As PIB Undergoes Public Hearing

The Petroleum Industry Bill (PIB) fully called “A Bill for an Act to Provide for the Establishment of a  Legal, Fiscal and Regulatory Framework for the Petroleum Industry in Nigeria” has remained in the Nation’s Parliament for over two decades now. And there are  still doubts in the  minds of Nigerians if this all important bill could be passed into law before the seventh assembly elapses.

On March 7, however, the bill passed its crucial second reading on the floor of the Senate, not without a heated debate  that involved an unprecedented 81 Senators of the 109-member Senate. This  is not a surprise  as the bill which  holds the hopes, fears and the complexities of the over 250 ethnic groups that make up Nigeria was at the stage  where most bills meet their cul-de-sac.

The PIB is a bill that contains all the requirements that apply to the entire petroleum industry in Nigeria as the title clearly states. It covers matters such as petroleum  administration, royalties and taxes, ladding procedure, environmental obligations, employment business opportunities  and technical requirements. It is a combination of 16 different Nigerian Petroleum laws in a single transparent and coherent document.

The original concept of the PIB is to provide strong basis for the renewal of the Nation’s Petroleum Industry based on international best practices. It is meant  to establish a new framework for the good governance of the oil industry with  increased petroleum revenues for the country and as well open a new window of opportunities for Nigerians.

In legislative drafting, for a law to command acceptability, it has to address  the issues that gave rise to the need for that law. It has to be in consistence with existing laws on the issue. It should also make provision for what constitutes  violation of that law, prescribe punishment and also put in place the mechanism  for enforcement.

Despite the scrutiny it has gone through, there are some grey areas in the bill that call for serious concerns, according to stakeholders.

During the debate on the general principles of the PIB, almost all the Senators disagreed on the sweeping power proposed for  the  Minister of Petroleum Resources which makes the Minister be above all oversight and fiscal control. Senator  Ita  Enang representing Akwa Ibom North-East was quoted as saying that “The powers and functions vested in the  minister are excessive and should  be reviewed so that the institutions established  and statutory powers conferred can operate with minimal interference and conflict from the minister.

He, therefore, advised that caution should be taken in the definition and assignment of function to the minister as the need may arise in the future to split the  functions and powers of the ministry under the petroleum industry to two or three ministers and even  for gas; amending the Act may not  be necessary then before it could  be effected.

Also, Senator George Akume, Senate  Minority Leader and former governor, Benue State in an interview said one of the concerns  of the Senators from the North was the menacing powers vested on the Minister of Petroleum Resources by the bill. Industry watchers see this overriding power to the minister as a ploy to enrich some influential members of the society which is what the bill is meant  to curb.

In addition, one area that created a divide between the South-South and Northern Senators is the 10 per cent  Petroleum Host Communities (PHC) fund.

The Northern Senators feel that additional 10 per cent to the existing 13 per cent derivation fund would impoverish the states that have no oil.

According to Senator Akume, “what is  important here is the fact that they already have the 13 per cent derivation. Of course, they also have the Niger Delta Commission and the Ministry of Niger Delta. All these are designed to create an atmosphere that is very conducive and that would provide succour to the majority of people from the Niger Delta.

Overwhelmed by the weight of over  50 years of neglect, 10 per cent PHC fund  and 13 per cent derivation can barely meet the needs of oil bearing communities. Exclusion of indigenes of oil bearing communities from participation in the oil-economy like owning of oil blocs, has forced the people   to resort to illegal refining of crude, which is costing the country 500,000 barrels of crude per day.

Besides, comparatively, there are discrepancies in the provisions  for the host communities  in the PIB and the Nigerian Minerals and Mining  Act 2007. In the PIB, an oil licence or lease can be granted  without putting into  consideration  the closeness of the  said field to the communities.  Whereas, the  Mining Act gives adequate consideration to the lives of the host communities.

Section 3 (1)(c) of the Mining  Act provides that, “no mineral title granted under this Act shall authorise exploration  or exploitation of mineral resources  or  the erection of beacons on or the occupation of  any  land-occupied by any town, village,  market, burial ground or cemetery or archaeological site, appropriated for a railway  or sited within  fifty meters of a railway or which is the site of or within fifty meters of any government or public building, reservoir, dam or public road.

Also in section 102 of the Mining Act, the right of the owner of the property is recognised by giving the owner the right to determine the rent. The section partly  provides that “the minister, before granting a mining lease on any private or any state land should require the owner or occupier of the land, to state in writing  within  the period specified by the regulation, made under the Act, the  rate of annual surface rent which the owner desires should be paid to him by the lease for the land occupied or used by it for or in connection with its mining operation.”

Therefore, as the House of Representatives Committee on PIB commences public hearing on the PIB across the country and the subsequent  public  hearing by the Senate, it is imperative that all Nigerians nay the Niger Delta who wear the  shoes and know where they pinch should take advantage of the opportunity which the public hearing offers to see that their interests are protected.