The House of Representatives on Wednesday unveiled plans to investigate failure of Oil and Gas Producing Companies to release 3% of its annual operating expenditures to host communities and the refusal to incorporate host communities Development Trust Fund under the Petroleum Industry Act, 2021.

The resolution was passed sequel to the adoption of a motion sponsored by on. Hart Cyril Godwin, who frowned at flagrant breach of relevant provisions of the Petroleum Industry Act, 2021.

In his lead debate, Hon. Godwin who frowned at the development, observed that the legislative framework was enacted to provide legal governance, regulatory, and fiscal frameworks for the Nigerian Petroleum Industry and the development of Host Communities.

“The House notes that Section 235 subsection (1) of the PIA makes it mandatory for every licensee or lessee (settlor) whose area of operations is located in or appurtenant to any community to incorporate the Host Communities Development Trust Fund for the benefit of the host community.”

According to him, Section 236 also stipulates that Host Communities Trust Fund shall be incorporated within 12 months from the effective date for an existing oil mining lease.

“The House also notes that Section 240 subsection (2) of the Act provides that each settlor shall make an annual contribution to the applicable Host Communities Development Trust Fund of an amount equal to 5% of its actual annual operating expenditure of the preceding financial year in the upstream petroleum operations affecting the host communities for which the applicable Host Communities Development Trust Fund was established.

“The House is worried that some Oil Companies violate the provisions of Section 236 of the PIA by failing to incorporate the Host Communities Development Trust Fund in their areas of operation within the period stipulated in the Act, while others have bluntly refused to incorporate Host Communities Development Trust Fund as required by the law as at when due.

“The House is concerned that most Oil Companies failed to fund the Host Communities Development Trust as incorporated and have not been able to pay the 3% of the actual annual operating expenditures to the Host Communities Trust Fund in the areas of operation.

“The House is dismayed that failure to fund the Host Communities Development Trust Fund has hampered the development of the host communities where the Companies operate.

“The House is cognizant of the provision of Section 297 Subsection (1) of the PIA, which makes a breach of the Act punishable with the payment of administrative penalties per day, and for continuous breach and Section 238 makes failure to incorporate a Host Communities Development Trust, a ground for the revocation of a holder’s license or lease.”

To this end, the House mandated its Committee on Host Communities to investigate the failure of the Regulatory Agencies to act decisively, failure of the Oil Companies to release amounts equal to 3% of its annual operating expenditures to host communities and their refusal to incorporate Host Communities’ Development Trust Fund under the Petroleum Industry Act, 2021 and report within four weeks for further legislative action.

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