Vanguard (Lagos)

Nigeria: 13 Percent Oil Derivation War

Warri — GOVERNORS of the Niger Delta region, during the week, started mobilizing forces to quell the rising agitation by oil-producing communities for the Federal Government to stop paying 13 per cent derivation fund through state governments.

Leaders of the oil communities in Niger Delta, under the aegis of Oil and Gas Producing Communities of Nigeria, have, in the past few months, led powerful delegations to the Presidency, National Assembly, Revenue Mobilization, Fiscal and Allocation Commission, RMFAC, and other government agencies, campaigning for direct payment of 13 per cent derivation fund to host communities.

Vanguard gathered that the governors were not at ease with the campaign that payment of 13 per cent derivation to state governments was unconstitutional, as well as the allegation that they (governors) misappropriated N7.282 trillion in the last 13 years.

Some of the protesting communities warned that they would shut down oil flow stations in their areas if the Federal Government did not redress the anomaly.

The communities argued that the 13 per cent derivation fund did not belong to the state, as it was not part of the money that should have been credited to the state's consolidated revenue fund account.

An informed source hinted, yesterday, that the recent outburst by South-South leader, Chief Edwin Clark, during a visit to him by leaders of the group that payment of 13 per cent derivation to state governments was illegal, was a source of concern to the governors, knowing the weight of the opinion of the elder statesman on matters affecting the region.

Jonathan orders audit of oil revenues

Already, the Presidency in response to the agitation, had directed a probe into the increasing complaints and agitation by the communities over alleged misuse of the fund by governors.

Our source said: "President Goodluck Jonathan had directed an audit of all oil revenues, including the 13 per cent derivation fund disbursed through the Federation Account to ascertain the utilisation of the fund."

In one of the several letters to the RMFAC, the communities said: "Thirteen per cent derivation fund is not part of any consolidated revenue of state governments; it is not part of any state allocation. The fund is a benchmark for revenue allocation for host communities in Nigeria. It is, therefore, illegal to allocate 13 per cent derivation fund through a third party to the host communities."

NEITI to conduct probe

On the probe by the Federal Government, it was gathered that the Nigeria Extractive Industries Transparency Initiative, NEITI, had been named to conduct the audit.

The purpose of the audit, which is expected to be completed in nine months, is to determine how oil revenues are applied to entities such as Niger Delta Development Commission, Petroleum Trust Fund, and the 13 per cent derivation revenue allocated to some oil producing states.

In addition, the planned audit will determine how other monetary and fiscal transactions in the sectors have been utilised during the period under review.

The development was confirmed by a member of the NEITI Stakeholders Working Group, Mrs. Faith Nwadishi, who disclosed that the planned audit was to ensure that the nine-month timeline set by the Federal Government for the completion of the audit was met and assured of NEITI's full support for the proposed exercise.

Loud agitation in Delta

The agitation is more vociferous in DeltaState, where Senator Francis Okpozo and former chair of the Delta State Oil Producing Areas Development Commission, DESOPADEC, Chief Wellington Okirika are leading the offensive.

A dependable source told this reporter: "Governor Emmanuel Uduaghan is meeting with some of these leaders on Saturday (tomorrow) in Warri to see how they can iron out their differences, as things will not work out well the way matters are going at the moment.

"Uduaghan is among the first governors in the region to set up an oil commission, which is DESOPADEC to manage the 13 per cent derivation fund. But the truth is that what is remitted to the commission is only 50 per cent of the 13 per cent derivation fund, not the entire 13 per cent that comes from the Federal Government and we are saying that it is unconstitutional.

"Even as we cry in DeltaState that sometimes, the whole 50 per cent does not come to DESOPADEC, in some states of the region, there is no commission at all to manage the 13 per cent derivation fund. Except in Edo, Ondo, Imo and Abia states, where the governors also set up commissions, all the governors just use the money the way they like without challenge from the lawmakers."

Host communities regain lost voice in Rivers

Investigation by Vanguard showed that in RiversState, the host communities could barely meet, not to talk of confronting the governor, Hon Rotimi Amaechi, on the use of 13 per cent derivation fund.

However, with support from the leadership of the Oil and Gas Producing Communities of Niger Delta, oil communities in the state had found their lost voice. They have joined the campaign for direct payment of 13 per cent derivation to host communities.

In a petition addressed to the RMFAC chair, signed by Chief Henry Okpaks (Rivers), Mr. Wole Abel (Ondo), Mr. Monday Aghaghe (Edo), Mr. Ufot Nkang (Akwa Ibom), Mr. Macpherson Kurobo (Bayelsa) and Chief Willam Igere (Delta), the leaders said: "The 13 per cent derivation fund belongs exclusively to the oil and gas producing communities, which are the sources of derivation."

Derivation Board

They proposed that a Derivation Board, comprising an executive chairman, secretary and members, including a member from RMAFC, be set up to administer the 13 per cent derivation fund. They added that the chair should rotate among oil and gas producing states every four years.

They stated that the 13 per cent Derivation Fund currently being managed by the state governors in the oil and gas producing states was an aberration, adding that the fund had been managed without regard to the oil and gas producing communities, who are owners.

Understated moves in Edo, Ondo

In EdoState, the commissioner representing the state in the NDDC, believed to be voicing the position of the state government, was quoted recently to have stated that 13 per cent derivation fund could not be managed by host communities because of lack of administrative structure.

He opined that state governments should continue to manage the fund, while in OndoState, there was a subtle move to dissuade the oil communities from pressing ahead with the campaign.

Bayelsa keeps oil communities guessing

However, in BayelsaState, where the oil-producing communities had a rough time with the previous administration, they were yet to read clearly the body language of Governor Seriake Dickson, who has not inaugurated any commission to manage the fund.

Oil communities welcome probe

On the planned audit by NEITI, the leaders called on the organisation to visit the host communities and ascertain the facts on ground.

In a statement signed by William Igere (Delta); Pastor Macpherson Kurobo (Bayelsa); Harry Opaks (Rivers); Saviour James Okon (Akwa Ibom); Princess Nomwen Uhunmwunagho (Edo) and Samuel Ebiwanno (Ondo), they said: "We wish to affirm in very strong terms that any report or audit investigation without physical visit to the communities hosting oil facilities is unacceptable to the communities.

"The state governments, which received this money illegally, used the fund to develop their state capitals and non-oil and gas producing communities, leaving the actual oil and gas producing communities in hunger and penury."

They stated that the illegal and unconstitutional payment of 13 per cent derivation fund through the state governments had left the actual oil and gas producing communities in abject poverty.

State govts 've no business with 13% derivation -- Clark

Chief Clark, whose support for the oil communities caused a stir among the governors, said during the visit to him in Abuja: "The provision in the 1999 constitution is clear, 13 per cent derivation fund stands on its own.

It is not part of any consolidated revenue of any tier of government, nor part of any state joint local government account, 13 per cent derivation fund should then be treated on its own."

According to him, "Section 162 (2) of the 1999 constitution of Federal Republic of Nigeria is specific about the owners of 13 per cent derivation fund. The fund is for oil and gas producing communities who are the source of derivation, as the basis of derivation principle in the 1999 constitution."

He added that there was no mention of any state government in the provision of Section 162 (2) of the 1999 Constitution of Nigeria.

As in the case of fund from fuel subsidy managed through a national committee, headed by Dr. Christopher Kolade, he advised the Federal Government to put in place a National Derivation Committee on 13 per cent Derivation Fund with state implementation committees.

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