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Group urges refashioning of oil bill

By  Babajide Komolafe
LAGOS—The Civil Society Legislative Advocacy Centre (CISLAC), has called for a drastic reduction in the size of the Petroleum Bill, saying the bill is unnecessary voluminous.

CISLAC comprises 54 civil society organisations working on extractive revenue transparency, accountability and  good governance in Nigeria.

In a memorandum submitted to the House of Representatives on the Petroleum Industry Bill 2009, the group said, “The bill is a massive, ponderous text of 495 sections divided into 10 parts.

”While the decision to bring together all the institutions in the petroleum industry might have been informed by the need to have all the laws relating to the industry in one single text for accessibility, the size of the text could have nevertheless been considerably reduced if the administrative provisions relating to the institutions such as pension, restriction on suits, funds, power to accept gifts/gifts, power to sue and be sued, disqualifications, secretary, other staff, service, indemnity et cetera which are similar if not identical are not repeated for each and every one of the institutions.”

The group said if the drafted suggestions (or  amendments) presented in the  memorandum are taken into consideration, the bill can be pruned to about half its present prolix length.

Among things, the group proposed that the oversight role of the National Assembly be strengthened in the Bill.

The group said that Section 28 of the bill on Funding of proposed Institutions be expunged. Its stated that, Section 28 of the Bill provides that a portion of ‘fiscalised’ crude or gas shall be paid into an account of the Directorate to be shared by the proposed institutions for the purpose of their operations. This provision is misleading and unconstitutional in that the ‘fiscalised’ crude or gas proposed to be paid into the account of the Directorate is supposed to be part of the revenues accruing to the Federation Account. This should be counted as null and void.

On the Composition of the Governing Board of the Institutions, the group said that , “The Bill recommends that the Minister, Directors of the Directorates and the Director General of the Directorates shall compose the Governing Board.

Civil Society organisations are of the opinion that this is completely exclusionary of the broad stakeholders in the petroleum industry. They thus submitted that this board should include representative of the government, private sector, civil society, labour, professional groups, media and community.

The group also called for amendments to the sections relating to corporate social responsibility of Oil companies, and Health, Safety, and Environment. It said, “The Bill has no provision for corporate social responsibility.

The civil society group therefore, recommended that it should explicitly provide that oil companies seeking any form of license to work in the petroleum industry must have a well-articulated Corporate Social Responsibility strategic plan/memorandum of understanding with which they can be held accountable and punished if breached after duly signed and sealed.”

“The Bill requires companies to submit environmental programmes to the Inspectorate for approval, but does not provide clear standards that they must seek, or guidance on most of the key environmental goals they pursue. Instead of leaving these key issues to companies to provide their own individual solutions, the Bill should provide more guidance on a coherent national approach to environmental management.

Also the Bill inexplicably and inexcusably excludes the communities that bear the brunt of environmental degradation from its purview. Modern global thinking in environmental protection recognizes that, without the communities, environmental plans tend to be shallow and protective only of the interests of a few local collaborators of business concerns.

This aspect of the Bill needs to be reworked to align it with interests of the oil-bearing communities. Also, considering that there is currently a bill on Prohibition of Gas Flaring (2009) in the National Assembly, the civil society recommends that the Petroleum Industry Bill should be considered side-by-side with that Bill, and that the penalties for violation of health, safety and environmental rule (including environmental remediation) should be high to the level that discourages impunity. This can be deepened through regular environment audit and certification.

“Indefensible Environmental Remediation Levy: States and Local Governments are required to pay 1% and 0.5% of their annual derivation allocation into Remediation Fund under the custody of the Inspectorate to restore the environment in cases of damage caused to the environment as a result of sabotage (s. 286). This provision should be expunged from the Bill because majority of oil spillage is not as a result of sabotage, but as a result of equipment failure.”


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