The Revenue Mobilisation Allocation and Fiscal Commission has directed the Nigerian Upstream Petroleum Regulatory Commission to dissolve a disputed Host Community Development Trust within 48 hours over concerns about its constitution and representation of affected oil-producing communities.
The directive was contained in a statement issued by the commission on Friday and signed by the Head of Information and Public Relations Unit, Maryam Umar-Yusuf, following an investigative hearing into the operations of Sterling Oil Exploration and Energy Production Company and the implementation of the Host Community Development Trust provisions of the Petroleum Industry Act.
According to the statement, the ultimatum was issued during the hearing of the commission’s Investment Monitoring Committee after concerns were raised over the establishment of the trust for affected host communities.
The Chairman of the RMAFC, Mohammed Shehu, reaffirmed the commission’s commitment to protecting the interests of oil-producing host communities, saying it would continue to strengthen the oversight of operators and institutions responsible for ensuring that communities receive benefits due to them under the law.
Shehu, who spoke at the investigative hearing held at the commission’s headquarters on Thursday, described the exercise as “an important national service and a critical national responsibility.”
He commended the committee for its diligence and urged members to remain resolute, stressing that the commission’s constitutional mandate required “firm oversight, transparency and accountability in the management of national revenue assets.”
According to the statement, he expressed confidence that the investigation would strengthen trust in the petroleum sector and ensure that host communities received the full benefits guaranteed under the Petroleum Industry Act.
Leading the hearing, the Chairman of the Investment Monitoring Committee and Federal Commissioner representing Anambra State, Ekene Enefe, conducted an extensive investigation into SEEPCO’s compliance with the statutory provisions governing Host Community Development Trusts.
He maintained that host communities should no longer bear the environmental and social consequences of oil exploration without corresponding development, adding that the commission would ensure operators and regulatory institutions discharged their statutory obligations.
The committee also criticised SEEPCO for repeatedly failing to honour invitations to appear before it despite previous engagements.
Addressing officials of the NUPRC during the hearing, Enefe said the commission would hold every institution in the petroleum value chain accountable for the effective discharge of its responsibilities.
He consequently ordered the regulator to address concerns surrounding the trust established for the affected communities, declaring, “We are going to give you 48 hours to dissolve that host community development trust.”
The committee chairman also faulted SEEPCO over what he described as its failure to meet obligations owed to host communities.
“We are going to write them and we are going to give them an ultimatum to pay up what is owed the host communities,” Enefe said.
He added that the committee would conclude its investigation and submit its findings to the appropriate authorities, insisting that the commission would carry out its constitutional oversight responsibilities “without fear or favour.”
Earlier, the NUPRC delegation, led by the Director of Host Communities, Ufondu Ejiro, defended the implementation of the Host Community Development Trust established under the Petroleum Industry Act.
According to the statement, Ejiro told the committee that the trust had been duly incorporated, funded and structured in accordance with the law.
She said the commission had processed documents relating to community consultations, governance structures, funding arrangements and Community Development Plans, while also presenting records of statutory contributions made into the trust.
The NUPRC maintained that it discharged its responsibilities within the framework of the Petroleum Industry Act and the Host Community Development Regulations.
However, counsel representing the affected host communities, Peter Chukwudi, rejected the regulator’s submissions, insisting that several persons recognised as community representatives were not accepted by the communities.
He also argued that adequate consultations were not conducted before the Host Community Development Trust was constituted and questioned the level of development recorded in the affected communities despite years of oil production.
Chukwudi urged the committee to ensure that the grievances raised by the communities were thoroughly investigated.
Also speaking, the Anambra State Commissioner for Petroleum and Mineral Resources, Professor Charles Ofoegbu, called for stronger collaboration between the NUPRC and the state government in verifying community representation and monitoring compliance with statutory obligations.
He advocated greater transparency in calculating statutory contributions, operational expenditure and the execution of community development projects, stressing that the state government had a responsibility to protect the interests of its oil-producing communities.
Other members of the commission also raised concerns during the hearing.
The Federal Commissioner representing Rivers State, Desmond Akawor, said there appeared to be a disconnect between the regulator and affected state governments, adding that closer collaboration and direct engagement with operators were necessary for effective oversight.
He also criticised SEEPCO for failing to attend the hearing and urged all parties to cooperate with the investigation.
The Federal Commissioner representing Kogi State, Abdulazeez Idris-King, questioned the effectiveness of the NUPRC’s verification process, saying reliance solely on documents submitted by operators might not sufficiently establish that genuine consultations had taken place with host communities.
Similarly, the Federal Commissioner representing Jigawa State, Hauwa Umar-Aliyu, stressed the need for regulators to uphold professionalism and impartiality, saying public confidence would only be strengthened if the interests of host communities received equal attention alongside those of operators.
According to the statement, the hearing forms part of the commission’s ongoing oversight initiative aimed at promoting transparency, strengthening accountability and ensuring that host communities derive the benefits guaranteed under the Petroleum Industry Act.
The PUNCH reports that The HCDT was created under the Petroleum Industry Act 2021 as a new framework for ensuring that communities where oil and gas operations take place receive direct and sustainable benefits from petroleum activities.
The PIA requires petroleum operators, known as settlors, to establish trusts for their host communities and contribute 3 per cent of their actual annual operating expenditure in the preceding year to the funds. The trusts are intended to finance community development projects and promote peaceful relations between operators and host communities.
The NUPRC is responsible for regulating the trusts, including their incorporation, funding, governance and implementation of development projects. The provision was introduced against the background of decades of grievances in oil-producing communities over environmental impacts, inadequate development and disputes with petroleum companies
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