Understanding the Petroleum Industry Act (PIA) and the challenges for the Oil and Gas industry

(Being text of a paper delivered 14/6/23 at the workshop organised by Lagos Zonal Council of NUPENG on Petroleum Industry Act (PIA))

By Femi Aborisade, Esq.

Background

AT the backdrop of the act off NNPC Ltd suddenly increasing the regulated price of PMS from N185 per litre to N500, there can be no better time to discuss the challenges of PIA. This workshop is thus very timely. 

On 16^th August 2021, the President assented to the Petroleum Industry Bill, marking the transformation of the Bill into a law to govern the oil and gas sector. Various versions and revisions of the Bill had been in circulation since 2008 and various attempts made to pass the Bill in 2009, 2012 and 2018 had failed. The prolonged delay in passing the Bill into law had been because of antagonistic interests of organized stakeholders (particularly the National Assembly and the Executive arms of government, the petroleum host communities and the investors) which they could not easily resolve and/or reconcile.

The mainstay of Nigeria’s economy is the oil and gas sector. It contributes about 90% of the foreign exchange earnings, 60% of the total income, even though it constitutes only about 10% to the GDP. Therefore, the interest of dominant forces in Nigeria, the politicians and investors, is actually the oil resource. Whatever happens in the oil sector affects the direction and fortune of the entire economy, positively or negatively. Also, because of the relationship between the price of fuel and the prices of all other goods and services, the fortunes and misfortunes of the oil and gas sector have implications for the wellbeing of ordinary people. The oil and gas sector thus, consequentially, is the barometer with which to measure and anticipate the momentum of state-civil society relationships, agitations and struggles by the disadvantaged classes.

The common perception is that, historically, the oil resource has not brought about economic development, measured in terms of improved living standards for majority of the citizenry. The basic question therefore is, from the standpoint of utilizing the oil wealth for the welfare of economically excluded categories of people, what are the promises the PIA hold?  Is the PIA likely to facilitate improvement in living standards or it promises to deepen poverty?

The business class hopes the PIA would be “the game changer” from the point of view of their profit interests. Would the PIA attenuate or exacerbate poverty, from the standpoint of workers and the less privileged? 

It is therefore gratifying to find that the Lagos Zonal Council of NUPENG has taken an interest in examining the challenges of the PIA for the oil and gas industry. My only problem with the topic is formulated is that it does not pointedly concentrate on the challenges for the working class and the poor. As formulated, the topic does not distinguish between concerns for the investors in the sector and the interest of workers and the poor, not only in the sector but also in the larger society. This paper seeks to concentrate on the challenges of the PIA for workers in the sector and for the downtrodden people of Nigeria generally. Fora created by workers and their organizations should concentrate on their own interests just as fora created by employers and captains of industry are always concerned with their own interest. Employers hardly make concerns for the interest of workers their business when they gather at educational forums.

From the standpoint of workers and the poor, I draw particular attention of participants at this workshop to the following pages of this paper: 7-8, 10-11, 13 and 15-18.

PIA STRUCTURE

The PIA is structured as follows:

No. of Sections: 319

No. of Chapters: 5

No. of Schedules: 8

The structure may be better captured in a tabulated form as follows:

Chapters/ Parts	Title	Sections	Comment
Chapter 1	Governance and Institutions	1 – 65
Part I	Vesting and Objectives	1-2
Part II	Minister of Petroleum	3
Part III	The Commission	4-28	Nigerian Upstream Petroleum Regulatory Commission
Part IV	The Authority	29-52	Nigerian Midstream and Downstream Petroleum Authority
Part V	The Nigerian National Petroleum Company Limited	53-65
Chapter 2	Administration	66 – 233
Part I	General Administration	66-67
Part II	Administration of Upstream Petroleum Operations and Environment	68 – 110
Part III	General Administration of Midstream and Downstream Petroleum Operations	111-124
Part IV	Administration of Midstream and Downstream Gas Operations	125-173
Part V	Administration of Midstream and Downstream Petroleum Liquids Operations	174-208
Part VI	Other Matters Related to Midstream and Downstream Operations	209-215
Part VII	Common Provisions for Upstream, Midstream and Downstream Petroleum Operations	216-233
Chapter 3	Host Communities Development	234-257
Chapter 4	Petroleum Industry Fiscal Framework	258-306
Part I	Objectives and Administration	258-259
Part II	Hydrocarbon Tax	260-266
Part III	Ascertainment of Chargeable Tax	267-268
Part IV	Ascertainment of Chargeable Profits and Consolidation for Tax Purposes	269-272
Part V	Persons Chargeable	273-276
Part VI	Applicability, Accounts and Particulars	277-287
Part VII	Appeals	288-289
Part VIII	Collection, Recovery and Repayment of Tax	290-296
Part IX	Offences and Penalties	297-301
Part X	Application of Companies Income Tax to Petroleum Operations	302
Part XI	General Provisions	303-306
Chapter 5	Miscellaneous Provisions	307-319

Chapter 1:

Chapter 1 is divided into 5 Parts, spanning sections 1 to 65.

Part 1 consists of sections 1 and 2.

Section 1 provides that the property and ownership of petroleum within Nigeria and its territorial waters, continental shelf and exclusive economic zone is vested in the Government of the Federation.

Section 2 sets out the Objectives of Chapter 1, which are, to:

1. Create efficient and effective governing institutions for the petroleum industry
2. Establish a framework for the creation of a commercially oriented and profit-driven national petroleum industry.
3. Promote transparency, good governance and accountability in the administration of petroleum resources of Nigeria.
4. Forster a business environment conducive for petroleum operations, and 
5. Deeping local content practice in Nigeria oil and gas industry.

Powers of the Minister of Petroleum 

Part II (of Chapter 1)makes provisions for the powers of the Minister of Petroleum within the context of the statutory Objectives. The Act vests the Minister with omnibus discretionary powers over the industry, though circumscribed within the provisions of the Act. These include, to:

1. Formulate, monitor and administer government policy.
2. Exercise general supervision of the affairs and operations.
3. Promote an enabling environment for investment
4. Grant petroleum prospecting licences and petroleum mining leases upon the recommendation of the Commission.
5. Revoke and assign interests in the petroleum prospecting licences and petroleum mining leases
6. In writing, delegate any of his powers to the Chief Executive of the Commission or Authority.
7. Approve fees for services rendered by the Commission or Authority upon recommendations by the Commission or Authority.
8. Suspend petroleum operations, upon recommendations by the Commission or Authority, where in his opinion, a contravention of the Act has occurred, or is likely to occur, and in appropriate case, until arrangements to prevent danger to life or property, have been made, to his satisfaction.
9. Order a cutback in the levels of crude oil  or condensate production in the context of international oil pricing agreements supported by Nigeria.
10. exercise the obligatory power, with the use of the word, “shall”, to exercise the Rights of pre-emption of petroleum and petroleum products marketed under any licence or lease in the event of national emergency under the 1^st Schedule to the Act. The right of pre-emption granted under this section means that the Minister has the first right to buy or acquire petroleum or petroleum products before it can be offered to any other person or entity.
11. Give general policy directives, published in the Federal Government gazette, to the Commission and to the Authority over upstream operations and midstream and downstream operations, respectively.

THE COMMISSION

Chapter 1, Part III makes provisions for the Commission. 

The Act establishes the Nigerian Upstream Petroleum Regulatory Commission. It is otherwise referred to as “the Commission”, for short. The Commission is vested with the power to acquire, hold and dispose of property, sue and be sued in its name.

The Commission is responsible for the technical, operational and commercial regulations of upstream petroleum operations, including:

• compliance with all applicable laws and regulations;
• maintenance of ‘Nigeria petroleum data bank’;
• issuance of permits and other authorisations as may be necessary under an upstream licence or lease, including seismic, drilling and design, construction and operation of facilities for upstream petroleum operations;
• allocation of petroleum production quotas for the purpose of curtailing export of petroleum in conjunction with NNPC Limited, pursuant to regulations;

COMMISSION’S FUNCTIONS WITH REGARD TO FRONTIER BASINS

The Commission has responsibility to promote the exploration of the Frontier basins in Nigeria. This means that the heavy financial burden of developing exploration strategies, identification of information, opportunities about resource base within frontier basins, study, analysis, evaluation and exploration are to be borne by the Commission. 

Frontier Exploration Fund

For the purpose of frontier exploration, the Act establishes a Frontier Exploration Fund, which shall be 30% of NNPC Limited’s profit and profit gas. 

Where the data acquired and interpreted under a petroleum exploration licence requires testing and drilling of identifiable prospects, and no commercial entity has expressed an intention of testing and drilling such prospects, the Commission shall, in line with Section 64(k) request the services of the NNPC Ltd to drill or test and such costs shall be charged to the Frontier Exploration Fund.

However, where commercial discovery is made in such Frontier Basins, the NNPC Ltd shall have the first right of refusal in the award of the acreage for subsequent development and other petroleum operations.

GOVERNING BOARD OF THE COMMISSION

The Act provides for a “Governing Board”, otherwise referred to as “the Board of the Commission”, which shall be responsible for policy formulation, supervision and giving strategic direction to the Commission. 

The Board of the Commission consists of 9 persons,comprising one non-executive chairman, two non-executive commissioners, “the Commission Chief Executive”, two other executive commissioners, one representative of the Authority, not below the rank of Director; one representative of the Ministry, not below the rank of Director, and one representative of the Ministry of Finance, not below the rank of Director.

The appointments to the Board of the Commission are to be made by the President, subject to confirmation by the Senate, with the exception of ex-officio members who represent the Ministry, the Ministry of Finance and the Authority.

KEY LESSON FOR LABOUR

From the point of view of labour and the larger society, including communities in the oil-producing areas, it is important to point out that there is no single representative of any union or the central labourorganisations or community in the oil producing areas in the Board of the Commission. The labour movement is totally excluded, in spite of the enormous powers of the Commission.

The exclusion of labour representatives in the Board of the Commission is negatively remarkable to the extent that employees of the Commission are subject to the terms and conditions of service “set out by the Board of the Commission”, including appointment, promotion, disciplinary procedures, appeals against dismissal and disciplinary measures imposed on employees. In the best scenario, the Act provides that the Board of the Commission, in consultation with the Salaries, Incomes and wages Commission, “shall determine and periodically review the remuneration and allowances payable to the employees of the Commission” having regard to the specialized nature of the work, the need to ensure the financial self-sufficiency of the Commission and the remuneration and allowances paid within the industry to individuals with equivalent responsibilities, expertise and skills.

Collective Agreement Rather Than Unilateral Imposition of Terms And Conditions

Labour may have to consider advocating that terms and conditions of work in the Commission should be as agreed and varied by negotiations and collective agreements reached with the unions, rather than accepting unilateral imposition by the Board, as prescribed under section 20(1) of the Act and/or variation in consultation with the Salaries, Incomes and wages Commission, under Section 21 of the Act. 

Unilateral imposition of terms and conditions of service is an element of unitary ideology, which is considered backward in modern industrial relations praxis. Even in the Public Service, there is an element of negotiation with labour through the Joint National Public Service Negotiating Council (JNPSNC), apart from the influence of nationwide strikes in determining terms and conditions of work in the core public service.

Employees of the Commission Are Public Officers

Although the Act provides that employees of the Commission are public officers as defined in the Constitution, the terms and conditions “set out” by the Board under section 20(1) of the Act, and/or as varied in consultation with the Salaries, Incomes and Wages Commission, would be strictly construed, applied, and binding where disputes arise. Strict construction and application of terms and conditions of employment is the essence of employment relationship enjoying statutory and/or constitutional flavor.

Employees of the Commission subject to contributory Pension 

The Act provides that employees of the Commission “shall be subject to the provisions of the Pension Reform Act” (PRA) and “officers and employees of the Commission shall be entitled to pension and other retirement benefits” as prescribed under the PRA.

However, it should be noted that by Sections 84(5), 124(5) and 291(3) of the CFRN, the President, Vice President, Governors, Deputy Governors and top judicial officers, respectively, are entitled to the right to guaranteed pension for life, at a rate equivalent to their last salary, without being required to make pension contribution as a condition for entitled to pension for life.

Similarly, members of the Armed Forces, the intelligence and secret services of the Federation are exempted from the contributory pension system.

If indeed the Contributory Pension Scheme is more favorable to the employees than the previous non-contributory scheme, why exclude certain categories of public sector workers? The exemption clause in the PRA and in the Constitution, just shows that the new Pension Reform Act negatively discriminates against ordinary workers. 

Would workers consider mounting pressure for a reversal of the Contributory Pension Scheme contained in the PRA?

We think that what is good for Mr. President may be considered equally good for ordinary workers.

THE AUTHORITY

Chapter 1, Part IV makes provisions for the Authority. 

The Act establishes the Nigerian Midstream and Downstream Petroleum Authority, simply called “the Authority”. The Authority is vested with the power to acquire, hold and dispose of property, sue and be sued in its name.

The Authority is responsible for the technical, operational and commercial regulation of Midstream and Downstream Petroleumoperations.

Objectives

The objectives of the Authority include, to:

1. promote a competitive market for midstream and downstream petroleum operations;
2. promote the supply and distribution of natural gas and petroleum products in midstream and downstream petroleum operations and the security of natural gas supply for the domestic gas market;
3. Ensure compliance with applicable laws and regulations;
4. Ensure crude oil supply for domestic refineries;
5. Promote, establish and develop a positive environment for international and domestic investment in midstream and downstream petroleum operations;
6. Ensure strict implementation of environmental policies, laws and regulations for midstream and downstream petroleum operations;
7. Develop and enforce a framework on tariff and pricing for natural gas and petroleum products.

Functions of the Authority

Section 32 of the Act makes provisions for the functions of the Authority along the set objectives under Section 31. For example, the Authority is to:

1. Determine appropriate tariff methodology for processing, transportation and transmission of natural gas; transportation of crude oil, bulk storage of crude oil and natural gas;
2. Set cost benchmarks for midstream and downstream operations;
3. Provide pricing and tariff frameworks for natural gas in midstream gas operations and petroleum products based on market value of the applicable petroleum products;
4. Grant, issue, modify, extend, renew, review, suspend, cancel, terminate licences, permits and authorisations for midstream and downstream petroleum operations;
5. Promote competition and private sector participation in midstream and downstream petroleum operations.

Governing Board of the Authority

The Act also establishes the Board of the Authority. The composition of the Board of the Authority is similar to that of the Board of the Commission. The same criticism against the composition of the Board of the Commission is applicable to the Board of the Authority, particularly as it concerns exclusion of representatives of organized labour.

Functions of the Authority

The functions of the Authority, particularly in the determination of the terms and conditions of the employees of the Authority are largely the same as those of the Board of the Commission, except that while the Board of the Authority determines the terms and conditions of service of employees, the Board of the Authority, in a confusing or contradictory manner, shall‘recommend remuneration, allowances, benefits, pensions of employees of the Authority in consultation with the National Salaries, Incomes and Wages Commission”, having regard to the same set of factors set out under Section 21 of the Act with regard to employees of the Board of the Commission. However, S. 43(1) also provides that the employees of the Authority shall be subject to the terms and conditions set out by the Board of the Authority, while the Board of the Authority is also empowered to determine and review remuneration and allowances in consultation with the Salaries, Incomes and Wages Commission, as prescribed under S. 45 of the Act.

Employees of the Authority as public officers subject to the PRA

Similar provisions declaring that employees of the Authority are public officers under the Constitution, and that the employees are subject to the PRA, who are liable to make pension contributions as condition precedent to being entitled to pension and other retirement benefits are applicable to employees of the Authority.

KEY LESSON FOR LABOUR

From the standpoint of organized labour and society, the key lesson to draw from the establishment of the Authority is that the influence of organized labour in curtailing price increases through the PPRA has now been effectively excluded. Prior to the PIA, organized labour, the central labourorganisations and a few unions were represented in the PPRA, which had statutory responsibility for determining the prices of fuel. However, the Authority, in which organized labour is totally excluded has now taken over that role. By Section 310(1)(a)-(f), and particularly Section 310(1)(f), which repeals the Petroleum Products Pricing Regulatory Agency (Establishment) Act No. 8 of 2003 (PPPRA), among other repealed laws, organized labour is no longer in a position to exert any statutorily sanctioned role to curb the tendency of the price of fuel to rise.

Indeed, the supply, importation, distribution of petroleum products, including premium motor spirit (PMS), are now firmly statutorily guaranteed in the hands of the private sector, including NNPC Ltd, and effectively removed from the influence of the public, including organized Labour.

Chapter 1, PART V MAKES PROVISIONS FOR THE NIGERIAN NATIONAL PETROLEUM COMPANY LIMITED

The PIA has been mostly criticized for providing that the Joint Venture Partners, called Settlors, shall contribute only 3% of their actual operating expenditure in the immediately preceding calendar year to the host community’s Development Trust Fund.

However, the central problem with the PIA is beyond provision of 3% of actual operating expenditure to the host Community. The real problem with the PIA is that it is a neo liberal piece of legislation that has now legitimized the privatisation of the NNPC, which ordinary people and radical organisations have been resisting for decades. In other words, the PIA has dispossessed society of the decades of public investment in the NNPC and donated it to the private sector.

By Section 53(1) of the Act, the Nigerian National Petroleum Company Limited shall be incorporated within six months from commencement of the Act, that is, from 16^th August 2021. In fact, by 8^th October, it was widely reported by the media that the incorporation of the NNPC as a limited liability Company had been achieved by the presentation of the certificate to the President at a public function. 

At incorporation, the Government shall subscribe to the initial paid-up share capital of NNPC Limited, as may be determined by the Minister, in consultation with the Minister of Finance.  The shares are to be held by the Ministry of Finance Incorporated and the Ministry of Petroleum Incorporated in equal portions on behalf of the Federation, under the provisions of the 8^th Schedule, which creates the Ministry of Petroleum Incorporated as a Corporation Sole.

Paragraph 3 of the 8^th Schedule provides that the Ministry of Petroleum Incorporated may enter into contracts and may acquire, purchase, take, hold, and enjoy movable and immovable property of every description, and may convey, assign, surrender and yield up, charge, mortgage, demise, reassign, transfer or otherwise dispose of, or deal with, any movable or immovable property vested in the Corporation upon such terms as the Corporation deems fit.

Upon incorporation, NNPC Limited shall be appointed the agent of NNPC for the purpose of winding down the assets, interests and liabilities of NNPC.  By S. 54(1) & (2) of the Act, the assets, interests and liabilities of NNPC to be transferred to the NNPC limited shall be determined and caused to be transferred “within 18 months of the effective date”.

Section 53(5) of the Act appears contradictory. It provides that the shares held by the Government in NNPC Limited “are not transferable,”in any manner, “by way of sale, assignment, mortgage, or pledge”. At the same time, it goes on to provide that the shares are transferable if transfer is approved by the Government.In essence therefore, Section 53(5) simply means that shares held by the Government in the NNPC shall be transferable if “approved by the Government and endorsed by the National Economic Council on behalf of the Federation”. By section 318 of the Act, ‘Government’ means the Federal Government of Nigeria. 

Indeed, Section 55(2) of the Act provides that, NNPC Limited, upon being appointed agent of NNPC, pursuant to S.55(1), shall have the power to enter into contracts with third parties with respect to the assets, interests and liabilities of NNPC. To strengthen the power of the NNPC limited to sell or transfer the shares of the NNPC it has inherited, Section 53(6) provides that “… any sale or transfer of shares of NNPC Limited shall be at a fair market value”.

Section 54(3) of the Act formally declares that NNPC shall cease to exist as an entity existing to serve any form of public interest, no matter how limited, after its assets, interests and liabilities have been transferred and/or extinguished in favour of NNPC Limited.

For the avoidance of any doubt, Section 53(7) of the Act asserts that there has been a complete paradigm shift in the orientation of the NNPC – from an entity for public good, to an outright business entity, without any pretense to serving any social good or public interest. The section provides that:

“NNPC Limited and any of its subsidiaries shall conduct their affairs on a commercial basis in a profitable and efficient manner without recourse to Government funds… and NNPC Limited shall operate as a Companies and Allied Matters Act entity, declare dividends to its shareholders and retain 20% of profits as retained earnings to grow its business.”

From the foregoing, the essential ultimate goal of the PIA is to take over the assets and interests of the NNPC and to facilitate sale of shares or privatisation of the assets. This means the PIA is nothing but a neoliberal piece of legislation to rob or steal the wealth that belongs to all and hand over to the private sector, ‘legitimately’, or ‘according to law’. In that context, ordinary people in the host Communities and in Nigeria, as a whole, have been robbed of a common patrimony, through the PIA.

With the impending privatisation of the NNPC under PIA, the public would lose control over the price of fuel in the domestic market. Whenever there is an outcry against imposition of increases in fuel price in the domestic market, the Federal Government would reply, as they do on electricity issues: “Oh! It is no longer owned by the Government. It is no longer under public/Government control. It is now owned and controlled by the private sector”. Thus, uncontrolled astronomical and perennial increases in the price of fuel would characterise the PIA phase.

There is a direct relationship between the price of fuel and the prices of all other goods and services. The higher the price of fuel, the higher the cost of education, health, etc, and the loss of value/purchasing power of the minimum wage, and so on. Therefore, PIA ought to be resisted. It is a declaration of war against the socioeconomic wellbeing of ordinary people. The failure to resist privatisation of NNPC (which is what PIA comes to in the final analysis) would have dire consequences for the welfare of the downtrodden, their education, health care, purchasing power of the minimum wage, etc.

Statute of limitation afforded not-for-profit public agencies extended to profit-oriented entities

The Act extends statute of limitation which exists for the benefit of not-for-profit public agencies to the NNPC Ltd, which is profit-oriented. The Act provides that an action shall be commenced against NNPC Ltd or any of its agents where the time for commencing the proceeding would have lapsed had such asset, interest or liability not been transferred.

Transfer of employees and conditions of service

The Act provides that:

“Employees of NNPC shall be deemed to be employees of NNPC Limited and its subsidiaries on terms and conditions not less favourable than what previously obtained.”

However, whether the Federal Government continues to own controlling shares in the NNPC Ltd or majority shares are assigned to the private sector would determine whether employment relationship in the NNPC Limited would continue to enjoy constitutional flavor and the employees regarded as public officers, under section 318 of the Constitution.

Board of the NNPC Limited

The Act provides for an eleven-member Board of the NNPC limited, all to be appointed by the President. No consideration is given to labour or community representation on the Board.

Responsibilities of the NNPC Limited

Enormous responsibilities are placed on the shoulder of the NNPC Ltd. They include:

1. Being vested as the concessionaire of all Production Sharing Contracts (PSC), Profit Sharing and Risk Service Contracts as the National oil Company on behalf of the Federation;
2. Lift and sell royalty oil and tax oil on behalf of the Commission and the Service, respectively, for an agreed commercial fee; and in the case of profit oil and profit gas payable to the concessionaire, NNPC Ltd shall promptly remit the proceeds of sales to the Federation, less its 30% for management fee and Frontier Exploration Fund as specified under section 9(4) of the Act;
3. Being vested with the rights to natural gas under production sharing contracts;
4. Carry out management of production sharing contracts for a fee;
5. Carry out tasks requested by the Commission and the Authority on a fee basis;
6. Being supplier of last resort for security reasons and all associated costs shall be for the account of the Federation.

KEY LESSON

Given the sensitivity and importance of the roles assigned to the NNPC Ltd, it is a matter for concern that there are provisions to facilitate or sanction privatization of the NNPC. The privatization of the NNPC would serve the purpose of enriching private individuals at the expense of public interest.

CHAPTER 3: HOST COMMUNITIES DEVELOPMENT

Chapter 3 provides for “Host communities Development”. The Chapter, among others, seeks to “createa framework to support the development of host communities”, “provide direct social and economic benefits from petroleum operations to host communities”, and so on.

The Act establishes a “host communities development trust fund”. The trust fund is to be funded through contributions by Settlors. Each Settlor shall make an annual contribution to the host community’s trust fund, at the rate of 3% of actual operating expenditure of the preceding financial year in the upstream petroleum operations affecting the host communities.

The key problems with the conceptualization of the development of the host communities are that:

• The Settlor is to determine the membership and criteria of the Board of Trustees to manage the trust fund.
• The Settlor shall determine the selection process, remuneration, discipline, qualification, disqualification, suspension and removal of the Board of Trustees.
• The concept of development appears restricted to execution of “capital projects” through which funds may be looted.There appears to be a lack of focus on issues pertaining to basic needs of the masses, such as education, health care, water, housing, etc, and engagement of well-paid personnel to provide basic services.
• The Settlor is vested with the responsibility to carry out the needs assessment of host communities, “specify the community development initiatives required to respond to the findings and strategy identified in the host communities needs assessment”.

CHAPTER 5: MISCELLANEOUS PROVISIONS

The issues that are of pertinent interest under Chapter 5 of the Act are:

1. Application of Public Officers Protection Act (POPA) to bodies established to manage, essentially, the affairs of private companies rather than public institutions. The Act reiterates that no court proceeding shall be commenced against the Commission or the  Authority or any of their officers or agents unless commenced within three months of the accrual of the cause of action, and provided that the act or omission complained of was not done in good faith.This may have implications for employees challenging breach or perceived breach of their employment rights.
2. The requirement of not commencing any suit against the Commission or the Authority before the expiration of a period of one month after the service of a written notice of the intention to so do, and served on the office of the Commission Chief Executive or the Authority Chief Executive, as the case may be.
3. The requirement that ‘an order for execution (of Judgment) or attachment of any property of the Commission or Authority shall not be issued unless a three months’ notice of the intention to commence execution process has been given to the Commission or Authority’
4. Ranking the Act (PIA) 2^nd to the Constitution. The Act provides that ‘…where the provisions of any other enactment or law except the Nigeria Oil and Gas Industry Content Development Act are inconsistent with the provisions of this Act, the provisions of this Act shall prevail and the provisions of that other enactment or law shall, to the extent of that inconsistency, be void in relation to matters provided for in this Act.
5. Non-repeal of draconian anti-labour laws whilst other laws that promote the business profit interests of other ‘stakeholders’ in the industry are repealed, subject to contracts under the repealed laws being saved “until the termination or expiration of all oil prospecting licences and oil mining leases”
6. The Commission inherits the assets, movable and immovable as well as the assets and obligations of the Petroleum Inspectorate or the Department of Petroleum Resources.
7. All contracts (and these would include employment contracts, depending on the facts in appropriate cases) against the Petroleum Inspectorate or the Department of Petroleum Resources are now enforceable against (or in favour of) the Commission.
8. Transfer of employees. From 16^th August 2021, i.e. the effective date of the Act, employees in the relevant divisions of the Petroleum Inspectorate or the Department of Petroleum Resources shall be employees of the Commission, on terms no less favourable to those in effect immediately prior to transfer. The Commission shall also have responsibility for statutory pension obligations. The same provisions herein are applicable to the Authority as far as employees of the Petroleum Pricing and Product Regulatory Agency, the Petroleum Equalisation Fund (Management Board) are concerned.
9. Inter-agency transfer without a role for trade unions and/or effect on trade union positions that may be held by members of staff. The Act provides that within 24 months of the coming into force of the Act, the Minister may cause inter-agency transfer of any staff (of the Department of Petroleum Resources; Nigerian National Petroleum Corporation and any of its subsidiaries; Petroleum Equalisation Fund; Petroleum Inspectorate, and Petroleum Products Pricing and Regulatory Authority) to the Commission, the Authority or NNPC Ltd, based on skills and competence.

PIA & CHALLENGE FOR LABOUR

The labour movement and particularly NUPENG and PENGASSAN have a duty to study the PIA very closely and determine how it affects them positively or negatively, and then determine what actions to take to strengthen the favourable provisions and to resist the unfavourable provisions.

In particular, the labour movement, particularly PENGASSAN and NUPENG should campaign for the abrogation of Petroleum Production and Distribution (Anti-Sabotage) Act, CAP P.12, Laws of the Federation of Nigeria, 2004.

This law criminalizes what it terms ‘sabotage’. Any form of strike action by workers can easily pass for ‘sabotage’ considering the definition of the scope of the meanings of ‘sabotage’ under the Act. This is because, under the Act, any form of interruption in the process of production or distribution of petroleum products qualifies for ‘sabotage’, which is punishable, on conviction, by death sentence or imprisonment for a term not exceeding 21 years.

Under section 1 sub (1) of the Act, any person who wilfully does any of the following things or any person who aids, incites, counsels or procures any other person, to do any of the following things, whether or not that other person does any of the things, shall be guilty of the offence of ‘sabotage”. The ‘things’ or acts spelt out are:

1. doing anything with intent to obstruct or prevent the production or distribution of petroleum products in any part of Nigeria; or

2. doing anything with intent to obstruct or prevent the procurement of petroleum products for distribution in any part of Nigeria; or

3. doing anything in respect of any vehicle or any public highway with intent to obstruct or prevent the use of that vehicle or that public highway for the distribution of petroleum products,

Though this legislation has not been fully applied, nothing stops the State from fully applying it against striking workers, if and when the State feels strong enough to do so, for as long it remains in the statute books. But the mere existence of the Act has the capacity to condition the behaviour of certain segments of the working class to levels tolerable by the state and capital.

I thank you for your attention.

Femi Aborisade, Esq.

8^th June 2023.