Group Faults Senate on Petroleum Industry Governance Bill


By James Emejo in Abuja 

A body, the Social Development Integrated Centre (Social Action) has raised concerns that the Petroleum Industry Governance Bill (PIGB) as recently passed by the Senate is “seriously flawed” having failed to provide for health, safety and environment (HSE) issues.

It said the bill failed to make provision to end gas flaring and  lacked independence for regulators including a glaring neglect of host communities’ interest in the proposed new institutions.

The Director of the center, Dr. Isaac Asume Osuoka said during the launch of a new publication titled; ‘The Petroleum Industry Governance Bill (PIGB), 2017: Implications for the Environment and Local Communities’ that the provisions of the PIGB as passed by the upper chamber do not demonstrate an understanding of the need to guarantee energy access as a right of citizens.

According to him, the powers and functions of new institutions like the Petroleum Regulatory Commission created under the Bill do not reflect current global best practices.

“Our conclusion is that the version of the PIGB as passed by the Senate is an unconscionable attempt to legalise the appropriation of national oil and gas assets to some powerful private interests,” he said.

He also said the ill-advised separation of a hitherto comprehensive bill into bits by the Senate created a sufficient setback to a holistic and more effective effort to revamp of the oil sector for the benefit of Nigerians.

In a new publication titled; ‘the Petroleum Industry Governance Bill (PIGB), 2017: Implications for the Environment and Local Communities’, he said it was strange that the Senate was swift to create new institutions in the industry including the National Oil Company, the Nigeria Petroleum Assets Management Company, the National Petroleum Regulatory Commission, the Ministry of Petroleum Incorporated and the Petroleum Equalisation Fund among others without first creating the enabling environment on which the entities would thrive.

He said: “The vacuum of the non-effective and clear-cut provision (s) for Health, Safety and Environment in the bill is disturbing and lamentable. In point of fact, the bill does not have any part or section dealing with environmental protection. In its current form, the PIGB cedes virtually all powers on environmental regulation from the Ministry of Environment to the New Petroleum Regulatory Commission.

“Sadly, the Commission is saddled with functions that are conflicting with each other. For example, Section 5(f) mandates the Commission to “promote an  enabling  environment for investments  in  the petroleum industry” and in doing so ‘ensure that regulations are fair and balanced for all classes of lessees, licensees, permit holders, consumers and other stakeholders’ (as we find in Section 5(g)). Now the question is, how will a commission, charged with the task of promoting conditions for maximum profitability of investments in one stroke, turn round in another stroke to rigorously enforce environmental regulations against the same commercial entities?”

Continuing, he said: “The original PIB had made it clear that the Ministry of Environment shall have overriding authority on environmental matters. This neutrality and independence was necessary to appropriately enforce environmental regulations. Worryingly, in the PIGB, all provisions giving the Federal Ministry of Environment powers on environmental issues were struck out.

“By so doing, the Senate is causing the country to lose out on the opportunity of a new legislation to correct the lapses in our regulation of environmental issues in the Petroleum Sector. The logical consequence of this line of action is the exacerbation of environmental crisis and conflicts in Nigeria. We call on the National Assembly to promptly return to the 2015 version of the PIB as regards to the environment as it has clear and effective environmental protection provisions and regulations for the petroleum industry.”

He added: “On the creation of governance and other Institutions by the bill, several ambiguities abound and surround many of these institutions, raising questions as to their purpose and intents.

“For example, the Petroleum Equalisation Fund (which is to take over assets and liabilities of the existing Petroleum Equalisation Fund), would be funded primarily by way of a fuel levy in respect of all fuel sold and distributed within the Federation. This shall be charged subject to the approval of the Minister. Monies in the Fund are to be given to petroleum marketers for any losses in maintaining uniform price for petroleum products across Nigeria. See Sections 36, 37 and 56 of the enacted bill.

“The provision for a Petroleum Equalisation Fund does not provide a mechanism for dealing with the massive corruption that has attended the management of such funds in the past. It is our view that the Nigerian government should ensure fair pricing of petroleum products to protect national energy security, including guarantying access to energy services. However, this should be done with the understanding of the need to eradicate structures that protects corrupt practices. In many ways, the PIGB may actually undermine existing legal regimes intended to tackle corruption in the petroleum industry in Nigeria.”