By Ifeatu Agbu
Members of the Green Chamber of the National Assembly on May 9, 2017, defended the country’s national interest when it passed a bill which requires the payment of three per cent of annual budget of Nigeria Liquefied Natural Gas Limited, NLNG, into the coffers of Niger Delta Development Commission, NDDC.
The amendment bill, promoted by Minority Leader, Hon. Leo Ogor, adjusts the Nigeria LNG (Fiscal Incentives, Guarantees and Assurances) Act. The House will now transmit the bill to the Senate for concurrence.
In the new provision, the Act was amended by adding section 7b to the Principal Act, which provides that “Notwithstanding section 7 or any other provision of this Act, the Nigeria Liquefied Natural Gas Limited shall pay 3% of its total annual budget to the Niger Delta Development Commission Fund as required by section 14 subsection 1 and 2b of the NDDC establishment Act, 2000.”
Leading the debate on the NLNG Act of 2004, Leo Ogor, argued that with the untold environmental and health havoc wreaked on the people of the Niger Delta for decades “the only way we can solve this problem is to bring relevant amendments to the Act because our people have suffered so much and I said that it is very important that we appreciate the enormity of the danger present in the region for us to act quickly and as a people, hold the NLNG responsible for unnecessary gas flaring using this amendment.
“The amendment to this Act is aimed at redressing the great injustice that the NLNG has meted to the people of the Niger Delta region for almost 27 years now,” he said.
“To partly or completely rejuvenate the environment, the NDDC establishment Act, specifically section 14 (2)(b), stipulates that 3 per cent of the total annual budget of any oil producing company operating onshore and offshore in the Niger Delta area, including gas processing companies like NLNG, shall pay the said percentage into the funds of the Niger Delta Development Commission.
“To my knowledge, the NLNG Limited has not contributed a kobo to the NDDC fund as required by the NDDC Act, 2000 for about 27 years of its operation in the region, despite the huge earnings it has made. This is great injustice and dis-service to the people of the Niger Delta region.
“The NLNG has continued to hide under the pretext that the Nigeria LNG (Fiscal incentives, Guarantees and Assurances) Act exempted it from such contributions or payments, we now know that it is right and just for it to make such payment, especially when they have enjoyed these incentives for more than 27 years.
“It is important that we come to the rescue of the people of the region. It is on the basis of this injustice that I seek the amendment to the Fiscal Incentives Guarantees and Assurances Act,” Ogor added.
Surprisingly, the Nigerian National Petroleum Corporation, NNPC, has raised its voice in protest against the proposed amendment.
The NNPC Group Managing Director, Dr. Maikanti Baru, said that the move against the NLNG would have negative effects on strategic projects like the Brass LNG as it would discourage investors.
Of course many stakeholders in the Niger Delta maintain that this line of thought flies in the face of reason and justice.
The stakeholders remind those who care to listen that the Niger Delta region had suffered for too long and it was imperative that development agencies, such as the oil companies, the federal, state, local governments, the Ministry of Niger Delta Affairs and the NDDC, must collaborate at different levels to drive a regional development Master Plan oil-bearing Niger Delta region.
The NDDC had always joined forces with key stakeholders in confronting the enormous challenges of making a difference in the lives of the people in the remote communities of the Niger Delta.
One of such collaborations is in the construction of the 29-kilometre Ogbia-Nembe road, which it is undertaking in partnership with the Shell Petroleum Development Company, SPDC.
The N24 billion project illustrates the kind of challenges confronting the Niger Delta. It cuts through the swamps with ten bridges and 99 culverts.
The terrain is such that four metres of clay soil had to be dug out and then sand-filled to provide a base for the road.
It shouldn’t surprise anyone therefore to learn that constructing a road in this tough environment costs twice or thrice what is required in other parts of the country.
This is just one of the many mega projects being executed by the interventionist agency with the limited funds at its disposal.
Without doubt, the NDDC needs to be adequately funded to enable it confront the challenges of developing the region that gives Nigeria its oil wealth.
Recently, the Chairman of the NDDC Governing Board, Senator Victor Ndoma-Egba, lamented at separate meetings with Edo, Delta and Bayelsa state governors that the Niger Delta Regional Development Master Plan, which was launched in 2007, had remained largely unimplemented because of poor funding.
To call attention to this untoward situation, the NDDC was constrained to petition the Senate over Federal Government’s inability to pay N1.8 trillion being owed the commission between 2000 and 2015.
The amount according to the letter, which was addressed to the Senate President, Bukola Saraki, said that from its calculations the sum of N1, 797,713,966,652.29 was owed it in unpaid statutory allocations and N45, 091,075,401.66 unpaid ecological funds for the period of 15 years.
The letter dated February 21, 2017 was signed by the Managing Director and Chief Executive Officer of the NDDC, Mr Nsima Ekere.
In the letter titled: “Status of NDDC and Outstanding Statutory Payments,” Ekere urged President Muhamadu Buhari to direct the Minister of Finance, Mrs. Kemi Adeosun to immediately commence the full implementation of funding provisions of the NDDC Act 2000 section 14(2)(a) & (c).
The NDDC Act states clearly how the commission shall be funded. Section 14[2] provides that “there shall be paid and credited to the fund established pursuant to subsection [1] of this section; [a] from the Federal Government the equivalent of 15 per cent of the total monthly allocation due to the member states of the commission from the federation account, this being the contribution of the Federal Government to the commission; [b] three per cent of the total annual budget of any oil-producing company operating onshore and offshore in the Niger Delta area, including gas processing companies; [c] 50 per cent of monies due to member states of the commission from the ecological fund...” and other sources such as grants and loans.
The oil companies have also not been paying the three per cent of their annual budget as required by law.
Records show that they deduct first charges before calculating the three per cent from the balance.
It is more like cutting the nose to spite the face, given that what they spend for the development of the Niger Delta is for their own good at the end of the day.
Given the enormous impact of their activities on the environment, the oil companies are expected to be at the forefront in the critical task of urgently developing the oil basin that has suffered so much neglect in the past.
It is, in fact, in their interest to develop the region where they operate in order to guarantee peace, which is very necessary for them to continue with their work.
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Among those that have expressed their frustrations over this state of affairs is the Bayelsa State Governor, Hon Seriake Dickson, who was obviously worried by the poor funding of the interventionist agency.
He said: “The purpose of establishing the NDDC will be defeated if it is not in a position to undertake critical development projects in the Niger Delta; its purpose will be meaningless, if it will only award contracts for construction of classroom blocks and other jobs that may not have the capacity to impact the development of the area.”
According to the governor, the major challenges in the Niger Delta were ecological and environmental and the realization of this fact should be reflected in the release of funds by the federal authorities.
Sadly, this has not been so, thus limiting the capacity of the NDDC to fulfil its mandate of transforming the Niger Delta region that produces over 90 per cent of the country’s oil wealth.
The Senate had since last year shown willingness to assist the NDDC to recover its outstanding funds. The Chairman of the Senate Committee on Niger Delta, Senator Peter Nwaoboshi, noted that proper funding would help NDDC adequately address the sustainable development of the Niger Delta region, stating that the challenge of developing the region was enormous and that all relevant contributors to the NDDC must play their roles diligently.
“The Senate Committee on Niger Delta, in discharging its oversight functions, will ensure that every contributor to NDDC pays what they owe the commission, because we cannot afford to toy with the development of that very important region.
We owe it to the country to make sure we improve the living conditions of the people of the region.
It’s important that NDDC gets all that is due it from the Ecological Fund, for instance,” he said. He also pledged to do all that was necessary to resolve the impasse over the non-payment by gas processing companies to the NDDC fund.
Senator Nwaoboshi said that the committee was ready to do all it would take, including amending necessary laws, where necessary, to ensure full compliance by agencies statutorily obligated to contribute funds to the NDDC.
The Nwaoboshi-led committee swung into action shortly after, summoning the defaulting agencies to provide the much-needed explanations.
It formally opened an investigation into the non-remittance of statutory contributions to the commission by the Nigeria Liquefied Natural Gas, NLNG and Ecological Fund Office.
After its investigative hearing on February 3, 2016, Senator Nwaoboshi said that both the NLNG and Ecological Fund Office had starved the NDDC of its statutory funds for more than 15years, describing the failure of the agencies to remit required funds as fragrant abuse of the law setting up the NDDC.
“We have asked the Managing Director of the NLNG, Mr. Babs Omotowa, and he said they have not been contributing money to the NDDC.
They showed us a Supreme Court judgment which described NLNG as a gas processing company and that there is a Gas Act that came before that of NDDC Act.
“They argued that the NDDC Act has not repealed the Gas Act. The NLNG claimed that the Gas Act has given them tax holiday. We are lawmakers and we are going to revisit the two Acts.
We will go into the root of the matter. We don’t just make laws for the purpose of making it. Laws are meant to be obeyed.
If government agencies and institutions refuse to obey the law, why do we talk about the rule of law?”
Senator Nwaoboshi said that his committee had obtained the certified true copy of the Court of Appeal judgment and the Supreme Court ruling which the NLNG was relying upon to shirk its funding obligations to the NDDC.
“Everybody has been complaining that the NDDC was not performing but they did not know that the agency had not been receiving its dues, especially from the oil companies.
The oil companies are supposed to pay three percent of their budget to NDDC but they are giving less than that. When they came before our committee, I read out the Act to them and some of them started apologizing.”
“They said they thought that they were supposed to pay three per cent of the proceeds of projects that they execute in their communities.
There has been a total disregard and disrespect for the NDDC Act and nobody will allow that,” Senator Nwaoboshi said.
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