Senate’s PIB debate mirrors Nigeria’s geographical divide

Senate President, David Mark

In this piece, Oluwole Josiah X-rays the just-concluded Senate debate on the Petroleum Industry Bill and  the need for it to become law.

The Petroleum Industry Bill is not new to the National Assembly. It first made its debut during the Sixth National Assembly. It was then greeted with mixed feelings while allegations were rife that  International Oil Companies dictated the tempo of discussions. The conflict was basically between those in government  and the IOCs.  The legislature was caught in the middle as each of the contenders sought to sway public opinion in their favour.  The political process did not  bring the country to its knees. The north-south divide was latent, although the socio-political cum economic interests of all the  geo-political  zones were at stake.

When the bill was first introduced, as the Leader of the Senate, Victor Ndoma-Egba, explained, “legislative action on it could not be concluded as of that time; because it seemed several versions of it were in circulation in the chamber and elsewhere.”

However, the bill was reintroduced last year and was read the first time on September 19, 2012. Since its reintroduction, it has been politics all the way.

The bill immediately revived the inactive southern and northern caucuses in the Senate with each working hard to rally support for its position.

To most of them, especially those from the northern part of the country, it was strictly about the economic and political survival of their regions. Northern  opposition to the bill was evident. In response, their colleagues from the south began moves to find the best way to rework their machinery to ensure that the bill not only sails through but also does so with the support of their northern colleagues for some of the controversial clauses contained therein.

The battle for and against the passage of the bill started with the convening of meetings by the two blocs. After one of such meetings by northern senators in November, Chairman of the Northern Senators’ forum, Senator Umaru Dahiru, announced that the meeting was convened to deal with the thorny issues of the Petroleum Industry Bill.

He said, “The issue of PIB has been delayed for a while, probably until we come back from the recess. This is because it has not been taken. I believe when we come back and it is tabled,  we will take our position on that.”

For southern senators, it was also serious business. After one of their crucial meetings, a subcommittee headed by Chairman of the Senate Committee on Petroleum(Upstream) was set up to secure the services of an international consultant to advise them on the way forward. Chairman of the forum, Senator James Manager, told journalists that the issue of the PIB was paramount on the agenda of the meeting.

A series  of meetings followed. The result of these meetings and several person to person contacts was a precursor to the three-day fireworks which played out on the floor of the Senate during the debate on the general principles of the bill.

 Ndoma-Egba, while leading the debate for second reading, highlighted the merits of the bill saying that it was the panacea for all the woes that had bedevilled the oil industry. He said the bill, when passed, would harmonise and consolidate the diverse and disparate laws, (about 16 in number) that presently govern and regulate the sector.

According to him, the bill seeks, among other things: to enhance exploration and production of petroleum resources through robust production allowances in both oil and gas. This, he said, would increase the country’s revenue base.

He said the bill would “significantly increase domestic gas supplies especially for power and industry. It will ensure accelerated gas infrastructure development through private partnership by, in addition, addressing funding issues associated with slow development of the country’s gas infrastructure which is the backbone of our power sector reform agenda.

“The bill will also establish a fiscal framework that is flexible, stable and competitively attractive; creating, among other things, a two-tier royalty and tax regime that capture upside of crude oil and gas prices designed for fair and equitable share of revenue; royalty based on production against terrain; royalty by price introduced to claw back high crude oil and gas prices; distinct two tax regime: company income tax and National hydrocarbon tax as against the existing petroleum profit tax, as well as production rather than investment based incentives.”

Leading the onslaught against the passage of the bill from the north, Senator Ahmed Lawan, from Yobe North Senatorial District, said the bill, although an important one, had been spoilt with the inclusion of certain controversial sections.

He said, “10 per cent host community fund has no place in PIB,” arguing that it was unfair that  the south-south states which had received about N7.3trn as  derivation  fund in 13 years should be given additional funds. He said with the addition of funds for the Amnesty Programme and the Niger Delta Development Commission, the states had so far netted N11trn within the same period without any development to  show for it.

Lawan’s grouse was that it would further deny northern states of additional revenue, while more revenues would go to oil-producing states, whose coffers were already overflowing with oil funds.

Senator Ibrahim Gobir  of Sokoto East  said the host community fund would give  oil producing states 20-30 per cent derivation. He said, “It will short-change other federating states. It means we will have four tiers of government:  federal, states, local  government and host communities.”

Senator Isa Galaudu, Kebi North, also took  a swipe at the bill,  recommending that it should not go for second reading. He said, “Earlier speakers argued that what  would be paid to the host communities will not affect what goes to the Consolidated Revenue Fund. I disagree. Because it is tax deductible, it will definitely affect what goes into the CRF.”

Senator Abubakar Saraki, Kwara Central, in his contribution, noted that  the bill needed to be passed to ensure a total reform  of the oil sector. He, however, recommended that all the controversial areas, such as the  10 per cent host communities fund should be removed. “We should move  away from issues that divide us and focus on those issues on which we agree. This bill as it is cannot stand the test of time,” he said.

Besides Ndoma-Egba, most southern senators argued vehemently in favour of the bill, warning that the 10 per cent for host communities was a strategy to keep the oil flowing out from the wells in the Niger Delta. Senator Benedict Ayade, who represents Cross River North, said, “I agree with the 10per cent host communities fund, because this is what will guarantee oil production. It is  a  way of calibrating the host communities  in  the nation’s oil production.  Because  we  know that when the oil stops flowing, Nigeria will cease to exist.”

For Senator Nkechi Nwaogu, who represents Abia Central, those fighting the bill on account of the 10 per cent fund, should not lose sight of  sufferings  and deprivations in the Niger  Delta, saying the host communities  deserved the fund. Noting that “opposing the 10  per cent host communities fund may escalate the violence in the region.”

Senator Ita Enang’s bombshell, on the second day of the debate, shifted the pendulum in favour of the southern senators, when he disclosed all that 83 per cent of the country’s oil blocs belonged to northerners. He called for the revocation of the licences and the re-award of the same in line with the federal character principle to give a sense of belonging to other parts of the country. His contentions in favour of the bill greatly affected the tempo of the debate when senators resumed for the third day.

President of the Senate, David Mark, while drawing conclusions on the debate, warned that the debate was not about north or south, but about reforming the oil industry for better performance and accountability.

He also did not fail to remind senators that besides the host communities fund, which appeared the most controversial, they were largely in agreement with most of the provisions of the bill. Mark pointed out the areas where senators struck a common chord.

The President of the Senate said, “We are also very united on the fact that so much power is given to the Minister, particularly section 191 where the minister can grant lease unconditionally, and can also revoke lease unconditionally. We also all agree that the frontier exploration services should be properly funded.

“Let me emphasise that no bill has come to the chamber that we have not tinkered with. It will go for second reading and public hearing and by the time it comes back there will be amendments, additions and subtractions. So the draft bill that has been given to us is not sacrosanct.  When the bill goes for public hearing, the committees that will look at it will bring the bill back in a manner that will reflect the views that we have expressed here and the view that was gathered from the public. “

It is gladdening to note that although the contentions were intense in the bi-regional debate, it did not eventually destroy it when it was time to vote for it to sail through second reading. It is an attestation to the fact that the petroleum industry needs urgent reforms which will enhance transparency. It  is also in the interest of all to have the bill passed into law, with all the observations by lawmakers adequately factored in.