Oil producing communities in Gbaramatu and Egbema Kingdoms, Delta State, have rejected the recommended governance model under the Petroleum Industry Bill, PIB, 2020 for host communities’ development where oil companies would become overlords over oil producing communities, warning it would generate unnecessary anxieties in Niger Delta.
It would be recalled that Host Communities of Nigeria Producing Oil and Gas, HOSTCOM, had insisted that the government offering host communities 2.5 per cent operational costs in the new PIB, was a clear attempt to shortchange the host communities.
The communities under the Egbema and Gbaramatu Communities Development Foundation, EGCDF, stated this in a memorandum to the Joint Committee on Petroleum Downstream Sector, Petroleum Upstream and Gas on PIB 2020 by its Chairman, Mr Jude Ukori.
They said: “By sections 235 (1) & (4), 236, 242 (1), (2), (3) & (5) 243 (h), 245 (1), 247 of the proposed PIB 2020, oil companies (settlors) would now assume the role of overlords and masters over their host communities.
Furthermore, the oil companies will take over and determine the leadership structure of their host communities, including appointing people from outside the communities to manage host community affairs.
“This is totally wrong, obnoxious and should be rejected by members of the House of Representatives.
These provisions of the bill would not do the Nigerian oil and gas industry any good other than create needless and avoidable agitations in the oil producing communities.
“A few examples would make our position clearer. Section 235 (1) of the bill empowers the oil companies (settlor) to singlehandedly set up the trust for the development of host communities. It provides thus: ‘Settlor shall incorporate a trust for the benefit of the host communities for which the settlor is responsible (host community development trust)’.
“Then section 242 (1) and (2) dealing with the composition of the Board of Trustees and management of the trust provides as follows: ‘The composition of the host communities development trust shall contain provisions requiring the board of trustees to be set up by the settlor, who shall determine its membership and criteria for their appointment….’
“It continued: ‘the settlor shall, in the determination of membership of the Board of Trustees, include persons of high integrity and professional standing, who may not necessarily come from any of the host communities.’
“Then section 247 (2) dealing with the composition of the Host Communities Development Trust Management Committee provides as follows: The membership of the management committee shall comprise: One representative of each host community, who shall be nominated by the host communities as a non-executive member; and executive members, selected by the board of trustees, who shall be Nigerians of high integrity and professional standing, who may not necessarily be from the host communities and the number of executive members shall be determined by the settlor.
“The implication of the foregoing is that oil companies (settlor) would be legally empowered by an Act of Parliament to exclusively set up a board of trustees to manage the affairs of oil producing communities, including appointing people from outside the communities to manage their affairs.
Hosts Communities Development Funds
“Also, with respect to the Management Committee of the Host Communities Development Funds, the host communities are only entitled as a matter of right to appoint one non-executive committee member and the executive committee members appointment is at the discretion of the oil companies and can even decide to appoint someone from outside the affected communities.
“It is obvious that the proponents of this bill failed to realise that the relationship between oil companies and communities is always a tense one at that whereas the company officials protect the interest of their companies and on the other hand, the community leaders protect the interest of their communities which interests are in opposing end.
Provisions inimical to peaceful co-existence
“Therefore, these provisions are inimical to the peaceful co-existence between host communities and oil companies and the philosophy behind host communities’ development fund. The concept of Host Communities’ Fund, which is a product of years of agitations by the Oil Producing Communities of Nigeria was introduced to primarily make oil producing communities’ equity stakeholders in the oil operations within their communities in exchange for them providing the conducive environment for companies to operate.
“It was based on the foregoing that under the PIB 2012 submitted to the National Assembly by former President Goodluck Jonathan’s administration, sections 116 and 117 created the host communities’ development fund and section 118 specifically provides that every upstream petroleum producing company shall remit on a monthly basis 10 per cent of its net profit into the fund for the development of the host communities.
“Under the 2012 bill, oil producing communities were entitled to 10 per cent of the profit of the oil producing companies within the communities for the development of the communities in line with structures put in place by the communities.
“It is strange, unthinkable and undemocratic for oil companies to be saddled with so much powers and responsibilities with respect to the internal governance of oil producing communities in the proposed PlB 2020 pending before the National Assembly.” (Vanguard).
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