Conference Communique: PIB & Host Communities

Conference Communique: PIB & Host Communities 3


Despite being among the world’s top oil producers, Nigeria’s oil and gas industry has been plagued by institutionalized corruption, corporate impunity, and grave environmental and humanitarian devastations. As the central point of oil production, the Niger Delta region is most gravely affected by oil prospecting and exploration activities in which the traditional means of subsistence, farming and fishing in the creeks, streams and mangroves are adversely affected by constant oil spills, gas flares, blow-outs and leaks, with spiraling effects on health, soil productivity, aquatic life and the environment. Further aggravating the situation is the Nigerian government’s persistent failure to provide adequate regulatory oversight for the environment, compounded by the continuing exclusion of affected communities in the design and implementation of development solutions that affect them.

If passed into law, Nigeria’s oil sector reform bill, the Petroleum Industry Bill (PIB) holds strong prospects for improving the governance of the environment and strengthening the structure for community participation in the oil and gas industry. Between April 23 and 24, 2013, federal and state policymakers, environmentalists, the media, labour unions, representatives of multinational oil companies, civil society organizations and oil producing communities converged in Port Harcourt to begin the process of building a sustainable consensus for realizing greater community participation and environmental protection in the PIB. 

For over two days, presentations and discussions among the deliberating agents, with full participation of local leaders and traditional rulers of oil producing communities proffered a range of recommendations for enhancing community participation in the oil and gas industry and for the protection of the environment. With renewed commitment, participants resolved to take urgent action to support the promotion of economically, socially and environmentally sustainable future for present and future generations, while enhancing youth and women’s empowerment, and equal opportunities for all Nigerians, especially in the petroleum producing communities. 

Participants further resolved and recommended as follows to different stakeholders: 

To the Nigerian Government:

1.          Sustainable development in petroleum producing communities can only be achieved by: fostering equitable social development and inclusion; creating equal opportunities for all, raising basic standards of living; and promoting integrated and inclusive management of natural resources using rights-respecting strategies that support environmental conservation, regeneration and restoration.

2.         The independence of the two regulatory agencies: Upstream Petroleum Inspectorate (UPI) and Downstream Petroleum Regulatory Agency (DPRA) must be guaranteed, and mechanisms put in place to enable them better inform policy decisions.

3.         Oil theft, illegal refining, and gas flaring and the resulting environmental damage they cause portend great danger to oil-bearing communities, requiring urgent and ambitious action to bring them to an end, in accordance with the principles and provisions of the Nigerian Constitution, regional and international human rights treaties Nigeria voluntarily signed onto.

4.         Multi-stakeholder collaboration between all tiers of government, including oil companies and their host communities is required in order to proactively address the continuing high levels of unemployment and underemployment, particularly among young people in petroleum producing communities. Tackling youth unemployment and poverty, as a matter of urgency, can make an important contribution toward achieving social protection systems that address and reduce inequality and social exclusion.

5.        When there is any divestment, the first choice of take-over should be vested on indigenous oil companies, including qualified members of the community where the divestment company and facilities are located.

6.         The Wikileaks revelations alleging that security chiefs, political party heavy-weights in connivance with state officials are benefactors of crude oil theft in the Niger Delta should be investigated.

7.         Efforts to achieve lasting peace, environmental security and sustainable community development in the region should be reflected in national, state and local policies and plans.

To the National Assembly:

1.          We call for the adoption of all the detailed recommendations outlined in the PIB RESOURCE HANDBOOK publicly presented at the April 23 & 24, 2013 conference. Twenty copies of the said Handbook have been submitted to the PIB adhoc committee at the South-South Zonal public hearing held in Port Harcourt on April 22-23, 2013.

2.         The 2-day Zonal public hearings on the PIB conducted across the country, especially in the South-south region was grossly inadequate, as it afforded scant opportunities to both stakeholders and several oil producing communities’ to participate and voice their concerns regarding the Bill.

3.         The passage processes  must underscore access to information, broad public participation and the meaningful involvement and active participation of national, state and local-level legislatures and all major groups: women, children and youth, indigenous peoples, non-governmental organizations, local authorities, workers and trade unions, business and industry, the scientific and technological community, and farmers, as well as other stakeholders, including local communities, volunteer groups and donor agencies and persons with disabilities.

4.         Oil producing communities welcome the establishment of a Petroleum Host Community Fund, and urge the government to establish a community-based participatory structure, known as the Community Development Board (CDB) for the effective administration of the Fund. In this regard, the CDB will serve as an independent body, without prescriptive interference from government agencies, state governors and traditional institutions, whose members are appointed for a fixed tenure by different interest groups – women, youth, traditional rulers, elders’ council – within oil producing communities.

5.         The term host community should be clearly defined for the purpose of determining the direct beneficiaries of the PHC Fund. Any proposed definition must include both oil-bearing and oil-impacted communities.

6.         Contributions into the PHC Fund should be based on a minimum of 10% of crude oil sales rather than 10% of oil and gas companies’ net profits because of the difficulty in determining the actual net profit of different operators.

7.         The politicization of the PHC Fund is condemnable. All stakeholders are enjoined to contribute towards imparting new momentum to the implementation of all initiatives designed to address the surging local discontent in the oil-rich Niger Delta region.

8.         Section 118 (5) of the Bill should be expunged as communities lack the capacity to contain the high-level bunkering operations. Deducting the repair costs of damaged installations from the PHC Fund foists collective punishment on communities for the vandalization of oil installations, and ostensibly outsources government’s primary responsibility of securing lives and property to host communities. 

9.         Requiring oil companies and licensed operators to hold due consultations with oil producing communities in order to seek and obtain their consent before the commencement of oil production is consistent with the venerated principle of free, prior and informed consent. This requirement should be recognized and included as part of the obligations of licensee, lessee and contractors set out in S. 292 of the PIB.

10.      The vagueness of certain provisions in the Bill, such as the obligation on oil companies to adopt and utilize “best practices” and “good oilfield practices” is vague, and must be clarified. Considering that the different operators and companies often employ standards set by their respective home countries, it is difficult to ascertain which of these standards rate as the best.

11.       To check multiplicity of duties, the management of the remediation fund created by section 203 of the PIB should be vested in the National Oil Spill Detection and Remediation Agency (NOSDRA), responsible for cleaning up of oil spills and environmental remediation. This will not only guarantee the UPI’s and NOSDRA’s independence and effectiveness, but also, inject more clarity in institutional obligations and regulatory functionality in the oil industry.

12.      The process for determining compensation sums for trees and venerated objects destroyed during petroleum operations, including disturbances on the surface of the land outlined in S. 198, 199 and 296 of the Bill should be clearly outlined, recognizing landowners, female-headed households and communal landholdings.

To the Oil Companies: 

1.          We call for the adoption of all the detailed recommendations outlined in the Spaces for Change’s PIB RESOURCE HANDBOOK publicly presented at the conference, PIB & Host Communities between April 23 & 24, 2013. Beyond analyzing and critically reviewing specific provisions of the PIB that could potentially undermine community participation and environment protection, the Handbook evaluates their coherence with global best practices and standards on environmental sustainability and participatory development. Strengthening these critical provisions is of utmost importance to secure maximum support for the proposed oil sector reforms and avoid unwanted consequences that stifle economic growth, social cohesion and public participation.

2.         Oil companies lag behind in implementing previous legislative commitments and social policies for the protection of the environment and community rights. The PIB ushers a new vista to adopt socially responsible business practices and greater compliance with all regulations, state and federal legislations regarding the protection of the environment and development of local content.

3.         All oil companies and licensed operators are obligated to support and respect national regulatory and policy frameworks, particularly in the areas of environmental safety, finance and technology transfer, innovation and entrepreneurship, capacity building, transparency and accountability.

4.         Community development programmes designed to enhance productive capacity of local youth and indigenous oil companies is key to realizing the development of local content, and for bolstering community participation in oil and gas operations and decision-making.

5.         The development of clear guidelines for job creation, complemented by effective social policies is required to abrogate the current practice of fielding foreign expatriates in non-technical services an departments whereby local skills and capacities abound e.g carpentry, electrical and mechanical works, thereby limiting opportunities for youth employment, with adverse impacts on the local economy. 70% of this cadre of employees of oil companies should come from localities where the companies are located.

6.         All oil companies must take concrete steps to establish participatory structures for both engaging their host communities in culturally appropriate ways; and for facilitating full and effective community participation in oil and gas operations. 

7.         Oil companies should undertake and publish periodic audit of its personnel to determine the extent it is promoting full and productive employment and decent work for members of host communities, with a view to achieving poverty reduction and social cohesions in communities where they operate.

8.         We call for the adoption of holistic and integrated approaches to sustainable development in a manner that facilitates harmonious existence with nature and lead to efforts to restore and remediate environmentally damaged areas.

To the petroleum producing communities:

1.          Petroleum producing communities, in close collaboration with the Nigerian government through the office of the petroleum minister should make concrete efforts to develop a participatory community-led structure for the effective administration of the PHC Fund. 

2.         Credible and responsive community leaderships should be put in charge of handling multinational and local community relationships and engagements.

3.         Host communities must take ownership of development programmes which includes sustained monitoring and evaluation on environmental “Best Practices” applied by oil companies.

4.         The criteria for the location of community development programs should be clearly spelt out before the initiation of such projects. In line with  the DPRA’s mandate to review the impact of oil company development programmes and take stock of such development programmes in Sections 293 and 297,  the reports of such reviews and stock-taking should be made public and accessible by oil producing communities.

5.         Recognizing that communities lack the skills to contain high-level oil bunkering operations, community surveillance operations must be initiated across communities hosting oil installations, in order to complement the efforts of the national government and its security agencies. 

6.         Traditional rulers, non-governmental organizations and community-based organizations should encourage the active participation of oil-bearing and oil-impacted communities in processes that contribute to decision-making, planning and implementation of policies and programmes for sustainable development at all levels.

We acknowledge the role of civil society in strengthening access to information as well as an enabling environment – especially in the area of analysis, sharing of information and knowledge, promotion of dialogue – for an active citizen engagement in public decision-making, particularly in the passage of the PIB.


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