The new Petroleum Industry Bill (PIB) is downing the influence of the host communities in the oil-rich Niger Delta as it seeks to give enormous powers to oil and gas firms operating in the country in the setting up of the proposed host communities development trust.

 In the bill currently before the NationalAssembly, the oil and gas firms are to appoint key members of the trust,determine its membership and criteria for their appointment. They are.also tobe empowered to suspend or remove members of the Board of Trustees to be set upfor the host communities development trust, determine procedures for theirmeetings and provide regulations guiding their finances, among others.

According to the bill, the objectives of the host communities’ development trust included to finance and execute projects for the benefit and sustainable development of the host communities; undertake infrastructural development of the host communities within the scope of funds available to the Board of Trustees for such purposes, and facilitate economic empowerment opportunities in the host communities among others.

The PIB also requires that a fund called the ‘host community development trust fund’, be set up, where the settler, also called the oil and gas firm, would contribute annually, an amount equal to 2.5 percent of its actual operating expenditure in the immediately preceding calendar year in respect of all petroleum operations affecting the host communities for which the applicable host community development trust was established.

The new PIB is seekingto empower oil and gas firms, also called ‘settlers’ in the bill, toincorporate the trust for the benefit of the host communities for which thesettler is responsible and also appoint and authorise a body trustees, to becalled the ‘Board of Trustees’.

The Board of Trustees,according to the PIB, shall apply to be registered by the Corporate AffairsCommission as a corporate body under the Companies and Allied Matters Act,while its constitution shall contain provisions requiring the settler todetermine the Board’s membership and the criteria for their appointment.

However, it added thatthe membership of the Board of Trustees of the host communities’ developmenttrust shall be subject to the approval of the Nigerian Upstream RegulatoryCommission or the Nigerian Midstream and Downstream Petroleum RegulatoryAuthority, as the case may be.
“The settler shall, in the determination of membership of the Board ofTrustees, include persons of high integrity and professional standing, who maynot necessarily come from any of the host communities,” the bill said.

The bill further stipulates that the settler shall determine the selection process, the procedure for a meeting, financial regulations and administrative procedures of the Board of Trustees; the remuneration, discipline, qualification, disqualification, suspension, and removal of members of the Board of Trustees; and other matters other than those relating to the operation and activities of the Board of Trustees.

However, it noted thatthe Commission or the Authority, as the case may be, shall make regulations onthe administration, guide and safeguard the utilisation of the trust fund; andhave the oversight responsibility for ensuring that the projects proposed bythe board of trustees are implemented.

It said: “Each member ofthe Board of Trustees shall serve a term of four years in the first instanceand may be reappointed for another term of four years and no more. The Board ofTrustees shall have a secretary, who shall be appointed by the settler to keepthe books of the Board.”

Highlighting the dutiesand functions of the Board of Trustees, the PIB is also proposing that theBoard of Trustees shall be responsible for the general management of the hostcommunities’ development trust.


It stated that the Board of Trustees shall be responsible for: “determining the criteria, process, and proportion of the host communities’ development trust fund to be allotted to specific development programs; approving the projects for which the host communities development trust fund shall be utilised.

“Providing generaloversight of the projects for which the host communities development trust fundshall be utilised; approving the appointment of fund managers for purposes ofmanaging the reserve fund; set up the management committee of the hostcommunities development trust and appoint its members; and determining theallocation of funds to host communities based on the matrix provided by thesettler.”