Policy Alert, a Civil Society Organisation working oneconomic and ecological justice, has faulted the President’s assent tothe Petroleum Industry Act 2021, urging communities to test theprovisions of the Act before the courts.
President Muhammadu Buhari had on Monday, August 16, 2021 signed theerstwhile Petroleum Industry Bill (PIB) into law amidst protests fromcommunity groups and many other stakeholders that the Bill wasincompatible with the rights and interests of the host communities.
In a statement signed by its Communications and Stakeholder EngagementOfficer, Mrs. Nneka Luke-Ndumere, the organisation described thepresidential assent as “grossly insensitive and problematic.”
“It is sad that the bill has been assent to in the most controversialmanner despite its many obvious flaws and its rejection by manystakeholders” the statement read.
“For example, the controversial provision for a direct payment of 30percent profit oil and profit gas to the Frontier Exploration Fundpotentially shortchanges the oil producing states and local governmentsof some of its thirteen percent derivation as it bypasses therequirement in section 162 (2) of the 1999 Constitution (as amended)which provides that all revenues be channeled through the federationaccount. This is most unfair, viewed against the ceding of only threepercent of previous years’ operating expenses to the Host CommunitiesDevelopment Trust Fund and the punitive provision to charge costs of anydamage to facilities against the community’s Fund, among other obnoxious provisions.
“That Mr. President has gone ahead to give assent to these vexingprovisions only reinforces the politics of exclusion and expropriationthat has for long characterized the relationship between the Nigerianstate and the oil producing communities. We are also concerned that thehost communities’ component of the legislation flies in the face of oneof its stated objectives to address tensions between host communitiesand companies as it has all the ingredients for escalating rather thanabating such conflicts.
“At a time when fossil fuel investments are being deprioritizedelsewhere as a result of the global energy transition, it is unfortunatethat this Act failed to provide a bridge between the current era offossil fuel dependency and the low-carbon energy future that Nigeriaaspires to within the framework of government’s much vaunted commitmentsunder the Paris Agreement.”
The statement added: “Granted, the new legal framework introduces somepredictability and clarity to the governance and fiscal arrangements inthe oil and gas industry. We are also not oblivious to certain clausesthat respond to some of our earlier demands, such as those providingthat the Board of Trustees of the Host Communities Development Trustwill now be determined in consultation with the host communities, withmembership drawn from community members. But that is just as far as itgoes. As a tool for improved benefit sharing to host communities, theAct falls flat on its face. It actually ridicules the exertions of thehost communities and advocacy groups that have clamoured over the yearsfor a law that yields some space for participation, directsocio-economic benefits and environmental remediation for oil-richcommunities.
“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 next12 months, we urge host communities and civil society groups to begin to seek interpretation of some of its more controversial provisions before the courts.”