Communities and the PIB – case of 10% petroleum host communities fund
With the controversial clauses in the Petroleum Industry Bill (PIB) still generating more heat than light on the floor of the National Assembly and among Nigerians, one contentious area is the Petroleum Host Communities Fund (PHCF) which seeks to provide a fund for the host oil communities, leading to lost of heated debate among the lawmakers.
Speaking on the section of the Bill which seeks to grant 10 percent to oil states, Deziani Alison-Madueke, minister for petroleum resources, said that the proposal was not new.
That section of the PIB actually seeks to grant a 10 percent equity advantage to oil-bearing communities from the net profit of oil companies operating in the areas.
Part G, Sections 116-118 in the PIB provide for the establishment of a special fund to be known as the “Petroleum Host Communities Fund which shall be utilised for the development of the economic and social infrastructure of the communities within the petroleum producing area. The section has faced bipartisan opposition from some interests (mostly northern) who insist that the draft legislation seeks to empower only the oil-producing states.”
The text above is culled from a recent news article, quoting the Petroleum Minister’s efforts at seeking the support of the Senate to pass the controversial PIB. It is stated that the group of Northern senators who oppose the PIB argue that the proposed 10% PHCF gives the oil bearing and oil producing communities too much advantage in sharing of proceeds from oil and gas exploitation.
I only wish these people will summon the courage and venture to visit and live in the oil and gas producing communities to see and experience, how poor and disadvantaged they are, compared to the luxurious lifestyles of these lawmakers in Abuja. These communities are dotted with houses built with sticks and mud, with thatched roof, and most without any modern social facilities like running water, toilets, roads, hospitals, schools, etc.
They don’t even have access to micro-credit schemes to support growth of their small scale businesses. So what crime did they commit that they should not benefit directly from the proceeds and profits of oil and gas exploitation? Have they not seen how oil proceeds have transformed desert communities into world tourist havens? With proper management of oil proceeds, these same oil producing communities in Nigerian Delta can be transformed.
Besides this ignorant argument, there is a more serious issue and concern with the way the PHCF is designed in the current PIB. The intent that the Funds will be paid into an account and managed from Abuja is very faulty. This is not what host communities want, and they are not likely to support the current PIB in this regard. The desire of host communities has always been to have a direct share and participation, under what they term “resource control.” They may not be given the opportunity to participate directly in operations and decision making, but it is their right to have direct benefit from profits earned.
And they also argue that such profits should be paid from the operators’ funds, and to be managed by themselves and not through any third party (state or federal government agency). Small marginal oil field operators are already setting up Trust Funds in collaboration with their host communities, and managed by community Trustees.
They have recorded successes and enjoying peaceful co-existence between the oil operators and the communities. The funds go directly into planning of community generated and community projects based on their real social and economic needs.
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