NUPRC and Host Communities’ fund

The Federal Government must caution the Nigerian Upstream Regulatory Commission, NUPRC, over its regulatory over-reach in tampering with the three per cent set aside in the running cost of oil companies for the development of host communities.

During the long-drawn legislative struggles that culminated in the enactment of the Petroleum Industry Act, PIA, in 2021, Niger Delta activists and stakeholders had demanded at least 10 per cent from the operating costs of oil producing companies for the development of the host communities.

Eventually, only a miserly three per cent was approved in the Act signed into law by former president, Muhammadu Buhari, leaving the stakeholders grumbling.

Last month, the NUPRC wrote upstream operators, indicating its intention to participate in all activities such as Board of Trustee, BOT, and management committee nominations, and other activities that have little to do with core regulation.

More annoying to the host communities is the NUPRC and oil companies’ demand that the Host Community Development Trusts, HCDTs, should hire lawyers and chartered accountants of at least 10 years experience from the oil companies’ three per cent remittances.

This is a job that the oil companies are better suited to do and fund to ensure a proper check on the ways the funds are being spent by the HCDTs. If NUPRC persists in putting this unconscionable regulation in place, it will further shrink the already meagre fund, and the PIA will end up making very negligible impact.

Section 2 (Sub-section 72) of the PIA already heaped responsibility on the shoulders of the host communities for any act of vandalism of oil infrastructure. Should such happen, they are to pay for the cost of repairs from the three per cent. This job is tailor-made for the Police and security agencies, but the host communities are expected to dip their hands into a fund meant for development to do it.

We abhor the inherent hostility of both the legislative and executive branches of the Federal Government towards efforts to get the oil companies to give back to the communities from which they make their billions of dollars every year.

NUPRC is a regulator. It should restrict its activities to the dictates of the law setting it up. It has no role in implementation of the three per cent aspect of the PIA. It should concern itself with the need to see that funds set aside for the development of the host communities are spent according to the law.

The oil companies should hire and pay lawyers, auditors and accountants they need for the oversight of the expenditures of their remittances for the development of the host communities, while the law enforcement agencies must do their job to maintain law and order.