NUPRC registers 172 host community trusts under PIA
Key points
- NUPRC says 172 Host Communities Development Trusts have been incorporated by oil and gas companies.
- Commission links the trusts to infrastructure development, improved community relations and increased oil production.
- NUPRC says it is addressing disputes affecting some trusts through regulation and alternative dispute resolution.
Main story
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) says 172 Host Communities Development Trusts (HCDTs) have been incorporated by oil and gas companies under the Petroleum Industry Act (PIA).
The Commission Chief Executive, Mrs Onitsemeyiwa Eyesan, disclosed this in a statement issued by Eniola Akinkuotu, Head of Media and Corporate Communications, NUPRC, on Sunday in Abuja.
Eyesan spoke while receiving the leadership of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) in Abuja.
Under the PIA, oil and gas companies operating as settlors are required to contribute three per cent of their operating expenditure in the preceding financial year to the Host Communities Trust Fund established for their areas of operation.
Eyesan said the NUPRC had established procedures and regulations to ensure compliance with the host community provisions of the Act and manage contributions from oil companies.
She said the trusts had already supported the development of schools, hospitals and other infrastructure in host communities.
According to her, the interventions had also contributed to greater peace and stability in communities that previously experienced volatility, with the improved environment contributing to increased oil production.
Eyesan acknowledged that disagreements over the composition of Boards of Trustees had resulted in litigation involving some HCDTs.
She said the Commission was working to resolve such disputes and ensure that the trusts operated effectively.
She added that the NUPRC’s Alternative Dispute Resolution Centre had helped address some of the grievances arising from the implementation of the host community framework.
Eyesan also said the Commission would investigate the unresolved dispute between Sterling Oil Exploration and Energy Production Company (SEEPCO) and its host community in Anambra.
She thanked the RMAFC for its interest in host community development but clarified that oversight of the management of HCDT funds remained the responsibility of the NUPRC.
The Chairman of RMAFC, Dr Mohammed Shehu, commended the NUPRC for reforms in the upstream petroleum sector, which he said had contributed to increased oil production.
Shehu said the upstream sector remained important to the Federation Account because of the significant contribution of oil and gas revenues.
He called for stronger cooperation between RMAFC and NUPRC to advance the interests of the country.
The issues
The Host Communities Development Trust mechanism is intended to ensure that communities affected by oil and gas operations receive direct benefits from activities in their areas.
The incorporation of 172 trusts indicates progress in implementing this aspect of the PIA, while disputes over trusteeship show that challenges remain in putting the framework into effective operation.
What’s being said
“We have laid out procedures for doing things and we have put regulations in place to streamline the process.” — Mrs Onitsemeyiwa Eyesan, Commission Chief Executive, NUPRC
“So far, we have registered 172 HCDTs and we have been able to manage contributions by settlors.” — Mrs Onitsemeyiwa Eyesan
“The commission’s Alternative Dispute Resolution Center has also played a pivotal role in addressing some of these grievances.” — Mrs Onitsemeyiwa Eyesan
What’s next
NUPRC will continue addressing disputes affecting HCDTs and has pledged to investigate the lingering disagreement between SEEPCO and its host community in Anambra.
Bottom line
The NUPRC says the incorporation of 172 host community trusts is helping channel oil industry contributions into local development while improving relations and stability in producing communities, although disputes over the management of some trusts remain.
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