The Nigeria Extractive Industries Transparency Initiative (NEITI) has welcomed steps by both chambers of the National Assembly to pass the Petroleum Industry Governance Bill (PIGB).
The decision of the Senate and the House of Representatives to consider the bill as priority resulting in its eventual passage is bold, courageous and progressive, says NEITI, given the challenges the bill has passed through in its legislative journey for over 10 years.
NEITI, as an agency set up to enthrone transparency and accountability in the management of extractive industries in Nigeria, has legitimate interest in the PIGB.
NEITI says its interest is in view of the urgency and strategic importance of a new law to replace the existing archaic legislations that have aided huge revenue losses, impeded transparency, accountability and investment opportunities in the nation’s oil and gas industry.
NEITI recalls that, as an anti-corruption agency in the sector, it boldly alerted the nation last year through a special Policy Brief – titled: “The urgency of a new petroleum sector law” – that the current stagnation of investment opportunities in the Petroleum Industry was as a result of the absence of a new law for the sector. This, adds NEITI, has led to huge revenue losses to the tune of over $200 billion. In the publication, NEITI argued that the “revenue losses were as a result of investments withheld or diverted by investors to other (more predictable) jurisdictions.” The publication added that “the hedging by investors stems from the expectation that the old rules would no longer apply, but not knowing when the new ones would materialise.”
In addition, NEITI reports in the sector had also disclosed that over $10.4 billion and N378.7 billion were lost through under-remittances, inefficiencies, theft or absence of a clear governance framework for the oil and gas industry. The total cost to the nation in 2013 alone was N1.74 trillion largely as a result of the absence of a new law.
NEITI is optimistic that, with the new governance law for the industry, such huge revenue losses to the nation as a result of process lapses and outright stealing will be strictly checked if not eliminated.
Furthermore, NEITI notes that the implementation of the global Extractive Industries Transparency Initiative which Nigeria is a key signatory, have over the years been frustrated by the absence of a dynamic law that suits modern business modules and trends in the ever evolving oil and gas industry.
NEITI remains convinced that the PIGB, when assented to by the President, will provide “a dynamic governance framework required to re-position the Petroleum industry to fully embrace competition, openness, accountability, professionalism and better profit returns on investments to both companies and government”.
NEITI notes that it is encouraged that the National Assembly in this particular instance threw politics aside and dealt with the PIGB issue with the attention it deserves. The PIGB, now passed and ready for possible Presidential assent, is a product of this creative initiative, stresses NEITI.
NEITI also commends the media, civil society, development partners, industry, stakeholders and experts who it says have followed the bill in the National Assembly for their valued contributions to what has been achieved so far.
While hoping for early Presidential consideration and assent to the bill, NEITI says it hopes to work with multi-stakeholders, development partners and the industry to set the stage for informed stakeholders’ engagements to ensure effective implementation when the bill becomes law.
“Finally, we call on all the media, the civil society and above all the National Assembly to show similar coordinated attention to commence legislative process in the remaining legal frameworks in the industry especially the Petroleum Industry Fiscal Bill and the Host Communities Bill. These two key pending legislations will help complement and strengthen the provisions of the PIGB,” adds NEITI.