BACKGROUND / EXECUTIVE SUMMARY
ANEEJ hosted the civil society organisations (CSOs) and host communities dialogue on the Petroleum Industry Bill (PIB), with the objective of harmonising views and building consensus amongst stakeholders on the PIB. The programme, held at the Aldgate Hotel in Port Harcourt, Nigeria, brought together 53 participants representing CSOs and host communities across the Niger Delta region.
The programme provided room for ANEEJ, FOSTER and other partners to highlight the progress made so far in advocacy with regard to the PIB and the current state of affairs with regard to the Bill. The passage of the Petroleum Industry Governance Bill by the National Assembly was spotlighted as a major progress and the need to intensify engagement and advocacy for the passage of the two other Bills derived from the erstwhile PIB was stated as the underlying purpose of the dialogue.
Hence the dialogue concentrated on the Petroleum Host Community Development Bill (the Host Community Bill) and the Petroleum Industry Governance and Institutional Framework Bill (the Fiscal Framework Bill). Presentations on both bills were made by resource persons, and on the backdrop of this, participants took time to consider salient provisions of the Bills in groups and made presentations to the plenary on their respective positions on the provisions of the Bills.
A communiqué highlighting the consensus of participants at the dialogue was reached at the end of the programme and a plan of action was agreed upon in continuation of the engagement process on the PIB.
On the 1st of March 2018, the Africa Network for Environment and Economic Justice, ANEEJ, held a Civil Society and Communities dialogue at the Aldagate Congress Hotel in Port Harcourt, River State. The meeting focused on creating a framework and space to discuss the provisions of the Petroleum Industry Bill, especially as it relates to the host Petroleum host communities.
Through two key and expert presentations and numerous other interventions from stakeholders, the meeting observed the following;
On the Petroleum Host Community Development Bill, the following observations have been noted;
- The fragmentation of the PIB by the Nigerian government in 2016 to consist of the Petroleum Industry Governance Bill (PIGB) 2016, the Petroleum Fiscal Framework Bill 2016, and the Petroleum Host Communities Development Bill 2016 has created a situation where the weight of attention given to different components of the overall law is not only different, but also places more emphasis on the other aspects of the Bill.
- Communities in Nigeria, especially those in oil producing areas are restricted from participating in the governance, planning and management in the petroleum sector due to the constitutionally recognized 3 tier system of the Nigerian state. This has limited the ability of host communities to directly access benefits from the sector. Accordingly, the meeting observes that there is immediate need to creatively model a system which allows communities directly access benefits without the limits of Nigeria’s cumbersome system for resource sharing.
- The meeting also observed that the structure of the Board of Trustees is somewhat unclear. For instance, the number of members is unclear and could lead to high costs if they are to meet regularly.
- The meeting equally observed that by proposing the Secretary of the Board to be an Oil company nominee or staff, the Bill expressly proposes the dominance of International Oil Companies who have held sway in the sector with the attendant and resultant conflicts and failures. The meeting equally expressed concern over the participation of representative of oil companies in the Board. This, the meeting notes, is not only unnecessary, but also condescending and misleading.
- The bill as presented does not spell out how the Secretariat will function and the number of Principal staff that would be required, including how they will be employed and what their tenures will be.
- While the Bill defines petroleum communities according to the following three criteria- upstream communities, Facility communities and Pipeline communities it does not on the other hand adequately capture other impacted communities who, while not directly hosting any oil installation, but are nonetheless impacted by the effects of oil exploitation.
- The meeting also expressed worry that the Bill seems to propose the participation of IOCs in determining the development projects which communities will embark upon. This is meddlesome and unnecessary. This may be a drive towards converting the Host Communities Fund to a vehicle for company Corporate Social Responsibility.
- The meeting equally notes that what constitutes environmental infractions are omitted (environmental degradation: oil spills and gas flaring, air, water, soil quality) and hence ways to remedy them are unaddressed. Similarly, the Bill does not reflect on what happens in terms of compensation, etc. when livelihoods are lost on account of spillages and other forms of environmental damage.
- The meeting also observed with concern the fact that Section XIII defines restoration as “to ameliorate the effects of pollution and environmental hazards in the host communities.” This seems superficial and does not adequate capture the meaning and need for full restoration of the environment.
- The meeting also notes sadly that there are no roles spelt out for CSOs.
On the Petroleum Industry Fiscal Framework Bill, the following observations have been noted;
- Some sections of the Bill are too technical to comprehend, and randomly uses mathematical formulas. In interpreting the Law, it could give room for ambiguity and speculations.
- In several instances, the Bill is used to amend other existing Acts of the Federal Republic of Nigeria E.g. s. 2(2) Amends the Federal Inland Revenue Service (Establishment) Act 2007. Section 6 amends s. 39 of the Companies Income Tax Act Cap. C21 LFN 2004. In law, this is a misnomer.
- It is also observed that in Section 15(7), the Bill expressly promotes secrecy in fiscal matters when it treats certain levels of information which should be public as secret, and spell out punishment of officials who disclose them.
- Similarly, section 49 states that Hearing of appeals filed by companies against tax assessed by the Service shall be in camera. The meeting wonders why this is the case.
- Section 79 of the Bill provides for audits of the National Oil Company to be carries out every three years. The meetings wonder why this is the case rather than every year as is common company practice.
- The Bill is full errors and wrong references to the previous PIB
After extensive deliberations in group and plenary, the meeting resolved as follows;
On the Petroleum Host Community Development Bill-
- That oil company representatives in the Board should only have observer status and not the power to vote in the outcome of deliberations.
- The Secretary of the Board NOT be a representative of the oil companies but a retired civil servant of the rank of Grade 14 and above.
- Members serving on the Board should have a non-renewable tenure of 4 years instead of the 2 renewable years proposed by the Bill.
- Host Communities funding should be channeled directly to the leadership of the communities through the Board rather than the local government as is currently proposed by the Bill. The fund should be autonomous and independent.
- The development of host communities components in the Bill should clearly be a product of consultation and engagement with host communities. Their input should be deliberately sought and included in the Bill.
- The Bill should clearly make provisions for addressing issues of environmental pollution, compensation and remediation. This should include clear statements on gas flaring and oil spillages.
- It is recommended that there should be 13 members of the Board which must include key stakeholders drawn from communities, civil society, etc.
- ‘Oil Impacted communities’ should be recognized in the fund to reflect other communities that are otherwise affected by the effects of oil exploitation.
- It is recommended that a special tribunal or legal system be established to address environmental cases.
- The term ‘Restoration’ as used in the Bill should be clarified to define the full repair of the environment to its former productive state. The use of the term to refer to meagre amelioration should be jettisoned.
On the Petroleum Industry Fiscal Framework Bill, the meeting recommends as follows;
- The bill should be made less technical and cumbersome in order to provide ease of understanding and avoid confusion and ambiguity in interpretation
- The powers of the Minister as presently captured in the Bill is susceptible to abuse. It is recommended that this be watered down through alternative structures.
- The meeting observed that in many places, the Bill sets out to amend other existing Laws. It is recommended that this be reviewed.
- It is recommended that deductible and non-deductible items in the Bill be reviewed
- Court hearings emanating from the violation of rules spelt out in the Bill should be done openly rather than in camera as currently suggested by the Bill.
- Under penalty for offences, the meeting recommends that- $10,000 should be made the minimum, while penalties should be determined based who or what is involved in the breach.
- The Bill needs to deliberately mainstream and promote transparency and accountability in all its provisions.
- The Bill should bar the President from also being the Minister of Petroleum.
- The auditing period should be synchronized with acceptable accounting frameworks. Rather than every 3 years, it should be done every year.
- All errors and typos in the Bill should be corrected
- The Bill should identify clear roles for civil society organizations.
The passage of the PIB has been a prominent feature of the legislative agenda in Nigeria in the last decade. After repeated setbacks to its passage, the Federal Government has now adopted the strategy of breaking down the Bill in parts to facilitate ease of understanding and passage. Thus far, this approach has seen the passage of the Petroleum Industry Governance Bill by the National Assembly, which is now awaiting harmonisation and assent by the President.
There are two further bills before the National Assembly – the Host Communities Bill and the Fiscal Framework. This dialogue was put together by ANEEJ for civil society and host communities as stakeholders to preview and review both Bills for possible gaps, collating of positions and harmonising of views with a view to engaging the National Assembly and stakeholders on the issue of the PIB.
The dialogue is a part of ANEEJ’s work with the second phase of the Facility for Oil Sector Transformation (FOSTER), which aims at achieving more effective use of Nigeria’s extractive industries to support national development.
CALL TO ACTION
It was recommended that participants send further feedback on the Bills to ANEEJ within a week of the programme and continue engagement at the local level with stakeholders on the PIB. It was also agreed that another meeting would be held to adopt a position paper reflecting the position of participants and to agree on an advocacy strategy for engaging with the issue of the PIB going forward.
Members of the public, together with Civil Society Organisations and host communities should log on and sign this ANEEJ online petition for the accelerated passage of the Bill thus: