Another irrational levy on oil operators

by Editorial

November 6, 2017 | 12:57 am
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The recent directive by the National Petroleum Investment Management Services (NAPIMS), a subsidiary of the Nigerian National Petroleum Corporation (NNPC) that compels operators in the oil and gas sector to make a $100 million annual contribution each to the Internally Displaced Persons Intervention Fund (IDPIF) ravaged by the Boko Haram insurgency is baffling. According to the letter to the operators, contributions will be made to a proposed “Dedicated Account” and will be used “to construct resettlement facilities that can be replicated at various locations”. To be sure, the facilities as specified include 50 units of 2 bedroom twin bungalows per settlement (expected to house 100 families); primary and secondary schools; health care centres/cottage hospitals; market stalls; provision of potable water; electrification; as well as roads, drainage channels and waste disposal systems.

More baffling is that the fund, which was requested to be contributed urgently by the operators, is independent of the intervention fund for the same IDPs in the Northeast. An existing intervention fund managed by the Presidential Committee on the North-East initiative is being coordinated under the chairmanship of retired General Theophilus Danjuma, while the other one is the Presidential Initiative in the North-East (PINE), whose funds were allegedly mismanaged by Lawal Babachir, former Secretary to the Federal Government,.
In effect, the NNPC is setting up its own intervention fund for the same IDPs in the Northeast, whereas two other presidential initiatives exist for the same cause. At the same time, many other local and foreign Non-Governmental Organisations and charities are involved in raising funds for development in the Northeast. The nagging question however, is: why should the NNPC and NAPIMS be compelled to create another initiative for the Northeast, whereas there are many government and private initiatives already in existence and which they could key into?
Like all things Nigerian, this initiative reeks of fraud, exploitation and blackmail. Although businesses do have social responsibilities to their environment and where they do their businesses, they are not to be confused with government institutions and neither should they have to take up such responsibilities. It may not be so much of a surprise in a disordered society like ours, where the government preoccupies itself with doing what it should never be doing (i.e running businesses) and failing to do what is its primary responsibility (i.e maintaining law, order, security and provision of infrastructure to allow private citizens and enterprises run businesses). Government has over time become more comfortable in continuously pushing its duties to private concerns while it preoccupies itself with trying to acquire wealth to be shared by its functionaries.
The legal duty and obligation of all companies operating in Nigeria is to pay their fair share of taxes. While they are encouraged to do Corporate Social Responsibility (CSR) projects, those should be projects of their choosing and not those imposed or forced on them by the government. Besides, NAPIMS is not only compelling them to do CSR but to contribute money, which, if we know anything about government-managed programmes in Nigeria, are mostly mismanaged and the funds misappropriated.
Thus in Nigeria, companies are burdened not only with performing their duties to the Nigerian state (paying taxes) and performing CSR in areas where they operate and even wider, but are now being compelled to perform functions that are exclusively those of the state. We recall how oil and gas operators are forced to contribute a certain amount to the Niger Delta Development Commission (NDDC) and for which the government and the National Assembly are ready to imperil the Nigerian Liquefied Natural Gas (NLNG) just because it was legally exempted from paying the levy.
For long we have watched as the government continues to discourage businesses in Nigeria by overburdening them with responsibilities that are not theirs to bear.
We call on the president to intervene and stop this illegal move by the NNPC and its subsidiary.



by Editorial

November 6, 2017 | 12:57 am
  |     |     |   Start Conversation

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