Alas, the Nigerian House of Representatives has concurred with the Senate on the Petroleum Industry Governance Bill (PIGB). Although this latest development represents a departure from their earlier position not to pass the legislation piecemeal like the Senate had done in May 2017, The Reps concurrence with the upper legislative chamber comes at a critical time when decisive policy action is needed to reposition the industry for greater performance. Coming after a 17-year-long wait, industry watchers have cheered the passage of the petroleum sector-wide legislation. As good as this news may sound, the country needs to cross a few more hurdles in order to prepare the industry for the journey towards full transparency and accountability.
The first thing to notice in HB477, that is, the version of the PIGB recently passed by the Reps is the remarkable improvement made on the earlier version passed by the Senate (SB237). Particularly remarkable is the recommendation to transfer the minister’s power to grant, amend, renew, extend or revoke any license or lease required for petroleum exploration to the Nigerian Petroleum Regulatory Commission (NPRC). This review addresses concerns about arrogating excessive powers to the person of the minister, rather than to independent institutions, which can easily give room to abuse of power, patronage and political interference. Notably too, HB477’s recommendation further clarifies with specificity, who the minister can delegate powers to.
Any downsides? Should the president be minister of Petroleum Resources? Transferring power to the commission is laudable, but a likely problem that will emerge from this arrangement is where the president still retains the position of the substantive petroleum minister, as it has been witnessed under Obasanjo and Buhari administrations. Remember that the president is to appoint the members of the Governing Board of the Nigerian Petroleum Regulatory Commission (NPRC). (See HB 477: S 13 (5)).
Domiciling the power to issue and revoke licenses in the commission is meaningless in a situation where the president doubles as the petroleum minister and the appointing authority for members of the governing board of the same commission. In this situation, no real transfer of power from the minister to the Commission has occurred since the president/minister will retain the power to hire and fire those mandated to grant and revoke licenses.
This sort of arrangement obfuscates accountability because it elevates the president to the status of both the judge and the jury in the same case. One way to enhance the integrity of the licensing process, as well as the independence of the NPRC is through an express legislative prohibition requiring that the president should no longer have the power to become the petroleum minister under any circumstance.
Not only will the Reps commendable reviews be defeated if the current arrangement that allows a sitting president to double as the minister of petroleum resources is retained, this dual-portfolio arrangement violates constitutional provisions. Section 138 of the 1999 Constitution as amended, provides that the president shall not during his tenure of office, hold any other executive office or paid employment in any form whatsoever. These roles should be separated through a legislative prohibition.
The Reps version of the PIGB domiciles the responsibility to ensure strict implementation of environmental policies, laws and regulations pertaining to oil and gas regulations in the NPRC and removed the requirement for the NPRC to consult with the Ministry of Environment with regard to the implementation of laws and regulations pertaining to oil and gas operations. In other words, historically-overlapping regulatory functions of the ministry of environment and the NPRC in matters relating to environmental protection were resolved in favour of the latter NPRC.
That is, full responsibility for environmental matters in the petroleum industry is now vested in the NPRC. While this is a bold step toward addressing the issue of regulatory overlap, gaps however remain.
The Petroleum Equalisation Fund (PEF) is set aside for the reimbursement of petroleum products marketing companies who incur losses solely and exclusively as a result of selling petroleum products at uniform benchmark prices.
The Fund operates as a subsidy to be used to even out the prices of petroleum products, so that they can be purchased at a uniform price at any point and place within the country. In other words, what the Fund does is to harmonise the pump price of petroleum products across the country, irrespective of the distance and costs incurred in transporting the products from the depots.
Women are not advancing enough to leadership roles and contributing to influential decision-making, particularly in the oil and gas sector. According Pew Research Centre’s January 2015 research study, women constitute only 5 per cent of CEOs and 17 per cent of board members across all Fortune 500 companies. Likewise, Price Waterhouse Cooper’s study of the 100 largest listed oil and gas companies in the world found that women occupy only 11 per cent of seats on the board of directors. Out of the 11 per cent, most of them are in non-executive positions, while only 1 per cent of executive board seats are held by women. Alarmingly too, only a tiny proportion of women sitting on company boards have any executive power.
Nigeria’s national oil company, the Nigerian National Petroleum Corporation (NNPC) currently has an all-male leadership, comprising the group managing director, and the four group executive directors in charge of four new directorates.
Furthermore, redressing the power imbalances that traditionally exist on the basis of gender can be achieved by modifying the requirement for divesting 40 per cent of the shares of the national petroleum company to the public, in a transparent manner, within ten years from the date of incorporation. This might take the form of inserting a clause that requires women to get issued a certain percentage of the total shares divested to the public. A variety of measures such as quota system, dedicated share category, and targeted subsidies could be used to ensure that women are issued no less than one-third of the 40 per cent shares divested to the public. These approaches hold enormous potential to significantly remove the barriers and disadvantages women face in confronting the structural constraints that inhibit their visibility and participation in the energy sector.
Ibezim-Ohaeri is the executive director of Spaces For Change | S4C, Nigeria. She can be reached through [email protected].
