By Sunny Chuba Nwachukwu, PhD
The Petroleum Industry Act (PIA) has finally come, after a whole lot of time was spent on it. It was first introduced and presented as a Bill to the National Assembly in 2008. There is no point discussing the controversial areas being picked up and publicly criticised in the signed Bill here, but to go straight to business and discuss the issues that impact on the national economy (vis-a-vis, transparent corporate governance and accountability, alongside the following economic goals: efficiency, security, stability, equity, employment opportunity, economic growth and economic freedom), for a high national output and a significantly improved national income.
From the score board though, realising this Petroleum Industry Act is a big plus to this administration; with all the accolades and commendations attached to it. This singular exploit, however, is already acknowledged as such, and we need to move forward!
The main issue remains in the manner of “walking the talk” within the oil sector. In other words, strictly taking the positive actions the PIA demands from now on, by all concerned ‘being doers of the word, and not hearers only’ (as contained therein). It should no longer be business as usual, where core business principles are thrown to the winds with impunity and politically overbearing corrupt practices. The time to get into real business has come!
Watching and listening on a recent programme on Arise News, the guest, Toyin Akinnosho, the publisher of Africa Oil and Gas Magazine, pointedly spoke with eloquence on the direct impact and the expected advantages of the ‘operating expenses’ of the producing companies (which is mandatory by law). These represent the compulsory commitment to their host communities that would directly rub off on them. This is a great gain and a welcomed development.
On the PIA’s full implementation, the document gives high hopes for better and improved performance in the overall output, on the basis that good governance roles would be carefully and fully observed. This aligns with the school of thought on Environmental, Social, Governance (ESG) goals. The ESG revolution for social needs and economic opportunities in the affected host communities with direct responsibility on the producing companies, would have to involve impact assessments of all activities as they affect the environment (pollution, degradation and devastation to the natural habitats, comprising the agricultural farm land, air pollution through gas flaring and the water/aquatic life).
It would also have to involve looking at other social implications, like increased unemployment rate resulting from pollution on farm lands and fishing waters; human health challenges due to air pollution, pronounced hunger and the abject poverty level among the villagers, and increased criminal tendencies, especially among the idle youths. One can now be hopefully consoled by the fact that such adverse effects as enumerated, now have a closer sustainable measure and direct mediation opportunities, to mitigate most of those challenges that might occur, if the PIA is effectively applied through efficient implementation.
The visibly, general poor performance of the oil industry for the nation’s economy, is attributable to the multitude of lapses emanating from the unwholesome activities in the downstream oil sector. The visible redundancy, noticed in low productivity within downstream operations; being shortchanged through a policy of massive importation of refined products with little or no transparent accountability on the government expenditure deployed, with regards to actual volumes being imported and/or its specific volumes for daily consumptions (say PMS) within the country, are practices that are now expected to be put in check, if the envisaged profit oriented operations, must record profit.
This brings up another dimension of the issue, bothering on the avoidable pressures and loads of cross border smuggling of the same imported products, presently being raised (with the current alarming outrageous and ambiguous figures that are attracting public outcry, being given by the NNPC). This appears alien to the known data, given in the past by the Department of Petroleum Resources (DPR), before the end of February 2020. However, the expected key changes (under Governance and Accountability) as enshrined in the PIA, are meant to navigate the new NNPC to a purely profit oriented business venture from now on. The big question before everyone is: How would this be, even though the new structure has a sub business entity that will solely manage and run the downstream productive operations, known as the Nigerian Greenfield Refining Company Limited?
A profit oriented business venture, like this NGRCL, should be strictly managed in a manner that the aims and objectives are to make profit, as reflected in the PIA. It, therefore, demands the sensitivity of constantly researched marketing and sales strategies for a success driven enterprise in all aspects of decisions, actions being taken from now on, for the purpose of achieving positive results. These should always tally with the company’s policies, recognising only attractions to competitive marketing within the open market environment; after all productions. It is also being speculated that government companies will start to challenge all employees to always be on alert and focus much more on ideas that will attract the right generation kind of revenues from the efforts of every stakeholder; otherwise, the business might go under, henceforth. The main reason, as explained, is to always remain in business and ensure the sustainability of the going concern.
Implementing the Petroleum Act should eschew all known forms of politics, corrupt practices and abuse of law and order, by strictly sticking to due process (under the company’s stipulated corporate governance structure). Trying to ever prove or favour ethnic and religious superiority points in the coming business era (as was prevalent before now) shall be counterproductive and will adversely affect the performance of the oil sector.
They are definitely not relevant to the social needs and economic opportunities in the nation’s economy anymore as this will completely hamper the attributes of patriotism in the minds of the citizens that would be positioned on specific professional tasks and responsibilities (if continued); that ought to be based on merit from now on. What matters most is the consciousness of transparency, to rightly and efficiently prosecute assignments committed into their care; for the interest of the state. This commitment must be freely and patriotically exercised, taken with a note of caution that is devoid of nepotism, towards actualising the targets for the right national development.
Sunny Nwachukwu,, PhD, a pure and applied chemist with an MBA in management, is an Onitsha based industrialist, a fellow of ICCON, and vice president, finance, Onitsha Chamber of Commerce. He can be reached on +234 803 318 2105 (text only) or email@example.com