NUPRC develops digital platform to monitor community development trust
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC develops digital platform to monitor community development trust) has developed an industry intelligent digital automated platform for reporting and monitoring the Host Community Development Trust (HCDT), for transparent administration of the Host Communities’ provisions of the Petroleum Industry Act (PIA) 2021.
The Commission developed the platform in partnership with an Original Equipment Manufacturer (OEM).
The portal has been designed to meet specific requirements of HCDT as enshrined in the PIA and will aid all stakeholders (including the Settlors, Board of Trustees, Management Committees, Advisory Committees, Fund Managers etc) to fulfil their obligations to host communities and promote accountability and transparency in the management of the HCDT programme. It is also to enable quick feedback from the stakeholders and the public for the Commission to carry out its regulatory oversight effectively.
The Commission Chief Executive (CCE), Engr. Gbenga Komolafe, who made the disclosures on Wednesday in Abuja at the Host Community sensitisation workshop on implementation of the Host Communities Development Trust, stated that so far, the Commission has successfully approved seventy-five (75) Host Community Development Trusts out of which forty-one (41) have been fully incorporated by the CAC. It has also pre-qualified nineteen (19) Fund Managers and commenced the process of establishing a baseline of ongoing community development projects, in preparation for their migration into the HCDTs.
The workshop was therefore to deliberate on the operation and funding of the platform to be hosted by the Commission.
Engr. Komolafe reiterated that the PIA represents a significant shift in the way the oil and gas industry in Nigeria operates.
“It recognises the critical role of host communities and provides a framework for their participation in the sector’s development. The establishment of the HCDT will create a more equitable distribution of the industry’s benefits and reduce the social and economic disparities in the country.
“The Commission shall continue to provide requisite support and guidance for the full implementation of the Law. Therefore, we urge all stakeholders to continue to work together to ensure the successful implementation of the PIA. We must all play our part in creating a sustainable and equitable oil and gas industry that benefits all Nigerians, particularly those in the host communities.”
In his address titled “Implementation of the Host Communities Development Trust, a critical statutory prescription under the PIA, 2021,” the CCE said with the unveiling of the Host Communities Development Regulations as well as the template, the Commission has now defined clear navigational path regarding the administration, management, and allocation of funds for development of host communities as well as clear grievance resolution mechanism for settlement of disputes.
“Our objective in this workshop is to create further awareness on this very important piece of legislation and provide updates on the Commission’s activities geared towards the implementation of the regulations for Nigeria’s oil and gas industry, provide a clear roadmap for the implementation of the Host Communities Development Trust to enhance peaceful and harmonious co-existence between oil and gas industry operators and host communities, and ultimately support the development of host communities.
“While the Commission is prioritising efforts towards increasing oil and gas production and ensuring maximum Federation revenue through the optimization of oil and gas value chain, the efforts have been constrained by myriad of challenges ranging from insecurity, low investment, de-prioritisation of funding of hydrocarbon development arising from energy transition. Currently, Nigeria has the technical allowable capacity to produce about 2.5 million barrels of oil per day. However, arising from the highlighted challenges, our current production hovers around 1.5 million barrels of oil and condensate per day.
“To further stem the tide of sabotage and third-party interferences on oil and gas critical infrastructure, the PIA has in effect domesticated the protection of our oil and gas infrastructure to the Host Communities. One critical milestone under the PIA is the incorporation of Host Communities Development Trust (HCDT) by the settlor provided for in Section 235 as well as appointment of Board of Trustees (BOT) by the settlor in consultation with the host communities.
“Settlors are the Oil and Gas companies operating within host communities. Section 240 (2) of the PIA stipulates that each settlor, where applicable through the operator, shall make an annual contribution to the applicable host communities development trust fund of an amount equal to 3 per cent of its actual annual operating expenditure of the preceding financial year in the upstream petroleum operations affecting the host communities for which the applicable host community’s development trust fund was established.”
