Page 7 - DMEA Week 29 2021

DMEA COMMENTARY DMEA

petroleum and gas products for trade purposes” the head of an organisation known as the Host
– to the new regulatory agencies that will oversee Communities of Nigeria Producing Oil and
the hydrocarbon industry. Gas (HOSTCOM), suggested earlier this week
It also alleged that this change had been intro- that the Nigerian government could easily meet
duced secretly, as it had not been in the original the host communities’ demands for more com-
version of the PIB. pensation by reducing the incentives offered for
Taking this step is unnecessary, since the development in other parts of the country. Spe-
Federal Ministry of Industries, Trade and Invest- cifically, he recommended that Abuja cut the rate
ment already has experts trained in the oil and of compensation for work in northern frontier
gas industry on staff and does not need to have provinces from 30% to 10% so that southern host
these functions duplicated, the note asserted. It communities could also receive 10%.
also goes against industry practices and conven-
tions around the world to make sector-specific Long-standing problems linger
regulatory agencies responsible for standardisa- Thus far, Nigeria’s government has not
tion of weights and measures within that sector, responded formally to any of the complaints
it added. mentioned in this essay – and this is reasonable,
given that the Senate and House of Representa-
Host community compensation tives have not yet officially wrapped up the har-
The PIB has also attracted criticism for the monisation process so that the PIB can be sent
approach it takes to the sharing of revenues with to Buhari.
host communities in the southern part of the Nevertheless, these objections indicate that
country. the bill, in its current form, will not resolve all
The bill calls for communities in which of the problems that have been acting as a drag
onshore oil and gas fields are located to be on the performance of the oil and gas industry.
granted a share of revenues equivalent to at least This is particularly true with respect to debates
3% of operating expenditures. (The Senate’s ver- over host community compensation, as resi-
sion of the PIB set the rate at 3%, while the ver- dents of southern Nigeria have been complain-
sion passed by the House of Representative fixed ing for decades that both the government and
it at 5%.) Peter Akpatason, the deputy majority international oil companies (IOCs) ignore their
leader of the House, described 5% as a compro- needs and neglect their obligations to repair the
mise figure on which deputies had settled after environmental damage caused by oil and gas
vigorous debate. operations.
However, a number of public figures – In other words, the PIB may not serve to set-
including representatives of host communities tle the tensions that have characterised relations
in the states of Abia, Ondo, Edo and Delta, as between the federal government and residents
well as the governors of several southern states of the Niger River Delta for so long. As a result,
– have argued that the rate of compensation is companies that work in southern Nigeria may
still too low and ought to be 10%. Likewise, Chief continue to pay a security premium of sorts.
Edwin Clark, the national leader of the Pan-Ni- Minister of State for Petroleum Resources Tim-
ger Delta Forum (PANDEF), has denounced the pre Sylva made this point on July 12, noting that
PIB’s compensation plan as “satanic and unjust”, production costs were higher in Nigeria because
calling for the number to be raised to 10%. of the need to provide protection to oil and gas
For his part, Benjamin Style Tamanarebi, facilities.™

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