42 Slipping on oil and gas laws

This article was first published in 234NEXT on February 15, 2011[1]

Over the last two years the National Assembly made attempts to enact laws that would bring about needed changes in the oil and gas sector and in the overall socio-economic environment. Somehow, both the Senate and the House of Representatives slipped into deep sleep over the salient issues.

The first bill that comes to mind is the highly talked about Petroleum Industries Bill (PIB). Oil and gas companies operating in Nigeria have generally been happy to continue business as usual, riding on the tracks set by various military dictators who held sway over the powers of state in the past. The PIB, with all its imperfections, attempts to bring some level of sanity into the sector and allows for some form of integration as well as enabling the nation to derive more financial and socio-economic benefits from the sector.

Expectedly, the oil companies have fought the bill. They have openly said that they would not accept any law that is not favourable to them and have often twisted statistics to suggest that Nigeria is attempting to drive them into bankruptcy if the bill is passed into law without being watered down.

Similarly, the government seems to be bending back and doing the donkey work to ensure that the oil companies are happy. Having been in bed together for so long, the necessary social distance needed for serious negotiations between the government and the companies is difficult to create and so they continue with their pillow talk away from public view.

While the oil companies kick and scream over who gets to pocket how much money, the issues that really concern the local communities living in the oil fields were largely overlooked by the PIB. For example, there are no concerns about the impacts of the sector’s activities on the environment. Neither did the first draft make any allowance for community consultations and participation.

This writer fully appreciates the difficulties that governments have when it comes to communities. I often recall a conversation I had with a mines and energy minister of another country over serious agitations from communities who feared that mining activities in their communities would destroy their livelihood. They demanded a consultation with the government and the government would not agree to hold one because, according to the minister, the national constitution did not say anything about popular consultations and as such the government could not say what it meant, how it should be held, and who would pay for it.

Even when the community folks were ready to hold the consultation at no cost to government and insisted that this was a right under the International Labour Organisation’s covenant, the government would not budge. The only promise our meeting left with was that the government would not proceed with the mining projects until a suitable agreement was reached with the affected people.

Consequently, violent conflicts deepened in the area and it does seem that this is the sort of dialogue that some governments would prefer to have. Conflicts in Nigeria have similar roots.

The PIB has the possibility of making environmental and community concerns central in the sector. The environment has been trashed for long enough and there is need for a cease-fire now. And if we like, we can extend an amnesty to the oil companies too.

Sleepy chambers

The Gas Flares Prohibition Bill of 2008 is another critical bill that has been sleeping in the chambers of the House of Representatives. The Senate passed the bill and going by it, gas flaring would have been outlawed again by the end of 2010. Gas flaring has been illegal in Nigeria since 1984 and a High Court sitting in Benin City affirmed in November 2005 that the activity is indeed illegal and a flagrant abuse of human rights.

Shell informed the world about the origins of gas flaring in Nigeria in a document on their website. ‘When The Shell Development Company of Nigeria Limited (SPDC) built many of its first production facilities in the 1950s, there was little demand or market for gas in many parts of the world, including Nigeria. So, Associated Gas (AG) was usually burned off safely— a process called flaring. This remained accepted industry practice as SPDC established a major oil operation across the Niger Delta.’[2]

As you can see, this dastardly act goes back five decades! Gas flaring may have been a practice accepted by Shell and their co-travellers in the pursuit of ecocide, we can loudly say that the practice was never celebrated by the suffering people of the oil region. Neither will communities elsewhere in Nigeria accept it if oil is found in their territories.

The gas flare prohibition law for the first time proposes sanctions that should deter the companies from engaging in the destructive activity. Apart from prison terms proposed, offenders would pay fines equivalent to market value of the flared gas. The bill also proposes that no company should be given any lease for oil and gas exploitation without an accepted gas utilisation plan.

Now the slumber of the House of Representatives over this matter has allowed the 2010 deadline proposed by the bill to slip by. Added to dinner party deadlines set and ignored by past governments, this one has been swept under the carpet and no future deadline is even hoisted to keep hope alive.

Gas flaring is an abuse that cannot be tolerated for any reason. We have allowed it for long enough. We do not need new deadlines. And the farce of presenting projects with regard to existing gas flares for carbon credit under the United Nations Framework Convention must be halted.

The slippery terrain of the oil sector has dulled the outgoing NASS into sleep and given room for continued abuse and pillage. If electioneering will allow governance to proceed, it is not too late in the day for the legislators to rouse from slumber and do the right thing.

  1. Now available at http://nigeriang.com/money/oil-politics-slipping-on-oil-and-gas-laws/6994/ (accessed 15 June 2016)
  2. Shell. Gas Flaring. http://s06.static-shell.com/content/dam/shell-new/local/country/nga/downloads/pdf/2013bnotes/gas-flaring-2012.pdf (accessed 7 June 2016)


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