Even as stakeholders express fear of possible abuse of the new Local content bill, the Executive Secretary of the Nigerian Content Development and Monitoring Board, Engr Ernest Nwapa has assured that multinational oil companies would not be allowed to seek waivers as a ploy to skip implementing the provisions of the Local Content Act.
The executive secretary spoke at a meeting of the Implementation Committee of the Nigerian Content Development and Monitoring Board (NCDMB) in Abuja, where he also warned that limitations in the capacity of local service companies and deficiencies in infrastructure, equipment and facilities would not be an excuse for operators and contractors to seek and obtain frivolous waivers.
The all-important Act which was signed into law by President Goodluck Jonathan on April 22, 2010, specifies benchmarks which must be attained through the involvement of indigenous companies and other Nigerian interests in the oil and gas business.
He assured that the management will create a mechanism to handle waivers where the capacity did not exist without making waivers a culture of the industry.
The assurance becomes expedient because even though the new law requires NCDMB to ensure that specific scopes in the schedules to the Act are performed in Nigeria, most of the capacity still resides with the multinational service companies.
According to him, “prior to the Act, multinationals imported their tools and equipment on temporary basis to execute operations without vesting such assets in the Nigerian subsidiaries that win the contracts such that a huge proportion of sums spent on services within Nigeria end up in the companies’ country of origin." Notwithstanding, the law holds operators responsible for the compliance of their contactors and subcontractors and called on the operators to take this duty seriously, he stated.
Giving an insight into the progress so far made on the implementation of provisions of the Act, the executive secretary said the board had successfully completed the first phase of transition to ensure that industry operations were not disrupted and that there is proper understanding of the provisions by the key industry stakeholders, even as headed that the minister of Petroleum, Mrs. Diezani Alison-Madueke would clarify any grey areas.
“If there is any area in the Act that needs definitions and further clarifications, the board can make suggestions to the Minister to that effect. The board also has the authority to issue procedures on how any of these things can be done.”
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