Tuesday, 18th January 2022
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Needless discord over host community fund

THE disagreement in the House of Representatives over the host communities’ fund component of the Petroleum Industry Bill (PIB) is trivial and uncalled for and distracts attention from the main issues.


THE disagreement in the House of Representatives over the host communities’ fund component of the Petroleum Industry Bill (PIB) is trivial and uncalled for and distracts attention from the main issues.

In the matter of the PIB, there are far weightier issues of national concern that require deeper thought, clear-headedness, and maturity than the splitting of hairs over a 2.5 per cent differential.

But of course, this triviality reflects, the unpardonably unserious treatment by the National Assembly of the PIB since 2008 when the bill was first sent to the federal legislature by then President Olusegun Obasanjo.

Close to a decade during which even purportedly fake versions were in circulation, so sensitive legal framework that is all important to the Nigerian economy has moved hither and thither but never forward within a National Assembly of persons elected by Nigerians to ‘perform faithfully and …always in the interest of the sovereignty, integrity, solidarity, wellbeing and prosperity of the Federal Republic of Nigeria’.

The PIB’s 10 objectives are as good for Nigeria as can be conceived under the circumstances. Among these are to ‘enhance exploration and exploitation of petroleum resources in Nigeria and to promote petroleum production for the benefit of the Nigerian people’; ‘establish a commercially-oriented and profit-driven National Oil Company’; ‘promote transparency, simplicity and openness’; ‘protect health, safety, and environment’; ‘optimise domestic gas supplies in particular for power generation and industrial development’.

It is an all-encompassing 368-page document of nearly 350 provisions and admittedly quite a task to address. Its importance to the nation demands that it be treated with serious-mindedness, deep and broad-minded consideration, and the utmost sense of urgency.

It is regrettable to say that, to the terrible disappointment of Nigerians, this has not at all been the case at the National Assembly. And now, at the eleventh hour and akin to the proverbial man who abandons an elephant to chase a rat, the less important, less urgent issue of host community fund is elevated to the level that triggers a needless discord. The PIB is too important to have dragged on for so long; that this is allowed to happen speaks volumes of the patriotism and sworn commitment of all concerned.

The latest and, mercifully uncontested version was presented for consideration and enactment on July 18, 2012 to the seventh session of the National Assembly by President Goodluck Jonathan. The issue in contention is clause 127 (1) which provides that ‘each upstream petroleum company shall remit on a monthly basis 10 per cent of the net profit…’ The Petroleum Host Communities Fund (the PHC Fund) is, according to (clause 126 (1), to be ‘utilised for the development of the economic and social infrastructure of the communities within the petroleum producing communities.’

The House of Representatives Committee on the PIB not only reduced the figure to 7.5 per cent but also redefined the term ‘host communities’ to include that the money goes not only to communities where oil is extracted and who suffer the attendant environmental damage, but should also be shared by communities where refineries and pipelines are located.

It is strange indeed that anyone will compare, talk less equate the environmental, economic and ultimately human damages suffered by the oil-producing communities with whatever is experienced by communities that host refineries and pipelines.

Host communities are in a manner of speaking, the very first ‘local content’ that the petroleum industry must factor into its operations. To reduce the funding for the care and development of the communities is wrong.

The point is taken that one way or the other, oil-related processes damage the environment and affect the health of people within industry environs.

For this reason, communities where refineries and pipelines are located do need special fund to protect or clean up the environment or support persons that suffer health damage. But this is the very justification for retaining the 10% for the PHC Fund, if indeed it is not increased to cover the enlarged meaning of host communities.

Three points need to be made in respect of all these. Firstly, that whatever the figure approved – and this newspaper strongly recommends that 10 per cent be retained –, there must be a mechanism within this bill to ensure that the money is transparently and judiciously spent. So often, money meant to develop the oil-producing communities does not get to them at all or where it does, is badly misapplied.

Secondly, there must be a comprehensive, measurable and time-bound template to guide what to do, where, and how, in developing host communities. There is too little to show for huge sums that are reported to have gone into these areas; the people continue to wallow in abject poverty and are forced to perpetually agitate for better treatment. Thus aggrieved, the nation suffers revenue and political instability from their acts of militancy.

Thirdly, oil-related matters have dominated Nigeria’s economic, political, and social affairs for too long. It is as if this country has absolutely nothing else to survive on except oil which is far from the truth.

From the states of Abia with gold, salt lead; Abuja with tantalite, marble, cassiterite; and Adamawa with bentonite, gypsum, magnetite; through Bauchi with columbite, gold, limestone, lignite; Bayelsa with clay, manganese, uranium, and Borno with diatomite, kaolin, limestone; to Kano with glass sand, copper, gemstone, tantalite; Kogi with coal, dolomite, talc, feldspar, iron ore; Nasarawa with amethyst, coking coal, mica, sapphire, quartz; Ogun with bitumen, phosphate, kaolin; Ondo with coal, bitumen, granite, clay; Plateau with barite, bauxite, tin, emerald; Sokoto with gold, gypsum, potash, limestone and Zamfara with coal, gold; there is no state in this federation that is not blessed with proven minerals in commercial quantity to develop itself.

It is with the strongest emphasis, therefore, that the point is being made that this republic must be made truly federal in terms of control of mineral resources.

This will reduce the needless – even irritating – agitation for resource control, the rancorous sharing of proceeds of oil, the desperate scramble for control of the centre, and the attendant instability that these inflict on a potentially great country like Nigeria. Indeed, this is the burning issue to which the National Assembly should address itself.