The Detriment of the Petroleum Industry Act to the South-South Region

The Detriment of the Petroleum Industry Act to the South-South Region

The Detriment of the Petroleum Industry Act to the South-South Region.

By Onyeawuli Emmanuel

The South-south region is one of the 6 geopolitical regions in Nigeria. According to Wikipedia, it is an amalgamation of both the Western and Eastern regions of Nigeria, which took place on the 27th of May, 1967, under the auspices of General Yakubu Gowon.

The South-south is a conglomerate of various states: Edo and Delta states (formerly Bendel state) form the Mid-western region, while Bayelsa, Rivers, AkwaIbom and Cross river states form the Eastern region. It may be surmised that the region is the richest in terms of culture, customs and traditions, considering the presence of diverse tribes, such as the Ika, itshekiri ,Ukwuani Aniocha, Ijaw, Urhobo, Isoko, Ozanogogo and Abavo, among others.

The region provides the economic mainstay of the country, being rich in crude oil deposits, which provide about 90% of Nigeria’s foreign exchange. It thus goes without saying that the South-south region is the economic powerhouse of the Federation.

Going by the above assertion, one may be forgiven for thinking the region a land flowing with milk and honey, so to speak. However, what obtains is a complete reversal of expectations. A case in point is the oil-rich state of Bayelsa in the Niger Delta. Despite being the site of the Oloibiri Oilfield responsible for an estimated 30-40% of the country’s total crude oil output; despite being home to some of the largest natural gas and crude oil deposits in Nigeria, its inhabitants continue to wallow in poverty.

There have also been various incidences of pollution stemming from oil spills, which have led to numerous environmental litigations against the government. The wells of wealth have also been subject to pipeline vandalism coupled with various communal clashes, resulting from feelings of dissatisfaction among the inhabitants of the land.

The plight of the aggrieved people of the region is not without justification, either, as the 13% revenue allocation designated for them is hardly ever adhered to. In a classic case of robbing Peter to pay Paul, the proceeds from the sale of the oil is unfairly apportioned by the Federal Government at the expense of the host communities.

On a bid to remedy the problem of revenue allocation, the Petroleum and Industry Bill was proposed. According to Premium Times, its origins can be traced to the Oil and Gas Reforms Committee (OGRC) constituted by the administration of former President Olusegun Obasanjo. The report of the committee formed parts of the bill which was first introduced to the National Assembly by former President Umar Yar’Adua’s administration in 2008.

Mr Yar’Adua had constituted a committee on the implementation of the OGRC report. A subcommittee chaired by Yinka Omorogbe drafted the bill, but that particular bill was marred by controversy. Segun Adeniyi, the spokesperson of the late president, detailed some of the controversies that bedevilled the bill in his book “Power, Politics and Death”.

The bill was again reintroduced in 2012 by former President Goodluck Jonathan’s administration. It was passed by the House, just a few days to the end of that administration, but the Senate failed to pass the bill.

Under the 8th National Assembly, lawmakers took the decision to introduce the PIB in parts. The bill was broken down into the Petroleum Industry Governance Bill (PIGB), Petroleum Industry Fiscal Bill, Host Communities Entitlement and Protection Bill and the Petroleum Industry Administration Bill. Several lawmakers introduced different versions of the bills, but the PIGB sponsored by Tayo Alasoadura and Pally Iriase was the version passed by both chambers and harmonised. The bill was transmitted to President Muhammadu Buhari but failed to get his assent.

Even though the two chambers reconsidered and made another attempt at passing the bill into law, it was still not assented to by President Buhari, causing the House to adjourn further considerations for it sine die.

In 2020, following the harsh effects of the Covid 19 pandemic, amid the need for the removal of petrol subsidy and a desire to increase Nigerian’s foreign exchange earning and G.D.P, the bill was proposed again. This time, it attempted to transform the Nigerian National Petroleum Corporation (NNPC) into an industry.

The industry was to operate as a coperate entity, called the Nigerian National Petroleum Corporation Limited, incorporated under the Companies and Allied Matters Act (CAMA). The bill provided that the industry would operate as an “efficient profit-making venture”, which would declare dividends and also pay all fees, rents, royalties, profit oil share, taxes and other requirements on any lease or licence.

Unlike the version considered by the 8th National Assembly, the current bill is an executive bill. It was sent to the National Assembly in September 2020, and was passed, after much deliberation, on Thursday, 1st July, 2021.

The bill proposed a 3% holding in host community trust funds, as opposed to 5% recommended by the Joint Committee of the National Assembly. Both recommendations were rejected by the host communities, who demanded not less than 10%.

Another controversial area passed was the fund exploration of frontier basins, which the Senate left at 30%, while stakeholders in the Niger Delta had demanded that it be reduced to 10 percent. The original bill brought to the Senate by the Executive was 2.5 percent for funding of the Host Communities Trust Fund, but the Senate committee moved it to 5%. At the end of the day, the Senate approved only 3%, disregarding numerous opposition by South-south Senators.

Benjamin Tamanarebi, the National President of Host Communities of Nigeria Producing Oil and Gas (HOSTCOM), expressed his displeasure, he complained bitterly of the, pollution in the host communities, the lack of good water, light, roads and basic social amenities, in the presence of wealth, poverty looms, he cited rivers as example, who he said in some communities “you can’t hang your clothes in the sun without it turning to charcoal”, therefore 3%, is not enough to compensate the indigenes of these communities, for the damage caused to their environment.

The National Assembly who are representatives of the people, should not enact laws that would bestow hardship on those they have sworn to represent, therefore, it is my learned opinion that the provisions of the PIB bill, is Repugnant to Natural Justice, Equity and good conscience, it would do more harm than good, to the south south, my advise to Mr President is to resend the bill back to the house, and for the lawmakers to do the needful and provide remedy for the damage already caused by them, to amend the bill, which would include a provision of not less than 7% for host communities, and if the 3% should subsist, for reasons best known to them, then the government and oil companies should improve the warfare of host communities, in order to reduce their fraustrations.


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