April 16, 2024

PIA: S4C, NEITI, NUPRC, others counsel communities on Host Community Development Trusts, HCDT for sustainable development

Oredola Adeola


Host communities in Nigeria have been advised to key into the provisions of the Petroleum Industry Act (PIA) by ensuring that they are not left out of the decision-making process and that their interests are represented in the governance and administration of petroleum resources and other minerals in their areas through the Host Community Development Trusts (HCDTs). 


According to the source, HCDTs can be used to direct significant resources towards community development, replacing CSR projects. They added that this approach would ensure that large investments are made to bring about changes, reduce future risks for the oil and gas industry, and prevent tensions across the Niger Delta. They noted that host communities should not see exploration companies as corporate benefactors but as entities that they can engage with.


This was the highlight of the just concluded two-day National Extractive Dialogue 2023, hosted by Spaces for Change, S4C, in collaboration with the Nigeria Extractive Industries Transparency Initiative, NEITI and with the support of Ford Foundation in Owerri, Imo State.



Victoria Ibezim-Ohaeri, Executive Director, Spaces for Change, S4C, in her remark advised host communities to embrace opportunities offered by Nigeria’s Petroleum Industry Act, PIA, in order to achieve sustainable development.



According to her, unlike in the past when communities were denied their entitlements, the legislation has created the opportunity for communities to be rewarded for the various minerals that abound in their areas.



Ibezim-Ohaeri said, “Not too long ago, transformation knocked gently on the door, in response to the yearnings of local people. The Nigerian government signed into law the Petroleum Industry Act (PIA) in August 2021.


“Chapter 3 of that Act offered a beacon of hope by demanding the creation of the Host Community Development Trusts (HCDTs).



“Under Section 240 of the Act, the benefits of natural resources must now flow back to the communities where they came from. Extractive corporations—whether indigenous or international—are now required to contribute 3% of their actual operating expenditure to the Host Community Development Trusts,”
Ibezim-Ohaeri  said.



Emphasizing on the benefits of the HCDTs, the Executive Director, S4C further said, “the opportunities are no longer acts of corporate benevolence, but an entitlement to partake in the design, content and structure of their own development, and most importantly, participate in the governance and administration of petroleum resources through their membership of either the Board of Trustees, the Management Committees or any of the advisory bodies created under the Act.


“To give life to these promises, SPACES FOR CHANGE has consistently monitored policy implementation at the grassroots, generated knowledge products, shared information, and engaged most of the host communities gathered here today to empower, sensitize and channel their concerns to the appropriate target agencies and corporations,” Ibezim-Ohaeri said.



Dr. Orji Ogbonnaya Orji, Executive Secretary, NEITI, while speaking on the theme “Host Communities Development Trusts: Catalysts for Equitable Benefit Sharing and Sustainable Prosperity for all” as its theme, stated that the involvement of NEITI is targeted at deepening the implementation of EITI at sub-national levels.



He said, “NEITI also seeking opportunities to work with host state governments to promote environmental justice, gender equity, and protection of fundamental human freedom that ensures that the revenues from the extractive sector are beneficial to all the citizens not just a few.


Professor Eugene Ukachukwu Opara, Commissioner, Ministry of Petroleum Resources, Imo State, on his own part said, “Until S4C intervention, Assa North Ohaji (ANOH) host communities signed Global Memorandum of Understanding (GMoUs) without having external contacts with other organizations and situations that could give them sound legal advice and alternative information that could enrich the quality of negotiations with extractives companies. A negotiation with unequally endowed or unbalanced teams can be exploitative.”



He explained that the GMoU generated a lot of concerns as it relates to the Imo State Gas project, adding that now that HCDTs has been inaugurated communities need to take ownership for maximum benefits under the Petroleum Industry Act (PIA) 2021.



Engr. Gbenga Komolafe, Commission Chief Executive (CCE), Nigerian Upstream Petroleum Regulatory Commission, NUPRC, noted that past initiatives, including the Oil Mineral Producing Areas Development Commission, OMPADEC, did not make much impact on communities.



However, the NUPRC CCE. who was represented by A. M. Uviovo, the Regional Coordinator, NUPRC, Owerri, further said, “The choice of projects to embark on will be determined by the community and this means the company will have unlimited access to the facilities.


“That also means that any expenditure made by the company due to any denial of access, disruption of activities, vandalization and sabotage will be deducted from the 3% Trust fund of that financial year.


“The communities are therefore advised to take ownership of the facilities located in your domain to enable you to obtain the maximum benefit of the provision of the Petroleum Industry Act (PIA), 2021. I urge you to diligently work together to ensure that our communities continue to thrive positively to enable our country to progress and develop economically,” the representative of CCE said.