Commission questions the legitimacy of a Host Community Development Trust linked to Sterling Oil, citing concerns over representation and compliance with the Petroleum Industry Act……
The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has directed the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to dissolve a disputed Host Community Development Trust (HCDT) within 48 hours over concerns surrounding its constitution and the representation of affected oil-producing communities.
The directive was issued during an investigative hearing conducted by the commission’s Investment Monitoring Committee into the operations of Sterling Oil Exploration and Energy Production Company (SEEPCO) and the implementation of the Host Community Development Trust provisions under the Petroleum Industry Act (PIA).
In a statement released on Friday by the commission’s Head of Information and Public Relations, Maryam Umar-Yusuf, the RMAFC said the order followed complaints over the manner in which the trust was established for the affected host communities.
Speaking at the hearing held on Thursday at the commission’s headquarters, RMAFC Chairman Mohammed Shehu reaffirmed the commission’s commitment to ensuring that oil-producing communities receive the benefits guaranteed to them under the law.
He described the investigation as a vital national assignment and praised members of the Investment Monitoring Committee for their diligence, stressing that transparency, accountability, and effective oversight remain central to the commission’s constitutional mandate.
Shehu expressed confidence that the investigation would strengthen public trust in the petroleum sector while ensuring that host communities receive their rightful entitlements under the Petroleum Industry Act.
Chairman of the Investment Monitoring Committee and Federal Commissioner representing Anambra State, Ekene Enefe, led the investigation into SEEPCO’s compliance with statutory requirements governing Host Community Development Trusts.
He said host communities should no longer suffer the environmental and social consequences of oil exploration without corresponding development, adding that both operators and regulators must be held accountable for fulfilling their legal responsibilities.
During the hearing, Enefe criticised SEEPCO for repeatedly failing to honour invitations issued by the committee despite previous engagements.
Addressing NUPRC officials, he insisted that every institution within the petroleum industry must be accountable and subsequently directed the regulator to dissolve the disputed trust within 48 hours.
He also announced that SEEPCO would be issued an ultimatum to settle all outstanding obligations owed to the affected host communities.
According to him, the committee will conclude its investigation and forward its findings to the appropriate authorities, assuring that the commission would discharge its oversight responsibilities without fear or favour.
Responding to the allegations, the NUPRC delegation, led by the Director of Host Communities, Ufondu Ejiro, maintained that the trust was established in line with the provisions of the Petroleum Industry Act.
Ejiro told the committee that the trust had been duly incorporated, adequately funded, and structured in accordance with the law. She also presented records covering community consultations, governance arrangements, Community Development Plans, and statutory financial contributions made into the trust.
The regulator maintained that it had carried out its responsibilities in line with the Petroleum Industry Act and the Host Community Development Regulations.
However, counsel representing the affected host communities, Peter Chukwudi, challenged the regulator’s position, arguing that several individuals recognised as community representatives were not accepted by the communities themselves.
He also questioned whether adequate consultations were conducted before the trust was established and raised concerns about the limited development recorded in the communities despite years of oil exploration.
Chukwudi urged the committee to thoroughly investigate the grievances raised by the affected communities before reaching its final conclusions.
Also speaking at the hearing, Anambra State Commissioner for Petroleum and Mineral Resources, Professor Charles Ofoegbu, called for closer collaboration between the NUPRC and state governments in verifying community representation and monitoring compliance with statutory obligations.
He also advocated greater transparency in the calculation of statutory contributions, operational expenditure, and the execution of community development projects.
Federal Commissioner representing Rivers State, Desmond Akawor, said stronger cooperation between regulators, state governments, and petroleum operators was necessary to improve oversight, while criticising SEEPCO for failing to appear before the committee.
Similarly, Federal Commissioner representing Kogi State, Abdulazeez Idris-King, questioned whether relying solely on documents submitted by operators was sufficient to confirm that genuine consultations had taken place with host communities.
Federal Commissioner representing Jigawa State, Hauwa Umar-Aliyu, also urged regulators to remain impartial and professional, saying public confidence would only improve if the interests of host communities received equal attention alongside those of petroleum operators.
According to the commission, the hearing is part of its broader oversight efforts to strengthen transparency and accountability in the management of host community development funds.
Under the Petroleum Industry Act 2021, oil and gas companies are required to establish Host Community Development Trusts and contribute three percent of their actual annual operating expenditure from the preceding year to support development projects in their host communities. The framework was introduced to address longstanding grievances over environmental degradation, inadequate infrastructure, and the distribution of benefits from petroleum operations.
