News - Oil & Gas - Politics & Policy - March 9, 2021

PIB: South-South governors demand 10% for oil host communities

Want Buhari to deposit in an escrow account funds for the Board of the NDDC, except salaries, until the Board is reconstituted

To guarantee a peaceful environment for the exploitation and production of crude oil in the country, South-South Governors, on Tuesday, formally tabled a demand for the immediate upward review of appropriation to the Trust Fund for host oil Communities in the Petroleum Industry Bill (PIB) from 2.5 percent to 10 percent.
Chairman of the South-South Forum and Governor of Delta, Ifeanyi Okowa, said at the end of the South-South Governors’ meeting in Port Harcourt that the 2.5 percent proposed appropriation in the draft PIB currently before the National Assembly for the host oil communities was inadequate.
The meeting was attended by Governors Nyesom Wike of Rivers; Godwin Obaseki of Edo, and Douye Diri of Bayelsa. Udom Emmanuel of Akwa-Ibom State was represented by his deputy, Moses Ekpo.
“We the governors of the oil producing states in the South-South region are of the view that while we welcome the Host Community Trust Fund in the PIB, we believe that 2.5 percent appropriation being proposed in that Bill for the purpose of host community fund is grossly inadequate.
“We have discussed with our people and collectively as leaders of the people in our various states and as leaders standing on behalf of our people, we urge the National Assembly to increase the provision in the Host Community Fund from 2.5 percent to 10 per cent in the best interest of our communities and the nation,’’ Okowa said.
If satisfied with the provision of the trust fund, Okowa said the host communities would feel a sense of belonging and an obligation to serve as the watchdogs of the oil facilities in their domains on behalf of the Federal and State Governments as well as the oil companies.
The governor said a peaceful environment in the various oil communities would enable the country to have greater and seamless production of oil, without any form of disruption going into the future.
The Governors said they have also urged President Muhammadu Buhari to ensure that in the absence of the Board of the Niger Delta Development Commission (NDDC), funds for the Commission, beyond the payment of salaries, should be put in an escrow account until the Board was reconstituted,’’ Okowa said.
Acknowledging the ongoing forensic audit of the operations and activities of the NDDC as the reason the Board has not yet been reconstituted, Okowa said putting allocations to the Commission in an escrow account till the completion of the exercise would allow for proper processes to be followed in the management of its expenditure for accountability purposes.
He described as worrisome the running of the NDDC in over a year by an Interim Caretaker Committee, and now an Interim Administrator.
This situation, he noted, does not augur well for the people of the Niger Delta region, as the opportunity for all states to be represented on the Board of the NDDC did not exist.
“So, it means that the NDDC is being run in a manner that is not beneficial to our people, because there is no stakeholder input in the running of the affairs of the NDDC.
Members of the National Assembly have in recent times been on tour of the States in the Niger Delta region to consult with the leaders of the region on issues bordering the PIB as the lawmakers are rounding off deliberations on the draft law pending its passage.
One of the sticky points in the debate for a PIB has always been the right and entitlement of the people and communities hosting oil industry operations.
Over the years, the government experimented with the payment of 13 percent derivation to the states where oil is produced; creation of the NDDC and the Ministry of Niger Delta Affairs to cater for the development needs of the people using the revenue realized from the exploitation of the natural resources in their domains.
However, despite these policies, the real communities from were the exploration and production of oil activities are held, have not been identified and taken care of by the government, as the funds were allocated to the States.
But, a proposal in the current PIB before the National Assembly is not only asking a direct allocation to the host communities through the special instrumentation of the Host Oil Communities Trust Fund managed and run by representatives from the area, but the allocation be raised from the proposed 2.5 percent to 10 percent.
Proponents for the Host Community Trust Fund say the arrangement would foster sustainable prosperity in the host communities; provide direct social and economic benefits from petroleum operations to host communities; enhance peaceful and harmonious co-existence between licensees or leases and host communities as well as create a framework to support the development of the host communities.
Out of about 44 memoranda submitted to the National Assembly during its public hearing by representatives of different interest groups on the PIB, at least 31 spoke about the host community issues, with 21 specifically focusing on it.
Issues highlighted in the Host Community memoranda focused on lack of local ownership of the development planning and delivery on projects as reflected in the organs of the Development Trust; funding options for the Trust Fund, and participation of indigenous players in the sector, among others.

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