Breaking News
Translate

Oil companies to incorporate host community development trust – PIB

Kindly Share This Story:

Oil companies to incorporate host community development trust - PIB

Oil companies operating in Nigeria are expected to incorporate a host community trust for social and economic benefit from petroleum operations in the host communities.

From excerpts in the new Petroleum Industry Bill (PIB) obtained by the News Agency of Nigeria ( NAN) in Abuja, the aim of the trust is to foster sustainable prosperity within the host community.

It will be recalled that milliants over the years had disrupted the exploration of oil in  Nigeria over the inability of oil companies to develop the region.

Experts are of the opinion that a good legislation would help to ensure that both the oil companies and host communities work together to achieve required development in the oil host communities.

The new PIB said ” Settlors ( oil companies) shall incorporate a trust for the benefit of host communities for which the settlor is responsible.

” Where there is collective of settlors operating under a joint operation agreement with respect to upstream Petroleum operations, the operator appointed under the agreement shall be responsible for compliance with the chater on behalf of the settlors.

” For settlors opearting in shallow water and deep offshore, the littoral communities and any other community determined by the settlor shall be host communities for the purposes of this act.”

It added that the settlor would appoint and authorise a board of trustee that would be registered by the Corporate Affairs Commission as a corporate body under the Companies and Allied Commission Act.

It noted that the name of the corporate body to be registered would be “Host Community Development Trust”

The new bill noted that settlor would determine the members of the board of trustee and criteria for their appointment.

” The membership of the board of Trustees of the host communities development trust shall be subject to the approval of the commission or the regualtory body, ‘the Authority’.

READ ALSO: Nigeria’s oil & gas earnings climb to N24trn in 5yrs

“The settlor shall in determination of membership of the board of Trustees, include persons of high integrity and professional standing who may not neccessarily come from any of the host communities,” it said.

It added that the members of the board would serve a term of four years in first instance, and may be reappointed for another term of four years and no more.

It said that the board would also have as Secretary one that would be appointed by the settlor to keep the books of the board.

The new PIB revealed that the board of trustee would be responsible for the management of the host communities development trust, determine the criteria, process and proportion of host communities development trust fund to be alloted to specific development programmes.

It added that the board would approve projects for which the host communities development trust fund would be utilised adding that it would provide oversight of the projects for which the funds would be utilised.

“It will approve the appointment of fund managers for purposes of managing the reserve fund, and set up the management committee of the host communities development trust and appoint its members,” it said

It noted that allocation of funds to host communities would be based on the matrix provided by the oil companies.

” The board of trustee shall in each year, and in pursuant of section 240 of this bill allocate from the host communities development trust fund , a sum equivalent to 75 per cent of the capital fund.

” The board shall make disbursements for projects in each of the host community as may be determined by the management committee in furtherance of the objectives set out in section 234 of this bill.

“20 per cent to the reserve fund, which sums shall be invested for the utilisation of host community development trust whenever there is a cessation in the contribution payable by the settlor,” it said

Vanguard News Nigeria

 

Kindly Share This Story:
All rights reserved. This material and any other digital content on this platform may not be reproduced, published, broadcast, written or distributed in full or in part, without written permission from VANGUARD NEWS.

Disclaimer

Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.
Do NOT follow this link or you will be banned from the site!