The House of Representatives Committee on Local Content at the weekend hinted that it would soon launch an investigation into the activities of some multinational oil companies in Nigeria over their alleged violation of the Local Content Act.
The law was passed by the National Assembly in 2010 to protect the interest of Nigerians in the oil and gas sector but oil multinationals which have dominated the scene for several decades seem to have been observing the law in the breach.
Investigations revealed that a Korean firm recently executed a contract worth over $8 billion in the sector, a job that could have been handled by a local firm to create jobs and stem the tide of capital flight.
Deputy Chairman, House Committee on Local Content, Hon. Nasir Ali Ahmed (APC/ Kano), told journalists that in the course of exercising its oversight functions, the committee had discovered a lot of breaches of the Local Content Act by these International Oil Companies (IOCs).
Ahmed disclosed that the committee had already summoned some of the firms to explain their actions.
The Local Content Law stipulates among other things that: “All regulatory authorities, operators, contractors, subcontractors, alliance partners and other entities involved in any project, operation, activity or transaction in the Nigerian oil and gas industry shall consider Nigerian content as an important element of their overall project development and management philosophy for project execution.”
Section 3 (2) of the Act demands that indigenous service companies which demonstrate ownership of equipment, have local personnel and capacity to execute such work be given exclusive consideration for such jobs in the oil and gas industry.
“An operator, contractor or subcontractor who carries out any project contrary to the provisions of this Act, commits an offence and is liable upon conviction to a fine of five per cent of the project sum for each project in which the offence is committed or cancellation of project.”
Similarly, Section 49 (1) of the Act states that all operators, project promoters, alliance partners and Nigerian indigenous companies engaged in any form of business, operations or contract in the Nigerian oil and gas industry, shall insure all insurable risks related to its oil gas business, operations or contracts with an insurance company, through an insurance broker registered in Nigeria under the provisions of Insurance Act.
Posted by SirVic for wetopup(News Laboratry)