HOSTCOM, Ijaw Committee,

By Emma Amaize, Asaba

Host Communities of Nigeria Producing Oil and Gas, HostCom, has asked the National Assembly to explain where the law-making organ got its description of Host Communities, which federal lawmakers implanted in the Petroleum Industry Bill, PIB.

National President of HostCOM High- Chief Benjamin Style Tamaranebi, raised the poser in a letter to the Senate President, Senator Ahmad Lawan.

Before and after the passage of the PIB by the National Assembly, there have been heated controversy over the classification of communities where pipelines passed through as host communities.

Tamaranebi in the letter said: “HostCom demands that NASS show us the authority from where they derived the definition of Host Communities and criteria of pipeline community to be ‘host community’ without range or acreage.

“The United Nations Framework Convention for Climate Change – Clean Development Mechanism, UNFCCC- CDM Projects as defined by European Union, EU Energy Security has clearly defined the Host Communities, therefore, in the interest of peace, unity, and love of one Nigeria the NASS should revisit the PIB for efficient amendment

“The PIB did not prescribe a clear definition of host communities. On good authority, we dare say that for shallow and onshore communities, the UN-Energy Security defines host communities ‘as communities that are 50-km radius within a project site.’ Therefore, the bill be amended to read accordingly,” he said.

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Furthermore, the HostCom president, who spotted more potholes in the PIB, observed: “Chapter 1, section 1 was incomplete as it fails to include ‘in trust for and on behalf of the Producing Host Communities of Nigeria’ as was in the Mining Lease Act.”

“The title in Chapter Three, section 234 ‘Host Communities Development’ should include Sustainable Development, and the word settlor in Chapter 3, section 234 (3) was retained as against the interest of the Host Communities. Therefore, we demand that the bill be revisited, revised, and amended as submitted.

“The objective of the draft bill should be in section to foster sustainable development within the host communities. It would be improper for the operating companies or marginal field owners to be referred to as settlors. Therefore, the draft bill needs to be revisited and amended to read operating companies or International companies,” he said.

“Section 234 (d) deals with the insertion of new clauses without the knowledge of the host communities and further deals with the creation of a framework to support the development of the host communities.”

“ For the purposes of transparency, industry sustainable development and favorable working condition, the draft PIB section 234, subsection (2) should be revisited and amended to read as: ‘There shall be established a framework known and called Host Communities (HostCom) Oil Producing Areas Development Commission, OPADEC) with national headquarters located within any of the major producing oil and gas states shall ensure that each respective oil and gas producing states shall replicate its own OPADEC Commission that would be known as Host Communities States Oil Producing Areas Development Commission (SOPADEC), as specified in section 234 subsection (1) (d) in pursuant to this Act and not jettisoned.

“Section 236 deals with a time frame for the incorporation of Host Communities sustainable development trust fund: For existing operations, the twelve months period is rather too long. It should be reduced to six (6) months since the operating company or gas refining/processor is already in full operation in the area.

“For existing oil mining leases, the Sustainable Development Trust shall be incorporated within six (6) months of commencement of this Act. For existing designated Midstream and Downstream Assets, the period of incorporation should also be reduced to six (6) months; therefore, the passed draft PIB be revisited and amended to read so.

“Section 237 deals with the transfer of operating company/s, interest and obligations subject to host community’s sustainable development trust obligation.

“Subject to the provisions of this Act, where the whole or part of an interest in a license or lease governed by this Act is assigned, novated or otherwise transferred to another party, the legal and equitable interest, rights and obligations of the transferor in relation to any associated host community sustainable development plan and host community sustainable development trust, shall be deemed to attach to the property to be transferred to the transferee, the legal and equitable interests, rights and obligations of the transferor shall be deemed to become the interests, rights, and obligations of the transferee.

“Where part of a license or lease governed by this Act is surrendered pursuant to the provisions of this Act, the holder or holder nominee will not continue to discharge its surviving obligations, to the host communities, but surrender or forfeit the lease acquisition to be renegotiated and the Host Communities given the Right to First Refusal notwithstanding that the area that is surrendered may be granted to a new lessee or licensee.

“Where any license or lease governed by this Act is revoked, terminated or expired, the holder will not continue to discharge its surviving obligations but surrender or forfeit the lease acquisition agreement and or any memorandum of understanding to the Host Communities who shall be given the Right to First Refusal notwithstanding that the area revoked, terminated or expired maybe granted to a new lessee or licensee.

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“Section 238 deals with the failure to incorporate Host Communities trust fund, so a mere suspension of the license without further penalty for none incorporation of the Trust is not enough. The failure to incorporate a trust fund shall be a ground for suspension of the license by the Commission and a financial penalty invoked after a three months warning, a penalty that will include, a ground for total cancellation of the license or the payment of an amount equivalent to at least 20% of the previous OPEX and CAPEX or 100% of the royalty the company was paying prior to the date when the infringement commenced, depending on whether the company is in Petroleum Exploration and Production or a midstream or downstream company, therefore, the draft PIB be revisited and amended to read so.

“Section 239 deals with managing the trust fund: the draft bill in subsection (1) be revisited and amended to read as: ‘The Constitution of the host communities Sustainable development trust shall allow the Host Communities Oil Producing Areas Oil & Gas Development Commission (OPADEC) as established to manage and supervise the administration of the annual contribution of the operating company contemplated under this chapter and any other sources of funding.’

“Section 239, subsection (2) be revisited and amended to read as: ‘The objectives of the host communities Sustainable development as shall be specified in the constitution set out in paragraphs (a) to (i) of subsection (3) of this section.

“Section 241 deals with matters on which the funds may be utilized: This section envisages a global host community and sub-host communities. For each area or license, there should be only one Board of Trustees to serve the community and no need for distribution of funds. The Board should be large enough to accommodate all sections.

“However, if they must be broken down into smaller communities, then, of course, the operating company should work out that with the Board of Trustees. The Board is not expected to carry out directives of the operating company as servants. There should be no master/slave/servant relationship,” he added.

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