NNRC and MiTEi Advocate for the Assent to the Petroleum Industry Governance Bill (PIGB)

The Nigeria Natural Resource Charter (NNRC) in conjunction with the Media Initiative on Transparency in Extractive Industry (MITEI) organised a Roundtable on the Petroleum Industry Governance Bill (PIGB) themed: ‘Understanding the Petroleum Sector Reforms Proposed by the PIGB on March 8, 2018, in Abuja. The event was organised to explore the ‘critical reforms proposed by the PIGB’ and ‘the transition process in the post-PIGB’ era. The theme of the roundtable was explored within the context of the recently published 2017 Benchmarking Exercise Report of the NNRC which assesses Nigeria’s petroleum resource management against 12 economic indices which promote effective resource management for the benefits of citizens. It was highlighted at the dialogue that Nigeria’s scores against the indices may have been more positive if the PIGB has been passed and implemented instead of the ‘amber’ and ‘red’ it scored against Precepts 1 and 6 which assess ‘Strategy, Legal Framework and Institutions’ and ‘State Owned Enterprises’. Three major presentations pertaining to the PIGB and other key interjections were made at the Roundtable. The Roundtable attracted relevant stakeholders in Nigeria’s oil and gas industry including civil society organisations (CSOs), the media, the legislature, Ministries, Departments and Agencies of government such as the Ministry of Petroleum Resources (MoPR), Petroleum Products Pricing Regulatory Agency (PPPRA), Department of Petroleum Resources (DPR), and Nigeria Extractive Industries Transparency Initiative (NEITI), and the Academia amongst others. In her welcome address, the Programme Coordinator of the NNRC, Ms, Tengi George-Ikoli gave a comprehensive explanation of the objectives of the Roundtable. Pointing out that it was planned to improve understanding of the components of the PIGB, and how it would help reposition Nigeria’s oil industry when it becomes a law in the country. George-Ikoli, commended the National Assembly (NASS) for passing the PIGB but noted that its harminsation and assent into law by President Muhammadu Buhari, was critical hence the roundtable to develop strategies to push for an accomplishment of this. She gave a historical background to the Petroleum Industry Bill (PIB) – the omnibus bill from which the PIGB and three others emerged, as well as the thorny legislative path it had travelled before now. According to her, the PIGB would be expected to create a properly governed oil industry for Nigeria which had lost about $235 billion in the years she hadn’t passed the PIB into law. Nigeria, she added now has the need more than any other time to improve the laws governing her oil and gas industry in wake of increasing competition around her. The National Coordinator of MITEI, Mr. Collins Olayinka, stated that members of MITEI took the stand to move beyond being passive reporters of Nigeria’s extractive industry to active reporters. Olayinka, noted that the passage of the PIGB would come with a lot of challenges and that MITEI would be there to help journalists measure up in their reportage of the industry. He commended the partnership between NNRC and MITEI, and stated his expectation of more opportunities in future. The keynote presentation of the day was by Prof. Wumi Iledare, titled, The Petroleum Industry Governance Bill: Critical Reforms Issues and Resolutions. According to Prof. Iledare, a professor of Petroleum Economics & Policy Research, Centre for Petroleum Energy Economics & Law, University of Port Harcourt, warned that the delay in the passage of the PIB has become devastating to the country’s economy. Prof. Iledare said the absence of a good governance law regulating the petroleum industry operations has resulted in declining revenues, oil & gas production and national reserves, deferment of core investments of diversion of new investments to other destinations due to uncertainty in legal, regulatory, fiscal and commercial frameworks, declining competitiveness and infrastructure deficits. Other issues include loss of jobs as a result of gaps in governance structures, systems and people due to inadequate delivery capacity, lack of transparency, increased theft and sabotage as well as absence of policies to promote sustainability, open market, indigenous participation and equitable revenue distribution. He said the passage of the PIGB into law would establish a clear, separate, transparent and accountable regime between policy and supervision, regulation and commercial operations as against the current confusion that characterize operations in the industry. The presentation highlighted that Nigeria has continued to experience uncertainty in her oil industry since 2000 that it had failed to pass the PIB. He noted that all that the country had rejected in the now rested PIB have been accepted and passed by other jurisdictions like Ghana. He also stated that it took Brazil just about six months to pass a new legislation for its oil industry. The current law used by Nigeria to run her oil industry was enacted in 1969 while the country fought a Civil War with secessionist eastern part of the country. He said the law was still applicable in Nigeria’s oil industry in 2018, adding that the foundation of the problem in the country’s oil industry was the lack of good governance. Mr. Gbite Adeniji who represented the representative of the Minister of State for Petroleum Resources, stated in his opening remarks that there will be very little areas of contention in the PIGB. He noted government’s delight to see the transformation in the industry’s governance structure, adding that the two policies created by it in the sector – petroleum and gas policies, would require clear-cut institutions and processes to be implemented for the good of the country. Adeniji, said the government would like to have the PIGB sorted out before June and then look forward to the other parts of the larger PIB which have accordingly moved beyond second reading on the floors of the National Assembly. He commended the media and other partners for showing keen interest in the industry, and emphasised the need for an independent and strong regulator for the oil industry of the country. Dr. Dauda Garuba who represented the Executive Secretary of Nigeria Extractive Industry Transparency Initiative (NEITI) stated in his remarks that stakeholders in Nigeria’s extractive industries have come to recognise that the country initiate credible changes in its oil and gas governance. He stated that the government’s plan to diversify the economy will need oil money to be done, adding that the current legislative status of the PIGB was the farthest and best record the country has in its long years of trying to get the bill through legislation. He pointed out that with the 2019 general elections quite; it offers Nigerians the opportunity to demand with their votes, for the completion of extant process on the PIGB quickly. In his remarks, Mr. Henry Adigun, Team Leader, Facility for Oil Sector Transparency (FOSTER) noted that the passage of the PIGB was vital to the survival of Nigeria’s oil and gas industry. He warned that the continued delay in the passage of the PIB accounted for the negative ‘no sufficient progress’ reported in two of the 12 precepts covered under the 2017 recent Benchmarking Exercise Report done by the NNRC, including legal and regulatory frameworks in the petroleum industry. Mr. Adigun expressed confidence the collaboration between NNRC and MITEI would create the awareness necessary to persuade those in positions of authority to act positively towards the speedy passage of the Bill. Dr. Nuhu Abeeb who represented the Director of the Department for Petroleum Resources (DPR) stated that governance has been a real issue in Nigeria’s extractive industry. Noting that the world was moving at a supersonic speed away from using fossil fuel to energise its economy and that Nigeria should not be left behind, hence, the need to reform the energy industry of the country. He also highlighted the fast pace of the global shift to energy efficient sources and the need for Nigeria to key into this as soon as possible. In his own remarks, the National Coordinator of Publish What You Pay (PWYP), Mr. Peter Enwelo warned the country and stakeholders to stay up and at alert on the processes of getting the PIGB to become a law in the country. He informed that the harmonized copy of the bill has not got to the president and that stakeholders should continue to push to ensure the bill gets to the president and assented to as soon as possible. Interjecting, Mr. Joseph Amenaghewa of the Open Society Initiative for West Africa (OSIWA), calls for the need to continue to sensitize the country and Nigerians in general on what the PIGB means for it and them. On what the National Assembly is doing to ensure the Bill eventually becomes law, Dr. Francis Adigwe, Consultant to the NASS Committees on Petroleum Resources (Upstream), stated that the harmonisation process for the PIGB had begun and as such there was no more room for input to be made on it. He rather asked that efforts should be channelled towards an effective implementation of the PIGB when it becomes a law. The Roundtable highlighted the fact that the PIGB seeks to empower institutions and not individuals, take away bad governance which leads to inefficiency, ineffectiveness, rent seeking tendencies, inequity, secrecy and corruption in the system. There was an agreement that it was wrong for the government to continue to spend a lot of money investing in the oil industry but gets very little contributions from the industry to Nigeria’s GDP. During the question and answers session on the presentation, Prof. Iledare highlighted that the delay in passing the PIB has resulted in a lot of leakages, theft, sabotage, adding that prioritising governance was key to getting it right in the industry. He pointed out that the core objectives of the PIGB includes establishment of effective and efficient governing institutions; clear and separate roles for institutions and actors; commercially oriented and profit driven companies; transparent and accountable practices, as well as conducive business environment. The three of the controls elements in the PIGB, the presentation listed include institutional mandates, institutional control, and industry structure. For the building blocks of the PIGB, it listed them to include the Petroleum Regulatory Commission (PRC), the Minister, National Oil Company (NOC) and National Petroleum Asset Management Company (NPAMC). Iledare, further stated that in the PIGB, the regulator will become extremely impartial in the sector – protecting the industry from the government and government from the industry. He noted that the PIGB will trim down the number of agencies in the sector from 11 to 7. The PIGB will also ensure the NOC have serious board members and not political boards who do not have the reputation to go to the capital market to borrow funds to invest. He noted that the PIGB will push the NNPC to become commercially oriented. Key changes in the PIGB he noted would include roles and accountability better clarified; ministerial discretionary powers abolished; independent regulator, governance and transparency strengthened; introduce meritocracy in appointments; refocused industry regulation – one stop shop regulator; two commercial entities created for improved performance and accountability; refocused attention to frontier exploration, etc. On what the PIGB will achieve, the presentations listed them to include: set out foundations that will ensure optimum management of Nigeria’s petroleum resources; satisfactorily define the governance and institutional frameworks necessary to put the country in line with contemporary global and industry trends; and turnaround aspirations of the reforms in the oil industry. The event according to many participants cleared doubts in many gray areas concerning the PIGB and the PIB and was quite helpful in helping many have full understanding of the Bill and what it sets out to achieve. They commended the NNRC and MiTEi for creating such a wonderful opportunity for cross pollination of ideas, urging the NNRC not to relent in efforts to enlighten the public on issues bordering on extractive sector reforms.

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