Policy Alert Urges HostCom To Challenge Controversial PIA Provisions In Court

oil pollution in the Niger delta

By Gift Eguavoen

Host communities have been called upon to test some controversial provisions of the recently enacted Petroleum Industry Act (PIA) in the court of law.

This call was made by Policy Alert, a Civil Society Organisation working on economic and ecological justice, while faulting the President’s assent to the Petroleum Industry Act 2021 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,” adding that “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

Pointing out an example, the statement emailed to Extractive 360, noted the controversial provision for a direct payment of 30percent profit oil and profit gas to the Frontier Exploration Fund potentially shortchanges the oil producing states and local governments of some of its 13percent 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 3percent 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 provisions.

“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,” the statement read.

According to Policy Alert, the Act falls flat on its face as a tool for improved benefit sharing to host communities, stressing that 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 communities.

“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,” the statement said.

The organization further added that it is unfortunate that the 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, at a time when fossil fuel investments are being deprioritized elsewhere as a result of the global energy transition.


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