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PIB: Imperfect comparison of petroleum minister’s powers

By Felix Ayanruoh

It is not too late for the Nigerian government to have a New Year’s resolution and new slogan.

This resolution may be hard to understand or solve, but it is crucial. The government – executive legislature and judiciary, must be determined to be smarter from this year than they had been in the past.

The petroleum industry in particular, had acted in ways that were inconceivable, corrupt and embarrassingly inefficient for much too long. The industry had caused problems for the economy and mortgages the future of generations yet unborn particularly in the Niger Delta region. The passage of the PIB is in doubt, not because of the good of country but for reasons unbeknown to some opponents of the bill. It’s time to stop the self-destruct.

The National Assembly should not be swayed by the debate comparing the petroleum’s minister’s power to foreign jurisdiction. Some have argued that the proposed bill gives the petroleum minister too much power while others posited that the said powers are not different from what obtains in other jurisdiction.

It is indisputable that the proposed bill confers prodigious powers to the Minister of Petroleum Resources. If passed “as is”, will certainly affect transparency, accountability and would jeopardise the reform process, which the bill sought to establish.

These powers cover assemblage of issues including the following:

• Anyone who obstructs or “interferes” with the minister will be fined or imprisoned.

•    Power of the petroleum minister and the directors of state institutions to receive gifts

• Powers to determine rentals and royalties by regulation.

• Power to regulate and distribute the Petroleum Host Community, PHC fund.

• Powers to grant, amend, renew, extend or revoke upstream petroleum licences and leases

• Powers to grant, amend, renew, extend or revoke downstream petroleum licences for gas transportation pipeline, gas distribution networks, refineries, Liquefied Natural Gas (LNG) and Gas-to-Liquid (GTL) plants, petrochemical plants and gas plants.

• Power to “do all such other things as incidental and necessary to the performance of the functions of the minister under this Act.”

This piece is devoid of peregrination into the legal regime of other jurisdictions vis-à-vis the proposed PIB, but analyzes developmental issues, multiple dimensions of petroleum industry governance failures and smarter conceptual design and implementation of policies. Our government had quite often tended to merely follow precedents or get boxed into bureaucratic and ideological straitjackets rather than an excellent exposure to the diversity and complexity of development challenges.

As a general matter, the importance of choice of law and the necessity of institutional comparison seem common sense. It is not odd, therefore to find calls for institutional comparison and even instances of serious institutional comparison. What remains remarkable is the vast amount of law and public policy analysis that either ignores, trivialises or poorly executed institutional comparison.

Institutional comparison is difficult as well as essential. The choice is always a choice among highly imperfect alternatives. The strength and weakness of one institution versus another vary from one set of circumstances to another, for example, the UK’s compendium of laws – UK Bribery Act, and other UK petroleum laws as against Nigerian petroleum laws and dearth of strong anti-graft law.

As we all know, corruption was and is still a major factor in the cycle of failures and inefficiencies affecting the industry. At every stage of the petroleum industry reform process a constant theme is the issue of corruption. This is not the problem most jurisdiction cited in the comparison are facing.

Now that the reality of a corrupt and inefficient industry and stunning economic downturn has so roughly intervened, we at least have the option of being smarter going forward. There is broad agreement that we have no choice but to enact a PIB that addresses our peculiar problems but not that of other jurisdiction.


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