- 75 HCDTs, 19 fund managers approved
From Uche Usim, Abuja
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and host communities of the Niger Delta region are currently brainstorming to end pipeline vandalism, oil theft, insecurity and other challenges retarding the momentum to boost oil and gas production in the country.
To realise the lofty ambition, the NUPRC organised a HostCom sensitisation workshop on the implementation of the Host communities development Trusts (HCDTs) on Tuesday, where the Commission Chief Executive, Mr Gbenga Komolafe noted that the Petroleum Industry Act (PIA) domesticated the protection of the nation’s oil and gas critical infrastructure to the Host Communities as a way of addressing sabotage and third-party interference on them.
He noted that Nigeria has the technical allowable capacity to produce about 2.5 million barrels of oil per day but the aforementioned challenges have shrunk the current production to around 1.5 million barrels of oil and condensate per day.
He added that the peace efforts have led the Commission to successfully approved 75 Host Community Development Trusts out of which 41 have been fully incorporated by the Corporate Affairs Commission (CAC).
More so, 19 Fund Managers have been pre-qualified and commenced the process of establishing a baseline of ongoing community development projects, in preparation for ensuring the migration of such into the HCDTs.
In addition, the Commission has in partnership with an OEM developed a digital automated platform for reporting and monitoring the Host Community Development Trust (HCDT) for transparent administration of the HostCom provisions of the PIA.
The portal, he noted, has been designed to meet specific requirements of HCDT as enshrined in the PIA and will aid all stakeholders (including the Settlors, Board of Trustees, Management Committees, Advisory Committees, Fund Managers etc) to fulfil their obligations to host communities and promote accountability and transparency in the management of the HCDT programme as well as enable quick feedback from the stakeholders and the public for the Commission to carry out its regulatory oversight effectively.
He noted that Section 240 (2) of the PIA stipulates that each settlor, where applicable through the operator, shall make an annual contribution to the applicable host communities development trust fund of an amount equal to 3% of its actual annual operating expenses of the preceding financial year in the upstream petroleum operations affecting the host communities for which the applicable host community’s development trust fund was established.
“In addition, Section 247 of the Act requires the Board of Trustees to set up a Management Committee which shall be responsible for the general administration of the Host Communities Development Trust Fund. The Management Committee in turn is required to set up an Advisory Committee, which advises on activities as well as monitors and reports the progress of projects being executed in the community to the Management Committee. It will interest us to note that the Act requires that the host communities should be represented in the Board of Trustees, Management Committee and Advisory Committee.
“Section 244 of the Act also provides an allocation formula upon which the Board of Trustees (BoT) shall on an annual basis allocate sums of money from the HCDT trust fund, as follows: 75% to the capital fund to be disbursed for projects in each of the host communities; 20% to the reserve fund to be invested for the utilization of the host communities development trust whenever there is a cessation in the contribution payable by the settlor; and an amount not exceeding 5% to be utilised solely for the administrative cost of running the trust and special projects.