Oil communities insist on physical assessment by NEITI

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By Emmanuel Elebeke

Oil producing communities in six states of the country have called for physical allocations and statutory disbursement audit of the extractive industry from 2007 to 2011 by the Nigeria Extractive Industry Transparency Initiative (NEITI).  They said this would enable the auditors have firsthand knowledge of what is on ground in the communities.

In a press statement signed on behalf of the communities by Chief William Igere (Delta State), Pastor MaacPherson Kurobo (Bayelsa State), Chief Harry Opaks (Rivers State); Saviour James Okon (Akwa Ibom State), Princess Nomwen Uhunmwunagho (Edo State) and Comrade Samuel Ebiwanno (Ondo State), they  emphasised that  it is illegal and unconstitutional to pay 13 percent Derivation Fund to any state government account.

Oil Spill farm

Oil Spill farm

“This illegal and unconstitutional payment of 13 percent Derivation Fund through the state governments has left the actual oil and gas producing communities in abject poverty. The state governments which received this money illegally used the fund to develop their state capitals and non oil and gas producing communities, leaving the actual oil and gas producing communities in hunger and penury.

“In the light of the above, we therefore appeal to NEITI to interface with the oil and gas producing communities in their audit and investigation of the 13 percent Derivation Fund. We wish to affirm in very strong terms that any report or audit investigation without physical visit to the communities hosting oil facilities is unacceptable to the communities,” they posited.

The community leaders noted that the physical visit of NEITI to the communities would enable the organisation ascertain the level of environmental degradation, health hazards, pollution, poverty and hunger, heightened by massive unemployment among the youths of the oil and gas producing communities.

They also expressed appreciation to all institutions they wrote letters to on the 13 percent Derivation Fund disbursed through the federation  account to the producing states including Chairman, Revenue Mobilisation Allocation and Fiscal Commission, Engr. Elias Mbam, who confirmed that the 13 percent Derivation Fund belongs exclusively to the oil and gas producing communities and not the state governments.

The group equally commended President Goodluck Jonathan for directing the audit of all oil revenues including the 13 percent Derivation Fund disbursed through the Federation Account to ascertain the utilization of the fund and also NEITI for its preparedness to carry out the directive of the President on full audit and investigation of the 13 percent Derivation Fund early in January 2013.

“Above all, our gratitude and appreciation goes to our National Leader Chief. (Dr) E. K. Clark for setting the record straight in its massive press statement affirming the position of the Chairman Revenue Mobilization, Allocation, and Fiscal Commission that 13 percent Derivation Fund belongs exclusively to the oil and gas producing communities. They went further to advice the Federal Government to stop the payment of the Derivation Fund to any state government saying it was unconstitutional. He also advised that the Derivation Fund should be directly paid to the oil and gas producing communities through administrative committee” they added.

In their letter to the Executive Secretary NEITI, dated 19th November, 2012, the communities restated that the legal position is that the 13 percent Derivation Fund was not part of any consolidated revenue to any tier of government nor part of state/local government joint account as 13 percent Derivation Fund is the first charge on the Federation Account as provided in Section 162 (2) of 1999 constitution of the Federal Republic of Nigeria. “13 percent Derivation Fund was prior to any revenue formula. We insisted that 13 percent Derivation Fund exists before any revenue formula or revenue sharing by the Federation Allocation Committee (FAAC),” they said.

It would be recalled that NEITI had confirmed its readiness to facilitate the immediate commencement of the Physical Allocations and Statutory Disbursement Audit of the extractive industry from 2007 to 2011 in line with the decision of the Federal Executive Council (FEC) at its November 28, meeting.

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