The Nigeria Extractive Industries Transparency Initiative, NEITI, Sunday, commended the National Assembly for the passage of the Petroleum Industry Governance Bill, PIGB, stating that the Bill would stem the massive loss of revenue recorded in the petroleum industry, arising from corrupt practices and process lapses.
NEITI, in a statement in Abuja, said it previous reports in the petroleum industry had also revealed 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.
According to NEITI, the total cost to the nation in 2013 alone was N1.74 trillion largely as a result of the absence of a new law.
It said, “NEITI is optimistic that with the new governance law for the industry, these huge revenue losses to the nation as a result of process lapses and outright stealing will be strictly checked if not eliminated.”
NEITI noted that 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, especially given the challenges the bill had passed through in its legislative journey for over ten years.
NEITI said its interest in the issue, was 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 ‘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 has led to huge revenue losses to the tune of over $200 billion.
“In that publication which was widely circulated, 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.’”
NEITI further noted that the implementation of the global Extractive Industries Transparency Initiative, which Nigeria is a key signatory, had 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.
It averred that it remained convinced that the PIGB when assented to by the President would 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.
It noted that, “NEITI 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.
“While hoping for early Presidential consideration and assent to the Bill, NEITI hopes to work with muti-stakeholders, development partners and the industry to set the stage for informed stakeholders’ engagements to ensure effective implementation when the Bill becomes law.”