The delay in passing the Petroleum Industry Bill, PIB, into law is generating increasing anxiety among stakeholders. The Executive Director of Africa Network for Environment and Economic Justice, ANEEJ, Mr. David Ugolor, in an interview with journalists as captured by Clara Nwachukwu, attributed the development to the confusion caused by the Nigerian National Petroleum Corporation, NNPC, in muting several versions of the bill.
Excerpts:

The Petroleum Industry Bill, PIB appears to be facing more challenges. What is your reaction to the delay in the passage of the bill?
The challenges facing the Petroleum Industry Bill, PIB, being passed into law is as a result of the lack of political will by the leadership in the country. Every step of the legislative process has been politicised to the extent that report from some media claim that some of the International Oil Companies, IOCs, tried to compromise some members of the National Assembly saddled with the responsibility to manage the PIB legislative process .To also support this claim, recently some of the diplomatic cables released by the Wikileaks report on Nigeria also made reference to how Shell has infiltrated key government institutions in Nigeria.

This is not the first time we are experiencing such an action by the IOCs in Nigeria. You will recall that when we were also lobbying the National Assembly to pass the Nigeria Extractive Industry Transparency Initiative, NEITI Act into law, we saw how the oil companies also made an effort to water down some of the key provisions in the law that will assist the country to achieve broad reform in the oil and gas sector, particularly in the areas of revenue transparency. If you look back to the concrete outcome of the NEITI Audit report of 1999 to 2004 and the 2005, you will be shocked to see how we have managed the oil and gas sector in Nigeria.

We have lost billions of dollars as a result of shady deals carried out by the multinationals in collaboration with major government agencies. A situation where oil companies will be assessing themselves because the government agencies like the Department of Petroleum Resources, DPR, lacked the capacity has put the country at a disadvantaged position. All attempts to remedy these problems, in most cases, are being challenged.

This lack of cooperation from the IOCs and some local oil companies has not really helped NEITI Secretariat to enforce the NEITI Act effectively in Nigeria. There are still mountains of issues yet to be resolved from those past audits carried out by NEITI.

It is this same challenge that is also affecting the PIB process in Nigeria. The IOCs with their local collaborators who currently benefit from the status quo do not want any reform in the oil and gas sector that will take away their pecuniary benefits from the sector. To worsen the situation, there has been poor leadership in the country and this has affected the oil industry, even to the extent that Nigeria, which was the leading country and flagship of the global Extractive Industry Transparency Initiative, EITI, is being affected.

The multinationals are kicking against some of the provisions of the PIB. What are your reactions to some of the issues they raised against the bill?
Well I don’t agree with the stand, which the IOCs have taken so far on the PIB legislative process because inasmuch as they continue to delay the passage of the law to strengthen the legal framework for their operation in Nigeria, it will also affect their activities as well. I think it is in the interest of the IOCs to cooperate with the National Assembly through a transparent negotiation to resolve the areas of contention and move swiftly to support the passage of the PIB Act. Nigeria is not the first or second country where the government has chosen to review the fiscal regime that governs its oil industry. I think Venezuela and Bolivia successfully did that without the heavens falling. The big problem we are presently facing in Nigeria is lack of political leadership and that is what the IOCs are taking advantage of to delay the process.

For instance, if the President of Nigeria takes the PIB as a priority and gives it the Presidential push and support, no IOC will undermine the process. But what we have seen so far is the NNPC making a mess of the process to the extent that we now have several versions of the same PIB at the National Assembly. During the public hearing organised by the Assembly, we were all embarrassed to see different versions of the PIB and that alone sends a message of confusion.

I recall when my organisation, ANEEJ, through the support of the Canadian Embassy, organised the first independent roundtable on the PIB, which drew stakeholders from the IOCs, government, academia, diplomats and civil society organisations to provide a platform for independent review, we all agreed that it is in the interest of all stakeholders to build a consensus to move the PIB forward. But I am surprised that after more than two years of that successful roundtable, we are yet to move forward with the passage of the PIB due to IOCs’ concerns in some of the provisions in the bill.

While I completely share some of the concerns raised by the IOCs, I don’t think it is a better business for them to kill the process. The fact is that we all desire that the oil and gas sector in Nigeria be given an urgent and drastic reform if Nigerians must benefit from their God-given resources.

I also want to appeal to the IOCs to quickly look for a modest way to mend fences with the National Assembly and the Federal government, to quickly pass the PIB so that the right signal can go out to investors and the international community. I also think that it can go a long way to sustain the relative peace in the Niger Delta region. It is for the IOCs and the government to identify the key areas of disagreements and look for a transparent mechanism that will provide access to all, including the communities who suffer most, to participate in building a consensus that will lead to the final legal framework.

Some industry operators also question some provisions in the Production Sharing Contract, PSC. What is your reaction to this?
What do you expect from the oil and gas players? They still want the laws made three decades ago to continue to guide the fiscal policies, which put the country at a disadvantaged position. Like I earlier mentioned, other countries have reformed their oil and gas sector to benefit from the increase in oil price. Today, oil prices have increased dramatically. Why should Nigeria not benefit from it? I think is fair for the IOCs to cooperate with the Nigeria government to agree on a fiscal regime that will give Nigeria some benefits particularly as the oil price increases in the international market. We cannot allow the current fiscal regime to continue, while the IOCs are making huge profits, the country is not making as much to respond to the new challenges arising from oil exploration.

Looking at other industry issues, particularly oil spills, which have devasted the Niger Delta, how do you think this can be checkmated through legal framework?
As a matter of fact, the legal framework is already there, but enforcement is the key challenge. I think we should increase the capacity of the government institutions charged with the responsibility to oversee the oil spill problems. Once we can avoid the culture of impunity, which is a big problem in Nigeria, and empower government agencies to prosecute companies and individuals found guilty, the problem of oil spills will reduce drastically. But unfortunately that is not happening in the Niger Delta. Companies and individuals are not respecting the law and to a large extent, capacity challenges also militate against the proper enforcement of existing laws guiding oil spillage.

A Central Bank of Nigeria, CBN Report put indigenous oil production level at just five per cent of the nation’s total oil production. What is the implication to the local content policy?
I think that is unfortunate because as you and I know, we must also be frank with ourselves that we lack the discipline to measure up, and if we must change the situation to reflect the spirit of the local content policy, we must be prepared to acquire the knowledge which drives the oil industry. How we respond to this will demonstrate our seriousness as a country to increase our benefit. Unfortunately, the renter economy has done so much damage to the entire education, which is supposed to provide the necessary skills and manpower to enable us achieve the goals of the local content policy.

Quality manpower in the oil and gas industry is said to be on the decline. What do you think should be done to improve on this?
It is very simple; our educational system must be improved. Investments in the educational institutions are low compared to other oil producing countries that are doing well. For example, I expect that if the Nigeria government really wants to implement local content policy that would have been seen in how they handle the University of Petroleum in Warri, Delta State, as the first indigenous petroleum university in the country. But so far, government’s action is not very encouraging and how do you produce the manpower and skills that will support the local content policy in Nigeria? We need to walk the talk, otherwise, we will not be taken seriously by others. So the right thing to do is for the Federal Government to get the right policy in place and ensure that they direct the resource to it for achieving the goal.

You have been organising workshops for states in the Niger Delta on revenue accountability. How successful have these programmes been?
For the past two years, my organisation, ANEEJ, has be implementing a capacity building project in five Niger Delta states, which include Edo, Delta, Bayelsa, Rivers and Cross River, with support from Norway, Switzerland and German governments. The beneficiaries include governments, civil society organisations, community-based organisations and the media. So far, we have achieved some objectives of the project particularly in Edo and River states in the areas of building dialogue among stakeholders, strengthening oil and gas commission in Edo State, legislative capacity including media and also undertaking media outreach on key development issues ranging from revenue management, procurement and fiscal transparency legal framework.

We have also raised the profile of key governance reform initiative in the five Niger Delta states and organised several capacity building workshops with resources drawn from the universities and international development agencies.

Do you think those programmes can make the Niger Delta to be more accountable to the people and foster effective development in the area?
I think so. For instance, the level of accountability in the region is increasing. In River State, the government is making a saving of over N28 billion for future generation, which is quiet remarkable, and in Edo State, civil society organisations and labour unions were nominated into the World Bank Public Finance Reform Project, which is also quiet unique .There are quite a number of examples in the region that clearly demonstrate that things are gradually changing particularly with the increase attention of Non-governmental Organisations NGOs, focusing on transparency and accountability in the region.