By John Ikani
The Nigerian Content Development and Monitoring Board (NCDMB) on Wednesday, at the Delta State High Court Conference Hall, Asaba, held a one-day sensitisation workshop for High Court Judges and members of the legal profession on the Nigerian Oil and Gas Industry Content Development (NOGICD) Act, 2010, its implementation, and achievements to date.
In his opening remarks at the event, the Director, Legal Services of the NCDMB, Barr. Naboth Onyesoh, said the Act, which established the Board, recognises the importance of other stakeholders to the successful implementation of the Nigerian Content law and expressly mandates the Board to create awareness and public enlightenment through workshops, conferences, and other forms of public education.
He noted that the Board has consistently utilised such platforms to engage critical stakeholders, including the National Assembly and members of civil society, to create awareness of Nigerian Content requirements and galvanise support for the implementation of the Act.
Barr. Onyesoh seized the opportunity provided by the workshop to clarify issues relating to provisions of Section 251(n) of The Constitution of the Federal Republic of Nigeria (as Amended), which vests the Federal High Courts with exclusive jurisdiction over matters pertaining to mines and minerals, inclusive of oil and gas.
According to him, “there are other touch points and stakeholders whose involvement in petroleum operations and business transactions connect and trigger the jurisdiction of other courts of coordinate jurisdiction like the State High Courts and National Industrial Courts.” In other words, State High Courts and the National Industrial Court could handle a subset of cases arising from petroleum industry operations.
The Legal Services Director also presented a paper titled “Legal Framework for Nigerian Content in the Oil and Gas Industry: Scope, Application and Expectations from the Judiciary,” in which he highlighted the Pre-NOGICD Act Scenario in the oil and gas industry and the journey to develop in-country capacities and capabilities to cut losses, among other things.
He pointed out that until 2010, the industry was characterised by a massive inflow of expatriates, from the level of welders and fitters to top engineering positions; facilities such as floating production storage and offloading (FPSO) vessels, platforms, topsides, threaded line pipes, equipment, components, and marine vessel services. Nigerian Content was as low as five per cent, which translated into capital flight estimated at US$380 billion (between 1958 and 2010).
The process to reverse the trend began in 2001 with the setting up of presidential committees to chart a way forward on local content, followed by the creation of a Nigerian Content Division in the defunct Nigerian National Petroleum Corporation (NNPC) in 2005 to drive local content in the oil and gas sector.
In 2006, 23 Presidential Directives on Local Content were released, but compliance by industry operators and service providers remained on a ‘Best Endeavour’ basis, that is, ‘the best that a company could possibly do in the circumstances.’ Such latitude came to an end in 2010 with the enactment of the NOGICD Act.
The NCDB adopted localisation strategies as well as targeted interventions, among other things, to enable it to fulfill its twin mandates, namely, “Develop local capacities and capabilities” and “Monitor compliance and enforce provisions of NOGICD Act without compromising standards.”
Under its localisation policy, First Consideration is a governing principle. It stipulates that in the award of oil blocks, procurement of goods and services, employment, and training, Nigerian companies with the requisite technical capabilities must be given priority.
Also, Exclusive Consideration has to be given to Nigerian indigenous service companies with the requisite capabilities for land and swamp operations. In addition, a Nigerian Content Plan, which spells out how an operating company intends to develop and/or utilise in-country assets, has to be submitted in bidding for licences and before carrying out any project in the Nigerian oil and gas industry.
Contract Threshold is also instituted, requiring an industry operator “to submit to the Board all proposed projects, contracts, subcontracts and purchase orders in excess of US$1,000,000 for approval of adverts, prequalification criteria, technical bid documents, technical evaluation criteria and proposed bidders list.”
Other elements of the localisation strategies include Quarterly Procurement Report, Project Office in Catchment Area, Submission of Succession Plan, Expatriate Quota Application with the Board Prior to Submission to Interior Ministry, and Nigerian Content Development Fund, that is, deduction at source and payment of 1% (one per cent) levy from each contract awarded in the upstream sector of the Nigerian oil and gas industry.
Under expectations from the Judiciary, Barr. Naboth listed Reinforcement of the rule of law, Judicial Review in regard to the legal validity of norms and actions, strengthening of the rule of law, and making consequential orders and reliefs.
He further highlighted the imperative of balancing competing interests, with specific reference to national interest versus industry interest, indigenisation versus domiciliation (the latter being the standpoint of the Act), revenue versus in-country value, and feasibility versus strict legalism.
In another presentation titled “Capacity Gaps in the Oil and Gas Industry in Nigeria – Interventions to Close the Gaps,” the Director, Corporate Services, Dr. Ama Ikuru, recalled the state of the sector as earlier characterised by the Director, Legal Services, in his “Pre-NOGICD Act Scenario” and listed institutional measures toward remediation.
He said NCDMB has been focused on growing capacity and capabilities and enforcing their utilisation in-country to ensure value retention, with the result that Nigerian Content has risen from less than five per cent in 2010 to 56 per cent in 2024.
The Corporate Services Director, who was represented by the Manager, Institutional Strengthening, Engr. Dokubo Obongo, said the Board has been consistent in its approach through “enabling business environment, strategic business development such as Nigerian Content Equipment Certificate (NCEC), Nigerian Content Marine Vessel Certification and rig utilisation certification.”
According to him, strategic interventions by the Board have significantly reversed “critical infrastructure deficiency through construction and equipment of workshops, laboratories, Information and Communication Technology (ICT) centres, and Research and Development (R&D) centres.”
The Board has, within the space of 14 years of its existence, covered over 16 million man-hours in training programmes in critical industry skills in Nigeria and overseas, with over 13,000 Nigerian youths trained and certificated by accredited manpower-development organisations.
From the community of the learned was a presentation titled “Partnering with the Bench for Effective Implementation and Enforcement of the NOGICD Act” by Hon. Justice Simon W. Amaduobogha.
Citing discriminatory practices of international oil companies (IOCs) operating in developing countries, whereby oil servicing companies in their home countries are engaged for major contracts, he stated that “it is imperative to change the unfortunate narrative that propelled government to midwife and put to birth the Nigerian Oil and Gas Industry Content Development (NOGICD) Act.”
While noting with satisfaction that “the Board has achieved so much in Nigerian Content development in the oil and gas industry without or with little legal battle with major operators in the industry,” he said “local content law is predominantly about economy, and economy is about survival.”
He stressed the fact that “To accommodate and tolerate breach of the NOGICD Act is to spell on the country further economic woes,” as it would precipitate “stagnation of growth in the industry” and loss of opportunities for transfer of skills and technology, among other things.
In his conclusion, he urged judicial officers to appreciate the fact that law is “an instrument of social engineering meant to create the greatest good and happiness for the greatest number of persons in society,” and that the interpretative role of the courts must be exercised to meet the intentions and reasons for the enactment of the law.
Earlier in a welcome address, the Chief Judge of Delta State, Hon. Justice Theresa Diai, commended the NCDMB for organising the event to raise awareness of the NOGICD Act and the Board’s operations. She expressed the hope that the Judiciary and the legal community at large would become better informed about Nigerian Content law, its requirements, and benefits.
The sensitisation workshop, themed “The Philosophy and Imperative of the NOGICD Act: The Role of the Judiciary in the Implementation of Local Content Requirements in the Nigerian Oil and Gas Industry,” included a panel discussion in which legal experts, namely, Barr. Billy Osigwe and Dr. Brown Etareri, were discussants, while Pereowei Subai, of Niger Delta University, Amassoma, was moderator.
