Advocacy Memo to the Senate on PIB,By ANEEJ



ADVOCACY MEMO
TO: THE LEADERSHIP OF THE SENATE
NATIONAL ASSEMBLY COMPLEX, ABUJA.
BY: THE AFRICA NETWORK FOR ENVIRONEMNT AND ECONOMIC JUSTICE (ANEEJ)
DATE: DECEMBER 13, 2012
1. BACKGROUND
The Africa network for Environment and Economic Justice (ANEEJ), has been working closely with other stakeholders to make sure the Petroleum Industry Bill sees the light of the day, since the introduction of the bill to the national assembly by late President Umaru Musa Yar’Adua administration in 2008, the bill has suffered so many setbacks.
We know that the essence of the bill is to reform the structural, regulatory and commercial / fiscal framework of the petroleum industry in order to halt the mismanagement, inefficiency and lack of transparency in the industry.
ANEEJ and other civil society organizations (CSOs) decided to work for the passage of the bill because of the belief that the PIB would present a significant window of opportunity to further deepen reforms that could redress decades of secretive and ineffective management of the oil and gas sector. For this and other reasons, we are in full support of the bill and we want it passed as soon as possible.
We are aware of the diverse interests on the bill but we are encouraged by the many voices calling for its immediate passage this time around. A lot is expected of Civil Society organizations to amplify the voices of the poor, and marginalized. We believe that this advocacy visit will help to give the needed push to the passage of the Petroleum Industry Bill (PIB).
2. ADVOCACY ISSUES
• ESTABLISHMENT OF PETROLEUM HOST COMMUNITY FUND; SECTIONS 116, 117, 118.
Section 116 establishes a fund to be known as the Petroleum Host Community Fund {PHC Fund} which is to be used for the development of the economic and social infrastructure of the communities within the oil producing areas vide Section 117. This is good and we commend the provision in this section.
However, Section 118(5) went further to state that where an act of vandalism, sabotage or other civil unrest occurs that causes damage to any petroleum facilities within a host community, the cost of repair of such facility shall be paid from PHC fund entitlement unless it is established that no member of the community is responsible. We see this as an attempt to criminalize oil producing host communities and a potential source of crisis/conflict.
This subsection will obviously defeat the intentions of the PHC because the act of a few vandals being used as an excuse to derail the development of a whole community cannot be deemed fair in any clime. Also, by stating that acts of vandalism would be repaired from the PHC opens a wide door for political manipulation. Moreover, this acts mentioned in section 118(5) are criminal acts which should be investigated and the perpetrators personally held liable for.
• EXEMPTION OF THE NATIONAL OIL COMPANY FROM APPLICATION OF CERTAIN EXISTING LAWS – THE FISCAL RESPONSIBILITY ACT 2007 AND THE PUBLIC PROCUREMENT ACT 2007.
Section 149 states that the National Oil Company (NOC) shall not be subject to FRA 2007 and PPA 2007. This seems to be an effort to legalise shady procurement practices in the NOC. We think this is against the spirit of transparency and accountability which the bill seeks to achieve. We recommend that this provision should by expunged or replaced with “the National Oil Company (NOC) shall subject to Fiscal Responsibility Act and Public Procurement Act 2007.
• ON GAS FLARING; SECTIONS 275-280
Section 275 provides for zero tolerance for gas flaring after a ‘flare out’ date that will be prescribed by the Minister. The good intentions of this provision will be defeated by its unrealistic undertone. Nigeria has a long history of unobserved flare out dates from the Associated Gas Re injection Act No 99 of 1979 which outlaws gas flaring by January 1,1984, to the gas flaring prohibition and punishment bill of 2009 which outlawed gas flaring by 31st December 2010.
It is necessary that a compulsory and immediate structural adjustment should be made to ensure the necessary infrastructures are put in place before a decision for a flare out date can be objectively decided.
• ON DUTY TO RESTORE THE ENVIRONMENT; SECTION 293
Whereas Section 293 sought to hold operators in the sector responsible for the restoration of damages done to the environment, Section 293 (2) gives them an open window to shy away from this responsibility because sabotage of oil facilities and tampering of pipeline and storage facilities which this subsection exempts them from are all incidentals to this responsibility . The responsibility to safeguard the environment and the safety of the masses cannot be sacrificed for the criminal acts of a few people.
Section 293(3) which makes the agency the only and ultimate court on dispute as to the cause of an act that has resulted in harm to the environment is an overhaul of laid down judicial process. With respect, the constitution of the Agency does not make it a competent court for the above subject matter.
Section 293(4) which laid the cost of restoration and remediation on the LGA and the State government which the act occurred is gross injustice because not only will they suffer the immediate and future effects of the environmental damage, they will at the same time be made to pay for the damages from their purse.
• DISCRETIONARY POWERS VESTED ON THE PETROLEUM MINISTER
We take exceptions to the discretionary powers conferred on the President and the Minister of Petroleum on Oil Licensing and other issues. Such latitude goes against the grains of transparency and accountability the new bill seeks to serve.
Section 5 – the discretionary powers vested in the Minister of Petroleum Resources under this section is too wide and it is subject to abuse. There is need to make the powers of the Minister under the section subject to the scrutiny of other national institutions such as National Assembly, the Nigeria Extractive and Transparency Initiative (NEITI), Media and Civil Society Organisations to enhance checks and balances in the operation of the petroleum sector, which is a very sensitive sector to the Nigerian economy. To safeguard one or more of the objectives of the PIB as stated in the proposed Act (particularly as expressed in s. 1 (g) of the PIB), it is necessary to subject the supervisory powers of the Minister to the overriding powers of the National Assembly. To this end, there is need for the Minister to give periodic report of activities in the industry to the National Assembly where all Nigerians are represented for review in order to constantly meet the general objectives of the Act.
Section 6 – Similar to s. 5 above, s. 6 (1) (a) gives too much power to the Minister of Petroleum. It might be an uphill task to get a single individual with the capacity to efficiently carry out all the responsibilities assigned to the Minister of Petroleum. The section empowers the Minister to formulate policies, determine and monitor the general policy for the petroleum industry without recourse to any other authority. This carte blanche provision can easily be abused and open for inefficiency. It can lead to a total defeat of the objects of the PIB where the nation is confronted with an insensitive Petroleum Minister in the future. Besides, the fact that s. 6 (1) (c) expects the petroleum Minister to only “report developments in the petroleum Ministry to the Federal Executive Council” is not enough to promote transparency. The Minister is a part of the Federal Executive Council (FEC). It is like giving the report to himself or herself. The Petroleum Minister should be made to report to the National Assembly, besides reporting to FEC. This will give room for independent assessment of his/her stewardship. The policy formulated by the Minister under s. 6 (1) (a) should also be made subject to the scrutiny (approval) of the National Assembly before the Minister carries out the implementation of such policies.
Section 6 – Under s. 6 (1) (f), amongst other provisions therein, the Petroleum Minister is given the powers to exclusively negotiate international petroleum treaties and agreements with other sovereign nations, international organisations and other bodies and execute same on behalf of the nation. This is unsafe for the nation. The section assumes that the Petroleum Minister would always be a person who knows it all and has the know-how and capacity to make accurate judgments on petroleum issues on behalf of the nation. This cannot always be so, particularly an era of democracy where Ministerial appointments are influenced by political considerations and not expertise or technocracy. There is need for the Minister to consult with a team of experts before entering into such sensitive negotiations on behalf of the nation. The provision in s. 6 (2) does not cure this defect because the powers of the Minister to delegate under that subsection is discretionary. The Minister is not liable if he/she fails to exercise such discretion in the present circumstance.
• Speedy Passage
Given the fate suffered by the PIB in the immediate past legislative dispensation, it is only normal for us to advocate for the speedy passage. We are building synergy among stakeholders including civil society, labour, students, private sector, and international development agencies to step up their support for the passage of the PIB, including increased sensitization of all sectors of the society as to the importance and impact of the PIB on development and standard of living in Nigeria.
We urge the leadership of the National Assembly, in the interest of national unity, to work to ensure the speedy passage of the bill, taken into consideration, input from stakeholders. We hear that the sum of N520,540,876 is in the 2013 budget for the implementation of PIB. Even if there are no details as to the breakdown of the fund, we take that to mean, the bill will be passed in good time next year.

For further information, please contact:
ANEEJ Secretariat,
123 First East Circular Road,
Benin City, Edo State.
[email protected], [email protected]
052-840554, 08039718335

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