Nigeria’s oil and gas stakeholders have expressed concern about a new danger to the business environment created by the Senate’s order requiring Nigeria Liquefied Natural Gas (NLNG) to pay host communities N18.4 billion for the right of way (RoW) it purchased in 1989 for N73 million.
At the Platforms Africa Forum 2022 in Lagos, the participants argued that the Senate lacked the authority to order NLNG to pay N18.4 billion.
Dr. Ayodele Oni, a partner at Bloomfield Law Practice who spoke from Houston, Texas, and Barrister Jide Ologun, the keynote speaker, all agreed that the Senate has a lot of power under the constitution, but that power does not include ordering a firm to pay money within a certain amount of time.
“The Senate is not a court. That right to order resides solely with the Court,” Ologun said.
“The 9th National Assembly has done well and sets a standard for the 10th Parliament to surpass. But one area the forthcoming Assembly should refrain from is giving a directive to companies. The recent directive to NLNG to pay N18.4bn within eight weeks is not within the powers of the Senate, ” Oni added.
The government granted them the land, and all lands are its property. Additionally, it was established that NLNG paid N73 million in 1989; therefore, everything else NLNG does is merely Corporate Social Responsibility (CSR). Foreign Direct Investment will only be hampered by the company’s payment requirement (FDI).
Energy analyst Tajudeen Adigun advised the 10th National Assembly to focus on passing laws that will encourage FDI, noting that Nigeria’s energy sector is suffering from a lack of FDI and that many businesses are closing down because of regulations.
“The Senate has the constitutional oversight function but in discharging this role, it must always consider the ease of doing business.”
“The communities must be protected while companies deserve protection to succeed. The NLNG is a company bound by law and anyone enraged by the action or inaction of the company should approach a court for redress. Well, they can write a petition to the NASS and the parliament to have the right to accept the petition and look into it. But only the Court, not the NASS, has the right to make an order for a company to pay within a stipulated time. The bottom line is that the parliament should consider the ease of doing business in discharging its legislative duties.”
The Nigerian Senate had in September 2022 ordered the NLNG Limited to pay N18.4 billion to 73 host communities and 200 families in Bonny, Rivers State, on its acquired land for Right of Way (RoW) within two months.
The Senate acknowledged that the NLNG actually paid N73 million in 1989 to acquire the land for its right-of-way after receiving a petition from the communities through its Committee on Ethics, Privileges, and Public Petitions (RoW). It still issued a directive stating that the NLNG has two months to make good on its obligations.
The NLNG just stated that it was analyzing the resolution and the circumstances surrounding it in a statement released a day after the Senate’s instructions. Added is: “NLNG wishes to state that it has always conducted its business responsibly and in accordance with the laws of the Federal Republic of Nigeria, including in this specific matter.”