Page 5 - AfrOil Week 28 2021

AfrOil COMMENTARY AfrOil

According to the sources, the unions hope the Host community compensation
National Assembly will address the matter dur- The PIB has also attracted criticism for the
ing the harmonisation process, before the PIB is approach it takes to the sharing of revenues with
sent to Buhari for signature. host communities in southern Nigeria.
The bill calls for communities in which
Labour unions and regulatory agencies onshore oil and gas fields are located to be
PENGASSAN and NUPENG have additional granted a share of revenues equivalent to at least
concerns about the bill. 3% of operating expenditures. (The Senate’s ver-
For one thing, the two groups are disap- sion of the PIB set the rate at 3%, while the ver-
pointed that the PIB does not carve out a larger sion passed by the House of Representative fixed
role for labour unions, Vanguard’s sources said. it at 5%.) Peter Akpatason, the deputy majority
They want to see the government reserve seats leader of the House, described 5% as a compro-
on the board of the country’s new regulatory mise figure on which deputies had settled.
agencies for representatives of PENGASSAN However, a number of public figures –
and NUPENG, they stated. This will help protect including representatives of host communities
the interests of oil and gas workers, they said. It is in the states of Abia, Ondo, Edo and Delta, as
also in line with global best practices and would well as the governors of several southern states –
help promote transparency and accountability have argued that the rate of compensation is still
in the oil and gas industry, they added. (More- too low and ought to be 10%. Likewise, Chief
over, it has the support of the Nigeria Labour Edwin Clark, the national leader of the Pan-Ni-
Congress, or NLC, according to a report from ger Delta Forum (PANDEF), has denounced the
the Leadership newspaper.) PIB’s compensation plan as “satanic and unjust”,
Vanguard’s sources also noted that NUPENG calling for the number to be raised to 10%.
and PENGASSAN still oppose the provisions of For his part, Benjamin Style Tamanarebi,
the PIB that called for the establishment of two the head of an organisation known as the Host
regulatory agencies – one to oversee down- Communities of Nigeria Producing Oil and
stream and midstream activities and another Gas (HOSTCOM), suggested earlier this week
to oversee upstream activities. The unions con- that the Nigerian government could easily meet
tinue to believe that the industry would be better the host communities’ demands for more com-
served by the formation of a single agency that pensation by reducing the incentives offered
could serve as a “one-stop shop” for investors, for development in other parts of the country.
they said Specifically, he recommended that Abuja cut the
They also maintain that doing so would rate of compensation for work in northern fron- The PIB may
streamline interactions between investors and tier provinces from 30% to 10% so that southern
the government, the sources commented. host communities could also receive 10%. not settle the
long-standing
Weights and measures Long-standing problems linger
Meanwhile, Nigeria’s Federal Ministry of Indus- Thus far, Nigeria’s government has not tensions between
tries, Trade and Investment has complained responded formally to any of the complaints
about provisions of the PIB that pertain to mentioned in this essay – and this is reasonable, the federal
weight and measurement standards. given that the Senate and House of Representa-
In a note submitted to the National Assem- tives have not yet officially wrapped up the har- government and
bly earlier this week, the ministry expressed monisation process so that the PIB can be sent residents of the
concern about the possibility that the bill might to Buhari.
encroach upon its own authority by assigning Nevertheless, these objections indicate that Niger River Delta
responsibility for maintaining certain standards the bill, in its current form, will not resolve all
– namely: “verification/fiscalisation, calibration of the problems that have been acting as a drag
and certification of all measuring instruments on the performance of the oil and gas industry.
used at both upstream and downstream sectors This is particularly true with respect to debates
of the petroleum industry in line with interna- over host community compensation, as resi-
tional practices and procedures; quantity deter- dents of southern Nigeria have been complain-
mination of petroleum and gas products for ing for decades that both the government and
trade purposes” – to the new regulatory agen- international oil companies (IOCs) ignore their
cies that will oversee the hydrocarbon industry. needs and neglect their obligations to repair the
(It also alleged that this change had been intro- environmental damage caused by oil and gas
duced secretly, as it had not been in the original operations.
version of the PIB.) In other words, the PIB may not serve to set-
Taking this step is unnecessary, since the tle the tensions that have characterised relations
Federal Ministry of Industries, Trade and Invest- between the federal government and residents
ment already has experts trained in the oil and of the Niger River Delta for so long. As a result,
gas industry on staff and does not need to have companies that work in southern Nigeria may
these functions duplicated, the note asserted. It continue to pay a security premium of sorts.
also goes against industry practices and conven- (Minister of State for Petroleum Resources Tim-
tions around the world to make sector-specific pre Sylva made this point on July 12, noting that
regulatory agencies responsible for standardisa- production costs were higher in Nigeria because
tion of weights and measures within that sector, of the need to provide protection to oil and gas
it added. facilities.) ™

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