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Policy Alert, a Civil Society Organisation working on economic and ecological justice, has faulted the President’s assent to the Petroleum Industry Act 2021, urging communities to test the provisions of the Act before the courts.
President Muhammadu Buhari had on Monday, August 16, 2021 signed the erstwhile Petroleum Industry Bill (PIB) into law amidst protests from community groups and many other stakeholders that the Bill was
incompatible with the rights and interests of the host communities.
In a statement signed by its Communications and Stakeholder Engagement
Officer, Mrs. Nneka Luke-Ndumere, the organisation described the
presidential assent as “grossly insensitive and problematic.”
“It is sad that the bill has been assented to in the most controversial
manner despite its many obvious flaws and its rejection by many
stakeholders” the statement read.
“For example, the controversial provision for a direct payment of 30
percent profit oil and profit gas to the Frontier Exploration Fund
potentially shortchanges the oil producing states and local governments
of some of its thirteen percent derivation as it bypasses the
requirement in section 162 (2) of the 1999 Constitution (as amended)
which provides that all revenues be channeled through the federation
account. This is most unfair, viewed against the ceding of only three
percent of previous years’ operating expenses to the Host Communities
Development Trust Fund and the punitive provision to charge costs of any
damage to facilities against the community’s Fund, among other obnoxious
provisions.
“That Mr. President has gone ahead to give assent to these vexing
provisions only reinforces the politics of exclusion and expropriation
that has for long characterized the relationship between the Nigerian
state and the oil producing communities. We are also concerned that the
host communities’ component of the legislation flies in the face of one
of its stated objectives to address tensions between host communities
and companies as it has all the ingredients for escalating rather than
abating such conflicts.
“At a time when fossil fuel investments are being deprioritized
elsewhere as a result of the global energy transition, it is unfortunate
that this Act failed to provide a bridge between the current era of
fossil fuel dependency and the low-carbon energy future that Nigeria
aspires to within the framework of government’s much vaunted commitments
under the Paris Agreement.”
The statement added: “Granted, the new legal framework introduces some
predictability and clarity to the governance and fiscal arrangements in
the oil and gas industry. We are also not oblivious to certain clauses
that respond to some of our earlier demands, such as those providing
that the Board of Trustees of the Host Communities Development Trust
will now be determined in consultation with the host communities, with
membership drawn from community members. But that is just as far as it
goes. As a tool for improved benefit sharing to host communities, the
Act falls flat on its face. It actually ridicules the exertions of the
host communities and advocacy groups that have clamoured over the years
for a law that yields some space for participation, direct
socio-economic benefits and environmental remediation for oil-rich
communities.
“The theatre of action will now have to move to the communities and the
courts of law. As implementation of the Act gets underway over the next
12 months, we urge host communities and civil society groups to begin to
seek interpretation of some of its more controversial provisions before
the courts.”
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