LEGAL disputes over the composition of Boards of Trustees have clouded the progress of Host Communities Development Trusts (HCDTs), the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has disclosed.

Being a key part of the Petroleum Industry Act (PIA), NUPRC said significant progress has been made with about 172 HCDTs already established.

Speaking at a meeting with the leadership of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) in Abuja, NUPRC boss, Oritsemeyiwa Eyesan, acknowledged that some HCDTs had become subjects of litigation stemming from disagreements over how their governing boards were constituted.

This admission complicates an otherwise upbeat account of implementation, which she said has reached 172 HCDTs that oil and gas companies have incorporated under the PIA.

The PIA requires settlors to contribute three per cent of their prior year’s operating expenditure to a Host Communities Trust Fund.

The governance disputes point to a structural tension in the framework, while the financial mechanics of the PIA’s host community provisions appear to be functioning, with contributions being collected and channelled into schools, hospitals and other infrastructure, the question of who sits on these trusts’ boards has proven contentious enough to end up in court.

Eyesan said the Commission was working to resolve the disputes and ensure the trusts operate effectively, pointing to NUPRC’s Alternative Dispute Resolution Centre as a mechanism for addressing grievances arising from the HCDT framework.

One specific case singled out was the unresolved dispute between Sterling Oil Exploration and Energy Production Company (SEEPCO) and its host community in Anambra State, which Eyesan promised to investigate.

He also used the occasion to draw a jurisdictional line, telling RMAFC that while its interest in host community matters was welcome, oversight of HCDT fund management remains NUPRC’s responsibility alone.

RMAFC Chairman, Dr Mohammed Bello Shehu, commended NUPRC’s broader reforms and their contribution to increased production, calling for stronger collaboration between the two institutions, without directly addressing the litigation concerns raised.