The Africa Network for Environmental and Economic Justice (ANEEJ) recently held a roundtable to ginger the Federal Government to implement the recommendations of the House of Representatives’ Ad-hoc Committee on Fuel Subsidy Management. The Executive Director of ANEEJ, Mr. David Ugolor, in this interview with CHARLES OKONJI, stated that corruption in the nation’s oil and gas industry must be tackled headlong.
WE have many Non-governmental Organisations (NGOs) in this country, but Africa Network for Environmental and Economic Justice (ANEEJ) seems to be more concerned about the recent report of the Ad-hoc Committee of the House of Representatives. Why so much interest in the report?
Africa Network for Environmental and Economic Justice (ANEEJ), for over 14 years now, has been seriously involved in the struggle for transparency and accountability in the extractive sector and in the fight against corruption. So seeing this report as touching on issues of corruption, it became important to us to address it.
As you may be aware, following the release of the report of the Ad-hoc Committee on Fuel Subsidy led by Hon Farouk Lawan, it was found among several other things that the subsidy regime, as operated during the period under preview (2009- 2011), were fraught with endemic corruption and entrenched inefficiency.
Over N1.06 trillion was discovered to have been paid out through corrupt means.
Most unfortunate was that the Nigerian National Petroleum Corporation (NNPC), a government agency, was found to be unaccountable to anybody or institution.
Now, it is unfortunate that despite the huge fraud in this sector and its impact on the Nigerian people, Civil Society Organisations (CSOs) has not taken lead in mobilising the public against corrupt leadership of the NNPC, Petroleum Products Pricing Regulatory Agency (PPPRA), the Petroleum Ministry and other agencies.
This is why ANEEJ, under her anticorruption programme, has taken a lead in bringing CSOs together to push for the implementation of the report.
What can you say is the significant effect of the roundtable, which your organisation
has just organised on the enforcement of the recommendation of the report?
When you want to start a struggle, it is pertinent that a clear cut action plan be developed and followed. There is also an issue with ownership of the process hence ANEEJ brought together civil society from across the country to contribute to the process.
This is why this roundtable is important because as you would have read, the expectations of the roundtable was to come up with a civil society’s position policy brief, providing clear cut suggestions on how to enforce the recommendations of the House of
Representative report on fuel subsidy and civil society action plan on campaign for
the implementation of such recommendation.
Some industry stakeholders say that corruption in the nation’s petroleum industry did not start with the present administration. How would you react to this?
I share this view. If you could re-call, the Farouk Lawan-led subsidy report covered
a period of 2009 – 2011 and this present administration started in May 2011, even if
President Jonathan was on acting capacity during those periods.
Initially, the subsidy expenditure was small with few companies involved in the importation. Even then, you remember so much money was spent on the turn around maintenance of our refineries without anything to show for it.
The oil block allocation and bidding process has also not been transparent. All these have
been going on before this administration came on board.
As subsidy claims have been the current corruption drive in the industry, some people have therefore called for the removal of this subsidy. Do you ascribe to this position?
Since the initial design was for the subsidy to benefit majority of the populace especially
the poor and middle class, that has not been achieved now as few wealthy individuals
and companies have hijacked the subsidy benefit that should have accrued to the
majority of Nigerians.
With this scenario, the removal of subsidy is necessary. But because of previous experiences, Nigerians have become skeptical about government intentions as they are not sure if the dividend that will accrue from the removal of the subsidy will be judiciously used by the government of the day.
This was why there was wild protest in January when the Federal Government announced the removal of fuel subsidy. The government did not also consult wildly before the announcement.
The real issue is that before subsidy can be removed from petroleum product as an
aspect of government deregulation policy, the necessary regulatory frame work need to
be put in place. In this effect, the PIB need to be passed first and other processes
completed before the subsidy removal will make meaning.
From your own evaluation, do you think the Ad-hoc Committee of the House of
Representatives did a thorough job on the subsidy management, considering the fact
that some legal experts have said that the report would stand the test of litigation in
the court of law?
The Farouk Lawan-led committee did a good job, given the time frame and the
environment where they worked. The report has gone a long way in exposing some of the
canker-worms that is eating up the sector.
However, the unfortunate thing is that the entire report did not mention anything about
the Public Procurement Act, which would have given it legal teeth without any further
ventilation from any other agency.
The Farouk Lawan-led report did not also recommend the need for a change in the leadership of the Petroleum Ministry, under whose supervision the monumental frauds against Nigerians took place. But as legislatures, the House has the right to make laws and give recommendations for actions by other relevant bodies.
So the onus now rest on the presidency and various anticorruption agencies to act on the recommendations of the report. Good enough, the executive has confirmed receipt of the report and the president has given the necessary directives.
Some people are saying that if the Petroleum Industry Bill (PIB) is passed into law, it will help to address the corruption in the oil and gas industry. From your own opinion, do you think the PIB will help to tackle it?
The answer is “Yes”. The essence of the PIB is to reform the structural, regulatory
and commercial / fiscal framework of the petroleum industry in order to halt the
mismanagement, inefficiency and lack of transparency in the industry and one of the
recommendations made by the Farouk Lawan-led committee is the passage of the
PIB into law.
ANEEJ has been leading campaigns for the passage of the bill because of the belief
that the PIB would present a significant window of opportunity to further deepen
reforms that could redress decades of secretive and ineffective management of
the oil and gas sector. So the PIB is vital for the end of corruption in the oil sector.
Since corruption in the nation’s petroleum industry is like epidemic, what proper measure do you think should be adopted to tackle it?
The first is the need to accelerate work on the passage of the PIB to set the regulatory frame work aright. This will lead to the unbundling of NNPC to make it more efficient.
Again, there is the need for change of leadership in the Ministry of Petroleum resources because some of the issues of corruption exposed in the Hon. Faruk Lawan-led Committee report took place under the supervision of this present leadership of the Ministry of Petroleum while few cases took place before this current leadership.
This was one of the omissions of the Farouk Lawan-led committee report. Having established monumental fraud in the sector; the committee would have recommended a change of leadership in the ministry.
The truth of the matter is that you cannot be a judged in your own case. If the Federal
Government will make headway in the quest to restructure the industry and fight corruption head-on, first, the leadership of the petroleum sector must be changed.
There is also the need for those found wanting in the Farouk Lawan-led report to
be tried and brought to book to serve as deterrent to others who still have the
intention to steal our money away. It is necessary for them to know that it’s no
longer business as usual.
Also, year in, year out, Nigerian Extractive Industry Transparency Initiative (NEITI) carries out audits of the oil sector with recommendations on how to sanitize and improve the sector but those recommendations are hardly considered. There is, therefore, the need for the Federal Government to go back to those recommendations to end this epidemic
Again, the Federal Government should take a second look at the KPM’s report on NNPC.