Sacrifice to oil firms, costs and burdens of host communities

Sunny Nwachukwu (Loyal Sigmite), PhD, a pure and applied chemist with an MBA in management, is an Onitsha based industrialist, a fellow of ICCON, and vice president, finance, Onitsha Chamber of Commerce. He can be reached on  +234 803 318 2105 (text only) or schubltd@yahoo.com

The oil-rich Niger Delta region is indeed a place deserving of empathy and compassion. It is a place where uncontrollable deep regrets thrive ceaselessly amongst the indigenes because, their God-given oil and gas resources, proudly used in some other economies that flaunt their stupendous oil wealth, characterised by their profiling as ‘oil-rich’ countries, have turned out, in their case, to be a social misfit and an economic curse against them. These host communities that are naturally endowed with great hydrocarbon resources, yielding the petrodollar the oil producing countries, including Nigeria, exploit for robust economic well-being and growth, are visibly neglected, abandoned and left even in a worse situation than they were, ab initio. The case of the Niger Delta region is very pathetic, which regrettably seems more like a curse than the uncountable blessings that the region should be enjoying as host communities for hydrocarbon business operations on their land.

The agonising and deplorable state of hopeless disrepair this entire region, the very goose that lays the golden eggs for Nigeria’s economy, suffers is alarming. It should be vigorously and violently expressed by raising a bitter “Save Our Souls” outcry against the state of total environmental  degradation and devastation that has resulted from the reckless management by oil companies of the drilling and exploration activities in the area. This devastation of the natural habitat, always recorded by observers, who sincerely sympathise with the host communities over their pains and woes over oil spillages they constantly experience, are almost irredeemably, very expensive and costly to clean up.

Their farmlands and waters are often completely destroyed and polluted by oil spillage, which results in near extinction of aquatic life (plants and fishes/flora and fauna) in the entire region. This further renders the citizens impoverished, as they are thrown out of their skilled heritage, and ancient traditional vocations, leaving the able bodied young men and women jobless, living in deplorable conditions, without basic social amenities like potable water, good roads, adequately equipped primary schools for their children, and health centres.

Unfortunately, and very sadly, the companies involved and the government agencies are not helping matters. They seem to care less about the residents’ well-being and welfare, and do not in any way show signs of living up to their expected corporate social responsibilities, nor the derivation fund to be utilised therein. Yet, the region in question is where this treasure called the “black gold” is tapped from. But they are denied the benefits, which ought to pave the way for creation of an enabling environment for the seamless operations of these oil producing companies in such communities.

The Nigerian Extractive Industries Transparency Initiative (NEITI) is very much aware of the Derivation Fund Act in Section 162, sub-section 2 of the Nigerian Constitution (which is assumed that it is also taken up as an oversight function), that the fund’s exclusive usage on host communities as “compensation for loss of fishing rights and productive farmlands as a result of oil and gas exploration and production activities,” would make desired impacts on the social lives of the residents.

The major issue, though, is that NEITI, after capturing the funds in their Reports, needs to follow up with the actual implementation and monitoring of the claimed projects with such funds, to make sure that what is captured in its Report is physically utilised, delivered as stipulated in the projects’ terms of reference, and that it is in existence in those communities. This is because, an example being cited with the findings by a prominent Nigerian news daily, revealed that the only project executed by the said oil company in Onne was only a community hall constructed about three years back (which seems to be at variance with the huge sums of money regularly captured in the Nigeria Oil and Gas Industry Audit Reports), even when other oil companies operating in the same area had nothing to show for it, as a noticeable and deliverable project.

The same reasons are further backed up by the recent Petroleum Industry Act, PIA of 2021 with provision for three percent equity allocation to host communities called Host Communities Development Fund, (HCDF); deemed as catalyst for development of the affected host communities, although its percentage is still being criticised by many stakeholders in the country (especially in the National Assembly) as paltry and unsatisfactory.

The wisdom derived from this very Act, as provided in Section 239, that “a Trust should manage and supervise the administration of the annual contribution of the settler as contemplated by the Act and any other sources of funding,” is surely going to be a low hanging fruit, as also suggested by the director, Emerald Energy Institute, University of Port Harcourt, Chijioke Nwaozuzu, a professor of petroleum economics. He described the management of the fund as most critical, advising that it should be administered equitably and judiciously, considering that it is meant for provision of basic amenities, and went further to advocate the use of project managers in executing community projects under the fund, by saying inter alia that, “They know how to identify where the needs are, how to do their project costing and how to schedule projects and deliver them on time. If the people are involved and the youth become part of the labour force for the project, it will go a long way to engage the youth and tackle a lot of social vices.”

The above suggested templates and ideas going forward, can improve effective project delivery in the host communities, and adequately channel proper usage of the provided funds, claimed to have been spent for community projects in the region, through proper monitoring.