PIB: Rivers, host communities fault NNPC privatisation plan


Leke Baiyewu, Abuja

The Government of Rivers State and communities in the Niger Delta region have criticised the proposal by the Federal Government to unbundle the Nigerian National Petroleum Corporation and privatise a part of it as well as oil assets without the approval of other tiers of government.

The state and the communities, in their separate written presentations to the House of Representatives on the Petroleum Industry Bill, stated that the proposal to eventually sell off a National Petroleum Company to be created from the NNPC requires a collective approval of all stakeholders.

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According to them, the NNPC and petroleum assets belong to the federation and not the Federal Government alone.

The Host Communities of Nigeria Producing Oil and Gas, in its presentation to the House Committee on PIB at its public hearing held between Wednesday and Thursday, particularly faulted the proposed plan to empower the petroleum minister to solely determine the fate of national assets in the oil and gas sector.

The position was stated in the document signed by the National President, HOSTCOM, Chief Benjamin Tamaranebi, on behalf of host communities of Nigeria.

It read in part, “It may be necessary to have a mechanism whereby the minister may have to obtain the approval of the federation in matters that affect the Federation Account especially the petroleum producing states and the host communities.

“This is especially important because all the assets the minister is to supervise belong to the federation and not the Federal Government.

“It would therefore be wrong to seek the approval of the Federal Government alone if the minister wishes to divest any asset that is under his purview.”

The host communities also warned against privatisation in the petroleum sector, saying it posed a major economic threat to Nigeria.

The document read, “Our host communities would want a careful handling by the government of all petroleum privatisation issues and to use our petroleum resources for the development of the entire nation.

“Consequently, we demand that Nigeria continues to maintain a robust national petroleum company whose interests should not be privatised or divested as proposed in the bill, where it intends to divest not less than 10 per cent in five years and not less than 30 per cent thereafter. Each of those provisions mathematically/legally implies 100 per cent divestment.

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“If we divest our oil and gas resources, we would have stripped our nation bare. No nation can survive and be economically healthy after stripping itself of its natural resources.

“The divestment programme will create wide margin between the rich and the poor. It will enslave Niger Delta, impoverish Nigeria and turn Nigeria into a worthless nation. We would have surrendered ourselves to servitude forever. The buyer of our oil and gas assets will be the only one to determine whether we breathe as a nation or not.”

HOSTCOM added, “We have, therefore, resolved and demand that no one should sell off our oil and gas reserves.

“Consequently, we invite Mr President not to sign the bill until everything about divestment or privatisation and selling off our petroleum reserves are expunged from the bill.

“It will be very absurd and economically very illogical to sell performing equity. No equity/asset is performing more than our oil and gas reserves. This quest to take over complete control of all our national assets by a very greedy few has been on for too long.

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“If Nigeria must divest or privatise our oil and gas assets, then the host communities must have the first right of refusal before you open up the sale or bid to other Nigerians because the oil and gas in Nigeria, indeed, belongs to the host communities in the first place.

“It was the military decree of 27 November, 1969, that took it away from us and vested it on the nation. Rather than keep and use it as a nation, the nation now plans to give away our national resources to a few greedy foreigners and their local collaborators.”

Similarly, the Government of Rivers State also stated that petroleum resources and assets belonged to the entire federation.

In the presentation signed by the Commissioner for Energy and Natural Resources, Peter Medee, the Rivers State government faulted the clause, ‘Vesting of Petroleum: The property and ownership of petroleum within Nigeria and its territorial waters, continental shelf and exclusive economic zone is vested in the government of the Federation of Nigeria.’

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Rivers asked that the clause be amended to read, ‘The property and ownership of petroleum within Nigeria and its territorial waters, continental shelf and exclusive economic zone is vested in the government of the Federation and the governments of the petroleum producing states for and on behalf of the people.’

Rivers stated that governments and the people of the host communities had a major stake in the ownership of the mineral resources on their land, territorial waters, continental shelf and exclusive economic zone as applicable in the Mineral Mining Act, 2007.

On the powers of the petroleum minister, the state also said, “…all the assets the minister is to supervise belong to the Federation and not the Federal Government. It would, therefore, be wrong to seek the approval of the Federal Government alone if the minister wishes to exercise his power to divest any asset. The vesting of enormous power in the minister that is not limited or constrained by oil-bearing states poses a clear and present danger to the oil-bearing states as it leaves the states at the mercy of the minister.”

On ownership of all Nigerian petroleum assets, Rivers said, “In one vein it (the bill) says the shares of NNPC are not transferrable and right below that statement, you now also have an NNPC that is not wholly owned by government.

“Let it be made clear that the NNPC must remain a government national company and any sale of shares must be with the approval of the Federal Government, the petroleum producing states, host communities and the National Assembly. The assets NNPC controls belong to the federation not the Federal Government alone.”

The state government added, “Indeed, the easiest way to permanently enslave Nigerians is to sell off or privatise the nation’s natural resources.

“When we transfer all national assets, oil, gas, products pipelines that are in NNPC to NNPC Ltd and sell same to a private party, we would have completed our permanent enslavement.

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“The petroleum producing states and host communities reject that move totally. Whenever the nation decides to privatise NNPC Ltd, the Niger Delta states must be given right of first refusal to acquire the shares, since most of the assets NNPC Ltd manages are derived from petroleum which is produced in the Niger Delta.”

Also, the Government of Bayelsa State called for membership of oil-producing states in the board of the proposed bodies.

In the document presented by the Attorney-General and Commissioner for Justice, Bayelsa, Biriyai Dambo (SAN), the state said legislative consideration of an important bill like the PIB “should ordinarily involve several properly planned stakeholder events hosted close enough to the host communities and with their full participation.”

Meanwhile, the Revenue Mobilisation Allocation and Fiscal Commission, in it’s written presentation to the House, proposed a new sharing formula for the 13 per cent oil revenue derivation that goes to the oil-producing states.

The RMAFC document read, “The National Assembly should enact an additional legislation (Act), pursuant to the provisions made in Section 162(2) of the 1999 Constitution of the Federal Republic of Nigeria (as amended), on the 13 per cent derivation, defining the beneficiaries as follows: 40 per cent directly to Host Communities Development Fund and 60 per cent directly to oil and gas producing states.

“Considering the fact that the word ‘community’ is not clearly defined in the proposed bill, and the complexity that will arise in the management of the numerous communities, it is recommended that the Host Community Development Trust Fund should be on local government basis and must include an appointed ‘trustee’ of the state government, in addition to representatives of the various communities.

“Consequently, all the responsibilities given to the ‘settlor’ in this bill should then become that of the state government in respect of managing the Community Development Trust Fund.

“Within three months of the establishment and promulgation of this bill, the governor should set up the Community Development Trust Fund in every local government.

“Pursuant to the establishment of this Fund, the office for the administration of the funds should be domiciled in the respective LGCs.”