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Civil Society Rejects Petroleum Industry Bill

*Says it is anti-people

A coalition of civil society groups on Wednesday roundly condemned and rejected the Petroleum Industry Bill (PIB) as proposed by the Senate and House of Representatives.

The Bill is one of the oldest and most contentious Bills since the country returned to democracy in 1999. It was introduced to the legislature in 2008 with the intention that it would help streamline the operations of the oil and gas industry in Nigeria.

Some of the provisions include the establishment of a more efficient national oil company, the adoption of improved transparency and accountability measures, as well as new and efficient regulatory institutions for the sector.

Addressing the media on the passage of the Bill, although with little differentials by both the Upper and Lower chambers, these are to be harmonized and passed to the Executive for assent, Ken Henshaw of the We People said the Bill has travelled a long way and that what was passed by both chambers was far from what the country or the host communities need.

According to him, “It is important to note that civil society organizations in the country, including those here today have historically engaged the PIB process in efforts to ensure that the final outcome reflects the popular thinking of Nigerians, not just on the economy of oil and gas, but also on the outlook of the country beyond oil. Indeed, we have engaged communities and the Nationally Assembly, presented Memos for consideration and produced detailed reports recommending adjustments to the different drafts that have been considered. It is pertinent to note that we did same in this recent effort. Unfortunately, it is regretful that our suggestions which emanate from a long history of work on the sector, engagements with stakeholders including oil producing communities, and established international best practices, have not been taken seriously in the Bills passed by both chambers of the National Assembly.”

Among the issues the CSOs disagreed with in the Bill are on Host Communities. Henshaw noted that, “The PIB makes elaborate provisions for the establishment and management of a petroleum host community development trust as a framework for the transfer of development benefits to petroleum host communities. However, the Bill specifically makes the incorporation of this trust the exclusive responsibility of the oil companies operating in the area, and gives oil companies overriding powers to decide who become members of the trust and other governance structures. Without doubt, the provisions for the establishment and governance of the Host Communities Trust downgrades the participation of communities, while overtly promoting the role of oil companies. The PIB gives the companies power to nominate all members of the Board of Trustees with only an obligation to ‘consult’ host communities.”

This power according to them was wrong and open to flagrant abuse by oil companies. The CSOs also faulted what they described as the “paltry 3 of 5 percent earmarked for host communities, we consider this provision in the Bill a clear indication that the PIB intends to continue the historical treatment of host communities as oil colonies and sacrifice zones under the control of profiteering companies.” They said this was unacceptable and a continuation of the abuse of the communities that has gone on for years.

It said the government was treated host communities as people who cannot take charge of their affairs by making them not have a say in what concerns their people.

The CSOs which consists of We the People, Corporate Accountability and Public Participation Africa (CAPPA), Home of Mother Earth Foundation (HOMEF) and Environment Rights Action/Friends of the Earth Nigeria (ERA/FoEN) deplored the idea of placing the responsibility for the protection of pipeline and other oil infrastructures on host communities. They said this was putting the communities in charge of what they have no requisite power to do.

According to them, “Oil theft is the major reason for puncturing oil pipelines. This illicit activity is carried out mainly by armed cartels (and not poor community people), suspected to be working in close collaboration with oil company officials and the military stationed in those communities to protect oil installations. Placing the responsibility of protecting oil installations from armed gangs on unarmed communities is simply an unrealistic expectation.”

This it said was done because the communities are being blamed for what is clearly beyond their power.


On Gas Flaring


Turning to the issue of gas flaring, the CSOs say in making gas flaring illegal, the however creates a series of exemptions which basically ensures that the same gas flare regime continues literarily unchecked. The Bill identifies instances where gas flaring may be permitted. These include (a) in the case of an emergency; (b) pursuant to an exemption granted by the Commission; or (c) as an acceptable safety practice under established regulations. The Bill goes further to clarify that the Authority or Commission may grant a permit to a Licensee or Lessee to allow the flaring or venting of natural gas for a specific period –

(a)    where it is required for facility start-up; or

(b)   for strategic operational reasons, including testing.


It pointed out that although gas flaring in the country had been illegal since 1984 but this has not stopped the practice even with t Federal High Court pronouncement of it as a violation of the constitutional right to life and dignity of the people.

They regret that rather than obey this law and pronouncement, the deadline continues to be shifted with the latest been from 2020 to 2030 and called for a clause “which affirms the outlawing of gas flaring and requires that offenders pay the full economic cost of the flared gas as well as the related health and environmental costs. It should ensure that gas flare fines are invested in the host communities’ funds and an Environmental Remediation Fund.”

No to Frontier Basins

The CSOs faulted what they call “the most contentious issue in PIB” which they see as the proposal for the utilization 30% of NNPC profits for oil exploration in so-called frontier basins mostly located outside the Niger Delta. They said while the PIB expects the NNPC to become a profit-making enterprise, it already dedicates a hefty chunk of its expected profit into the search for additional crude oil. It is interesting to note that Nigeria has for decades invested heavily and futilely in the search for crude oil in the same basins. Indeed, it is reported that as much as $3bilion may have been spent in this effort. The fact that public resources have to be spent in this effort is indicative of the fact that oil companies around the world do not consider this a worthwhile investment. Rather than spend so much of the expected profits of NNPC on exploring for oil in unlikely places, we propose that the government considers investing the same percentage of NNPC profits in generating clean and affordable energy for Nigerians.

Finally, they regretted that the PIB ignored entirely the issue of climate change thus still hammering on dependence on fossils at a time the world was moving away from crude oil.



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