Hon. Emmanuel Ekon, Chairman, House of Representatives Committee on Local Content, spoke with KAUTHAR ANUMBA-KHALEEL on how the Local Content Act of 2010 is affording Nigerians employment opportunities in the Oil and Gas Industry, as well as some of the challenges, amongst other issues.
How far has the House of Representatives Committee on the Local Content gone in ensuring that foreign companies are abiding by the Local Content laws vis-à-vis giving priority to local employment as against foreign workers in the relevant sector in Nigeria?
The Local Content Act of 2010 was passed just for oil and gas related services and operations in this country. A lot has happened within the sector between 2010 and date. So many Nigerians will agree with me that prior to the passage of this bill just about everything including feeding, catering services in offshore platforms were basically done by foreigners. Even the water some Nigerians were drinking, Escravos and offshore were supplied by foreigners up to the janitorial services. Most of those jobs were outsourced to foreign companies. But today, it is relatively different and a lot has happened. So many Nigerians have had opportunities to work within the oil and gas industry, provide services, capacities have been built, and a lot of Nigerians have undertaken jobs that were hitherto done by the so-called expatriates. I will say we have made tremendous progress between 2010 and now.
I want to first of all thank former President Jonathan who saw tomorrow from yesterday and signed that bill into law because if he did not do it, we would have remained in the same situation where just about everything within the oil and gas sector were done by foreigners but he saw the importance and signed that bill into law and today, we have witnessed changes in that regard.
Now, the question is how far we have gone. Can I sit down here and say we have achieved much? Well, we have achieved so much but can I say that we attained the maximum level of achievement that we are supposed to achieve? Well, the answer is no. We still have a lot to do within the oil and gas sector to get our Nigerian people properly situated in that sector. We are still fighting the expatriate quota because companies have continued to bring in foreigners that ordinarily are not supposed to come and work in that sector even after the law was passed and this violates that law. If you look at Section 35 of the Local Content Act which is very explicit, it says that “All operators and companies operating in Nigeria oil and gas industry shall employ only Nigerians in their junior and intermediate cadre or any other corresponding cadre designated by the operator or the company”. What this means is that there are certain levels or positions that are meant to be occupied by Nigerians only.
In fact, skilled crafts like plumbing, welding, painting and others are jobs that should be done by Nigerians but even as we speak, it is still very common that companies are still bringing people from other countries to come and weld, paint and refer to them as expatriates. That was the issue we had with Samsung. The committee visited Samsung in Lagos and what we saw there was a complete departure from what the law says. A complete violation of the Local Content Act. That is why we are still fighting today and I believe that as a committee, we will fight this battle to a logical end. We will make sure, by the grace of God, that the Nigeria Immigration Services deports all those people that are brought into this country to work as welders and feeders in fabrication yards all over the country. That is where we are presently.
Besides, the expatriate quota challenge, are there any others the committee is faced with?
We are faced with challenges every day. The IOCs, that is the International Oil Companies has not really come to terms with the fact that the narratives have changed in the sector. Some of them have been in the country for over five decades, some, more than that operating within this sector and have done things in the same way for that period of time and this law is barely six years old. It was passed in 2010 so you don’t expect these companies to just wake up overnight and adhere to this law a hundred percent. I don’t expect that, I also don’t see that happening right now but my problem with them is that they do not even want to move from point A to point B. I expect the IOCs to show good faith in the law, to move from one point to another. Like I said, I don’t expect hundred percent compliance given that the law is quite young, but some of them still want to cut corners because they are used to doing that which is why I keep telling them “there is a new sheriff in town” and they just have to do it by the books, by what the law say.
We have situations where contracts are given to foreign companies as against Nigerian companies that have displayed capacity and competence, companies that have shown some high level of investments in assets, manpower, training and more. But the IOC still prefer to bring in foreign companies to award such contracts. But like I said, we are still talking to the IOCs, we are still trying to make them understand that the so-called capacity they are looking for is here. That there are competent indigenous companies that can execute these contracts and they have to make use of them.
We also have situations where a Nigerian company will for a contract for say the sum of N5 million but an IOC will prefer to award the contract to a foreign company for N8 million. That is totally unacceptable but it is happening and we are trying to let them know that the capacity is here. We have issues where a foreign company will sit in Aberdeen, UK or US and ask a competent Nigerian company here to quote for a tender that is being opened by an IOC and the Nigerian company will quote for say for $1 million and then send it to that foreign company there in the UK , and the foreign company will thereafter, put its own mark up and then send it to the IOC through the Nigerian company and when they eventually win that bid, they will now use the Nigerian company to do that job. Those are some of the challenges we are facing every day but we are trying to address them.
While your committee talks to the IOCs on the need to operate within the confines of the Local Content Act, is there anything else that can be done additionally because six years is a long time?
The law is already here. It is just that the IOCs are used to doing things a certain way and they think they can still continue that way. However, I must also point out that the problem we are having in this country today is actually caused by us, Nigerians. Nigerians are the architects of their own misfortune. Nigerians are the ones conniving with the IOCs to defraud Nigerians but we are simply trying to make them understand that the era has gone and they must have to do things the right way.
Even with the expatriate quota, it is Nigerians that connive with foreign companies to help them to bring in these people. They tell these foreign companies “yes, give me whatever kick back and it can be done”. It is the Nigerian people that advice the companies not to go through the Local Content Board by telling them “just give us something and we will go to the ministry of interior direct and get you an expatriate quota” whereas it’s not meant to be so. The law is very explicit. It says before you do any business within the oil and gas sector in Nigeria, you are supposed to get an approval from the Local Content Monitoring and Development Board in Bayelsa to an approval that you will take to the Ministry of Interior to get your expatriate quota. But what we observed recently is that people just go straight to the ministry because they have their links, people who help them get expatriate quotas and then when you ask the IOC, they tell you “we are not in violation because we have our expatriate quota, we have expatriate quota renewal, work permit renewal, extension and all that”. That is not what the Act says.
But I have met with the Immigration Services, I have also met with the Ministry of Interior, the Minister and I have told them there is need for us to come together. I will call a stakeholders meeting any moment from now so that we can address this issue holistically and each one of them will know their scope and also work in harmony. It is for the collective good of this country.
Once more, if you look at Section 1 of the Act says: “Notwithstanding, anything to the contrary contained in Petroleum Act or any other enactment or law, the provisions of this Act shall apply to all matters pertaining to Nigerian content in respect of all operations or transactions carried out in or connected to the oil and gas industry”. What this means is that yes, we have before now, a Free Trade Zone Act that allows you to you to bring just about anybody from anywhere to come in and work as long you are within that zone. That is what the Free Trade Zone Act says and it remains that way but the Local Content law which came into effect in 2010 says not withstanding that one, as long as you are operating within the oil and gas industry, you have to go to that board and get approval. You can be in the free trade zone and sell tomatoes and run a cocoa factory, textile business whatever kind of business but as long as you are going into the oil and gas industry, this Act says you have to go to the board. We are trying to make the stakeholders understand that they have to be guided by the Local Content Board for the issuance of work permit, expatriate quota within the oil and gas industry.
Recently, your committee was handling an issue with some staff of HHI who are in violation of a section of the Local Content Act with regards to expiration of work permit, expatriate quotas and illegal entry into the country. Is it not worrisome that it took a committee of the House for this violation to be noticed and addressed and for the Immigration to do that which they ought to do considering the fact that there are possibly many other companies that violate this law?
Well, in this case, I want to first of all, truly appreciate the synergy that has existed between the committee, the Ministry of Interior as well as the Immigration Services. Prior to now, there was no such synergy. And let me also put this on record, Nigeria is a country of about 160 million people, the US is populated with about 360 million people but as sophisticated as America is, it still faced with immigration issues as people still find their way into that country to reside without papers yet, they have very sophisticated system to check and monitor some of these excesses but the fact remains that they can’t get it right all the time.