Senator Lee Maeba Ledogo
Senator Lee Maeba Ledogo talks passionately about his crusading efforts to transform the petroleum sector through his introduction of the Nigerian content bill after his tour of some oil producing countries where the issue of local content was already a done deal. But the two-time Senator is not happy with the Petroleum Industry Bill at present before the National Assembly, saying the bill needs to be reworked. Maeba speaks in an interview with Nduka Nwosu
What did you set to achieve as chairman Senate Committee on Petroleum Resources Upstream with emphasis on Local Content Law?
The issue of a Nigerian content law did not come to me as a member or chairman of the Senate Committee on Petroleum. As a petrochemical engineer, I had early in the day been in the oil field where I witnessed the suffering of Nigerian oil workers, the predicament of Nigerian companies struggling to bid for contracts from multi-national companies and international contractors. When I came to the Senate, I had a two-pronged agenda; one was the issue of resolving the Nigerian content in the oil and gas industry and the second was on social security. So, my being the chairman of the Petroleum Committee Upstream was just a plus. The law was the dogged effort of a professional who works in the industry and sees where it pinches. I knew that something was lacking in terms of empowering Nigerian workers and there was an urgent need to correct the anomaly.
Immediately I got to the Senate, I set the ball rolling through the introduction of a bill in 2005 after extensive work had been done on it. I went to Indonesia, Brazil, Norway, Colombia et al, trying to see the history of content development in these countries. It was amazing that these oil producing countries already had well-developed content laws whereas Nigeria had a zero content law all because of the issue of policy. I had to introduce a legislation that would establish the Nigeria content, a legislation that would empower Nigerian workers and companies to do business in their own country, a legislation that would fuel the economy through a plough-back into the economy, of millions of dollars that are always going out of the country by giving out contracts to multi-national companies that cart them away. We initiated it in 2007 and when I came back in 2008, I re-introduced the bill which was passed into law in 2010 and on April 22 President Goodluck Jonathan had no choice but to sign the bill into law.
What has been the implementation status so far?
I am not impressed with the activities of the Nigerian Content Monitoring Board created by my committee. You don’t just sit and allow the oil producing companies do it the way they want. I have not seen a compliance team touring the companies to ensure compliance. There is supposed to be a compliance team and I have not seen this team in any market place that is established in any of the oil producing communities to enable any of the local contractors have access to what they have to offer. Such market place will include an e-platform accessible to the contractors from the oil producing areas wishing to bid for the contracts. So, every company has to go and register in this market place as a participant and could be informed through email it has won a contract. So, that way, a company owned by one Mr. Bull in Nembe for instance, can get a contract or provide certain services to Shell without going to Shell. He could through e-advert or publication access information he needs to do business with Shell. I have not seen this happening, nor is local employment going on. The laws propose that 95% of all employment in the company is supposed to be in the direction of a Nigerian content, while five percent is left for expatriates on international engagement because we are talking of a global business. Now, I have not seen this reviewed. Tenders are still on-going without preference to job qualification.
I was a very critical part in the nomination of Eze Nwapa as the pioneer Executive Secretary of the board. His credentials qualified him for the job because he had pioneered the local content issue while at the NNPC and he worked with me throughout the formation of this bill. Therefore, I believed he should be able to do better by going out to effect the rules than sit in the office and watch things go wrong. There is the issue of compromise. If the Nigeria content board allows itself to be compromised, I will put it as a prime case. All the multi-national companies fought me throughout the creation of this bill from 2005 – 2010 for five years. They do not want this law. The Oil Producing Companies (OPCs) do not see anything good about the local content law and would rather see to its demise or shoddy performance.
You are saying that the Nigerian companies under this content law are doing better now, how?
I see an inflow of about $50 billion in trading stock back in Nigeria in the next five years, which can only happen if the Nigerian content monitoring board sits up and does its job. There is a lot of complaint of ineffectiveness about the board. I believe the best way to address the issues is for the board to buckle up and face the challenges. I know Ernest Nwapa; he knows the job and understands what the Nigerian local content is all about but, he should resist any temptation of being compromised. The board needs the support of the Petroleum Ministry in terms of funding. The board is not doing enough to push the process to gather the momentum that it is expected of and this is only possible if the minister gives him the required resources and support. If the board must carry out its oversight functions it must not be allowed to lean on the OPCs. It needs money to acquire its helicopters for instance and other support facilities and not to rely on the same organizations it is expected to supervise in terms of oversight functions.
What value added will you give to the board?
Well, just like as I have said, the board has not rolled out its achievements to the Nigerian public; it owes this to the Nigerian public. It should come out, annually or quarterly, to roll out its achievements and say look, this is what we have been able to achieve within the two years and I am waiting for that like any other Nigerian. So, when that happens we will be able to evaluate whether they have done well or not but for now, we can’t.
By way of implementation so far, what value added can you ascribe to the content law so far?
There is a wind of positive change going on in spite of the huge lapses on ground. I come across many Nigerian companies who confess things are changing for the better; therefore I can say we are making progress. You see, I can see that a lot is being done and a lot of companies are happy. My happiness is business is changing for the better. Nigerian companies are no longer begging multi-national companies for sub-contracts. Rather, multi-national companies are begging Nigerian companies for technical partnership.
The European Union is said to be having issues with the law, what is your take on this?
Well, if they say that you know that is the issue we are battling with and they have the guts to look us in the face and say that we don’t know what we are talking about. I went to Norway and observed that the content law is a serious matter. If you supply something in Norway, even in the UK, you are required by law to set up a plant to manufacture components for assembly. The OPCs hide under the WTO pact to repatriate all the money made in this country. Nothing is left behind to promote local capacity and the transfer of technology even in principle. We insist all the proceeds must not be repatriated. That is the whole essence of leaving behind 10% of their liquid assets in Nigerian banks. I will tell you, the much we have been able to enforce this rule has helped to stimulate the liquidity position of Nigerian banks.
The OPCs are against the transfer of technology, which is why after 50 years of oil exploration in Nigeria there is no international company that has established a plant in this country for manufacturing or fabrication of parts for the Nigerian oil sector. Is that correct? We can’t continue like that. In Indonesia exports in the oil sector is a thriving business that boosts the economy. The International Bank has established a very big bank in Indonesia because the government made it a condition that you must domicile money generated in the country in its banks. Why can’t we have HSBC Nigeria Limited? I did not just help make a law that is only peculiar to Nigeria; I am pointing to countries where I have travelled to, where I saw the positive gains of their local content law and so why not here?
The House now has a committee to deal with this content law; how far has it gone with its work?
I have told my friend Hon. Asia Honourable who is the Chairman of the House Committee, on Nigerian Content that this is a very serious job given to him. This is a very serious committee. This committee is the engine room of the Nigerian content. This committee will form the nucleus of all actions being taken to promote the Nigerian content. I told him that the committee is a serious committee because the Nigerian Content Monitoring Board requires certain pressure to be able to meet its expectations. So, I can see the committee as a catalyst in the implementation of the Nigerian content.
How did you handle the clamour by certain trade unions for representation on the board?
The law and its board go beyond trade unionism especially since the corporate bodies involved are not represented. It is not an issue of trade unionism. It has to be as professional as possible. In the first place, I ensured that the Nigeria Society of Engineers has a representative on the board. I also ensured that the Nigeria Insurance Corporation has a representative on the board because a lot of insurance jobs come from the sector. We also ensured that certain associations and agencies have representation on the board. If the law is amended to accommodate organisations like PENGASSAN, so let it be.
How will the PIB rub off on the content law?
In the first place, I will tell you something, if there is no PIB law, there won’t be a meaningful content development in the petroleum sector. I say so because the issue of content development is tied to projects. You have content when there are new projects. Capital projects in the oil sector generate content extending to the emerging oil producing countries. So far I have a data suggesting we have lost up to $28 billion worth of oil field investments because of non-passage of the PIB. I have always said it would be difficult for the bill to be passed except the President exercises his political will to do so.
Why do you think the petroleum ministry and NNPC should not drive the PIB?
When President Olusegun Obasanjo set up the Oil and Gas Implementation Committee to drive the bill independent of the Ministry of Petroleum and the NNPC, the officials there were not happy. So neither the ministry nor the corporation had wanted that bill to be passed by an independent body that would recommend a restructuring process that would have affected their stranglehold on the status quo. I will tell you, neither the NNPC nor the Ministry of Petroleum Resources wants the bill passed as an autonomous bill without their interference.
Why are you insistent on the President driving the bill?
The PIB is to reform both the Ministry of Petroleum and NNPC, unfortunately President Goodluck Jonathan has allowed the Minister and NNPC to dictate the pace of a reformation expected to turn around the sector and empower the institution rather than the individuals that are in charge. And allowing that is not correct. We resisted all temptations from the NNPC from day one because we wanted a strong institution that is not mired in corruption and controversy. The rot in NNPC cannot be corrected by a PIB that is guided by the same organisation that does not want to be subjected to inspection through oversight. Its clamour is for autonomy. I think the President has made a fundamental mistake by not allowing an independent committee to look at the bill and instead has allowed the Minister of Petroleum to arrange a rehearsed PIB that leaves her with certain powers. An example will suffice: the first bill gave her powers to revoke an oil block and re-award it to a company she deems to be a good corporate citizen. What kind of clause is that? So we removed it and all similar clauses and that was the beginning of the crisis I had with both the Minister of Petroleum and the NNPC, halting the passage of the bill. We were approaching the passage clause by clause and just when we were four clauses to complete the work, the bill died.
I am using this medium to advise the President that the best way to give Nigerians a befitting oil industry act is to set up an independent committee of experts to look at the PIB and define the way forward for the sector.
The committee should report directly to the President. It is the President that will submit a bill to the National Assembly, not the Minister of Petroleum, not the NNPC. This bill is intended to modernise and commercialise the NNPC and the ministry. Our committee formed what we called the National Petroleum Commission. The National Petroleum Commission was to report directly to the President not any minister. Now, NNPC does not want the National Petroleum Commission, a statutory agency that was to regulate the industry with a director-general. They don’t want this regulatory agency whose model was taken from that of the National Communications Commission that has been very effective since inception.
Part of the mandate of a National Petroleum Commission was the management of our oil wells because our oil blocks are not well managed and that is why we are not getting any value for them. There are oil blocks that were allocated 50 years ago and till date are only 20 percent explored or developed. Rather than seek for the full development of these blocks, the beneficiaries are only keen on being allocated new blocks. The commission is expected to insist on full exploitation before coming for a new oil block So that one company does not have all of Nigeria’s oil blocks while selling back to government the old blocks.
Our PIB also brought into focus the problems of oil producing communities. The earlier PIB from the government ignored the welfare of the oil producing communities. We introduced this in bold relief, insisting on a partnership between the communities and the OPCs. The PIB that the late President Umaru Musa Yar’Adua administration sponsored failed to address the welfare of the oil producing communities, making it look like its business as usual. The PIB we left behind gave 10% equity of their oil blocks to them so that they became part and parcel of the oil field.
We also resolved the issues of national interest which recognised the need to use Nigeria’s oil to lubricate the entire economy. That is the idea of the Nigerian content law; that is the idea of the Petroleum Industry Bill. I believe that, everything necessary should be done by the President to ensure the passage of the PIB. And I say it and I will continue to say it, the President should pull out the issue of the PIB from the NNPC and the Ministry of Petroleum; these two institutions are meant to be reformed by the PIB. How can somebody who is supposed to be reformed reform itself? The NNPC does not want any interface, they want everything locked within their system and that is the problem I have. In all my eight years as the chairman of the Senate Committee on Petroleum Resources, I fought to ensure transparency in the industry; I visited NNPC Headquarters only twice. I am not doing any illicit contract in NNPC, I am not doing any business in NNPC, and I have no company doing any business in NNPC. That is my conquest.