It is now common knowledge that President Muhammadu Buhari has finally signed into law the recently passed Petroleum Industry Bill. The Senate had passed the Bill on July 15, 2021, while the House of Representatives did the same on July 16, thus ending a long wait for regulation of the sector since early 2000.
While controversy has continued to trail the development, there are reasons that in the Newspaper’s views qualify the Act as a positive development.
Fundamentally, aside from the awareness that it is a piece of legislation that will among other things expected to provide legal, governance, regulatory and fiscal framework for the Nigerian petroleum industry, bring about the development of host communities, and related matters, the passage of the Bill/ascent by Mr. President has ended the seventeen years of unnecessary politics characterized efforts to develop effective/workable framework in the nation’s crude oil exploration and production sector.
Although crafted with a lot of unresolved issues which render the Act imperfect, it however in our views provides stakeholders with clarity about the institutions and legal structures for the industry.
Again going by what experts are saying, it will help promote investment across the value chain, enhance performance efficiency of the national oil company, streamline governance structure in the sector, and provides direct support to the host communities
Again, going by the content of the Petroleum Industry Act (PIA) 2021, which became law on Monday, it is now compulsory for International Oil Companies(IOCs) to develop their areas of operations(Host communities). When implemented, the new legislation would herald a new era in the oil communities and end the situation where oil exploration activities stifled the fishing activities.
As an illustration, Chapter 3 made far-reaching provisions for the Host community’s development. It demands that any oil prospecting license or mining lease or an operating company on behalf of joint venture partners (the settlor) is required to contribute 3% – 5% (upstream Companies) and 2% (other companies) of its actual operating expenditure in the immediately preceding calendar year to the host communities development trust fund. This is in addition to the existing contribution of 3% to the NDDC.
About the commentary expressed in some quarters that the 3% allocation to the host community is very small, it is our view that no law becomes perfect the first day. It is the Newspaper’s belief that the Act is a work in progress in the sense that it is like every other legislation subject to amendment.
However, while that is said we encourage the host communities to at this early stage imbibe ‘cultures’ that will help put the said 3% when received into effective/transparent use. If that is done, it will go a long way to save the people of such a community from their present socioeconomic and environmental plights.
We also call on the State Government to put the 13% into judicious use in ways that will improve the life chances of the region. The same advice goes to the NDDC.