Host Communities Funds: Repeal PIA Section 257, Stakeholders Urge Lawmakers

Oil and gas industry stakeholders  have called on the National Assembly to expunge section 257 (2) from the Petroleum Industry Act (PIA).

This is as Spaces for Change (S4C), with support from the Ford Foundation, unveiled a report detailing the challenges, the wins and further action on oil companies transitioning Global Memorandum of Understanding (GMOU) to Host Communities Development Trusts (HCDTs).

Stakeholders who made the call include the Ford Foundation-funded Spaces for Change; chairman of the House of Representatives committee on host communities, Dumnamene Dekor, and , King of Ekpetiama Kingdom in Bayelsa, Bubaraye Dakolo among others.

The controversial section deals with conditions under which a host oil community may lose its three percent financial entitlements and shifts the liability for damage, vandalism, or sabotage to the communities, which are expected to repair or replace damaged oil facility and operating expenditure incurred during production shutdown.

The chairman of the House committee promised to work with his colleagues to see that that part of the law was repealed.

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The event also marked the launch of a progress report on the host communities fund document titled, “Transitioning from GMOU to HCDT: wins, challenges, and further actions.”

According to Dumnamene, as a piece of legislation, the lawmakers will continue to look at the grey areas of the PIA, including the part that compels communities to protect pipelines or lose their funds.

He stated that the well-being of host communities was essential to Nigeria’s collective desire for a progressive and prosperous nation since the oil and gas sector constituted over 65 per cent of total government revenue and about 90 percent of total export earnings.

Dumnamene argued that the country has failed to effectively deliver the benefits of resource exploitation to host communities for nearly seven decades since the discovery of oil in Nigeria, stressing that this has had enormous consequences on the development of the oil and gas sector.

According to him, there have been some gaps and delays in the implementation of the provisions of the PIA concerning the establishment of the Host Communities Development Trusts (HCDTs), especially by some companies.

The lawmaker further informed that the committee has developed a strategic plan that will guide its programming for the period of the 10th National Assembly from 2023 to 2027.

The executive director, S4C, Victoria Ibezim-Ohaeri, stated that the report examined the extent to which indigenous and international petroleum companies were living up to their statutory obligations of delivering development to the oil-producing areas in Nigeria under the HCDT.

According to her, the HCDT replaces the previous benefit-sharing mechanism called the Global Memorandum of Understanding (GMOU) wherein oil and gas companies operating in Nigeria executed benevolent, or sometimes, negotiated agreements with their host communities.

She said that what the report has done was to highlight the wins and challenges associated with HCDT implementation, the emerging good and bad practices, as well as the disparate experiences established by petroleum corporations for transitioning from GMOU to HCDT.

While some progress has been made, the executive director stated that some practices call for attention.

“Top on that list is the high volume of litigation and protests across oil-producing communities and the lack of due process and transparency in the nomination of community representatives serving on the governing bodies of the HCDTs.

“The repeal of Section 257(2) of the PIA which touches on sabotage and pipeline vandalism is long overdue. This section vests the responsibility of securing oil and gas installations in the hands of unarmed host communities — a duty which the military, civil defence, police and pipeline surveillance contractors have failed woefully at,” the group said.

On his part, Dakolo stated that the ‘criminalisation’ of host communities, in section 257 of the PIA should be expunged, stressing that it will make a difference if the recommendation is implemented.

Also speaking, Hart Cyril, representing Bonny/Degema Federal Constituency at the House of Representatives, lamented that though the PIA empowered the NUPRC to withdraw licences of oil firms that violated the regulations on the host communities, it needed to be more efficient.