PIB: North opposes Host Community Fund

The North has opposed the Host Community Fund that has been prescribed in the new Petroleum Industry Bill, which is undergoing debate at the National Assembly.

The apex socio-cultural group in the North, the Arewa Consultative Forum, in response to SUNDAY PUNCH’s inquiry, said the establishment of the Host Community Fund, while leaving the 13 per cent derivation to oil-producing states would amount to the whole nation funding the managerial imperfection of the Niger Delta state governments.

The Publicity Secretary of the ACF, Anthony Sani, said the group was not favourably disposed to the fund, adding that funds that had been paid to Niger Delta states were used to develop only the state capitals.

He said, “ACF is not favourably disposed to the Host Community Fund because while a section of the PIB provides that 10 per cent of the monthly profits of all oil operations of both onshore and off shore be paid into the Host Community Fund, the following section provides that the off shore part of the fund be removed and paid into littoral states.

“Our grouse  is that states have no environment being degraded separate from the host communities. More troubling is the tendency of the PIB to forget the existence of 13 per cent derivation meant for amelioration of effects of degradation of environment of host communities which have agitated that the 13 per cent derivation be paid directly to them. Reasons are that the derivation is being used by state governments to build airports, flyovers and five-star hotels in state capitals to the chagrin of the host communities.”

Sani added that though the argument of compensating for environmental degradation might be tenable, the North was opposed to the inclusion of profit from offshore operation in the calculation.

He said, “If derivation is to compensate for environmental degradation and/or to reward effort, we still do not see the wisdom of including proceeds from off shore exploration in the calculation of derivation, precisely because off- shore exploration does not degrade any environment and is not due to effort of any community, considering it is in deep sea.

“I think those clamouring for such fund must be reminded that we cannot claim one country and live as if we are on different continents. The concept of nationhood presupposes bringing of people together to enable them to live up their synergy for common good. And that is why reduction of gaps in development and income is not only good politics but good economics as well.”

The PIB proposes that 10 per cent of monthly profits of all oil operations both onshore and offshore be paid into the fund for the development of the communities that host oil and gas production.

The governors of Niger and Kaduna states had recently opposed the fund and other provision of the PIB including the amount of powers prescribed for the Minister of Petroleum Resources; the governance structure of the three commercial entities – the National Oil Company, the National Gas Company and the National Petroleum Asset Management Company – proposed to replace the Nigerian National Petroleum Corporation.