Mr Odein Ajumogobia, Chairman, Expert Advisory Panel, Nigeria Natural Resource Charter (NNRC), while decrying delay in passage of the Petroleum Industry Bill (PIB) has said a bad law is better as no law at all.
TheNewsGuru.com (TNG) reports Ajumogobia, former Minister of State, Petroleum Resources stated this at the NNRC launch of 2019 Benchmark Exercise Report (BER) in Abuja on Friday.
He said the absence of laws, especially the Petroleum Industry Governance Bill (PIGB) has hampered the full maximisation of Nigeria’s oil and gas resources.
According to him, Nigeria needs better oil and gas management and only a legal framework can help achieve that.
“What we launched today was the 2019 benchmark report. We have this biannually, and it is a valuable piece of information based on a lot of research in the industry that recommends best practice.
“Policy makers will benefit from looking at the report because presently, we have a law that confers enormous power on the minister of petroleum to do whatever.
“A bad law could be worse than having this present law we have. The present law we have gives the Minister the power to do everything we ask him to do.
“Why we want the Petroleum Industry Bill is to have a law that is predictable. If you have a law that allows a man to do whatever he likes, investors will not be pleased with that because they can’t predict.
“We might have a very good man today who does everything that is right, then you have a bad man who does everything that is wrong. Investors will like to look at the law, and not at the man. That is why PIB is important”.
TNG earlier reported the Speaker of the House of Representatives, Femi Gbajabiamila as saying at the NNRC launch of the 2019 BER that the House was set to pass the PIB by mid 2020.
The Speaker, represented by the Deputy Chairman, House Committee on Niger Delta Affairs, Henry Nwawuba, said the bill would have been passed during the 8th Assembly, but for some disagreements between the legislature and the executive.
“The PIB is supposed to be a single piece of legislation, but to make it easier to pass through the rigours of the bill passage circle we have broken it into four bills.
“So, we are doing the governance bill and we have started the administrative framework. Then, we will do the administration bill; we will take all of the other three at the same time.
“All of it had to do with the petroleum operation, how much power the minister has, the revenue sharing formula and all of that, so it is just a case of crossing the T’s and dotting the I’s .
“We have set the timeline to pass it by the middle of this year, so in the next four to five months we should get it passed if we meet our own timeline.
“Of course you know that it is a bicameral legislature, so whatever we do in the House of Reps must be replicated in the Senate and then we meet to concur, but we are nonetheless confident that we will meet the timeline,’’ he said.
Gbajabiamila said that the benefit of the PIB to Nigeria was like air to humans.
He said that the bill would basically open up the entire industry to the required investment needed, so the country could benefit maximally.
He explained that with the global competition of energy, it was important that Nigeria had a good environment for people to show interest in participating in her oil and gas industry.
“As it is today, Nigeria has no law; we have pieces of legislation, but very old. We do not have a PIB law like other climes.
“So, this is critical, because it was what is needed to harness all the potentials and articulate them in one place, to get the best.
“The power of lawmaking does not rest in the executive, nor in the hands of the President, so even if the President does not sign a bill, we still have our ways of getting it passed if we feel it is a critical piece of legislation.
“We are determined to pass this bill that is what is most important, we will work with the presidency and the executive but if push comes to shove we can veto it to pass the bill,’’ he said.
Ms Tengi George-Ikoli, NNRC Program Coordinator, said that identified gaps had been well-articulated in the 2019 BER and ways forward.
George-Ikoli said the report was based on 12 precepts providing a focal point for public engagement and civic action while acting as a tool for holding government accountable for its decisions.
She said that the report highlighted those areas where there had not been any form of improvement.
”Notably precepts five and six and the other two precepts that will be affected when the PIB is passed; precepts three and four.
”The four key benchmarks Nigeria needed to attain and focus on as it targeted reforms were the Natural Resource Charter (NRC)’s precepts three, four, five and six consecutively which asked pivotal questions.
“It ask questions: on whether government encourages efficient exploration production operations, and allocate rights transparently.
”Does the current fiscal framework enable the government realise the full value of its resources consistent with attracting necessary investment, and should be robust to changing circumstances?
“Does government pursue opportunities for local benefits and account for, mitigate, and offset the environmental and social costs of resource extraction projects?
”Is the national oil company accountable, with well-defined mandates and an objective of commercial efficiency?,” she said.
George-Ikoli said that if all these questions were adequately tackled, Nigeria would have the potential to compete globally and stand a chance of moving some of its 187 abjectly poor citizens out of poverty.
TNG reports NNRC is a non-profit policy institute, and BER is its biennial findings from assessment of Nigeria’s petroleum sector, with its recent report the 2019 BER.
The 2019 BER report recommended that the Federal Government should put in place legal framework to boost investment in the oil and gas sector to help Nigeria maximise profit for the benefit of all citizens.
The report which identified petroleum sector progress and areas for improvements, was aimed at empowering stakeholders to advocate for best practices within their various spheres of work in the sector.
It said that NNRC through BER had kept track of 12 specific areas or precepts of natural resource governance in which Nigeria needed to improve to successfully translate resource wealth to sustainable development to its citizens.
“The report revealed that Nigeria realised N83 trillion in the oil sector in the past 37 years and yet 87 million Nigerians are still in poverty.
“Findings showed that, impact of oil and gas between the local communities from 2017 to 2019 has some notable decline in terms of strategy by the government to transfer benefits and to ensure that the impact of oil extraction on local community is minimised.
“The research shows that discretionary powers are still retained by the Minister of Petroleum over the licensing process while there is no pre licensing Environmental Impact Assessments (EIAs), since there is no PIGB.
“It also shows that Nigeria National Petroleum Corporation (NNPC) audit report is not readily available, refinery losses continue and NNPC lacks focus while there are conflicts of interest due to absence of the PIGB.’’
The report showed that costly non-essential investment incentives by government had not been totally minimised for oil and gas resulting in less revenue for government due to flare gas tax credits.
It also revealed that Nigeria had not improved in the area of transparency and accountability since 2017.
It added that every Nigerian could enjoy quality health, education and overall quality of life if Nigeria was graded green in all 12 focus areas.