“Your brother’s pocket cannot keep
your wealth”. African Proverb
1. What is the P.I.B?
The Petroleum Industry Bill (P.I.B) is a piece of legislation
initially intended to address endemic structural, policy and managerial issues
in the Nigerian oil and gas sector. Its goals were to enhance the value of the
asset for the Nigerian people by plugging loopholes in policies and management
and improving transparency and efficiency of the sector. It was an attempt to
redress observed weaknesses and abuses by operators and stakeholders, eliminate
corruption and restructure the industry to make it more responsive to social
and economic needs of Nigerians and foreign investors with basic key concerns
such as equity, responsibility and sustainability targets.
The P.I.B as originally drafted has gone through
massive tampering, alterations, amendments, duplications, disputes over
authenticity, delays and damaging debates. It is now singularly the most
divisive legislation, pitching mostly Northern legislators who feel it
represents a declaration of economic war on their poorer region, and their colleagues
from mostly the south-south who feel it represents a fairly packaged deal which
is non-negotiable.
2. Why
is the bill so controversial?
There are many provisions in it many interests
dislike. Foreign oil companies and even foreign nations see it as an unwelcome
intrusion into their traditional monopoly over the industry and an assault on
their stranglehold over production and profits. The NNPC see it as an effort to force
it to be more open and transparent, a virtual death sentence for an institution
which thrives on lack of openness and accountability. Northern legislators see
it as further enriching a zone which already takes more than it is entitled to,
and impoverishing their region. South–south legislators think it makes too
little provision for more. Government thinks the legislation is poorly
understood by Nigerians, and has become unduly politicized.
3. Are
there provisions in it anyone likes?
The Jonathan administration will want the bill passed
as it is. In particular, it does not want provisions for the 10% host community
fund reduced or removed, and it wants the huge powers conferred on the office
of the Minister of Petroleum Resources to remain. South-south legislators want
the provision for host community fund retained, and it possible, increased.
They want the bill to be passed as presented, unless changes in it give the
region more of the proceeds from oil and gas. Northern legislators like the
provision for exploration funds, but want it to be radically improved.
4. Are
these issues non-negotiable?
Nothing is non-negotiable in politics, but many
positions have hardened over time. A lot of regional and parochial interests have
been whipped up in support of various positions. Basically the battlelines
appear to be drawn around northern and south-south legislators. Other
legislators are intensely interested as well, but there are less resources at
stake for their own interests than those from these two regions.
5. Why would the North fight if its people
have majority of oil blocs?
Ownership of oil blocs by citizens broken down by
regions is one of the weapons thrown into the fray. Nigerians from all parts of
the country own oil blocs, as they should, and it has been proved that northerners
own anything near the 83% mentioned on the floor of the Senate. In any case,
ownership of oil blocs by northerners does not deprive its citizens of their
rights to equity in the sharing of revenues which accrue from oil and gas.
6. Why would anyone fight against the 10%
provision for host communities?
Ordinarily, there should be no reason to resist
allocating more funds to areas where petroleum resources are extracted from.
Commonsense, good politics and equity demand that areas from where resources
emanate from should benefit from God’s bounties, which means they get more than
communities further away. There are also environmental and other consequences
which additional funds should mitigate. The grouse with the host community fund
is that it is an addition to 13% derivation, funding of NDDC, Ministry for
Niger Delta, cost of the amnesty programme, statutory allocations and other
benefits derived from the operations of the industry which go to oil producing
states. The combined effect of all these funds should make the region the most
affluent, and Nigerians from the Niger Delta among the most well-off. This is
not the case. Funds are grossly abused and diverted by governments, and majority
of citizens in the region are as poor as the poorest peasant from Jigawa state.
“Communities” tend to become a small circle of elites who retain huge resources
using strong arm tactics of all types, and there is no guarantee that morefunding
“host communities” will translate into better living conditions for the
poor in the region. 10% is also a huge chunk of the resources that could be
shared among all Nigerians to address poverty. The host community fund does not
address the issue of equity: it complicates it.
7. Can
the resistance against host community fund be sustained?
It is doubtful. In the end, it may be negotiated
against raising the funds for frontier exploration, but the debate over it
would have caused much damage. Its supporters see any resistance against it as
arrogant posturing from a parasitic part of the nation which has no moral or
any other right to deprive the community from enjoying the full benefits of
“its” resources. Its opponents see it as increasing evidence of structural
inequity which characterizes the Nigerian federal system. Along with the
removal of the onshore-offshore dichotomy, some of the provisions of the P.I.B
are seen by other parts of the country, particularly the north, as a
short-sighted and ultimately damaging scramble for the nation’s resources by one
section.
8. Why
is the frontier exploration fund important?
Northern legislators believe that with sufficient
funding, oil and gas which they believe abound in the north will soon be
exploited. This will reduce the region’s dependence on petroleum revenue from
the south-south, and improve the nation’s overall economic assets. They think the
current provisions are inadequate, but they may negotiate improvements of the
fund by making concessions in other areas of the P.I.B. They will continue to
insist that oil exploration in the south-south was historically funded from
resources from other parts of the nation; and the rest of Nigeria is entitled
to explore and exploit “their” own resources using revenue from petroleum.
9. Does
the North need petroleum?
Everyone needs petroleum resources if they can get it,
but it does not come without huge a price. The North has immeasurable assets in
solid mineral resources,huge population and very rich agricultural land. This is what it
should try to develop. In the meantime, it has a right to demand that proceeds
from petroleum resources be used to exploit oil and gas in the region.
10. What
will be the fate of the P.I.B?
Everyone will get something out of it. The bill has to
be passed in one form or the other,because it is important to provide a new,
comprehensive framework for managing and sharing the nation’s petroleum
resources. The debates and quarrels around it, however, expose the weaknesses
of a Nigerian state which is yet to come to terms with the basics around the
nature of its federal arrangement.
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