Port Harcourt — Except the National Assembly include the payment of royalties to oil producing communities in Petroleum Host Communities Development Trust unrest in the Niger Delta will persist.
Former group general manager, corporate planning and development division, Nigerian National Petroleum Corporation, Dr Joseph Ellah, who stated this said it will be difficult to implement the host communities bill when passed into law.
Ellah told The Guardian in Port Harcourt that the assumption that the bill will enhance peaceful and harmonious coexistence between oil companies and host communities was illusionary.
He noted that provisions requiring that the Petroleum Host Community Development Trust shall have an Endowment Fund to which an annual contribution of an amount equal to 5% (five per cent) of profits after tax of any particular oil company accruable from its operations in the particular licence or lease area for which the Petroleum Host Community Development Trust is established was unacceptable.
According to him, the only want to ensure the issue of unrest in the Niger Delta is addressed is to pay royalties to the host communities from the proceeds accruable from oil and gas explored in their land.
"Oil production is causing pollution and total dislocation of the life style of the people who live in the oil producing communes. Therefore, it is necessary that a percentage of royalty be paid to them where the companies produce.
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What this bill proposes is 5 percent of operating and capital expenditure of the company operating in that area the previous year. But this is something you can hardly calculate"
"What the Niger Delta people are looking for is payment for the oil produced in their land. This bill says nothing about it, hence, making it worst than what was provided in the first Petroleum Industry Bill (PIB) where they talked about 10 percent net revenue" he said.
He argued that the bill provided that in the constitution of the Petroleum Host Communities Development Trust executive management committee which shall take charge of the responsibility of managing and supervising the application and utilizatiòn of the annual contribution of the oil companies and other sources of funding , it is not mandatory for the companies to nominate persons from the host communities into the board.
He explained In a situation whereby oil producing communities in the Niger Delta have been agitating over years to have stakes in the operation of the resources in their land, it will amount to insensitivity to allow the oil companies to become the sole determinants of who becomes an executive member of the fund management committee.
According to him, if the companies will be the ones to appoint members of a board to finance and execute projects for the benefit and sustainable development of the host communities, it therefore means that the status quo is being sustained and strengthened.
Ellah wondered how a board which does not comprise of persons from the host communities be enjoy support of a possible local initiatives that enhance protection of the environment and security in the Niger Delta where relationship between most host communities and the oil companies have been frosty.
He stated that if the bill is passed into law without a review of its present content, it will create a lot of crisis in the Niger Delta oil producing communities that it will be difficult for the oil companies to operate.
He stressed that the bill was too vague in certain areas that it might even be difficult for the oil companies to interpret the bill.
He insisted that the participation of the oil producing communities in terms of equity stake in the companies operating in their locality should be clearly engrained in the bill to give the communities for once a sense of belonging.
The bill proposes incorporation of Petroleum Host Communities Development Trusts by every company or collectivity of companies with sole or joint equity interest in a licence to prospect for petroleum or licensees of designated midstream or downstream assets whose area of operations are located in or appurtenant to any community or communities, for the benefit of the community or communities within such area of operation.