Multi-national firms in breach of local content law, says Senate

The Senate said Tuesday that most multi-national companies operating in the country have failed to substantially comply with the provisions of the Local Content Act.

Senate President, Abubakar Bukola Saraki, stated this as upper chamber began the investigation of the implementation of local content in the country’s oil and gas industry.

Senate joint Committee on Petroleum Resources (Upstream) and Gas Resources was saddled with the responsibility of the probe.

Saraki,  who inaugurated the investigation said that the National Assembly was concerned with the poor level of implementation of local content in the country.

Represented by the Senate Leader, Senator Ahmed Lawan, Saraki said that “most multi nationals are yet to substantially comply with the provisions of the law.’’

The Senate President noted that under the Nigeria oil and gas Industry Content Development Act, investors were mandated to consider Nigerian companies as an important element in their project development and management.

He said, “The Nigeria content in this context refers to firms registered in Nigeria in accordance with the provisions of the Companies and other Allied Matters Act.

“The National Assembly is challenged to ensure that the oil and gas industry provides an avenue where more jobs and opportunities are given to qualified local experts in the industry.

“We are here to discuss to know where we are today in the implementation of the Nigeria Oil and Gas Industry Content Development Act since it was enacted in 2010.

“We are also here to know where we have made progress and identify the gaps and where we need help to up the game.’’

Saraki said that it was obvious a rich local content was one of the most efficient ways to stimulate the economy for a multiplier effect in different sectors.

He noted that to achieve that, a full implementation of the act was necessary, stressing that it would help in creating employment among other benefits.

Chairman, Senate on Petroleum (Upstream) Senator Omotayo Alasoadura, assured that the joint committee was determined to finding a lasting solution to the problem.

Alasoadura said that the Senate at its sitting on September 27, 2016, mandated the joint committee to carry out an extensive investigation into the level of compliance by multi- national companies in the industry.

He said, “The senate arising from a debate on the need to ascertain the degree of local content in Nigeria oil and gas industry, mandated the committee to determine compliance with the  Act by industry operators.’’

Engr. Simbi Wabote, Executive Secretary of the Nigerian Content Development & Monitoring Board (NCDMB), Engr. Simbi Wabote, told the committee that the board had made tremendous progress since enactment of the Act in 2010.

Wabote said the board was currently implementing a 10 year strategic roadmap anchored on delivering five pillars of sustainable local content.

He noted that the board had a target of achieving 70 per cent local content in the next ten years.

He said, “A lot has been achieved in terms of local content development. It is a key pillar for our nation’s development. A lot has also been done to get the agency to its enviable position.

“Part of it is to develop the required technical capability and also to ensure strict compliance and enforcement of the provisions of the act.

“The other pillar is to enable business environment in order that investors will be attracted to Nigeria to invest.

`”Then most importantly is to enhance the organisational capability of the board to carry out its mandate and ultimately create sectorial and regional market,’’ he said.

He added that the board has set up the Nigeria Content Development Fund Account and has mobilised stakeholders towards remittance of one per cent of contracts awarded.

He said that the agency monitored Nigeria content compliance and applied sanctions to defaulting companies in line with Section 68 of the Act, among other achievements.

“Nigeria content has recorded 6 million training man hours since the inception of the act.

`”Out of 20 billion dollars spent in the industry from five percent participation, we have been able get back 5 billion dollars into the country and we desire to increase sales to 15 billion dollars in 2027.

“Before the act, all marine activities in the industry were in the hands of experts outside this country.

“Today we have been able to get back 36 per cent of those marine activities for equitable participation of Nigerians and established about six world class fabrication facilities.

“So, today Nigeria is able to handle 60,000 metric tonnes of fabrication capacity in the country. This was at zero level before the enactment of the act.

“All electrical cables used in the oil and gas operations are manufactured in Nigeria and we are able to manufacture 670,000 of metric tonnes of pipes today,’’ he said.

The executive secretary said before the act came into being seven years ago, all fabrications, engineering and procurement activities were done outside the country.

He further said the development had resulted in a capital flight of 380 billion dollars from Nigeria in the past fifty years.

He added that the capital flight necessitated the exporting of jobs that would have been made available for Nigerians, leading to loss of 2 million jobs.

“There was high unemployment rate due to the dearth of skills and the total local content utilisation before the enactment of the act was put at just five per cent.

“That was when the government decided to intervene seeing the way the industry was going and it culminated in putting in place the Nigerian Content Act of 2010.

“The main goal of the act is to develop the capacity of local supply chain for effective and efficient service within the oil and gas industry without compromising standards.

“It is also aimed at enhancing development and inclusion of Nigerian services and manpower,’’ he said.


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