House Probes IOCs over Violations of Local Content Act.

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)