Oil-producing communities in Bayelsa State have issued a stern warning, signaling a potential halt in oil production across the state if the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) continues to disregard their concerns regarding the three per cent host community fund under the Petroleum Industry Act (PIA).
The warning was disclosed in a statement released jointly by prominent youth leader, Mr. Christopher Tuduo; His Royal Highness, Theophilus Moses; Chairman of the Dodo River Rural Development Authority, Francis Amamogiran; Target Segibo of Oporoma Rural Development Authority; and former Chairman of Koluama Clan Oil and Gas Committee, Engr Ebimielayefa Dick-Ogbeyan.
The communities have expressed disapproval of NUPRC’s intentions, as stated in a letter dated 9th October 2023, and signed by Capt. John R. Tonlagha, the Commission Chief Executive. The letter proposed the participation of NUPRC in various activities relating to the host community fund, including BOT nominations, selection and inauguration, Management Committee Advisory Committee nomination and selection, and facilitation of NEEDS assessment.
These activities were criticized by the group as potentially overwhelming for the three per cent fund allocated to the host communities.
While acknowledging the importance of NUPRC’s oversight function, the communities voiced concerns that excessive involvement in the activities of the Host Community Development Trusts (HCDTs) would be counterproductive and financially burdensome.
“Their increased involvement in operational activities will have adverse effects on the industry, as each of their participations will be funded from the HCDT trust,” the group emphasized.
The group also raised objections to the mandate for HCDTs to engage lawyers and accountants with a minimum of 10 years’ experience, deeming it nearly impossible to sustain such professionals from the five per cent administrative fund, which is derived from the three per cent.
“In reality, no NGO organizations, including successful ones like Accord or the Nigerian Conservation Foundation, employ full-time lawyers, let alone those with 10 years of experience. The HCDTs are structured as NGO organizations and should be expected to adhere to the best practices and standards of the sector,” the statement pointed out.
Furthermore, the group firmly demanded that NUPRC refrain from overstepping its boundaries, cease acting as operators, and desist from deducting expenses from the three per cent fund through cunning means. While advocating for transparency and accountability, the group highlighted that the HostComply portal, developed by NUPRC to manage the fund’s administration, should not be funded from the three per cent.
The statement indicated that the regulator should bear the financial burden for the application, enabling it to effectively monitor the activities of various stakeholders. Additionally, the group accused the regulator of insensitivity to the host communities’ concerns, particularly regarding the allocation in the PIA and the criminalization of oil and gas asset destruction without surveillance contracts in communities.
Questioning the timing of NUPRC’s review of host community regulations, the group suggested that the focus should be on establishing HCDTs and prioritizing community benefits.
In a resolute tone, the communities warned that they are prepared to take decisive action and escalate their efforts to address the issues affecting the oil and gas communities if NUPRC fails to address the matter as an emergency.
