The plight of oil host communities and the need to ensure that funds allocated to them under the Petroleum Industry Act (PIA) are effectively utilized to deliver meaningful development in host communities came into sharp focus at a recent stakeholder engagement session held with the KEFFESO Host Communities Development Trust (HCDT).  The KEFFESO HCDT serves as the representative body for various oil producing communities including Koluama 1 and 2, Ezetu 1 and 2, Okumbiri, Foropa, Fish Town, Ekeni, Sangana, Opu, Okumbiribeleu and Oginibiri in Bayelsa State, under the NNPCL/First Exploration & Petroleum Development Company (FIRST E&P) JV.

The Petroleum Industry Act, 2021, which consigned Petroleum Act and Petroleum Tax Act of 1967 to history allocated 3 percent Host Community Development Fund for the development of oil host communities. This significant legislation which brings the oil host communities into sharp focus is imbued with revolutionary fervor; for the first time, it created a special fund which ensures that allocated funds are properly channeled to foster tangible development in the oil producing communities of the Niger Delta and elsewhere. Given the pivotal role he played in the birthing of the Petroleum Industry Act, his tireless advocacy, strategic engagements with critical stakeholders within the legislative branch and the oil and gas sector, it incontestable that the PIA Act has the imprimatur of Mele Kyari. This assertion is without prejudice to the unwavering commitment and strong political will exhibited by the Buhari administration which broke the over two decades stalemate of the bill.  The Act created a Host Community Development Trust Fund with the aim to cushion the negative impact oil exploration may have on oil producing communities. The fund would be managed by a Board of Trustees. Funding for the Trust Fund will be secured from holders of Licenses or leases who will contribute three per cent of the operating expenditures of the previous year in respect of all petroleum operations affecting the host communities.

Kyari’s unbridled enthusiasm and full support of the allocation to oil producing communities is driven by his strong passion to drive development in oil producing states, who suffered decades of neglect. In giving ringing endorsement to the Act, he believes that emplacement of the Act will galvanize massive development for oil producing communities. As corporate leader with human face, Mele Kyari, even before the PIA was deeply committed to interventions that would impact the lives of oil host communities as part of the Corporate Social Responsibility (CSR) of NNPC. It mattered so much to him that the Act would cure observed anomalies of the past by ensuring that the host communities take full responsibility and ownership of development projects that would be sited in their communities. This is in furtherance of the commitment of NNPC to improve physical and material wellbeing of the people. Under this arrangement, only projects with direct developmental impact on the people would be implemented through the fund. The active participation of members of the host communities in the power structure of the organization emplaced to manage the fund will ensure that the resources will be used in a manner that conforms to the aspirations of the host communities.  According to the spirit of the Act, the fund will be deployed in such a manner to engender sustainable development for the benefit of the host communities. Also, the fund will be used to advance and propagate educational development of the people, support healthcare and local initiatives that will enhance protection of the environment.

According to Kyari, “The whole concept of the Host Communities was the creation of the executive and the government decided that the PIB must have a provision in the law where the welfare of host communities is taking back to them.

“The Host Communities Fund is in control of the host communities; it is not one that will be managed by the oil companies. It is our responsibility as government to ensure that those funds are set up.

“The data along how much oil companies are spending in a year is no longer secret, the PIB has made it clear that you must disclose your spending for the purpose of taxation to the FIRS and therefore your cost of operation is no longer secret.

“Let us not forget that every attempt in the past to ensure that development comes to the host communities failed. Without any contradiction, I can tell you that the 13 per cent derivation was designed to make sure development comes to the Niger Delta region and by implication the host communities.

“Secondly, we have the NNDC to ensure that development comes to the Niger Delta Region and more so by implication the host communities.

“So, this is an addition to complement what is on ground and we will make sure the existing structure delivers what it is meant to achieve. While the NDDC is doing what it should do according to its Act, the Host Communities Fund will drive massive development that will be driven by the communities.

“We know what the host communities go through, there are villages that are just 200 metres away from a flow station that don’t have drinking water, no hospitals, the schools are not operating and yet there are massive provisions that we have made as an industry to make this work but this won’t happen. Going forward, these communities will decide what they want and it will be done because the funds are available.”

The insight provided by Mele Kyari captures succinctly the neglect of oil producing communities particularly in the Niger Delta and underpins his determination to turn the page with the inauguration of the PIA. For decades, this neglect has led to environmental degradation, lack of basic amenities and social unrest. Government cannot be totally blamed for doing nothing to ameliorate the problems of the oil producing communities. Critical interventions to cure this systemic problem has recorded minimal progress at odds with billions of dollars that has poured into their operations by the federal government and players within the oil and gas ecosystem.

Even interventionist agencies such as Niger Delta Development Commission (NNDC) continues to be mired in lack of transparency and accountability. Instead of fulfilling its core mandate, over the years, the commission has turned out to be a cesspool of corruption, to enrich a few persons. At inception, NNDC was saddled with the mandate which included the formulation of policies and guidelines for the development of the Niger Delta region, conception, planning and implementation, in accordance with set rules and regulations, of projects and programmes for sustainable development in the areas of transportation (roads, jetties and waterways), health, employment, industrialization, agriculture and fisheries, housing and urban development, water supply, electricity and telecommunications. The commission was also saddled with the responsibility to survey the Niger Delta and come up with measures that will promote its physical and socio-economic development, prepare masterplans and schemes designed to promote the physical development of the region.

The achievement of these lofty objectives has remained a pipedream. As at 2022, a study and the forensic report, commissioned by the Social Action in conjunction with MacArthur Foundation on the activities of the commission spanning 20 years revealed that 12,000 contracts were abandoned. Among other underhand dealings, the study found that personnel of the commission diverted the larger chunk of payments made to contractors who as a result abandoned the projects. The report also discovered that the region lost over N15 trillion or $40 billion to 13,377 contracts awarded and 12,000 abandoned.

After NNDC gulped trillions with modest impact, the consensus of opinion is that everything should be done to ensure that KEFFESO Host Communities Development Trust (HCDT) does not go the way of the commission. The deepening of NNPCL’s activities in this sphere underscores its belief in the importance of stakeholder collaboration in driving socio-economic growth within oil producing communities. In furtherance of this objective, NNPC is leaving no stone unturned; Mele Kyari is resolute in directing PIA funds towards key development projects in education, healthcare and infrastructure. Attempts in the past to ensure that oil companies provided for the host communities were impaired because it was not carried out in the right manner in the name of Corporate Social Responsibility (CSR) projects.

As the team leader in NNPCL, he has left no one in doubt about the sustenance of robust strategic engagements by the company. According to him, “Our mission is clear. We are committed to fostering lasting peace, creating economic opportunities and transforming the Niger Delta into a model of unity and progress. NNPCL stands with the Niger Delta as it builds a prosperous future that is driven by mutual respect and collaboration.”

After initial delays in getting the Trust to take-off, NNPC and other critical stakeholders have put in place, processes to ensure that oil host communities enjoy projects covering infrastructure, social, economic and human capital investments that will lead to sustainable development of the people and the communities. Recently, in Rivers state, HCDT in conjunction with joint venture operators, Green Energy International Ltd. (GEIL) and Lekoil Oil Joint Venture kicked off several projects in the first phase of the implementation of the five year development plan in three of their host communities namely Ugama Ekede, Ayama Ekede, Asukama and Asukoyet in Ikuru Town of Andoni Local Government Area of the state. The projects include 1Km access road into Ugama Ekede, scholarship for students in primary, secondary and tertiary schools, bursary for university students in Ugama Ekede, a town hall, a box culvert in Asuk-ama and a road project in Asukoyet.

NNPCL under Kyari strongly believes that the institutionalization of the community development trust initiative and constant stakeholder engagements will engender the much needed governance, transparency and accountability in community development efforts. NNPCL has already stamped its leadership footprint on these initiatives and for the foreseeable future, will continue to provide remarkable guidance which it hopes will usher in a new era of lasting peace and economic prosperity to the oil producing communities in the Niger Delta.

•Sotonye Princewill contributed this comment from Port Harcourt, Rivers State.