Oil And Gas Sector Reforms - Openness & Participation: A Case of NLNG Act Amendment

The Nigerian House of Representatives has passed a Bill for the amendment of the Nigeria Liquefied Natural Gas (NLNG) Act.

Oil And Gas Sector Reforms – Openness & Participation: A Case of NLNG Act Amendment

The Nigerian House of Representatives has passed a Bill for the amendment of the Nigeria Liquefied Natural Gas (NLNG) Act.  The Bill, sponsored by Mr. Leo Ogor, the Minority Leader, will be transmitted to the Senate for concurrence.

In the proposed amendment, NLNG shall pay 3percent of its total annual budget to the Niger Delta Development Commission (NDDC) Fund. The sponsors of the bill argue section 14 subsections 1 and 2b of the NDDC Act obligates NLNG to make such payments.

Prior to the passage of the Bill, stakeholders from the oil and gas sector were invited to a public hearing held by the House Committee on Gas Resources to make their inputs.

At the hearing, invited stakeholders did not give approval to the legislation and warned that if allowed to be passed, it will have an adverse effect on the oil and gas sector. They argued, amending the NLNG Act will steer up the company and weakens Nigeria’s efforts at luring foreign direct investment.

Mr. Ogor, pushing for credence, argued, gas flaring has led to serious environmental pollution in the Niger-Delta for decades, and the only way to address the challenge is to amend the NLNG Act so the people can hold the company to account using the Act. An argument that does not connect to what the proposed amendment seeks to address.

In a reaction, Mr. Kudo Eresia-Eke, the General Manager NLNG External Relations, said the amendment violates the assurances and guarantees granted investors by the Nigerian state and was reinforced by successive governments.

By January 2017, Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) opposed the amendment, describing it as unnecessary. In a statement signed by Mr. Francis Johnson and Lumumba Okugbawa, PENGASSAN President and Acting General Secretary respectively, the oil workers said, the amendment will have negatively impact on Nigeria’s foreign image and could cause imminent losses that will surpass the envisaged gains. The workers argued, the international community would perceive Nigeria as a country which does not honour its promises or take its desire for foreign investments seriously.

They further disclosed the Act amendment will directly affect about $25 billion worth of foreign investments as well as 18,000 Nigerian jobs linked to NLNG’s Train 7 and 8 expansion programmes. This will hamper job creation and job security policy being propagated by the Buhari led government the workers alleged.

Mr. Diri Douye, member, House of Representatives Committee on gas, in a Channels Television (Sunrise Daily), said the amendment is to make NLNG comply with section 14 of the NDDC Act which provides that all oil and gas producing companies operating in the Niger-Delta area are to pay 3percent of their total income budget to the NDDC fund. Mr. Diri argued, NLNG has had a tax holiday for 10 years in spite of the huge gains it had made.

Besides the un-encompassing stakeholders that were reported to have been invited by the House Committee at the public hearing that opposed the amendment, there is no tangible evidence showing that the Civil Society Organizations (CSOs) and the host community were consulted and participated in the Bill process.

In the Nigerian state, we often forget, CSO and citizens participation no doubt improves the quality of governance and overcome the democratic deficit in the formation of policies and law making. The attitude of consultations and participation with CSOs and the citizens in any political decision or law making is a mechanism that leads to legitimacy in governance which represents “participatory democracy” which is at the very heart of the idea of democracy.

At the moment, there is the decline of public trust in institutions. And the more transparent process of decision-making and the inclusion of all parties concerned into the process directly influence the regaining of trust.

The reason for all policies and laws is that they become applicable upon adoption. However, when all parties concerned are consulted and they dully participate in the development of policies and laws, subsequently, the laws and policies will not only be applied easily but will be observed by people willingly.

In the past, we have had laws and reforms that were devoid of citizens’ consultation and participation in the process. The failure of most reforms, laws and policies in Nigeria no doubt can be traced to none citizens participation, and this leads to dare challenge in their application, hence leading to their dead on arrival.

From our past experience, we hope that the Bill to amend the NLNG Act will not go the direction of other reforms and laws that never achieved their intended purpose.

Audu Liberty Oseni, Communication Officer, PWYP-Nigeria

Abuja Secretariat