PIA: Beyond Buhari’s Assent

In spite of the many benefits some industry players claimed were embedded in the new Petroleum Industry Act, President Muhammadu Buhari’s assenting to the bill was a subliminal message to the people of Niger Delta, writes Iyobosa Uwugiaren

Even the five-days quarantine as required by the Presidential Steering Committee on COVID-19 after returning from London on August 13, could not deter the President from assenting to the controversial bill. President Muhammadu Buhari’s assent to the provocative Petroleum Industry Bill (PIB) 2021 into law demonstrates his determination to fulfil his constitutional duty.

Presidential spokesman, Femi Adesina, alluded to this fact. In a statement announcing Buhari’s action on the PIB, he said that the Petroleum Industry Act has proved to be ‘’a real nightmare for successive administrations’’ since the need for the bill was first mooted by the former President Olusegun Obasanjo administration, over two decades ago.

To interest groups in the South-south, however, Buhari’s assent to the Bill was an affront, offensive, hateful, against natural justice, and a very strong proclamation that the voice of the region doesn’t matter in the vexed issue. Going by the harsh criticisms and protests that greeted the Bill – when it was passed by the National Assembly, most people in the region expected the President to exercise his discretion rightly by returning the bill to the NASS to, at least, among others bring the host fund to 10 percent.

The bill, which was first presented to the National Assembly in 2008, was intended to remove legal and regulatory uncertainties that have held back the industry’s growth for decades. Analysts said that while oil contributes less than 10% to Nigeria’s Gross Domestic Product, it accounts for nearly all foreign-exchange earnings and half of the government revenue. The nation’s economic-growth cycle is strictly linked to crude oil output.

Monitors of the oil industry also argued that squabbling between politicians and complaints by the multinationals in the oil industry frustrated earlier efforts to bring up-to-date the regulations/policies, a process that started almost 20 years ago. It is on record that oil firms active in Nigeria, including Royal Dutch Shell Plc, Chevron Corp and others secured some concessions from the Federal Government – after objecting to parts of the bill that was sent to the National Assembly in September. Insiders say that was what informed the lawmakers’ reduction of the levels of taxes and royalties originally proposed and decided that a “hydrocarbons tax” should not apply to deep offshore production.

Consequently, while some industry monitors said the Act would offer materially lower royalties and taxes for oil, the Federal Government is expecting that the new Act would incentivize investors and players in the industry to support its determination to meaningfully increase Nigeria’s natural gas output and consumption.

On its part, the Nigeria National Petroleum Corporation ( NNPC) believes that the new legislation would make the oil sector more competitive and help attract more domestic and foreign investors, with the NNPC becoming a separate limited liability company to encourage the inflow of both foreign and domestic investors. And with the expected growth in the number of investors, the oil industry will become more competitive and effective, and aid the deregulation of the oil sector to help attract more investors to the downstream sub-sector.

This, analysts say, will allow potential private investors the huge opportunity to participate in oil production in the downstream sector thereby raising aggregate oil output.

There is also a huge expectation that the Petroleum Act will help with the growth of oil infrastructure that will improve Nigeria’s oil production and export revenue. To be sure, it is expected that with the Act, private investors will help in the rehabilitation and development of the new oil refineries to increase aggregate oil output; while their investment will also lower Nigeria’s dependence on imported refined oil.

With the Act that is expected to enhance the deregulation of the oil sector, experts believe it will help to attract Foreign Direct Investment (FDI) into the country – thereby escalating the contribution of the sector to the country’s economy. While more FDI inflows is expected to help in external reserves accretion thereby supporting the exchange rate.

The Act contains five chapters, which include, Governance/Institutions, Administration, Host Communities Development, Petroleum Industry Fiscal Framework and Miscellaneous Provisions in 319 clauses and eight schedules. The Act provides legal, governance, regulatory and fiscal framework for the Nigerian petroleum industry, the development of host communities, and other related matters. The National Assembly had passed the bill – thus ending a long wait since early 2000. The passage of the Act was not devoid of controversy and protest.

In passing the bill, the Senate and the House of Representatives had recommended three and five percent percent respectively for host communities. But after a conference both houses eventually settled for three percent. The lawmakers equally approved 30 percent of the NNPC profit share for exploration of frontier basins. This immediately generated huge protests mainly from the Niger Delta region and some stakeholders in the oil industry.

For instance, the pan-Yoruba socio-political organisation, Afenifere; the Yoruba Ronu Leadership Forum; the apex Igbo socio-cultural group, Ohanaeze Ndigbo, the Pan Niger Delta Forum (PANDEF), the Southern governors and other stakeholders rejected the three per cent host community fund in the Petroleum Industry Bill (PIB) and recommended that the fund should be increased to five per cent. In fact, at the public hearing on the bill, representatives of the host communities had demanded that they be allocated 10 percent on the grounds that percent was not enough to improve the standard of living of their people.

Also, in rejecting the proposed 30 per cent share of profit for the exploration of oil and gas in the basins, the Southern Governors Forum disagreed that the company be vested in the Federal Ministry of Finance but should be held in trust by Nigeria Sovereign Investment Authority (NSIA) since all tiers of government have stakes in that vehicle.

However, the huge criticisms, protest and the ethnic and political tension the passage of the bill by the National Assembly generated, did not deter Buhari from assenting to the bill. And there appears to be jubilation in some circles, especially by NNPC over the new Act, while some groups representing the Niger Delta are mourning.

Specifically, the Pan Niger Delta Forum (PANDEF) has faulted President Muhammadu Buhari’s assent to the Petroleum Industry Bill (PIB) despite the public outcry associated with the passage of the bill by the National Assembly.

The group in a statement by its spokesman, Ken Robinson, stated that the Niger Delta people may have no option but to take a position on the issue, which include seeking political as well as legal response to the issue at stake.

PANDEF wondered why Buhari assented to the bill in spite of the condemnation of some of its provisions including the paltry three percent provision for the Host Communities Development Trust Fund and the brazen appropriation of an outrageous 30 percent of NNPC Ltd profit for a dubious, nebulous Frontier Oil Exploration Fund.

According to the group, the bill falls short of the expectations of the oil and gas producing communities, bearing the brunt of unconscionable industry operations.

“This assent, by President Buhari, simply speaks to the repugnant attitude of disregard, propelled by arrogance, disdain and contempt with which issues concerning the Niger Delta Region are treated, particularly, by the present administration,’’ the pan-Niger Delta group stated.

The protest alluded to the strong belief that in spite of the many benefits some players in the oil industry are associating with the Petroleum Industry Act, there is popular belief in the Niger Delta that what President Buhari’s ‘’constitutional responsibility’’ signifies is an unambiguous and resounding message to the Niger Delta people that how they feel and what they say, do not matter, in the schemes of the Nigeria project. Some said that Buhari’s covert message is impervious, offensive and far short of appropriate democratic behaviour.

The protest by the Niger Delta region over Buhari’s recent action could be located within several scholar’s works that have shown that in the past five decades of crude oil exploration and exploitation in the region, the business activities of the Federal Government and the multinationals have caused immeasurable damages to the environment and callous devastation to the people. Among the damages is ‘’the pollution of fishing waterways, habitat degradations, forest clearing, toxic discharges, and destruction of farm lands, and breathing air which accounts for life and mainstay of their economy.’’ In addition, some experts believe that the inconsiderate oil spillages and gas flaring emitted by oil firms have wrecked the very source of the economies upon which the Niger Deltas hang on to.

The several spiteful damages caused by oil exploration to the environment of the Niger Delta, according to several researches by scholars, include but not limited to destruction of arable soils, deforestation, destabilizations of the physicochemical properties of the soil, pollution of drinking waters, alienation of the people from cultural inheritance and practices, air pollution, social and communal conflicts, global warming, heavy downpour, cancerous sun, noise pollution and social vices.

While some have argued that the rate of poverty prevalence and unemployment have been on an incremental path in the Niger Delta region in over five decades of dirty oil exploration and exploitation.

There are findings that have also ascribed the increase in health challenges in the region to the impacts of oil activities in the area, and exponentially bemoaned the level of negligence by the operators and the government – despite the region being the economical hub of the nation – contributing over 78 percent of the national GDP.

However, in spite of this existential crisis and the consistent protest by the Niger Delta that oil exploration has become a terrific basis of agony, pain and disenchantment for the people of the region, the Federal Government has turned deaf ears all along.

What about the long history of peaceful protest by the people – complaining of marginalization, inadequate development, unemployment, and lack of social amenities, which has resulted in loss of lives, personnel and abject poverty?

It is on record that the Federal Government and the oil companies have continued to pay little or no attention to the request of the region.

QUOTE

In passing the bill, the Senate and the House of Representatives had recommended three and five percent percent respectively for host communities. But after a conference both houses eventually settled for three percent. The lawmakers equally approved 30 percent of the NNPC profit share for exploration of frontier basins. This, immediately generated huge protests mainly from the Niger Delta region and some stakeholders in the oil industry