profit Tax Act 1959 (as amended), and the Nigerian National Petroleum Corporation Act of 1977 (as amended).”

He noted that these laws are in a need of a holistic overhauling “to reflect the changing dynamics of the oil and gas industry world wide”. What is wrong with that? Do we want to remain in the periphery of global changes or to get into the hub of best practices everywhere else? The critics of the proposed bill need to get off the ingrained suspicious Nigerians have for anything new from government and explore the possibilities opened up by the bill. The bill, contrary to the cynics is not seeking to rob the host communities of revenue accruing from oil. It is almost insane to suggest that the sole aim of the bill is to deny host communities of royalties from the oil majors. It is not even in the precinct of the law to do that. It would require a constitutional amendment to bring about such an ambitious change. Of course, the traducers of the bill are peddling the unintelligent view that the bill seeks to reduce the gross earnings from the federal reserves to the host communities.

On the contrary, the host communities are in for a good time with the bill as it would mandate oil and gas companies operating in Nigeria to be guided strictly by the PIB local infrastructural development and maintenance guideline. The bill also stipulates for a mandatory consultations with host communities in the development of infrastructures and all related development initiative under SCR to be undertaken by a company operating in an area.

Furthermore, the bill will ensure that oil majors support educational and skills acquisition training programs for indigenes of host communities. Then it would also ensure that many of the unemployed gets skills that would make them employable in the oil companies. In fact, the bill wants to make it mandatory for the oil majors to draw 95% of their work force from the local community. Board membership would constitute 60% Nigerians.  With this, the oil majors will become more integrated with the local people who all these while have been treated marginally.

Even the age long crisis of the environment is addressed by the bill. Under the corporate social responsibility section of the bill, an elaborate presentation on the roles and responsibilities of companies and what constitutes their corporate social responsibilities to their host communities recommend stiff penalties for any act of environmental pollution by companies. In addition, it also spelt out provision for effective engagement and participation of host communities in the economic spin-offs arising from oil and gas activities in their vicinity. They would also be required to come out with a well articulated sustainable community development plan consistent with the PIB guidelines for effective sustainable engagement program.

It is a wonder therefore that with all these lofty ideals, among the many offered by the bill, some people could still cast it in horrible lights. The sad thing is that many of the critics are feeding the locals with same cock and bull story they have feed them since oil became an issue. Rather than let the people feel the presence of these majors in their domain, they shield them from light.

The fact however is that, at the moment, the nation oil sector can do with better laws. Ancient and anachronistic laws can only continue to enmesh the sector in the raging controversies- the type that has led to armed struggle in the NigerDelta region. If the issues of development and responsibility had been tackled in the past, we probably would have been in better times today. Yet, like it is often said: it is better late than never. Now is the time to usher a new day to the nation in general and the host communities in particular.

Olaoye, a public affairs analyst, contributed this piece from Garki, Abuja.