{"id":79240,"date":"2021-03-21T15:59:27","date_gmt":"2021-03-21T14:59:27","guid":{"rendered":"http:\/\/pointblanknews.com\/pbn\/?p=79240"},"modified":"2021-03-21T15:59:27","modified_gmt":"2021-03-21T14:59:27","slug":"oil-host-communities-fund-in-pib-south-south-and-serious-pending-issues","status":"publish","type":"post","link":"https:\/\/pointblanknews.com\/pbn\/articles-opinions\/oil-host-communities-fund-in-pib-south-south-and-serious-pending-issues\/","title":{"rendered":"Oil Host Communities&#8217; Fund in PIB: South South And Serious Pending Issues"},"content":{"rendered":"<div id=\"m82514\" class=\"mail-message expanded\">\n<div class=\"mail-message-header spacer\">By: Ifeanyi Izeze<\/div>\n<div class=\"mail-message-content collapsible zoom-normal  \">\n<div class=\"clear\">\n<p dir=\"ltr\">\nThe Petroleum Industry Bill (PIB) 2020 currently at the floor of the<br \/>\nNational Assembly is proposing that a trust fund, called the &#8216;Host<br \/>\nCommunity Development Trust Fund&#8217;, be set up, where the oil and gas<br \/>\ncompanies also referred to as &#8216;Settlors&#8217; operating in the area, would<br \/>\ncontribute annually, an amount equal to 2.5 per cent of their total<br \/>\nOperating Expenditure (OpEx) in the preceding year as development trust<br \/>\nfor host communities affected by the companies&#8217; exploration and<br \/>\nproduction operations.<\/p>\n<p>Meanwhile, the oil and gas producing Host Communities of Nigeria<br \/>\n(Hostcom) is demanding that a fair figure of 10 percent be allowed in<br \/>\norder to compensate for the negative fallouts of exploration and<br \/>\nproduction activities in their locales.<\/p>\n<p>And the governors of the South-South states in support of their people<br \/>\nhave also described the 2.5 percent proposal as inadequate and have<br \/>\nasked for an upward review of the provision for the Host Community Trust<br \/>\nFund in the PIB to 10 percent in the best interest of oil-producing<br \/>\ncommunities and the country.<\/p>\n<p>On its part, the Federal Government at the public hearing on the Bill by<br \/>\nthe Senate Joint Committee on Petroleum (Upstream, Downstream and Gas),<br \/>\ninsisted that the 2.5 percent of oil companies Operating Cost (OpEx)<br \/>\nallocated\u00a0 to the oil producing communities trust fund was a fair deal.<\/p>\n<p>According to the Minister of State for Petroleum Resources, Timipre<br \/>\nSylva, the proposed 2.5 percent provision in the PIB is reasonable.<\/p>\n<p>Now to me, there is no disagreement among the stakeholders especially on<br \/>\nthe position of the oil producing host communities and the Minister of<br \/>\nState for Petroleum Resources on this issue. What has emerged rather<br \/>\nfrom all the arguments is that there seems to be a deliberate and<br \/>\nmischievous intention to confused and muddle up issues as it affects the<br \/>\nfunding of the Trust and this will end up in detriment to the fortunes<br \/>\nof the oil producing host communities.<\/p>\n<p>The question to ask is whether the new PIB at the floor of the National<br \/>\nAssembly is making a very fair proposal \u2013 fair to the host communities,<br \/>\nfair to the country and fair to the oil companies?<\/p>\n<p>What needs to be unambiguously addressed is what really the host<br \/>\ncommunities&#8217; stakeholders including the South South State government are<br \/>\nasking for. Is it percentage as equity holding on declared annual profit<br \/>\nof operating companies or percentage of the companies&#8217; total annual<br \/>\noperational expenditure?<\/p>\n<p>The South South governors and their people must be clear on whether what<br \/>\nthey are calling for is 10\u00a0 percent equity of declared annual profit of<br \/>\nthe operating oil companies or 10 percent of their total annual<br \/>\nOperational Expenditure (OpEx) as the two concepts mean completely two<br \/>\ndifferent things in terms of figures that would accrue to the Trust<br \/>\nfund.<\/p>\n<p>Recall that 10 per cent equity holding in the operating companies was<br \/>\napproved in the executive bill that was signed by late President Umaru<br \/>\nYar&#8217;Adua in 2009.<\/p>\n<p>However, in the subsequent versions, it was reduced to 5 percent still<br \/>\nof equity holdings. This time around in the 2020 version of the same<br \/>\nBill, it has further been marked down to 2.5 percent and clearly stated<br \/>\nthat it should apply to the total operational expenditures rather than<br \/>\nthe previously stipulated percentage in equity holdings.<\/p>\n<p>These issues needs to be clearly explained and understood if not, the<br \/>\noperating oil companies will hide under the confusion to subvert<br \/>\nwhatever was supposed to come into the Trust Fund for the communities&#8217;<br \/>\ndevelopment.<\/p>\n<p>Before now, you had a provision of 10 percent of profit and profit means<br \/>\nthat if the operating oil companies don&#8217;t declare it, you don&#8217;t have<br \/>\nanything going to the host community funds and you can trust the oil<br \/>\ncompanies to work with dubious people in government and the NNPC to<br \/>\nmanoeuvre this either by under-declaring profit or outrightly coming out<br \/>\nto say no profit was recorded in the year under review. And for sure,<br \/>\nthese companies would always cook up more than enough reasons to explain<br \/>\nthemselves away as it customary with their dubious dealings with the<br \/>\npeople of the oil producing areas.<\/p>\n<p>Another issue to be taken up seriously is the fate of the existing<br \/>\nfederal government development intervention agency, the Niger Delta<br \/>\nDevelopment Commission (NDDC). Is the agency still going to exist and<br \/>\nfunded by the federal government as currently obtains? Let it not be<br \/>\nthat when the oil host communities&#8217; trust fund comes into existence, the<br \/>\ngovernment and the operating oil companies will expect the NDDC to be<br \/>\nfunded from the proposed host communities Trust. Everything must be<br \/>\nstreamlined and agreed now before the National Assembly goes on to pass<br \/>\nthe PIB into law because then it will be too late to dialogue on<br \/>\nanything as concerns the legislation.<\/p>\n<p>To me the more serious issue that our people in the oil communities,<br \/>\ncivil society groups and governments of the South South states should<br \/>\nseriously contend is that the 2020 version of the Petroleum Industry<br \/>\nBill is seeking to give enormous powers to oil and gas companies<br \/>\noperating in the country in the setting up of the proposed host<br \/>\ncommunities development Trust.<\/p>\n<p>It is curious that the members of Oil Producers Trade Section (OPTS)<br \/>\nwhich represents the interest of 30 upstream companies in Nigeria<br \/>\nincluding Chevron, Agip (Eni), ExxonMobil, Shell and Total should be<br \/>\ngiven absolute power to set up the criteria to appoint the entire<br \/>\nmembership of the management\/supervisory team of the Trust Fund and even<br \/>\nallowed to solely chose whoever will work there in whatever capacity.<\/p>\n<p>How can the operating oil firms that are parties in the dispute that the<br \/>\nnew Bill sets out to resolve be the ones to unilaterally decide who from<br \/>\nthe community side of the stake is qualified to serve and\/or work in the<br \/>\nTrust Foundation as persons of integrity? It doesn&#8217;t make sense at all.<\/p>\n<p>The right thing should be to involve the state governments,<br \/>\nrepresentatives from Hostcom and even some civil society groups in the<br \/>\nselection and composition of the board and staff of the Trust Fund.<\/p>\n<p>As further stated in the Bill, the oil companies shall determine the<br \/>\nselection process, procedure for meeting, financial regulations and<br \/>\nadministrative procedures of the Board of Trustees; the remuneration,<br \/>\ndiscipline, qualification, disqualification, suspension and removal of<br \/>\nmembers of the Board; and other matters other than those relating to the<br \/>\noperation and activities of the Board.<\/p>\n<p>&#8220;The settlor shall, in the determination of membership of the Board of<br \/>\nTrustees, include persons of high integrity and professional standing,<br \/>\nwho may not necessarily come from any of the host communities,&#8221; the bill<br \/>\nsaid.<\/p>\n<p>Does it make sense that a party in the dispute should be given such<br \/>\nenormous powers to determine &#8220;persons of integrity&#8221; that will manage the<br \/>\nwelfare of the other person in the same dispute? This is awkward walahi!<\/p>\n<p>Another key source of contention in the 2020 version of the PIB, at<br \/>\nleast from the point of view of host communities, should be the fact<br \/>\nthat it places the responsibility for the protection of pipeline and<br \/>\nother oil infrastructures with the communities.<\/p>\n<p>Placing the protection of oil installations on some unarmed host<br \/>\ncommunities people is unrealistic as &#8220;previous researches conducted by<br \/>\nSocial Action reveals that oil theft which is the major reason for<br \/>\npuncturing oil pipelines is carried out mainly by armed cartels who are<br \/>\nmost times not even members of the community.<\/p>\n<p>To the South South people, they must shout now because this 2020 PIB<br \/>\nseem to be deliberately designed to promote more confusion and renewed<br \/>\nspate of crisis in the oil producing areas and further expose the people<br \/>\nto more misery and untold hardship. If they don&#8217;t aggressively protest<br \/>\nnow, then silence may be taken to mean acceptance.God bless Nigeria!<\/p>\n<p>(Ifeanyi Izeze is a National Daily Guest Columnist:<\/p>\n<\/div>\n<\/div>\n<div class=\"mail-message-footer spacer collapsible\"><\/div>\n<\/div>\n<!-- AddThis Advanced Settings generic via filter on the_content --><!-- AddThis Share Buttons generic via filter on the_content --><!-- AddThis Related Posts generic via filter on the_content -->","protected":false},"excerpt":{"rendered":"<p>By: Ifeanyi Izeze The Petroleum Industry Bill (PIB) 2020 currently at the floor of the National Assembly is proposing that a trust fund, called the &#8216;Host Community Development Trust Fund&#8217;,&hellip;<!-- AddThis Advanced Settings generic via filter on wp_trim_excerpt --><!-- AddThis Share Buttons generic via filter on wp_trim_excerpt --><!-- AddThis Related Posts generic via filter on wp_trim_excerpt --><\/p>\n","protected":false},"author":1,"featured_media":79243,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[7],"tags":[],"class_list":["post-79240","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles-opinions"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.8 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Oil Host Communities&#039; 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