Nigeria: New Oil Industry Bill Exempts Sector From TSA, Due Process

Leadership
By Tordue Salem

Part 5, Section 62 of the Petroleum Industry Governance Bill, 2016, proposed by the two chambers of the National Assembly, seeks to empower a “National Petroleum Company” that would execute contracts and transact business on behalf of government without recourse to the Bureau for Public Procurement under the Public Procurement Act and Fiscal Responsibility Act, 2007.

These laws were made to ensure due process, transparency and spending restrictions in procurement and other transactions of agencies on behalf government.

Section 62 of the proposed law, says “The National Petroleum Company shall not be subjected to the provisions of the Fiscal Responsibility Act 2007 and the Public Procurement Act 2007″.

The lawmakers proceed in section 65(1) to state that “Notwithstanding the provision of any other law to the contrary, the National Petroleum Company shall be entitled to retain its revenue from its operations and shall be entitled to defray from such revenue all its expenses including its cash call obligations in respect of its joint venture assets and its petroleum operations and its obligations to lenders and financiers”.

Section 65(1) as proposed, however, breaches section 162(1) of the 1999 Constitution that states that all revenue from agencies of government must be lodged into the Federation Account.

Section 162(1) of the 1999 Constitution states that “The Federation shall maintain a special account to be called Federation Account into which shall be paid all revenues collected by the Government of the Federation, except the proceeds from the personal income tax of the personnel of the armed forces of the Federation, the Nigeria Police Force, the Ministry or department of government charged with responsibility for Foreign Affairs and the residents of the Federal Capital Territory, Abuja”.

But with the new proposed law authorising and encouraging the National oil company to spend revenue generated at their discretion, the provision of the constitution may also, besides the Fiscal Responsibility, Public Procurement Acts and the Treasury Single Act policy of government, be in breach.

LEADERSHIP had exclusively reported yesterday that the lawmakers’ version of the controversial Petroleum Industry Bill had recommended the dissolution of the Department of Petroleum Resources (DPR), the Petroleum Products Pricing and Regulatory Agency (PPPRA) and the Nigeria National Petroleum Corporation (NNPC).

Part three (3) of the Petroleum Industry Governance Bill, 2016, anticipates in section 4 subsection 1 that “from the date of the commencement of this Act, without further assurance, the Commission shall be vested with all assets, funds, resources and other movable and immovable properties which immediately before the commencement of this Act were held by the Petroleum Inspectorate, the Department of Petroleum Resources and Petroleum Products Pricing Regulatory Agency.

The commencement of this Act, the rights, interests, obligations and liabilities of the Petroleum Inspectorate, Department of Petroleum Resources and the Petroleum Products Regulatory Agency existing immediately before the effective date under any contract or instrument or at law or in equity shall by virtue of this Act be assigned to and vested in the Commission”.

The section adds that “any such contract or instrument covered by subsection 4(a) of this section shall be of the same force and effect against or in favour of the Commission and shall be enforceable as fully and effectively as if instead of the Petroleum Inspectorate, Department of Petroleum Resources or the Petroleum Products Pricing Regulatory Agency, the Commission had been named therein or had been a party thereto; and the Commission shall be subject to all the obligations and liabilities to which the Petroleum Inspectorate, Department of Petroleum Resources and Petroleum Products Pricing Regulatory Agency were subject immediately before the effective date and all other persons shall as from the effective date have the same rights, powers and remedies against the Commission as they had against the Petroleum Inspectorate, Department of Petroleum Resources and Petroleum Products Pricing Regulatory Agency immediately before the Effective Date”.

The new Commission, should the Bill become law, would also advise the Minister of Petroleum Resources on Policy, laws and regulations.

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