Policy briefs: HCB and PIGB – what you need to know

See our updated analysis for the latest version of the Nigerian Petroleum Industry Bill 2020

Today SDN publishes two policy briefs looking at key pieces of Nigerian oil sector legislation. They examine the environmental aspects of the legislation, should it be passed – and what this will mean for the people of the Niger Delta. The policy briefs highlight that while there may be positive developments on the horizon, more needs to be done to protect local people from the environmental impact of the oil sector. Without addressing this, the challenge of addressing the complex, connected problems of the Niger Delta will be made more difficult.

The first brief focuses on the Petroleum Host and Impacted Communities Development Bill – commonly known as the Host Communities Bill, or HCB. The HCB is intended to compensate local communities which play host to oil sector infrastructure, known as ‘Host Communities’, for the disruption and pollution they sometimes suffer from as a result.

The second brief focuses on the Petroleum Industry Governance Bill, or PIGB. The PIGB is intended to address structural issues in the regulation of the oil industry, including the key question of which regulatory agencies should set and enforce environmental protection standards.

These Bills have spent a long time coming to fruition in the Nigerian National Assembly. They form part of ongoing attempts at reform in the governance of the Nigerian oil and gas sector, first begun more than 15 years ago. Expectations are now high that the Bills will finally be approved by the National Assembly, and granted Assent by the President, in the next few months. But deliberations are ongoing, and even at this late stage SDN considers that improvements could be made.

The HCB could improve local community representation in the planning process for projects intended to compensate them for the impact of oil sector operations. Currently, there is too much power vested in oil companies to take decisions which will affect others. The PIGB should ensure that a key conflict of interest at the heart of the Nigerian oil industry is addressed. It should ensure the separation of powers between agencies mandated to maximise revenue generation, and to enforce environmental protection standards. Currently, these are housed under the same regulator. This must not be allowed to continue.

The HCB and the PIGB are the culmination of more than a decade of political debate, and are central to plans for long-term stability in Nigeria. The chance to ensure they deliver a more peaceful, prosperous oil industry – for the benefit of all – must not be missed. Read our brief on the HCB here and the PIGB here for our view on what needs to be done.

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