The Spaces for Change (S4C), in collaboration with the Ford Foundation, has called for a collaborative approach that prioritises genuine community engagement to ensure the needed development in oil production host communities.
The report titled ‘Transitioning from GMOU to HCDT: Wins, Challenges, and Further Actions’, launched in Abuja on Wednesday, examines the extent to which indigenous and international petroleum companies are living up to their statutory obligations to deliver tangible development to the oil-producing areas in Nigeria under the Host Community Development Trusts (HCDT).
Commenting on the report, Victoria Ibezim-Ohaeri, executive director for S4C, said that most oil and gas companies operating in Nigeria have so far implemented some initiatives for the good of the host communities.
According to her, some indigenous oil companies included non-oil producing communities that provide access roads to oil installations and those impacted by business operations in their list of host communities and set up Host Community Development Trusts (HCDTs) in those localities.
Other good practices, according to her, include the introduction of an automated platform for reporting and monitoring the HCDT; the creation of Alternative Dispute Resolution (ADR) offices in Lagos and Yenogoa, Bayelsa State; and the formulation and gazetting of the Host Communities’ Development Regulations, 2022.
“On the other hand, there are bad practices and contentious issues to watch out for. Top on that list is the high volume of litigation and protests across oil-producing communities; and the power asymmetry between petroleum corporations and their host communities.
“This report, chronicling the proceedings of the Technical Session of the House of Representatives Committee on Host Communities, examines the extent to which indigenous and international petroleum companies are living up to their statutory obligations to deliver tangible development benefits to the oil-producing areas in Nigeria under the auspices of the Host Community Development Trusts (HCDT).
“With a focus on the critical role of the HCDT in promoting sustainable prosperity and peaceful co-existence between oil companies and host communities, what this report has done is to highlight the wins and challenges associated with HCDT implementation, the emerging good and bad practices, as well as the disparate experiences and modalities established by petroleum corporations for transitioning from GMOU to HCDT,” she said.
She decried the lack of due process and transparency in the nomination of community representatives serving on the governing bodies of the HCDTs, noting the reprisals targeted at community members speaking up or exposing deficiencies in the HDCTs.
She said that most companies have been reluctant to disclose how 3 per cent operating expenditure (Opex) is calculated; adding that oil companies and resistance to innovation had been inflexible.
“Fortunately, the 10th Assembly of the Nigerian Legislature, through the House of Representatives Committee on Host Communities, has shown sincere commitment toward addressing the identified bad practices.
“The legislative monitoring of the implementation by oil companies will be crucial to delivering the objectives of this provision in the Petroleum Industry Act. This assurance, together with the recommendations of this report, if followed, will significantly enhance the successful implementation of the HCDTs for the benefit of host communities,” she said.
In his remarks, Dumnamene Dekor, chairman, House Committee on Host Communities, said the inauguration of the report which represented the opinion of all parties became necessary to strengthen the implementation of the Petroleum Industry Act 2021.
According to him, the move will also ensure the verification of claims of Operational Costs and OPEX of the oil companies.
He said the legislators monitoring the implementation by oil companies would be crucial to delivering the objectives of the provision in the PIA.
“Moving forward, a collaborative approach that prioritises data-driven decision making, genuine community engagement, and stanch commitment to transparency will be crucial to building a future where host communities truly benefit from mineral resource endowments,” he said.
