By Clara Nwachukwu
IT is not uncommon to hear about disputes between host communities and oil companies operating in the region. However, while some settle such disputes through dialogue, others are not so successful and often result in conflicts.

In the past, such conflicts resulted into youths’ restiveness and militancy, often characterised by violence and other criminality including kidnappings, pipelines vandalism and ultimately production losses, revenue losses and loss of lives and property.

Under such developments, while the oil companies blame the communities for lack of tolerance and peaceful co-existence, the communities lash back accusing the companies of lack of sensitivity and corporate irresponsibility in their modes of operations.

Communities often demand of companies to up their games in their corporate social responsibility, CSR programmes and give back more to the communities from where they are reaping so much profit. Many of the CSR programmes are captured in Memoranda of Understanding, MoUs, that stipulates what is expected of each party/parties and dictate the terms of their relationships.

Commitment to the terms of agreement result in peaceful co-existence, while more often than not, conflicts arise due to the failure of one or all of the parties to keep their own part of the deal.

Accordingly, MoUs are becoming very dynamic and modeled after current realities, or so one would expect. But judging from level of disagreements, this may not be so.

Public scrutiny

Whereas some companies are doing relatively well with their host communities and are willingly to subject their MoUs to public scrutiny, others prefer to hide under the confidentiality clause.

In this regard, Energy Limited in joint venture with the Oando Group, enters into agreements with Emu-Ebendo community, in Ndokwa West Local Government Area of Delta State.

Energia is the operator of the Obodugwa/Obodeti Marginal Field, better known as Oil Mining Lease, OML 56.

In the 29-page document, the company explained that the MoU “is with a view to creating understanding, cooperation and consolidating the existing cordial and mutually beneficial relationship between Ebendo and Energia.”

The objectives of the agreements include:

* To encourage responsible partnership between the operator and the host community.

* To foster greater development agencies/stakeholder interface with a view to eliminating duplication of resources and projects.

* To institute transparency and accountability in enforcing agreements among parties.

* To build and grow capacity of the rural community with resources provided by the company.

*  To enhance security of life and property and obedience to the Rule of Law.

* Community empowerment and sustainable development, and a host of many others.

The agreements are intended to transfer the responsibility and accountability for decision-making, planning and execution of development projects/programmes to the Ebendo Community Development Association.

“It is expected that if properly implemented, this process will assist Ebendo and its constituent communities to develop the capacity to own and manage their own development programmes,” the MoU stated, adding that over time, community members will gain the skills and competency to drive self-reliant development.”

As part of the agreements, Energia has already set up a Trust Fund to facilitate development programmes in the community. The interesting thing about the MoU is the fact that it is progressive.

According to the company, as production increases, more funds will be made available in the Trust Fund that will enable both the Energia/Oando JV and the community to undertake such projects in Obodugwa, such as road construction projects (ring roads); scholarship Programme; and housing projects. About 0.75 percent of the gross production is ceded to Obodugwa community.

Others are the mega town hall projsects; rural electrification; empowerment programmes, and education grant system.

Huge cash outlay

Despite the huge cash outlay, the JV partners, through the Trust Fund, have also provided other capacity building measures for Obodugwa community. These are the employment of indigenes, which currently stands at 21 percent of total company employees, starting a Youth/Women Empowerment orientation programme in October 2011 in collaboration with a non-governmental organization, NGO (MIND Foundation), and initiating separate MOUs with Obodugwa as impacted community.

Furthermore, the partners have incorporated a Trust Deed, and established a separate Trust board to manage revenues accruing to Obodugwa community for sustainable community development programmes.

Energia is currently producing an average of 1750 bopd from one well – Obodugwa well-1, and operates a 10,000 bpd Flowstation at Obodugwa, and has been producing since December 2009. Crude produced are transported to Umusadege through the 8.5 km x 6” export line.

Although Oando holds the majority equity in the JV with 55 percent, while Energia as the operator holds the balance of 45 percent.