PIB: North’s Undevelopmental Stance

The Petroleum Industry Bill (PIB) currently awaiting legislative assent in the hallowed chambers has become an enigma of sort. The reason is simple: from being one of the most democratic phenomenons ever thought of in Nigeria, it has become what is capable of disintegrating the most populous African nation.

Ridiculously, and ironically too, the root cause of the present imbroglio is encapsulated in what George Orwell meant when he said in the book, “Animal Farm” that “in a time of deceit, telling the truth is revolutionary.”

Interestingly, there is hardly any Nigerian, who disagrees, openly, that the country’s petroleum industry needs deliverance, in its entirety. The primary reason is that the industry is the backbone of the country. Therefore, if corruption thrives in it as much as have been variously alleged, the PIB couldn’t have come at a better time, even as many feel it is belated.

Obviously, this reasoning seems to be what guided proponents of the bill over a decade ago, prominent among which was Dr. Rilwanu Lukeman, former Minister of Petroleum Resources, who conceived the idea in 2000.

The PIB is based on the report of the Oil and Gas Reform Implementation Committee (OGIC) set up by the Federal Government in 2000 to carry out a comprehensive reform of the oil industry. The OGIC was charged with making recommendations for a far-reaching restructuring of the oil and gas industry. The committee was chaired by Lukman, who was then the Presidential Adviser on Petroleum and Energy.

According to Lukeman, the PIB constitutes a reform legislation designed to encapsulate the legislative and administrative instruments governing the petroleum industry in one omnibus legislation, establishing clear rules, procedures and institutions for the industry.

In a presentation at a stakeholders’ session in 2009, Lukman said: “The Nigeria Petroleum Industry Bill is a remarkable document, which contains most of the legal requirements that will apply to the petroleum industry in Nigeria.

“The PIB combines 16 different petroleum laws in a transparent and coherent document. This is the first time that such a large scale consolidation has happened anywhere in the world. Good governance is promoted through the removal of much of the confidentiality as well as creating transparency.

“Confidentiality encourages corruption. The best way to fight corruption is to remove confidentiality from all procedures, contracts and payments. Every Nigerian, including stakeholders, should have the right to know what is going on. The bill removes confidentiality on a scale not seen in the world before. Nigeria will move in one step from one of the most opaque petroleum nations in Africa, to one of the most open and transparent in the world.

“The texts of all licenses, leases and contracts and any of the changes to such documents will no longer be confidential. Payments to the government of Nigeria will be public information. All petroleum geological, geophysical, technical and (oil) well data will be accessible for all interested persons in a national data base.

“The proposed bill will result in a significant increase in transparency. From now on, petroleum prospecting licenses and petroleum mining leases can only be granted by the Minister through a truly competitive bid process. Such process will be open and accessible to all qualified companies.

“Every company involved in the upstream petroleum industry will be subject to the same system of rents, royalties and taxes, depending on whether they operate in the onshore, shallow or deep offshore or inland areas.

“This means it will not be possible under the bill to treat certain companies more favourably than others. Nigerians can only fully benefit from their petroleum resources, if there is a sound petroleum administration,” he said.

In spite of this anticipated Eldorado, major companies involved in oil and gas exploration and exploitation, mostly multinationals, were the first to pick holes in the bill. They kicked against the perceived contentious provisions in the bill, especially the fiscal terms, claiming that the benefits the government wants from operations are so high that if the bill is passed in its present state, they would be running their business at a loss.

Other issues in the bill that operators frown at include undue powers conferred on the Minister of Petroleum and some conditions attached to acreage leases to oil firms. These and other issues that border on downstream sector are what the Federal Government was trying to resolve before Northern lawmakers recently joined the fray.

The Chairman, Senate Committee on Housing, Sen. Bukar Abba-Ibrahim (ANPP-Yobe) gave an insight into the North’s opposition to the PIB, saying it is lopsided. He said the clause in the PIB, which allots additional 10 per cent revenue for oil producing communities was unacceptable.

Abba-Ibrahim, a former Governor of Yobe State, said, “This issue of oil producing communities getting 10 per cent of whatever is gotten from oil in addition to all sources of revenue for the oil producing states which has now divided the country into two, with oil producing states having more than what they need and squandering the oil riches, and the non-oil producing state, which are more in number, hardly surviving, hardly paying salaries and hardly doing anything has to stop.”

The lawmaker continued that the North was also opposed to the PIB because of its failure to make provision for the exploitation of other minerals all over the country.

“We have over 800 million tones of limestone in Gulane, Fune and Guljimba local governments of Yobe, but as a state government, you cannot go and exploit, it has to be Federal Government.’’

He is, however, optimistic that the bill when passed would sanitise the Petroleum Industry and address the issue of corruption in the sector.

A critical analysis of Abba-Ibrahim’s statements reveals that when he said oil producing states where “having more than what they need”, he was inadvertently confirming that governments have always been squandering public funds. Such funds are meant for the development of the populace.

Obviously, if the populace were being developed, the government would not have been accused of squandering funds allocated for development. So, why is he and his Northern brothers against the development of primary recipients of hazards accruable from oil exploration, extraction and exploitation? What difference will it make to the communities when such fund is deposited in the national treasury?

Democracy has clearly been so misconstrued that people are often so blind with their own version of patriotism that they find it difficult to face reality. They thus forget that wrong is wrong, no matter who does it or says it.

The Northern stance is thus a quest for the status quo of squandering public fund to remain. It is another way of saying that it is wrong for the hitherto devastated oil producing communities to be developed.

The North should rather take a cue from the popular television presenter, Oprah Winfrey, who once said, “Challenges are gifts that force us to search for a new centre of gravity. Don’t fight them. Just find a new way to stand.”

Since they have confirmed that they are rich in limestone, for instance, the right thing to do to avoid the division of the country over benefits accruable to host communities of mineral resources is to exert such energies as they expend on fighting for oil proceeds on the Federal Government to commence exploration of alternative mineral resources in their various states through legislation.

With the exploration and exploitation of such mineral resources in their states, they will also get into the groove of enjoying the proceeds. To do otherwise will amount to repeating the same mistake made during the pre and post colonial era when educationally developed states were made to wait for the less developed ones to catch up. This is against the principle of democracy.

In addition, if they are truly concerned about the development of Nigeria, they should concern themselves more with coming up with laws that would check financial impropriety at all levels of governance. This is what the PIB seeks to do in the petroleum industry.