OIL BENCHMARK PRICE OF $78 FOR 2015 BUDGET IS UNREALISTIC- SENATOR BUKOLA SARAKI

These are troubling times for the Nigerian economy. Our revenue base is caving in under the stress of falling price of oil in the international market. Due to the drastic and persistent nature of this fall from the highs of $115 in June of this year, it is my considered view that we can’t continue to give the impression that it is business as usual. The fact that the free fall in the international oil market price has seen it loosing over 25% of early June highs means that correspondingly our economy has lost over 25% of budget revenue estimates of the period as a result. More ominously, the fact that it continues to fall unabated means that it is not getting better yet and therefore we must now apply the breaks and act fast before they get out of hand.

 

Our economy cannot fully withstand the current trend of the current oil market. It is not our fault that the market is volatile but is will be our fault if we don’t learn from the mistakes of previous price falls especially 2008 to plan timeously on how to ease the pain for our people. This is not the time to paint over the rust, discussions and the choices we make now must be based on economics not politics.

 

The current position to put the benchmark for oil price at $78 is inconsistent with the economic trend and attitude of the managers of our economy, which has shown in the past to be very wary of over optimistic benchmark assumptions settling rather for the more prudent conservative base.

 

 

 

YEAR

PROPOSED OIL BENCHMARK PRICE

AV. OIL PRICE PER BARREL

2011

$75

$100

2012

$70

$111.67

2013

$75

$107.96

2014

$74

$90

2015

$78

$79

 

The above table clearly shows a clear departure from the trend over the years to a very acute tendency in 2015 proposed budget MTEF paper. This MOF/Executive position is hard to justify on any economic modeling or recent policy positions. One is left with the impression that this benchmark is not a product of any economic model but a political induced decision that does not paint the correct picture nor aligns itself to the 2015 forecast. So government should go back and come up with a realistic benchmark, which in my view cannot be above the lower 70’s. There is no better time to give full disclosure of the state of the economy and tell the Nigerian people the truth. We have a problem in our hands but not one that cannot be surmounted with the right political will. 

 

WHY THE URGENT NEED FOR ACTION

Aside the issue of the benchmark, the country needs a contingency plan in place now.

 

There is no country leadership that can continue to act like business as usual where it faces over 25% drop in its annual revenues.

 

Our foreign reserves have depleted considerably from the heights it had achieved of over $58b to the $39bn we have now. What this means is that we have small room to maneuver than we had in 2008.

Since most of this cost will be borne by the capital side of expenditure there is a likelihood that the implication will be in job losses, unemployment, social imbalance etc. none of the impact will be positive.

 

The implication of the state of our financial affairs and the reality if the truth is to be told by government is that there will be little or no capital project to be implemented in 2015 except things change drastically. But before Nigerians are called upon to make sacrifices government must show the will to tackle the monumental revenue leakages in our finances. These leakages have the capacity to significantly reduce the level of impact from this economic situation. It is unacceptable for these leakages to continue whilst Nigerians are called to make sacrifice.

 

These leakages, which are known to all but have persisted, now need to be tackled urgently.

 

1.   Crude oil theft.

The continuous loss of over 200,000- 300,000 barrels per day of crude must be stopped. Whether the perpetrators are powerful or highly connected is no longer an acceptable excuse why government with the full capacity of the law and instrument of state cohesion hasn’t been able to fully address this menace.

 

2.    The other issue is the vexed issue of the Kerosene Subsidy, which is costing the economy over N300b annually. This issue, which must be disconnected with the fuel subsidy, is one that government can easily deal with. There is incontrovertible evidence that the scheme feeds only the pocket of those who import Kerosene and does not get to the ordinary citizen. At this stage of our fiscal situation, this presents a good opportunity to exit the scheme to fund other critical sectors that can augment the revenue base.

 

3.        Another area that the government could work to review would be the Crude SWAP program. Many reports including the NEITI report have indicted this NNPC program and called for a review of the program, as it is not adding value to the economy. There is no better time to stop the program. It’s wasteful and inefficient.

 

4.        Government will have to revisit its recent decision to grant some oil companies Pioneer Status. This has become necessary as the nation can ill afford this due to the fiscal implications on the revenues of the country especially collectible tax in the face of these new realities.

 

What is required now is the right political will and leadership from government. Government should as a matter of national importance convene a meeting of the National Economic Council to proffer a collective and workable decision on the national contingency and viable benchmark oil price. There is no better time than now for government to do what is right and save Nigerians from the foreseeable hardship ahead.

SENATOR BUKOLA SARAKI is Chairman Senate Committee on Environment and member Senate Committee on Finance

Senate Activities for Thursday 10th April, 2014

Today at plenary, the Senate took the 1st Reading of the following Bills:

  1.  Nigerian Institute of Transport Technology Act 2011 (Repeal and Re-enactment) Bill 2014 (SB.472). Sponsor – Sen. Sahabi Ya’u.
  2. Nigerian Council for Clinical Psychologists (Est. etc) Bill 2014 (SB.473). Sponsor – Sen. Margery Chuba-Okadigbo.

 

The Senate in the Committee of the Whole considered the report of the Committee on National Planning, Economic Affairs and Poverty Alleviation on the screening of the nominees – Mr. Emmanuel Olusanya Omirin (Osun State) and Shettima Umar Gana (Borno State) for appointment as Members of the Revenue Mobilization Allocation and Fiscal Commission. The recommendations therein were approved and the nominees confirmed.

 

The Report of the Committee on Health on the HIV and AIDS Anti-Discrimination Bill 2014 (SB.258) was also considered by the Senate. The Bill was subsequently read for the 3rd time and passed.

 

The Senate further adjourned to Tuesday, the 29th of April 2014.

Senator Saraki’s views on 2014 budget

2014 Appropriation Act passed today:  Read below for Senators Saraki’s view.

Today at the plenary, the Senate considered and passed the 2014 Appropriation Act. During my contribution on the floor of the Senate on the consideration of the report, I drew the attention of the Senate to a lacuna in the budget, which I considered critical to the effective implementation of the budget. My intervention is simple. The Appropriation Act we passed today did not consider a valuable indicator of our revenue base- oil production variation. In other words, our national budget is predicated on oil production and price. So much emphasis has however been placed on the bench marked price but little consideration on the production side. In recent times, we have witnessed massive fluctuations in the production level with production going down sharply and other times going up. We have seen production fluctuate from 2.1mbpd to 2.5mbpd and back to 1.8mbpd to 1.9mbpd all within two years. We have budgeted for on a baseline production figure of 2.5mbpd and ended up with 2.1mbpd average. All of these have impacted on the implementation of the budget significantly. This throws up a lacuna in the budget implementation process which now raises few questions. Some of which are; What then happens if there is a significant drop in production?  What happens if there is a significant improvement in the production levels?  While we may have set a benchmark on oil price (helpful as it may be), we have not set clear parameters on what happens with production fluctuations a key determinant of revenues. We cannot deal with one and not the other if we want a level of certainty and predictability in our budget. Implementation outcome is a key factor and a stepping stone to the next level

NATIONAL ASSEMBLY READ NEW BILLS

The following Bills were read for the 1st time:
i. Mutual Assistance in Criminal Matters Bill 2014 (SB.470). Sponsor – Sen. Victor Ndoma-Egba.
ii. Proceeds of Crime Bill 2014 (SB. 471). Sponsor – Sen. Victor Ndoma-Egba.
The Senate, sitting in the Committee of the Whole resumed the clause by clause consideration of the Establishment & Public Service Committee Report on the Pension Reform Act (Repeal and Re-enactment) Bill 2014. The consideration of the report was concluded and the Bill was read the 3rd time and passed.
Other items on the Order paper were adjourned to another legislative date

Senate Activities for Wednesday 26th March, 2014

Yesterday, Wednesday the 26th of March 2014, the Senate took the 1st Reading of the following Bills-
1. Nigerian Metallurgical Industry Bill 2014 (SB.461).Sponsor – Sen. Victor Ndoma-Egba.
2. National Fertilizer Bill 2014 (SB.462). Sponsor – Sen. Victor Ndoma – Egba.
3. Immigration Act 2011(Repeal and Re-enactment)Bill 2014(SB.463). Sponsor: Sen. Sahabi Ya’u.
4. Nigerian Naira Stabilization Bill 2014 (SB.464).Sponsor- Sen. Benedict Ayade.

Senate received as laid before it the Reports of the Senate Committee on Ethics and Priviledges on the wrongful termination and dismissal of Mr. Alaowei Jumbo from the Petroleum Equalization Fund, Denial of Posting by the office of the Accountant-General and the Wrongful termination of Appointment of Mr. A.M Ezeh by the Central Bank of Nigeria.

The nominees- Hon. Justice Zainab Bulkachuwa and Mr. Godwin Emefiele for confirmation for appointment as President of the Court of Appeal and Central Bank of Nigerian Governor, both appeared before the Senate respectively and answered questions as referred to them by the Senators. Both nominees were subsequent confirmed after their screening sessions.

Senate activity for Wednesday 19th March, 2014

At the Senate plenary session yesterday- Wednesday the 19th of March 2014, the entire session was dedicated to the clause by clause consideration of the both bill which scaled their 3rd reading and passage by the Senate.
The Senate sitting in the Committee of the Whole, considered and debated clause by clause the consideration of the Committee Report of these two Bills – The National Assembly Service Commission Act (Repeal and Re-enactment) Bill 2013 and the Trafficking in Persons (Prohibition) Bill.
Both Bills were subsequently read for the 2nd time and passed by the Senate.
Other items on the Order paper were stood down to another legislative date.

Senate Bukola Saraki’s New Gas Flaring Initiative

Nigeria flares more gas than any other country in the world today. This is not a mare statistics it is a disgrace. It is significant in many respects; it shows the level of respect we have for our people’s wellbeing. It is also a measure of our environmental consciousness as a nation and a pointer to how much value lie in our regulations and enforcement of these regulations.

Gas flaring has been outlawed since 1968 in Nigeria. However, since 1968 very little progress has been made in terms of investment to end this very repugnant behavior. We have had the Associated Gas Reinjection Act and several regulations all aimed at forcing the hand of explorers to show more responsibility towards the environment and stop wasting our finite resources. Several flare-out dates have been set and flouted with impunity in the past under the guise of investment gestation. Every year when a new set of flare-out plan is introduced Oil producing companies in the country will jointly attack the policy proposal as technically infeasible. They tell us the efforts they are making. To them it is about commerce but to us it is about our future, our environment and our children whose lives and blood continues to be wasted on the alter of this kind of argument. Everything is about commerce for them yet gas is almost as important in the international market now as oil. Yet they are happy wasting it and we are happy listening to their hubris arguments.

Make no mistake about it; gas flaring is not a commercial challenge. In the past this issue has wrongly been treated as an oil industry issue. Little wonder the IOCs have continued to fly the commercial and technical viability argument on us. For the avoidance of doubt, gas flaring not a commercial issue. It is a critical environmental and health challenge. To the communities directly impacted it is a lot more than that- it is a life and death issue. Living with gas flaring is like living with death for the communities who of no fault of there are made to endure this indignation and maltreatment. The ecosystem continues to choke and pant for life. Even more critical gas flaring has been linked to many premature deaths and leukemia. In these areas close to the gas flares, medical staff reports treating patients with all sorts of illnesses such as asthma, bronchial, chest, rheumatic and eye problems, among others. Gas flares emit about 390 million tons of carbon dioxide every year, and experts say eliminating global flaring alone would curb more CO2 emissions than all the projects currently registered under the Kyoto Protocol’s Clean Development Mechanism.

According to the World Bank, human exposure to particulate matter causes the following increased rates of adverse health effects: 6.72 premature deaths per year for each increase of 1 ug/m3 for each 100,000 persons; 1,690 respiratory illnesses per year for each increase of 1 ug/m3 for each 100,000 children; and 32,600 asthma attacks per year for each increase of 1 ug/m3 for each 100,000 asthma sufferers. Assuming, conservatively, that 40% of the population of Bayelsa State are childrenand that 5% of the population are asthma sufferers, particulate matter emissions from gas flaring at the 17 on-shore flow stations in Bayelsa State would likely cause, each year, at least: 49 premature deaths, 4,960 respiratory illnesses among children, and 120,000 asthma attacks.

We must therefore commend the new chairman of the Senate Committee on Environment Senator Bukola Saraki for taking the bull by the horn to wrest down this menace. Indeed, this is not the first initiative towards arresting gas flaring in Nigeria. However, this is the first time there is an awaking as to the environmental value on the issue, which might be related to the failure in the past. Attempts earlier had focused on gas flaring as an exploration issue and little value placed on the environmental and health devastation that is being sustained by the practice. Little wonder the fact that even though in the past the senate had pass a gas flare-out bill it never saw the light of day. Again, it appears that once there is an effort from the lawmakers to stop gas flaring the IOCs quickly demonstrate a fervency to invest towards put out gas flaring and this is quickly recoiled once the buzz fizzles.

The Senate Committee Chairman in recognition if the environmental challenge of gas flaring in Nigerian had during his inaugural indicated his zeal to sponsor through the Senate a bill to end gas flaring and pledged his commitment to see this to fruition. He seem to have remained alive to this challenge as the Gas Flaring Prohibition Bill 2012 went through first reading at the senate. It is expected that well meaning Nigerians will rally together this time on this bill and encourage their representatives to give the bill unflinching support. This is not a fight that we can afford to loose. We can’t wait to make the kind of ignoble history we made with the UNEP Ogoniland Report again. We cannot continue to seat idly bye and watch our children’s life perish even before they grow all in the name of commerce and revenue. We all have a stake in this. No amount of revenue can replace the life of a Nigerian citizen.

I think it is these facts that lead the High Court, on November 14, 2005, to order all oil companies in the Niger Delta to stop gas flaring. Not withstand this, major oil companies in Nigeria have continued to flaring gas in the oil-rich Niger Delta. Nigerian gas flares emit as many greenhouse gases as 18 millions cars, and release toxic substances in densely populated areas, damaging both the environment and the people in the Niger Delta. Flaring can lead to leukemia, asthma and premature death. It causes acid rain, which acidifies lakes and streams and damages the environment. It is time to show that a Nigerian life is worth any in the world and we are ready to do whatever it takes to give every Nigerian life a chance to survive.

Even on the commercial side, it is unconscionable the amount of flare that goes on in Nigeria. The oil industry still flares 24 billion cubic meters of gas a year, enough to power a good portion of Africa for a whole year. Yet this flares burn most of the time right next door to homes that don’t have electricity. With this new initiative, it is expected that the IOCs will have to make a cost benefit analysis and see that it will be in their own economic interest to do the right thing. Those who chose to do right will be incentivized under the bill those who chose to remain impermeable will face consequences that wont be pleasant. Like the Chairman said this menace must be stopped. Our environment matter to our children and us are very dear to us. It will no longer be business as usual.

Lead Debate On A Bill For An Act To Amend The National Oil Spill Dectation And Response Act 2006 To Provide For Penalties And Compensation

As presented on the floor of the Senate on 19th of September 2012.

SPONSOR: SENATOR (DR.) ABUBAKAR BUKOLA SARAKI, CON (KWARA CENTRAL)

Mr. President, Distinguished Colleagues, thank you for the opportunity to lead debate on the General Principle of this all-important Bill. Oil spillage has devastated almost the entire environment of the oil producing areas. An estimated 13 million -16 million barrels of oil has been spilled into the ecosystem over the past 50 years, representing about 50 times the estimated volume spilled in the Exxon Valdez Oil Spill in Alaska in 1989. This amount is equivalent to about one “Exxon Valdez” spill in the Niger Delta each year. With all the environmental devastation arising from these, we do not have the requisite legal and regulatory framework capable of dealing with it. Arresting this situation is the core objective of this amendment.

The amendment to the NOSDRA Act 2006 aims at

  •  Strengtheningthe institutional and regulatory capacity of NOSDRA to proactively manage oil spill in a much more robust and effective manner,
  •  creating a clear and specificregime of penalties and responsibilities for oil spills
  •  providing a consistent guide and procedure for assessing and accessing compensation for oil spill and other civil liabilities.

My dear colleagues, in 2006, this hallowed chamber took the right decision to set up the National Oil Spill Detection and Response Agency a clear sign that the National Assembly was unhappy with the devastation oil spills have wrought on our environment and people. This agency was initially established to provide a reactionary role on the problem. But it is obvious by now that this problem requires a better framework. The agency ought to do more than that.

An effective legislative framework for oil spill management needs to go far enough to ensure that apart from remedying the environment that it can provide enough deterrent for bad environmental behaviour. It should make spilling intolerable. For e.g. the law, which stipulates a fine of not more than one million naira for oil spill, irrespective of the dimension and scope does not encourage environmental good behavior neither does it create an adequate disincentive to oil spilling and environmental irresponsibility. This bill attempts to makes it more economical to respect the environment than degrade it.

REMOVAL & REMEDIATION COST

Oil spillage is not an oil business it is an environmental problem. Oil spill is not a necessary consequence of oil exploration. It is an irresponsible environmental behaviour. The fact that it is as a result of oil exploration does not detract from the impact on the environment. Nigeria has lost over 13million barrels of oil to preventable spills. This is not the entire story. Rather, it is the story of millions of Nigerians struggling to make ends meet, whose livelihood is impacted by what is going on in the affected areas. The story is that of the destruction of the right of communities to live in a safe environment, to live decently and in good health. The full story is that we have ended up now victims of our own blessing because the cost on our people is no longer about economics, now it’s about lives.
It will interest you colleagues to know that Nigeria is one of the very few countries in the world not applying the polluter pay principle. There is yet no legal framework for oil spill penalties. The story is that of a people with nowhere to run, because, nowhere is safe. They turn to their waters for food the fishes are filled with carcinogenic hydrocarbons, the turn to their farms the land can no longer produce even weed not to talk of food.

Today, much of the spills we have, has been ignored, neglected and in most cases never cleaned up. Little wonder then that the UNEP report acknowledges that some of the spills of over 40years ago had not been cleaned or remediated till date. By this bill, responsible parties will no longer pass the bulk. They will pay for what they spilland must reimburse such remediationby government as well as pay penalties for not cleaning up in the first place. Which is the international best practice.

Distinguished colleague, it will interest you to know that from 1976 to 2001, report showed that 90% of the oil producing areas experiencethousands of oil spills annually, resulting to about 215,000 barrels of crude oil spilled into the already fragile environment each year with no significant negative consequences for the oil companies. In Brazil recently, Chevron and Transocean who already face a penalty of about R$20bn (US$11bn) for a spill of 3,500 barrels have seen prosecutors filed criminal charges against their employees. This charges could see them, face up to 31years in prison. In August 2012 a panel of judges in Brazil upheld this penalty and revoked the license of these companies to operate in Brazil. Here, for a 40,000 barrels spill we beg for clean ups and our government in most cases spend a fortune of public funds to cleanup oil spills for which the responsible parties are identified.

It has been acknowledged by several reports including the UNEP Report that fifty percent (50%) of oil spills in Nigeria has been due to corrosion of oil infrastructure, twenty eight percent (28%) to sabotage and twenty one percent (21%) to oil production operations. One percent (1%) of oil spills is due to engineering drills, inability to effectively control oil wells, failure of machines, and inadequate care in loading and unloading oil vessels. It is the responsibility of the spiller to rehabilitate oil spill sites. It is as simple as that. The number of identified sites is over 2,000. The majority of these sites are sites with identified spillers. This gives an indication of the problem we already have in our hands.

The agency charged with oil spill detection and response in our case has little capacity for oil-spill detection and relies completely on reports from oil companies or civil society concerning the incidence of a spill. The Agency lacks the capacity to attract those with the requisite technical expertise and resources to make it more efficient. The Agency has no proactive capacity for oil-spill forecast. This bill is a bold attempt at really giving the agency the ability to act adequately to protect the environment.

PENALTIES

Mr. President Distinguished Senators, the issue of penalties and disincentives to oil spill in Nigeria is now at a stage bordering on the ridiculous. A web based Wall Street Journal Blog had this to say about an oil company operating in Nigeria –

It said and I quote “Thursday after the Anglo-Dutch oil giant said it was taking a closer look at an oil sheen near two of its offshore platforms in the Gulf of Mexico. Later (on the same day) its shares rose and reversed most of the day’s losses after the company said the sheen didn’t stem from its two nearby platforms, and that the amount of oil was small. Meanwhile, the company’s admission that its facilities in Nigeria spilled some 5,300 tons of crude last year up from 700 tons the year before didn’t seem to merit a drag on its stock.

While it would be easy to explain the apparent contradiction by pointing to investors unconcerned at the suffering of people thousands of miles away, their rationale in this case that even one spill in the U.S. could cost billions while many spills in Nigeria probably won’t is hard to fault.”

Among the several reasons adduced by the writer for this state of affairs is the fact that the U.S. boasts one of the strictest regulatory regimes in the world when it comes to offshore drilling, while Nigeria does not. Shell executives and investors needn’t look far to see the consequences of an error in U.S. waters. In the United States for instance, it is criminal to be responsible for oil spill and more criminal to have even tried to falsify the records. The Deepwater Horizon is a case in point where although it may have cost BP a total of over $40bn still has its employees charged for criminal liability over the spill. BP shareholders are still counting the costs of the Deepwater Horizon disaster. The cost of spilling oil in Nigeria may be a stain on the company’s reputation but not on its profit margins.

A major highlight of this bill is the very robust penalty regime, which aims at encouraging environmental responsibility and care. The overall principle is that the polluter must pay. The benefit of this penalty regime is to cause operators to take more care to avoid spills and take proactive steps to nip in the buds any impending spill without much ado.

COMPENSATION
The issue of compensating for damage done to ecological and environmental degradation caused by oil spill is another sore point this amendment has sort to deal with. Even as we speak, the attitude of the average spiller to compensation is that of unwanted irritation because there is no specific framework for compensation for oil spillage. This much represents the recurrent excuse by operators when they are pressured to provide compensation, that they have not breach any law. Instead of receiving adequate compensation, in most cases (if the people even get what is derogatorily termed palliative),they would rather give a few monies to angry youths and settle loud chiefs and pay no attention to the very weak and voiceless in these communities whose farms and livelihood receive the heaviest hit by the spill. For the spill along the Gulf of Mexico, before claims for compensation even started BP contributed $15bn to a joint fund with the US government of about $20bn and it has so far paid out over $13bn to individuals for loss of profits etc. $1.3bn to government and government agencies for lost of revenue. In total it cost BP over $40bn. BP continue to face ongoing cleanup charges under the Oil Pollution Act, compensation claims, and probably a multi-billion dollar fine from the US government. Some might say this is America.

But in Nigeria for a spill of same magnitude or more, the affected individuals and families will get bags of rice, beans, and blankets and bread. Today, Nigeria will lose in the region of over $4bn due to Bonga, but Nigeria will get nothing for loss of revenue. We don’t even feel entitled to anything. In fact if we don’t pass this amendment bill, the scenario where the federal government would use taxpayers money to clean up and remediate the environment would follow.

The international best practice is to pay fair compensation, which takes into account the political, legal, economic, ecological and intrinsic value of the property that is violated. There is no gain saying in the fact that the idea of compensation is duly recognized by some of the oldest doctrines of the law of negligence and strict liability. This is elucidated in the case ofRylands v. Fletcher an old English case, which held that “the person who brings unto his land something capable of damaging other peoples property and opportunityif such a thing escapes is without more liable for all the damage which is the natural consequence of such escape” (paraphrased).

Under the proposed amendment we have set out a scheme of valuation to ascertain the value of payable compensation to avoid the rancor associated with determination of compensation, which has exacerbated the suffering of victims of spill in our communities.

Conflict of interest

One of the biggest hurdles to environmental protection in areas affected by oil spill in the country is the fact that those whose interest is in the business of oil profit have been saddled also with the regulation and monitoring of the environment. This is an anomaly. The international best practice has shown that it is wrong to place in the hands of the petroleum regulator the charge of policing the environment. Petroleum resources account for 80 per cent of national revenue and 95 per cent of export earnings. The government’s assessment of the ministry and its parastatal is on how much earning it has made for the year rather than how many environmental pollution and degradation it has been able to stop or solve.Historically speaking and in 1990, when the ministry, through its Department of Petroleum Resources (DPR), developed the EGASPIN, there was no federal Ministry of Environment. This necessarily made it logical at that time for the Ministry of Petroleum Resources to oversee the environmental aspects relating to the oil industry.

However, there is clearly a conflict of interest in a ministry, which, on one hand, has to maximize revenue by increasing production and, on the other, ensure environmental compliance. One case, clearly typifying this conflict in the recent case of NOSDRA v. PPMC in which the Federal High Court agreed with NOSDRA that PPMC has spilled and degraded the environment and therefore must pay penalties and clean up cost. If this case had been taken up by DPR it will never have the impetus to sue a sister agency in the same industry. Most countries around the world, including the US, Libya, Brazil and the Middle East where oil is the mainstay of the regional economy, have placed environmental regulation within the Ministry of Environment or equivalent. In this context it is noteworthy to mention that after the 2010 Deepwater Horizon incident, it came to light that the US Offshore Energy & Minerals Management Office (under the Bureau of Ocean Energy Management, Regulation and Enforcement) responsible for the development of the offshore oilfield was also the body that issued environmental approvals. President Obama called this a “cozy relationship between the oil companies and the federal agency that permits them to drill”.

Consequently, a new Bureau of Safety and Environmental Enforcement, under the US Department of the Interior, was created, which is independent from the department of Energy Resources and answerable to the state department of environment. There is today no genuine reason to continue this territorial poaching as it has only exacerbated the problem than sole it.

CONCLUSION

For the avoidance of doubt it must be said that the proposed amendment bill, is not aimed at punishing anybody or business. Rather, it seeks to use regulation to encourage good behavior and promote environmental responsibility, which inevitably will improve the business and environmental atmosphere within the oil producer host communities. What this bill seeks to do are things, which we ought to have dealt with yesterday, so we are late on arrival already. This is true because if we had there probably would not have been the level of restiveness we have in the area; the Bonga Spill could have been aborted; there may not have been the need for a UNEP Report on Ogoniland, in fact many devastation that have ravaged our land and waters may never have happened.

FINANCIAL IMPLICATIONS

Mr. President, Distinguished colleagues, this bill imposes no further financial implication on the federal government. Indeed, this bill has the implication of bolstering the revenue of government and improving the capacity of the agency to meet with its regulatory functions.

Distinguished Senators, brothers and sisters, this amendment bill seeks to do one thing and one thing only, to enable us as a country deal much more decisively with the massive oil spill degradation and ecological disaster going on around the oil exploration sites in Nigeria by strengthening our environmental governance and penalty system. I therefore have no hesitation in commending you to this bill and as that we allow this bill to be passed through Second Reading.
Thank you

Signed,

Senator Abubakar Bukola Saraki