Reps to probe oil firms over local content law violations

The House of Representatives has mandated its Committees on Nigerian Content Development and Monitoring, Corporate Social Responsibility, Petroleum Resources (Upstream, Downstream and Midstream), Finance and Justice to probe oil companies operating in the country, especially Imo State, over alleged violation of the Nigerian Oil and Gas Industry Content Development Act, 2010.

This decision followed the adoption on Wednesday during plenary of a motion of urgent public importance brought on the floor by Imo lawmaker, Hon Chike Okafor.

In 2021, the Senate, through its Committee on Local Content, accused a Korean firm, Daewoo Engineering and Construction Limited, of violating Section 31 of the NOGICD Act 2010, noting that the law required a Nigerian citizen to understudy any position held by a foreigner working in the nation’s oil and gas sector.

Similarly, host communities in oil-producing companies had at one time or another, kicked against the flagrant violations of the Petroleum Industry Act, calling the government’s attention to the need to protect the environment from the harmful effects of oil exploration.

The NOGICD Act was enacted to promote the utilisation of Nigerian human and material resources and the participation of Nigerian companies in the oil and gas industry.

The PIA 2021 is the legal and regulatory framework for the Nigerian petroleum industry, including specific provisions for host community development, environmental management, and equitable benefit sharing of dividends to concerned stakeholders.

Apart from these legal frameworks, the Taxes and Levies (Approved List for Collection) Act authorises state governments to collect certain taxes and levies from businesses operating within their territories, which is crucial for funding state infrastructure and social services.

Addressing his colleagues on Wednesday at a plenary presided over by the Deputy Speaker Benjamin Kalu, Okafor explained that several foreign and local oil companies operate oil and gas fields within the oil-producing communities of Imo State.

According to him, these companies include Seplat Energy Plc, Niger Delta Petroleum Resources, Sterling Oil Exploration and Energy Production Company Limited and WalterSmith Petroman Oil Limited.

Others include Associate Oil and Gas Limited/Dansaki Petroleum Limited, Chorus Energy Limited, TotalEnergies / NNPC Joint Venture and the Nigerian National Petroleum Company Limited.

He said, “The House is aware of the persistent outcry and allegations from host communities and the state government regarding the failure to establish functional operational offices within their areas of operation in Imo State as mandated by Section 3(j) of the NOGICD Act, 2010, thereby denying the state valuable economic activity and employment.

“We are concerned about the systematic failure of these companies to prioritise the employment of qualified indigenes of Imo State, in direct violation of Sections 11, 28, and 35 of the NOGICD Act, 2010.

“The House is worried about the refusal to award contracts to competent Nigerian companies, especially those from the host communities, for goods and services.

“We are also aware of the obstruction of lawful efforts by the Imo State Government and Imo State Internal Revenue Service to access their premises for assessment and collection of legally approved state taxes and levies.

Another issue is the non-compliance with the Host Communities Development Trust provisions under Chapter 3 of the PIA, 2021, leading to a lack of tangible benefits and development in these communities.”

According to the lawmaker, the continued neglect and infringement of these laws, if not urgently addressed, “May lead to violent protests that could threaten national security, destruction of critical oil and gas infrastructure, disrupting production and harming the national economy and a breakdown of law and order in the oil-producing regions of Imo State.”

The motion was supported by the lawmakers when it was put to a voice vote by the Deputy Speaker, Benjamin Kalu, as the House mandated oil and gas companies operating in the state to henceforth comply with the NOGICD Act in the areas of indigenous employment, contract awards, and establishment of operational offices.

The House also directed the companies to comply with the Host Communities Development Trust requirements under the PIA, 2021.

The House also mandated the companies operating in the areas to grant “Unfettered access to officials of the Imo State Internal Revenue Service for the performance of their lawful duties, engage in genuine dialogue with host community leaders to address grievances and ensure peaceful coexistence.”

It further charged its Committee on Nigerian Content Development and Monitoring to invite “The Chief Executives of the seven concerned oil companies, the Nigerian Content Development and Monitoring Board, the Executive Secretary of the Nigerian Upstream Petroleum Regulatory Commission and the Chairman of Imo State Internal Revenue Service for questioning.”