Policy Alert Advises Oil Communities To Challenge PIA In Court 

PIA: Oil communities hail Buhari over control of N300bn yearly – The Sun  Nigeria

Yemisi Izuora

Policy Alert, a Civil Society Organisation working on

economic and ecological justice, has faulted the President Muhammadu Buhari’s assent to the Petroleum Industry Act 2021, urging communities to test the

provisions of the Act before the courts.

Buhari had on Monday, August 16, 2021 signed the

erstwhile Petroleum Industry Bill (PIB) into law amidst protests from

community groups and many other stakeholders that the Bill was

incompatible with the rights and interests of the host communities.

In a statement signed by its Communications and Stakeholder Engagement

Officer, Mrs. Nneka Luke-Ndumere, the organisation described the

presidential assent as “grossly insensitive and problematic.”

“It is sad that the bill has been assented to in the most controversial

manner despite its many obvious flaws and its rejection by many

stakeholders” the statement read.

“For example, the controversial provision for a direct payment of 30

percent profit oil and profit gas to the Frontier Exploration Fund

potentially shortchanges the oil producing states and local governments

of some of its thirteen percent derivation as it bypasses the

requirement in section 162 (2) of the 1999 Constitution (as amended)

which provides that all revenues be channeled through the federation

account. This is most unfair, viewed against the ceding of only three

percent of previous years’ operating expenses to the Host Communities

Development Trust Fund and the punitive provision to charge costs of any

damage to facilities against the community’s Fund, among other obnoxious


“That Mr. President has gone ahead to give assent to these vexing

provisions only reinforces the politics of exclusion and expropriation

that has for long characterized the relationship between the Nigerian

state and the oil producing communities. We are also concerned that the

host communities’ component of the legislation flies in the face of one

of its stated objectives to address tensions between host communities

and companies as it has all the ingredients for escalating rather than

abating such conflicts.

“At a time when fossil fuel investments are being deprioritized

elsewhere as a result of the global energy transition, it is unfortunate

that this Act failed to provide a bridge between the current era of

fossil fuel dependency and the low-carbon energy future that Nigeria

aspires to within the framework of government’s much vaunted commitments

under the Paris Agreement.”

The statement added: “Granted, the new legal framework introduces some

predictability and clarity to the governance and fiscal arrangements in

the oil and gas industry. We are also not oblivious to certain clauses

that respond to some of our earlier demands, such as those providing

that the Board of Trustees of the Host Communities Development Trust

will now be determined in consultation with the host communities, with

membership drawn from community members. But that is just as far as it

goes. As a tool for improved benefit sharing to host communities, the

Act falls flat on its face. It actually ridicules the exertions of the

host communities and advocacy groups that have clamoured over the years

for a law that yields some space for participation, direct

socio-economic benefits and environmental remediation for oil-rich


“The theatre of action will now have to move to the communities and the

courts of law. As implementation of the Act gets underway over the next

12 months, we urge host communities and civil society groups to begin to

seek interpretation of some of its more controversial provisions before

the courts.”

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