Nigeria: Local Content – NCDMB to Sanction Defaulting Companies, Stakeholders

The Nigerian Content Development and Monitoring Board (NCDMB), has reclassified the categories of sanctions to be meted out to defaulting operators and companies who fail to comply with its rules.

The Director, Legal Services of the board, Mr Umar Babangida, who spoke during a two-day workshop held in Abuja, said that the draft Nigerian Oil and Gas Industry Content Development Compliance and Enforcement Regulation 2020 was designed to plug some of the gaps that were identified in the NOGICD Act.

He explained that non-compliance and breach of Nigerian content guidelines have now been categorised into minor infractions and serious ones.

According to him, minor offences refer to first time defaults, not meeting deadlines for periodic reports and similar defaults and applicable sanctions which he said would include letter of warning, invitation of management team of the operator or stakeholder for corrective dialogue with the board.

On the other hand, the NCDMB said that serious infractions include repeated or persistent defaults and or deliberate refusal to comply with directives issued by the board.

Punishment for such offences, it stated, will include “naming and shaming of defaulting operator/stakeholder with publicity within national and international oil and gas communities.

The board said that it would also involve the notification to other MDAs about the non-compliance of the operator/stakeholder, including request for the withdrawal of tax privileges, and/or preventing the operator/stakeholder from getting “cost recovery”, where applicable.

NCDMB added that part of the sanctions on defaulters may also be withdrawal of certificate of authorisation issued for the project under Section 8 of the Act and withdrawal of any approval given by the board as required under the provisions of Sections 17, 19 and 20 of the Act on Nigerian Content Compliance Certificate and Prosecution of the offenders.

Explaining further, the director said the board shall first give notice in writing to any operator or other stakeholder, specifying the identified default(s) and corrective step, action and/or remediation required to address an identified non-compliance.

He added that failure to comply shall attract the imposition of appropriate sanctions and/or penalties as may be deemed applicable in the circumstances.

The event themed “Understanding the Objectives and Philosophy of the Nigerian Oil and Gas Industry Content Development Act” was attended by personnel from the Economic and Financial Crimes Commission, (EFCC), Independent Corrupt Practices Commission (ICPC), Nigeria Police, Nigerian Customs Service and other relevant agencies.

Speaking earlier, the Executive Secretary of NCDMB, Mr Simbi Wabote explained that the board organised the workshop to create synergy and collaboration with regulatory and enforcement agencies in the discharge of its mandate.

Former Inspector General of Police, Solomon Arase, who also made a presentation at the workshop identified gaps in the provisions of the NOGICD Act that would hamper the successful prosecution and conviction of companies deemed to have breached the provisions of the Act.

He proposed some amendment to the act, notably, explicit definition of offences, expansion of the parties to offences and stiffer punishments for non-compliance.

In his intervention, Director, Monitoring and Evaluation, NCDMB, Mr. Akintunde Adelana listed some challenges faced by the board in implementing and enforcing the NOGICD Act.

He stressed that they include inadequate strategic collaboration among stakeholders in the industry; overlapping of tasks by various government agencies, non-submission or late submission of statutory reports and inadequate coverage of the projects and activities in the Nigerian oil and gas industry as a result of manpower shortage.

He itemized others as execution of projects, contracts/services without approval from the board and non-execution of NCDMB HCDI Training on the back of projects; non-deduction and remittance of NCDF one percent; utilisation of non-registered vendors in the NOGICJQ and deployment of expatriates without approval from NCDMB.

Others, he stated, include the use of manpower license designated for Nigerian personnel only to deploy Expatriates; refusal to “Nigerianise” expatriate positions after statutory four years as captured in the act and non-submission of research and development plan by service companies.

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