We will be looking at consequence management notices, pre-sanction procedures and administration of sanctions.
INTRODUCTION
These Regulations, made under sections 33 (i) and 231 of the Petroleum Industry Act, No. 6 of 2021, aim at: providing a framework for the application and administration of penalties in the midstream and downstream petroleum operations, with proper instruments and notices for enforcement of penalties.
According to the Regulations, penalties may concern: a misconduct in the operations related to the protection of environment, the safety of human lives and property, the sustainability of the operations; a failure in the operations in accordance with the terms of a licence, permit or authorisation concerning: financial impropriety, unfair market practices, unlicensed services, other unlawful practices.
Matters covered by the Regulations concern: management notices issued by the Authority, including: incidence of non-conformity, notice of non-compliance; pre-sanctions procedure; administration of sanctions; revocation of licences and permits.
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The Consequence Management Notices
Where the Authority reasonably believes that a person is about to commit an offence or has committed an offence, the person shall be issued the following notices:
- potential incidence of non-conformity;
- incidence of non-conformity;
- notice of non-compliance; or
- demand notice.
The potential incidence of non-conformity is the notice issued by the Authority to:
- prevent an imminent penalty; and
- provide an opportunity for corrective measures.
The incidence of non-conformity is the notice issued to a person where:
- one or more offences have occurred or deemed to have occurred;
- the failure to address such offence has arisen despite earlier notifications specified by the potential incidence of non-conformity; and
- an opportunity is provided for a person to make representations as regards the incident.
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Pre-sanction procedures taken by the management
Where an activity prohibited under the Act, Regulations or directives of the Authority, is likely to be undertaken by any person, the Authority may serve a potential incidence of non-conformity notice specifying the activity and directing the person to desist from such activity within the specified timeline as stated in the notice.
Where the Authority determines that a violation poses no danger to personnel, environment, equipment or midstream and downstream petroleum operations, the Authority may:
- Serve an incidence of non-conformity notice on the person specifying the act or activity;
- Direct the person to whom the notice is issued to do or not to do, the specified act or activity; or
- Specify the time frame for compliance with the notice.
Administration Of Sanctions
- A person whom the Authority suspects will either commit an offence or has committed an offence shall be issued a notice of non-compliance which shall:
- state the facts and circumstances that make the person liable to a penalty;
- specify the penalty; and
- inform the person of their right to make representation to the Authority
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- The person to whom notice in sub regulation (1) is sent may make representation to the Authority, within 30 days after receipt of the notice. The representation of the person to whom the notice of noncompliance is issued shall include:
- circumstances leading up to the offence,
- evidence that no offence occurred, or
- corrective measures provided to minimise impact, where there is no contention from the representation that an offence was committed.
The Authority, upon consideration of representation made in regulation 12, may:
- Assess a penalty and set a date by which the penalty is to be paid in full; or determine that no penalty be assessed.
- The Authority shall serve a copy of its decision in sub regulation (1) on the person who made the representation within 30 days after the receipt of the representation.
- Where a person to whom a notice of non-compliance is issued, fails to make a representation or fails to provide a compelling reason why a penalty should not be issued; the Authority shall issue a demand notice and:
- apply the administrative penalties in applicable Regulations; or
- impose the sanctions and fines provided in the Act.
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Where a person fails to comply with a cease-and-desist order issued as provided in section 215 of the Act, the Authority may, subject to the provisions of regulations 10,11,12,13 and 14, levy a fine not exceeding 5% of the annual turnover of the company for the preceding year or revoke the licence of any person who fails to comply with a cease-and-desist order.
- Prior to a decision by the Authority to revoke a licence or permit in section 120 of the Act, the Authority shall:
- Serve a notice of default on the licensee or permit holder setting forth in reasonable detail the default of the licensee or permit holder; and
- Give the licensee or permit holder 60 days within which to remedy the default.
- Where the Authority is satisfied with the remedy of the licensee or permit holder in sub regulation (1) (b), the revocation process shall be discontinued.
- Where, at the expiration of 60 days, the licensee or permit holder fails to remedy the default, the licence or permit shall be revoked
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- A notice of default shall be:
- sent by the Authority to the last known address of the licensee or permit holder or its legal representative in Nigeria or
- published in the Federal Government Gazette or on the website of the Authority, each of which shall constitute sufficient notice to the licensee or permit holder of the notice of default.
- Revocation shall be without prejudice to:
- liabilities which the licensee or permit holder may have incurred; or
- claim, which the Authority, the Government or any third party may make against the licensee or permit holder.
- A revocation decision shall be published in the Federal Government Gazette and the Authority shall amend relevant registers maintained by it to reflect the revocation.
CONCLUTION
A person who: fails to obtain a licence, permit or authorisation required by the Authority, fails to provide information required, makes a false declaration to the or willfully furnishes information so required which is in any respect false or insufficient, fails to comply with the provisions of these Regulations or directive given or condition of a permit or licence issued by the Authority.
shall, in addition to the sanctions, fines and penalties contained in the Act, be liable to the relevant administrative penalties in regulations made by the Authority, and any licence, permit or authorisation granted to that person may be suspended or revoked.