For over two decades now, the Petroleum Industry Bill (PIB) has been in the making yet to be passed into law. The long delay in having Petroleum Industry law in Nigeria has generated so much concerns and criticisms. This, The Tide investigation revealed, has frustrated investment in the oil and gas sector.

After several amendments, however, the PIB is now before the National Assembly awaiting to be passed into law. But sources say the current bill contains some defects that if passed into law, may not only meet the aspirations of Nigerians, but will also defeat the original concept of the bill.

The head of a multinational firm, for instance, was reported to have said the failure to pass the PIB would simply mean little or no further investment in the upstream sector of the petroleum industry “And that could result in huge losses for the federal government, as well as local companies, which could have benefited from such investment”, he said.

The Petroleum Industry Bill (PIB) is a bill that contains all the requirements that apply to the entire petroleum industry in Nigeria. It covers such  matters as petroleum administration, royalties and taxes, bidding procedures, environmental obligations, employment, business opportunities and technical requirements.

Petroleum matters, which before now, usually came under different laws and regulations are now in a single bill, hence, PIB is a combination of 16 different Nigerian petroleum laws in a single transparent and coherent document.

The original concept of the PIB is to provide a strong basis for the renewal of Nigeria’s petroleum industry base on international best practices. It is meant to establish a new framework for the good governance of the oil industry with increased petroleum revenues for the country as well as, open a new window of opportunities for Nigerians.

In legislative drafting, for a law to command acceptability, it has to address the issue (s) that gave rise to the need for that law. It has to be consistent with existing laws on the issue. It should also make provision for what constitutes violation of that law, prescribe punishment and also put in place the mechanism for enforcement.

Regrettably, the current version of the PIB that is before the National Assembly did not meet the above-mentioned requirements. There are a lot of grey areas in the bill that call for serious concerns. Many stakeholders have urged the National Assembly to take another look at the bill before it is passed into law.

According to the programme officer of Social Action, Vivian Bellonwu, “PIB in its original concept or idea is very commendable. When we had a press conference calling on the National Assembly not to pass the PIB, we did so not with the intention of depriving the country of its benefits. We did so out of the concerns that we have noticed that emanate from that document (PIB).”

“There are a lot of aspects of that documents that fall seriously below standard. There are a lot of grey areas in that bill. And you know, one thing about law is that once it is passed, it becomes very difficult to amend.” Bellonwu argued that law is not like an ordinary policy government in power can alter at will.

“People must understand this, if you are making a law, you should make every effort to have a good law since amending a law is difficult”, she said.

Corroborating Bellonwu’s stance, Mrs Diezani Alison-Madueke, Minister of Petroleum, in an interview with This Day said “the Senate President had mentioned both to me and to the President that the bill that he saw at the Senate had given him grave concerns because several aspects of the bill had been glossed over and not thoroughly addressed. Yet, that bill had already been laid before the Senate and when it has been laid, you cannot take it away to amend. So I told him if that bill was the one to go forward for passage then we are finished”.

What then is wrong with the bill? The Minister provided the answer. “The fiscal regime, especially for gas had not been touched at all. In fact, the regimes were not just workable and they were actually punitive even to our own indigenous operators; that was one aspect of the bill that had a problem”.

Another grey area in the PIB is lack of provision for developing the specific capacity of members of oil bearing communities so that they can participate in the industry and benefit from it, especially in view of the devastating effects of oil exploration and exploitation in the country.

The President of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) was reported to have lamented the exclusion of Petroleum Training Institute (PTI) which, according to him, “is solely responsible for training and retraining of more than 85 percent of the technical manpower in the entire upstream and downstream oil and gas sector in Nigeria”.

PTI appeared in the original draft of the PIB, but was later expunged. When compared with the Nigerian Minerals and Mining Act, 2007, there are discrepancies in the provisions for host communities. With the proposed PIB, an oil licence or lease can be granted without putting into consideration the closeness of the said field to the communities.

Section 3 (1) (C) of the Mining Act provides that , “no mineral title granted under this Act shall authorize exploration or exploitation of mineral resources on, or in of the erection of beacons on or the occupation of any land  occupied by any town, village, market, burial ground or cemetery, ancestral, sacred or archaeological site, appropriated for a railway or sited within fifty metres for a railway or which is the site of or within fifty metres of any government or public building, dam or public road”.

Also in section 102 of the Mining Act, the right of the owner of the property is recognized by giving the owner the right to determine the rent. This is seen in part of section 102 which provides a mining lease on any private or any state land should require the owner or occupier of the land to state in writing within the period specified by regulation made under the Act the rate of the owner desires should be paid to him by the leasee for the land occupied or used by it for or in connection with its mining operation”.

Noting the ambiguity of this community equity, Bellonwu says: “in the harmonized version, the equity was included. But now, it is one thing putting something and use another means to take away the entire thing. That is what they have done in that bill. The equity being talked about in the bill is vague. This is because it does not clearly define what the equity is all about. It just says 10 percent of what? Is it 10 per cent of royalties? Is it 10 percent of the entire oil drilled in the country? 10 per cent of what? It is not clearly defined.

Besides, it has a lot of deductions that has been introduced into the 10 percent that would practically erode the entire fund that goes to communities. For instance, there is an area or clause that says 10 per cent of 10 per cent would be deducted and used to run administration she argues that it is a ploy to make host communities feel that they are being given something when nothing is being given to them.

“It will still end up in the moribund NDDC that we have today. What are they deducting 10 per cent from 10 per cent for? What we are saying is that the deductions are wrong”, she says.

Meanwhile, there are other sections of the bill that demand the urgent attention of the National Assembly. These include the provisions on the management of the environment, gas flaring transparency and accountability in resource management, funding of proposed institutions, restriction on suits against the proposed institution and transparency and openness in the process of awarding licences, among others.

With the so many loopholes in the bill, it is not clear yet how the PIB, when passed into law, intends to address the equity rate, gas flaring and environmental gradation, among others.

Vivian-Peace Nwinaene