13% oil derivation should be spent on host communities – RMAFC

The Chairman of the Revenue Mobilization Allocation and Fiscal Commission, Engr. Elias N. Mbam, has stated that the 13 per cent derivation from monthly allocation paid to oil-producing states should be exclusively spent on oil-producing communities. Mbam said this should be the case because the oil- producing communities suffer most from the impact of environmental degradation occasioned by oil exploration in their domain.

Mbam observed that the clarification became necessary in view of the fact that a larger percentage of the 13 per cent derivation fund meant for the development of host communities is unjustifiably spent in the development of state capitals and other urban centres thus negating the principle behind derivation.

Mbam lamented that the law establishing States and Local Governments Joint Account is an encumbrance on the successful operations of the 13 per cent derivation principle since the law confers absolute control of the Fund on governors rather than local council chairmen who govern the host communities.

PENGASSAN: PIB must address labor & other issues

Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, has vowed that it will not support the Petroleum Industrial Bill, PIB unless it addresses labor issues, among others. In a 10-point position paper, the umbrella body for senior workers in the oil and gas industry insisted that transparency and accountability in the petroleum industry must take priority.

Specifically, PENGASSAN  in line with transparency and accountability stance said “PIB must ensure a competitive, non-discretionary licensing and tender processes, publish all licenses, tenders and contracts online,  void confidentiality clauses for oil revenue and payment information, publish quarterly comprehensive production, export and import figures and publish NNPC annual reports and audits online as the case with the multi-nationals.”

There should be community participation through Petroleum Host Communities Fund and clearer definition of community participation and ownership to foster enduring harmony and co-existence with the host communities.

PENGASSAN also said “there must be simple and transparent technical licensing, elimination of the downstream allocation process, end to the Minister’s role in issuing licenses and all discretionary power of the Minister with regards to licenses of all kinds”, arguing that approval processes should be simplified. It called for a single regulatory authority for upstream, midstream and downstream, capitalization and unbundling of Nigerian National Petroleum Corporation, NNPC.

On refinery, PENGASSAN demanded “the adoption of the Nigerian Liquefied Natural Gas, NLNG, model of 49%/51% Equity Shares and ensure that the management of each refining company is autonomous and fully responsible for its success and failure. Effective incentives should be granted to allow for the development of private refineries alongside the existing refineries.

PENGASSAN canvassed that “the PIB should ensure mandatory recognition of the right to freedom of association and effective collective bargaining by all companies operating or doing business in the Nigeria oil and gas industry, irrespective of where they are located. The position of the 2008 original PIB position on this should be strengthened. In addition, the PIB must ensure that all companies operating in the Nigerian oil and gas industry comply with all international labour conventions that have been ratified by Nigeria; the collective agreements with the labour unions and the extant labour laws as a minimum in all their dealings with the Nigerian workers and their representatives. Workers shall transit to the new companies on same terms and conditions.”

“There should be one representative each of PENGASSAN, Nigeria Union of Petroleum and Natural Gas Workers, NUPENG, Trade Union Congress of Nigeria, TUC and Nigeria Labour Congress, NLC, in all boards and committees set up in the PIB.