[NUPENG & PENGASSAN POSITION ON THE PETROLEUM INDUSTRY GOVERNANCE BILL, 2016]

Transcription

1 2016 NIGERIA UNION OF PETROLEUM AND NATURAL GAS WORKERS & PETROLEUM AND NATURAL GAS SENIOR STAFF ASSOCIATION OF NIGERIA () MEMORANDUM TO THE JOINT SENATE COMMITTEE ON THE PETROLEUM INDUSTRY GOVERNANCE BILL [ POSITION ON THE PETROLEUM INDUSTRY GOVERNANCE BILL, 2016]

2 The Chairman & Distinguished Members, Senate Joint Committee on the Petroleum Industry Governance Bill, National Assembly Complex Three- Arms Zone, FCT Abuja Our Distinguished Senators, s POSITION ON THE PETROLEUM INDUSTRY GOVERNANCE BILL, INTRODUCTION The Nigerian Oil and Gas Sector evolved, over the years following the discovery of crude oil in commercial quantity in Oloibiri, from just Miscellaneous to the Mainstay of the economy. Unfortunately, Nigeria missed great opportunities to : grow its oil and gas sector and has since reaching two million barrels per day production in the early 1970s remained there and is currently producing far less than the 1970 crude oil production levels; depends on importation to meet its demand for refined petroleum products locally; unable to develop its natural gas potentials ; unable to leverage on its huge gas potentials to provide reliable power to its citizens and industries ; etcetera, due to the challenges facing its oil and gas sector. This prompted the Federal government in April 2000 to inaugurate the Oil and Gas Reform Committee. Unfortunately, since then successive Nigerian governments has been unable to muster the political will and commitment necessary to end the reforms in the nation s Oil and Gas industry; and more specifically unable to legislate the proposed reforms into law. Consequently, the reforms have become more of motion without movement and witnessed a flip-flop progress. It is even dangerously looking like a vicious cycle: Executive forward the PIB to the National Assembly; the National Assembly will review the bill and set up ad hoc Committees on the PIB; the Ad hoc Committees carry out public hearings; the National Assembly will eventually fail to pass the Bill into law at the end of its tenure; and the next Executive and National Assembly will be asked to restart the process again. This was the story of the PIB in the sixth and seventh National Assemblies. While Nigeria continues to dither over the legislative phase of the reforms in its oil and gas sector, Ghana her neighbour (who just joined the Petroleum Club recently) on August passed its own petroleum industry bill, i.e. the Petroleum (Exploration and Production) Bill, 2016 into law in a bid to attract investments. It is instructive to note that Ghana started and completed its own PIB in less than two years! Painfully, Nigeria has lost some US$200 billion of investments due to its inability to legislate the proposed reforms in its oil and gas industry as follows: $15bn yearly in investments withheld or diverted by investors to 1 P a g e

3 other countries because of the uncertainty as investors do not know which rules will guide their investments; and another $100bn potential earnings in five years, from had the PIB been passed into law in Our Distinguished Senators! It is therefore our expectation that by your sponsorship of the Petroleum Industry Governance Bill 2016, the 8th Senate, indeed the 8 th National Assembly and the administration of President Buhari which is premised on the change agenda will eventually pass this first part of the Petroleum Industry Bill (i.e. The Petroleum Industry Governance Bill) as well as the other remaining parts of the PIB into law. We understand from Dr. Emmanuel Ibe Kachikwu 1 the Hon. Minister of State for Petroleum, that the Petroleum Industry Bill (PIB) will be divided into 6 bills namely: 1. The Petroleum Industry Governance Bill 2. The Petroleum Technology Development Fund Repeal and Re-enactment Bill 3. The Petroleum Industry Upstream Administration Bill 4. The Petroleum Fiscal Framework Bill 5. The Petroleum Industry Downstream Administration Bill; and 6. The Petroleum Industry Revenue Management Framework Bill We therefore look forward to not only the passage of the Petroleum Industry Governance Bill 2016 but also the passage of the five other remaining aforementioned bills especially as each of these bills deal with important aspect of the Petroleum Industry reforms in Nigeria. 2. BROAD POLICY THRUST ON THE PETROLEUM SECTOR REFORMS 2 As critical stakeholders, the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) believe that the objectives of the reforms of the Nigerian oil and gas industry and Nigeria s national interest are best secured under the following five broad themes: 1. Transparency and Accountability 2. Fiscal Terms 3. Institutional Framework: Minister, Regulator and Commercial entities 4. Refinery and other Downstream Activities 1 Kachikwu, E.I (2016). The Petroleum Industry Bill: Getting to the Yes. Law Publishing & Conference Services, Lagos, Nigeria. Page This position is irrespective of the number of parts the Reforms Bills/Laws are divided into. 2 P a g e

4 5. Labour Issues and Membership of Institutions, Boards and Committees It is also important to state categorically that our position on the Petroleum sector reforms and Petroleum industry bill remains the same whether the PIB is a single document as was the case in the 2009 and 2012 PIBs or broken into parts as is currently done. It is however important to point out that the aspects of the s Broad policy thrust that are relevant to the Petroleum Industry Governance Bill 2016 are Transparency and Accountability, Institutional Framework and Labour issues. As our distinguished Senators will readily agree, the importance of transparency and accountability in the nation s oil and gas sector cannot be overemphasised. Our Broad Policy Thrust number 3 on Institutional Framework is aimed at ensuring that Nigeria applies global best practice for the administration of its oil and gas industry. The global best practice is to have a policy formulating body i.e. a government ministry or department; an independent regulatory body and a national oil company for commercial operations. This is obtainable in such countries as Norway, Brazil, Malaysia, etc. In the Norwegian Model for example, Norway administers its hydrocarbon sector using three distinct bodies: a national oil company, Statoil engaged in commercial hydrocarbon operations; a government ministry to help set policy; and a regulatory body to provide oversight and technical expertise, the Norwegian Petroleum Directorate (NPD). Similar arrangements are discernible in Brazil s organizational reform of its petroleum sector which has provided clarity on roles and responsibilities with the following bodies: the Ministry of Mines and Energy develops sector policy and the Petrobras budget; National Agency of Petroleum, Natural Gas, and Bio-fuels (ANP), an Independent regulatory agency carries out regulatory oversight and royalty administration; and the national oil company, Petrobras is responsible for commercial petroleum operations. Therefore, in line with global best practice, the Minister and the Ministry of Petroleum should be concerned with broad policy framework and not with the day-to-day running of the industry while the Regulator is allowed to carry out its regulatory functions with little or no interference. On this score, we can draw enviable parallels to copy from the powers of other Ministers vis-a-vis the Nigeria Communications Commission (NCC) and Nigerian Electricity Regulatory Commission (NERC). Our Broad Policy Thrust number 5 on Labour Issues is critical for the smooth take-off of the Bill when passed into law. Ignoring the concerns of the Nigerian workers as clearly stated by will be counterproductive, if not catastrophic. Consequently, we present hereunder the key aspects of the Broad Policy Thrust number 5 on 3 P a g e

5 Labour issues, which are our minimum requirements on labour, and workers related matters: I. Ensure the mandatory recognition of the Right to Freedom of Association and effective Collective Bargaining by all organisations and companies operating or doing business in the Nigeria oil and gas industry irrespective of where they are located. II. Ensure that ALL companies and organisations operating in the Nigerian oil and gas industry comply with all international labour conventions; the collective agreements with the labour unions and the extant labour laws as a minimum in all their dealings with the Nigerian workers and their representatives. III. Ensure all workers in the NNPC and ALL other government agencies to be impacted by the PIB shall transit to the new companies/agencies on terms and conditions no less favourable than their present conditions. This is crucial to the successful take-off of these agencies, the NOC and the PIB itself. IV. Ensure that proper arrangements are made so that the liabilities of the NNPC and other agencies to their staff such as pensions to retired and existing employees are adequately provided for prior to the effective commencement date of the PIB. V. Ensure that companies operating in the oil and gas industry do not use the PIB as a ploy to disengage Nigerians. To this end, the PIB should give the regulatory agency the power to protect the jobs of Nigerians working in the oil and gas industry such that no Nigerian will be relieved of his/her job without the approval in writing of the regulator. VI. Ensure NO worker in the oil and gas industry impacted by the PIB shall be asked to leave service until a minimum of five (5) years after transition. In addition, after five years, the Union must be involved in re-organization/ right sizing cum negotiation of any staff proposed for exit. VII. Strengthen the Nigerian Content Act and policies, especially as relates to labour, training and manpower development. VIII. Establish the PETROLEUM INDUSTRY LABOUR ADVISORY COUNCIL to advise on and resolve all labour and industrial relations issues in the critical oil and gas industry. IX. A provision that will encourage IOCs to enter into an arrangement with the Petroleum Training Institute (PTI) and PTDF for the training of the lower and middle level manpower for the industries should also be articulated in the PIB. This will also enable us create Centres of Excellence in Nigeria. X. With respect to the membership of boards created under the PIB, provision must be made for representation of one person EACH of PENGASSAN and NUPENG in all the boards and committees set up in the PIB. This is predicated on the fact that workers and their unions are 4 P a g e

6 strategic partners and stakeholders whose participation, initiatives, drive and inputs are important for the successful operations of the oil and gas industry. 3. POSITION ON THE PETROLEUM INDUSTRY GOVERNANCE BILL 2016 Our presentation here will be divided into two. The first part is the OVERVIEW OF OUR POSITION ON LABOUR RELATED aspects of the Bill. The second part is our DETAILED by- Position on the Petroleum Industry Governance Bill We respectfully appeal that due consideration and attention is given to our position. 3.1 OVERVIEW OF LABOUR RELATED MATTERS: The Petroleum Industry Governance Bill () will determine the future of the Nigerian oil and gas industry, as well as the Nigerian workers. This is more so as the Bill contains provisions about staff transfers from the NNPC and other impacted government agencies. The bill also plans to change the ownership structure of the government establishments in the Petroleum sector, including asset sales and eventual divestments. Clearly, the is intended to privatise as much as is practicable government interest in the petroleum sector. This if not carefully handled will lead to serious labour issues. There are also additional challenges posed by Repeals of existing laws as some of the Acts establishing the government agencies except for Petroleum Equalisation Fund (PEF), Nigerian Nuclear Regulatory Authority(NNRA) and Petroleum Training Institute (PTI) will be repealed by the. The position of the is that staff of the NNPC and all other agencies that will be impacted by the must NOT lose their jobs or be allowed to be transferred on terms and condition of service that is less favourable than what they currently have under any guise. A major challenge that will confront the workers in the organisations and agencies that will be impacted by the, especially the National Petroleum Company, is the transition from a more socially focused organisation to a profit-focused organisation. The severe changes that these organisations will bring will suddenly catch up with the workers like those of the PHCN successor companies. A good example is the swift changes in behaviour and orientation that will be required from the workers. This is a huge change and challenge, and it is important that the process and transition be properly discussed ahead of passage with the workers and the Unions that represent them (i.e. PENGASSAN and NUPENG) 5 P a g e

7 The position of the is that wherever matters concerning or connected with the workers such as interalia: Remuneration, Pension, Welfare, Transfer and deployment are mentioned, the Unions (PENGASSAN and NUPENG) MUST BE INVOLVED and Collective Bargaining Agreements MUST BE RESPECTED and clearly included in the Law. In addition, Broad Policy Thrust 5 on Labour issues as aforementioned must be respected and given due consideration. These are key for successful implementation of the law. 3.2 DETAILED POSITION ON : - by- Review of the Petroleum Industry Governance Bill 2016 We note that the Petroleum Industry Governance Bill 2016 () contains some of the obnoxious provisions of the 2012 Petroleum industry Bill such as excessive wide discretionary powers to the Minister in charge of Petroleum. It also gives the Nigeria Petroleum Regulatory Commission the power to make Regulations without public hearing, which is completely alien to constitutional democracy. On Staff and workers related matters, we once again refer you to the preceding section of this memorandum -3.1 OVERVIEW OF LABOUR RELATED MATTERS. We however observed that there is no mention of the Petroleum Host Community Fund in the bill and hope that there are better plans to address the challenges in the Niger Delta including the increased militant attacks which has severely impacted the nation s ability to produce oil and gas. To be specific, the increased Militant Attacks in the Niger Delta has led to significant amounts of shut-in production at onshore and shallow offshore fields & frequent declaration of force majeure by oil and gas companies in Nigeria. Nigeria s 2016 budget was based on Crude oil export of 2.2mln bpd with MTEF projections of 2.347mln and 2.469mln bpd for 2017 and 2018 respectively. Unfortunately, due to the Militancy in the Niger Delta, Nigeria s crude oil export in 2016 only averaged some 1.5mln bpd creating a deficit of some 700,000 bpd in export, thereby worsening her economic crises and pushing the country deeper into recession, exchange rate crises, and stagflation. Therefore, it is important that any legislation to address the challenges in the Nigerian oil and gas industry must make provisions on how to effectively address the Petroleum Host community issues. At this point, permit me our Distinguished Senators to present the table below, which identifies institutions in, and sections of, the Petroleum Industry Governance Bill () 2016 and articulates s observations and on each of them. Part 1: OBJECTIVES ( 1) NUPENG & PENGASSAN s Proposed 6 P a g e

8 Part 1 OBJECTIVES 1(b) Establish a framework for the creation of commercially oriented and profit driven petroleum entities that ensures value addition and internationalization of the petroleum industry. The word internationalization is ambiguous in this context. It should be clarified to discourage abuse. Establish a framework for the creation of commercially oriented and profit driven petroleum entities that ensures value addition and internationalization of the petroleum industry having due regard to the provisions of the Nigerian Oil and Gas Industry Content Development Act and the interest of Nigeria at all times. Part 2: THE MINISTER (s 2 and 3) Part 2 THE MINISTER 2.2 The Minister may in writing delegate to any other person or institution any power or function conferred on him by or under this Act. This is very wide discretionary power is subject to abuse and may undermine the spirit and intent of this bill. S Proposed Therefore, If the Minister will delegate his/her power or function, such delegation must be subjected to the following conditions: a. The person/delegate should have experience on the subject matter of such delegation; b. Powers related to the functions of any institution established by law, should only be delegated to that institution a. Functions or powers should Not be delegated to any officer not less than a director with sufficient knowledge about the subject matter of delegation. 2.3(1) In the event of a state of national emergency as specified in the Constitution of the Federal Republic of Nigeria, 1999, the Minister shall have the right of preemption of all Petroleum and Petroleum Products obtained, marketed or otherwise dealt with under State of national emergency and what may constitute such should be made clearly stated in the bill. State of national emergency and what may constitute such should be made clear to avoid abuse. 7 P a g e

9 2.3(3) any license or lease granted under this Act or any other enactment. Any person, who fails or neglects to comply with a requisition made by or on behalf of the Minister under paragraphs 1, 2 or 7 of the First schedule of this Act, or fails to conform or to obey a direction issued by the Minister under paragraph 8 of the First schedule of this Act, commits an offence and is liable on conviction to a fine not above N10,000, or to imprisonment for a period not exceeding Six Months or both. Excessive powers to the Minister S Proposed This is Excessive powers to the Minister and should be expunged 2.3(4) Any person who obstructs or interferes with the Minister, his servants or agents in the exercise of the First schedule to this Act, shall be guilty of an offence and on conviction shall be liable to a fine not above N5,000, or to imprisonment for a period not exceeding Six months or to both. Excessive powers to the Minister This is Excessive powers to the Minister and should be expunged 2.3(5) The Minister may by regulation, increase the Financial penalties imposed under sub section 3 and 4 of this section Excessive powers to the Minister This is Excessive powers to the Minister and should be expunged 8 P a g e

10 Part 3: NIGERIA PETROLEUM REGULATORY COMMISSION (s 4 to 35) Part 3 NIGERIA PETROLEUM REGULATORY COMMISSION. OBJECTIVES OF THE COMMISSION From the date of the commencement of this Act, without further assurance, the commission shall be vested with all assets, funds, resources and other movable and immovable properties which immediately before the commencement of this Act were inspectorate, the Department of Petroleum and the Products Pricing Regulatory Agency. Objective of the Commission (a-i) is worried about the deliberate omission of Petroleum Equalisation Fund (PEF), and the Petroleum Technology Development Fund (PTDF) from this Bill and would want to know if their functions would be transferred and the workers absorbed in the commission. There is need for cost and financial discipline to be applied in the discharge of the duties of the Commission. S Proposed did not specify the role or state of the Petroleum Equalization Fund (Management Board) which is vested with the responsibility of ensuring and formulating pricing of petroleum products. Apart from the uncertainty of the Agency s institutional role, the bill will create job losses as no provision for services of the workforce is contemplated. Having been in the downstream sector for over 40 years, PEF should also be merged to continue its supportive role in the downstream sector with DPR, PPPRA to form the new Nigeria Petroleum Regulatory Commission. Add to section 5(i) implement such other objectives as are consistent with the provisions of this Act in a cost effective manner and with strict financial discipline. 9 P a g e

11 FUNCTIONS OF THE COMMISSION NUPENG & PENGASSAN 6.1(d) In consultation with the Minister of Environment, ensure adherence to applicable national and international environmental and other technical standards by all persons involved in Petroleum operations. REGULATIONS 8.5 & 6 5. Notwithstanding the provision of subsection (2) of this section, the commission may due to the exigency of the circumstances, make any regulation without conducting a public hearing, where it deems it necessary to do so. 6. Any regulation made pursuant to sub-section (5) of this section shall be valid for not longer than six months with effect from its commencement date, unless it is confirmed after public hearing. The bill should empower the commission to make regulations on environmental issues as well as enforcing international environmental standards. These subsections should be expunged. They give excessive powers to the Commission to make Regulations without Public hearing. Such discretionary powers could be subject to abuse, undermines the spirit and intent of the and creates unnecessary uncertainties that rules could be changed midway without inputs from stakeholders. s Proposed 6.1(d) should read: Establish environmental regulations and standards in the Petroleum Industry and ensure adherence to such standards. These subsections should be expunged DECISIONS AND ORDERS MADE BY THE COMMISSION 9.2 The commission shall issue written reasons in respect of any decisions or orders affecting the existing rights of any person, if the affected person requests There should be a stipulated time limit within One (1) month for the Commission to respond. There should be a stipulated time limit within One (1) month for the Commission to respond. 10 P a g e

12 COMMISION TO GIVE NOTICE TO INTERESTED PARTIES 10.2 such written reasons. Where the Commission is required to or otherwise decides to hold a hearing, all persons having an interest in such matter shall, as far as reasonably practicable, be notified of the questions at issue and given opportunities to make representations, if they so wish. Public hearing should be mandatory in a constitutional democracy. Public hearing should be made mandatory by the law. BOARD OF COMMISSION 13.2(g) The board shall consist of a representative of the Federal Ministry of Environment who shall not be below the rank of a Director. NUPENG & PENGASSAN This is supported, so that the inputs of the FME will be reflected in the decisions of the Commission to enable a one stop shop for effective and efficient regulation of the petroleum industry. s Proposed Prescription This is supported, so that the inputs of the FME will be reflected in the decisions of the Commission to enable a one stop shop for effective and efficient regulation of the petroleum industry. REMUNERATION AND ALLOWANCES OF MEMBERS OF THE BOARD Membership of the Governing Board of the Commission Members OF THE Board shall be paid from the fund of the Commission such remuneration and allowance as the Commission may from time to time determine, having regard to the recommendation of the National Salaries, Income and Wages Commission. PENGASSAN and NUPENG should be represented in the Board. This is predicated on the fact that workers and their unions are strategic partners and stakeholders whose participation, initiatives, drive and inputs are important for the successful operations of the oil and gas industry. In addition, due regard should be given to the Collective Bargaining Agreement with the Unions. This will ensure that there is a relationship between the PENGASSAN and NUPENG shall be represented in the Board. This should be included as section 13.2(h) Members OF THE Board shall be paid from the fund of the Commission. Such remuneration and allowance as the Commission may from time to time determine, having regard to the 11 P a g e

13 remuneration of the Board and that of the rest of the employees. Otherwise, the Board would be tempted to spend a disproportionate amount on its own remuneration. recommendation of the National Salaries, Income, Wages Commission and Collective bargaining agreements with the unions. Other Staff etc. of the Commission NUPENG & PENGASSAN 23.2 The employment of the commission s staff shall be subject to such terms and conditions as may from time to time be stipulated by the Board and contained in the respective employment contracts. The provisions of the Collective bargaining agreement should be recognized. The provision of section 52 which states minimum condition of service of transferred staff from NNPC to the management Company should also be applied to the commission staff minimum start up condition of service. s Proposed Prescription The employment of the commission s staff shall be subject to such terms and conditions as may from time to time be stipulated by the Board and contained in the respective employment contracts and the Collective bargaining agreements with the Unions. 24 PENSION 24.2 Nothing in subsection (1) of this section shall prohibit the commission from appointing a person to any office on terms that preclude the grant of a pension or other retirement benefits in respect of that office This may imply that staff would be subject to different conditions of service as deemed fit by the Board of the commission. Some staff may be employed on a nonpensionable basis. The provisions of the Pension Reform Act 2014 are very clear. It would be a mockery of the law for the PIG bill to even suggest that workers can be employed without pension. This section should be expunged. 12 P a g e

14 Parts 4 to 7: ESTABLISHMENT OF COMMERCIAL ENTITIES (s 36 and 37); NIGERIA PETROLEUM ASSETS MANAGEMENT COMPANY (s 38 to 60); NATIONAL PETROLEUM COMPANY (s 61 to 85): and REPEALS, TRANSITION, AND SAVINGS PROVISIONS (sections 86 to92) 36 Establishment of the Ministry of Petroleum Incorporated. 36(1-7) Establishment of the Ministry of Petroleum Incorporated(MOPI) The Ministry of Petroleum of Petroleum Incorporated (MOPI) should be replaced with The Ministry of Finance Incorporated(MOFI) should be allowed to hold these shares. It is an attempt to make the Minister of Petroleum have absolute powers to determine the shares. NUPENG & PENGASSAN s Proposed All references to the Ministry of Petroleum Incorporated(MOPI) should be expunged and replaced with the Ministry of Finance Incorporated (MOFI) 37 Incorporation of the Nigerian Petroleum Assets Management Company and the National Petroleum Company 37.1 The Minister shall within Six months after the effective date take such steps as are necessary under the Companies and Allied Matter Act to incorporate two entities the first may be called the Nigeria Petroleum Assets Management Company, or such other name as may be available, as Companies Limited by shares, which shall be vested with certain assets and liabilities of the Nigerian National Petroleum Corporation (NNPC) Need for government to clarify what constitutes certain assets. Need for government to clarify what exactly constitutes certain assets The Minister may in addition to the Incorporation of the entities above, incorporate other entities, as may be necessary to assume and manage some of the liabilities of the NNPC. This statement is too open-ended and gives too much power to the Minister. Furthermore, the roles of these other organizations should be clearly stated. This statement is too open-ended and gives too much power to the Minister. Furthermore, the roles of these other organizations should be clearly stated 37.4(a) The initial shares or other ownership interest of such other entities shall be held in the ratio of 51by the Ministry of Petroleum Incorporated and 49% by the Bureau of Public Enterprises on behalf of the Government. are concerned that the government is going for privatization, without proper engagement of the stakeholders. reject the privatization move by the government. 13 P a g e

15 37.5 The Minister shall ascertain outstanding liabilities, including the amounts of cash call arrears and shall within 12 months of the effective date layout a plan for the settlement of liabilities request for clarification as to why the bill is singling out cash call. NUPENG & PENGASSAN s Proposed request for clarification as to why the bill is singling out cash call. NIGERIA PETROLEUM ASSETS MANAGEMENT COMPANY (s 38 to 60) 39 Business or Objectives of the Management Company. 39:(a) The Minister shall ensure that the Memorandum of Association of the Management Company includes the following(a): to hold and manage certain petroleum assets on behalf of the government of the Federation. Need for government to clarify what constitutes certain assets. The assets that make up the certain assets should be clearly stated in the bill to avoid any ambiguity and undue discretionary powers. 41 Transfer of Employees, Assets and Liabilities 41:2 A transfer order shall be binding on the NNPC, the management Company and all other persons Employee audit should be done before transfer to ensure that no genuine staff is omitted in the transfer order. Employee audit should be done before transfer 41:4 & 41(4)(a) A transfer order may specify and describe employees, assets, liabilities, right or obligations to be transferred by reference to specific employees, assets, liabilities, rights of obligations. Specific employees should read all present employees. In addition to all stated agreements in this provision, the Collective Bargaining Agreement (CBA) of workers must be in included. Specific employees should read all present employees. 41:5 With effect from the date specified in the relevant transfer order, all bonds, loans, financing agreements, alternative financing agreements, joint operating agreements, production sharing contracts, participation agreements, hypothecations, securities, deeds, contracts, instruments, documents This is too much power to the Minister. With effect from the date specified in the relevant transfer order, all bonds, loans, financing agreements, alternative financing agreements, joint operating agreements, production sharing contracts, 14 P a g e

16 and working arrangements subsisting prior to the transfer date. NUPENG & PENGASSAN s Proposed participation agreements, hypothecations, securities, deeds, contracts, instruments, documents, collective bargaining agreements and working arrangements subsisting prior to the transfer date 41:6(f) Impose conditions on the exercise of powers by the management of Company that are related to employees, assets, liabilities, rights or obligations transferred by the transfer order. Excessive powers to the Minister. This could undermine the spirit and intent of the bill. Excessive powers to the Minister. This could undermine the spirit and intent of the bill. 41:8 The Government may thereafter vest in the Management Company any further assets as the government may from time to time. Excessive powers to the Minister. This could undermine the spirit and intent of the bill. Excessive powers to the Minister. This could undermine the spirit and intent of the bill A transfer order may contain provisions dealing with other matters not specifically referred to in this part that the Minister Considers necessary or advisable in connection with a transfer. Excessive powers to the Minister. This could undermine the spirit and intent of the bill. The Unions should be involved in all matters connected with transfer of staff Excessive powers to the Minister. This could undermine the spirit and intent of the bill. The Unions should be involved in all matters connected with transfer of staff 41:9 The Minister may by order require NNPC to transfer certain employees, assets, liabilities, rights and obligations to any other successor entity incorporated by the Minister pursuant to subsection (3) of section 37 of this Act. Such transfer order shall be binding on the NNPC and successor entities and all other persons. Excessive powers to the Minister. This could undermine the spirit and intent of the bill. There is need for comprehensive staff audit to ensure that no Staff is omitted in the transfer order Excessive powers to the Minister. This could undermine the spirit and intent of the bill. There is need for comprehensive staff audit to ensure that no Staff is omitted in the transfer order 50 Further order 50 The Minister may at any time within one year after making a transfer Employee audit should be done before transfer Some employees should read all present 15 P a g e

17 Amending a Transfer order order, make a transfer order amending the transfer order in any way that the Minister considers necessary or advisable, including such order or orders as may be necessary to rectify the transfer of any of the employees, assets, liabilities, rights and obligations. Pursuant to a verification or an audit of the employees, assets and liabilities of the management Company as at the date of the relevant transfer order, and this part applies with necessary modifications to the amendment and all employees should be transferred not just certain NUPENG & PENGASSAN s Proposed employees 51 Directions to the NNPC on matters related to transition 51 Prior to the vesting of assets and liabilities of the NNPC in the management Company, the Minister may give the Board of Directors of the NNPC directions in writing to ensure the proper transfer of the assets and liabilities of the NNPC to the management Company and the Board of Directors shall without delay, comply with such directions. This is too much power to the Minister This is too much power to the Minister and could undermine the spirit and intent of the bill 52 Transfer of Employees to the Management Company and conditions of service of transferred employees 52.1 Any employee of the NNPC transferred to the management Company pursuant to section 41 or 50 of this Act shall be transferred to the Services of Management Company on terms not less favourable than those enjoyed by him immediately prior to the transfer. This is supported by. This is supported by The service rendered by an employee transferred pursuant to section 41 or 50 of this Act to the NNPC shall be deemed to be service with the Management Company for the purpose of determine employmentrelated-entitlements as specified by the relevant laws of employment in Nigeria. This is supported by. In addition to all stated agreements in this provision, the Collective Bargaining Agreement (CBA) of workers must be respected. This is supported by. In addition to all stated agreements in this provision, the Collective Bargaining Agreement (CBA) of workers must be respected. 16 P a g e

18 52.3 Until such time as conditions of service are drawn up by the Management Company. In line with the doctrine of social dialogue, the unions must be involved in drawing up the conditions of service. NUPENG & PENGASSAN s Proposed Until such time as conditions of service are drawn up by the Management Company and the Unions. 55 Composition and Appointment of the Board Composition and Appointment of the Board Include PENGASSAN and NUPENG in the Board Include PENGASSAN and NUPENG in the Board 55.4 For the purpose of making appointments to the Board of Directors, the Shareholders shall constitute an independent Committee ( the Board Nomination Committee ) of Five persons with proven qualifications and tested industry experience one of which shall include a representative of the Ministry of Petroleum Resources who shall not be below the rank of directors, to identify and recommend highly qualified candidates for such in a competitive and transparent manner. Supported. Supported. NATIONAL PETROLEUM COMPANY (s 61 to 85) 61: Shareholding of the National Petroleum Company 66 Divestment of Shares of the National Petroleum Company At the time of its incorporation, the initial shares of the National Petroleum Company shall be held in the ratio of 51% by the Ministry of Petroleum Incorporated, 49 % by the Bureau for Public Enterprises on behalf of the government. Notwithstanding the provisions of section 61 of this Act, the Government shall within 5years from the date of incorporation of the National Petroleum Company, divest, Replace Ministry of Petroleum Incorporated with Ministry of Finance Incorporated. This is an indication that government plans to privatize the National Petroleum Company. Proper engagement with stakeholders is required. not less than 10% and not less than 30% should be replaced by not more than 10% Replace Ministry of Petroleum Incorporated with Ministry of Finance Incorporated. This is an indication that government plans to privatize the National Petroleum Company. Proper engagement with stakeholders is required. not less than 10% and not less than 30% should be replaced by not more than 10% 17 P a g e

19 . in a transparent manner not less than 10% of the shares of the National Petroleum Company, and within 10 years from the date of incorporation divest not less than an additional 30% of the shares of the National Petroleum Company to the Public in a transparent manner. and not More than 30% respectively. This is an indication that Government wants total privatization of the Industry. The Experience with failed Privatisation of the power sector should guide the National Assembly to the effect that privatization of national assets could be counterproductive and an avenue for corruption. earnestly seeks proper clarification of this section. NUPENG & PENGASSAN s Proposed and not More than 30% respectively. 67 Transfer of Employees Assets and Liabilities Transfer of Employees Assets and Liabilities The Unions should be involved in all matters concerning or connected with transfer of staff. Also, no worker should be transferred on terms less than they currently enjoy. The Unions should be involved in all matters concerning or connected with transfer of staff. Also, no worker should be transferred on terms less than they currently enjoy. 74 Further Order amending a Transfer Order 74 The Minister may at any time within one year after making a transfer order, make a further order in any way that the Minister considers necessary or advisable, including such order or orders as may be necessary to rectify the transfer of any of the employees, assets, liabilities, rights and obligations pursuant to a verification or an audit of the employees, assets and liabilities of the National Petroleum Company as at the date of the relevant transfer order and part applies with necessary modifications of the amendment. This is too much power to the Minister. The Unions should be involved in all matters concerning or connected with transfer of staff. Also, no worker should be transferred on terms less than they currently enjoy. The Unions should be involved in all matters concerning or connected with transfer of staff. Also, no worker should be transferred on terms less than they currently enjoy. 18 P a g e

20 76 Transfer of Employees to the National Petroleum Company 76 Any Employee of NNPC transferred to the National Petroleum Company pursuant to sections 67 and 74 of this Act shall be transferred to the service of National Petroleum Company, on terms not less favourable than those enjoyed by him immediately prior to the transfer. Supported. Movements of staff to the successor companies must as managed with NUPENG & PENGASSAN and Staff who are NUPENG & PENGASSAN members will be transiting as union members. NUPENG & PENGASSAN s Proposed Supported. Movements of staff to the successor companies must as managed with NUPENG & PENGASSAN and Staff who are NUPENG & PENGASSAN members will be transiting as union members. 79 Composition and Appointment of the Board 79.2a-d The Minister shall cause the Articles of Association of the National Petroleum Company to provide for the composition of the Boards as follows: a d The composition of the Board should include one representative each from PENGASSAN and NUPENG. The composition of the Board should include one representative each from PENGASSAN and NUPENG. REPEALS, TRANSITION, AND SAVINGS PROVISIONS (sections 86 to 92) 89 Transfer of staff etc Upon the vesting of Assets and liabilities to the department of Petroleum Resources on the commission, the Minister shall make an order in writing in which he shall give directions to the Management of the Department of Petroleum Resources for the Transfer of certain employees of the Department of Petroleum Resources to the commission and the Board of Directors shall, without delay, comply with the directions in such order. Transfer of Staff of Petroleum Pricing Regulatory Agency to the Commission The Unions must be involved in All transfers and movement of Staff. Under transfer of staff from DPR and PPPRA, such transfer shall be regarded as continuous for the purpose of Pension and Gratuity. need to know the existing structure of the NNPC and how it will metamorphose into the company. The Unions must be involved in All transfers and movement of Staff. Under transfer of staff from DPR and PPPRA, The Unions must be involved in All transfers and movement of Staff. Employees so transferred under this section shall do so with their membership of Trade Unions. The Unions must be involved in All transfers and movement of Staff. Employees so transferred under this section shall 19 P a g e

21 such transfer shall be regarded as continuous for the purpose of Pension and Gratuity. need to know the existing structure of the NNPC and how it will metamorphose into the company. Employees so transferred under this section shall do so with their membership of Trade Unions. NUPENG & PENGASSAN s Proposed do so with their membership of Trade Unions. From the date of vesting the assets and liabilities of Petroleum Equalization Fund (PEF), the staff of PEF performing functions relating to such assets and liabilities being vested in the PEF or any other agency they are merged with shall be regarded as having transferred their services to the new agency on terms and conditions no less favourable than those obtaining immediately before the effective date. At the end of the transfer exercise, the Minister should ensure that no staff will lose his/her job either by omission or commission. 20 P a g e

22 We sincerely hope that all concerns and as hereinabove stated will be given adequate attention. On our part, we assure you of our readiness to collaborate with the Senate and indeed the National Assembly for the good of the Nigerian oil and gas sector. Yours faithfully, For: NIGERIA UNION OF PETROLEUM AND NATURAL GAS WORKERS (NUPENG) & PETROLEUM AND NATURAL GAS SENIOR STAFF ASSOCIATION OF NIGERIA (PENGASSAN) COMRADE HYGINUS CHIKA ONUEGBU JP, FCA Chairman, Petroleum Industry Bill Committee COMRADE AFOLABI OLAWALE Secretary, Petroleum Industry Bill Committee 21 P a g e