By Felix Ayanruoh

Over the past decades, Nigeria’s petroleum industry has been hurtling toward a crisis. There is forlorn of investments and hence scanty economic and social development in the country, the primary reason is the non-passage of the PIB. While calls by some questioning Section 118 of the PIB are necessary and crucial, but decisions of this multitude should not be personalized and used as a tool for political brinkmanship.

Section 118 proposes the establishment of the Petroleum Host Community Fund – requiring a detailed and transparent financial distribution system to ensure that host communities benefit directly from petroleum activities. It provides for direct financial transfer of 10% net profit – adjusted profit less Nigeria Hydrocarbon Tax (NHT) and Company Income Tax (CIT), derived from upstream petroleum operations in onshore areas and shallow waters areas to the communities and littoral states. Contributions made to the fund will be available as a credit against fiscal rent obligations being royalty, NHT and CIT although no order of offset is provided for.

This is not the time to relive the suffering of these communities but what should be done to help them recover from long sufferings. As rightly observed by Senator Ahmed Lawan, in a statement credited to the highly respected elder statesman, Chief Edwin Kiagbodo Clark, accountability of monetary allocations made to this region should be a reminder to all of us that legislative oversight should be put in place to correct these anomalies. The social and economic development of these communities is very much an economic issue to the nation, as are the legislative mechanisms to improve same.

The issue of sustainable development of these areas is a Human Rights issue; hence the allocation of the 10% is a corporate responsibility issue and not that of derivation. The principle of corporate responsibility for human rights is now a crucial part of international law. The preeminent solution to corporate responsibility is government regulation – binding effect.Government has often encouraged corporate social responsibility in order to manage an array of governance issues.

However, many governments have chosen to draw corporations into governance issues without actually mandating behavior. The government can also as in this case, provide a policy and institutional framework that stimulates companies to raise their performance beyond minimum legal standard. Government can also use its insignia to exhort and encourage corporate responsibility.

The scope and breadth of human rights is wide and encompassing. The United Nations Universal Declaration of Human Rights provided for better living conditions for these communities. The PHCF is a social investment that is needed to foster economic development, thriving business venture and lasting benefits to all parties involved.

The National Assembly should heed to the calls of Pa Clark and other stakeholders in the region to hold a hearing on the issue of allocated funds. Additionally, legislative drafting procedure should be used to create a transparent, fair and judicious way of managing the fund.