Shell Petroleum Development Company (SPDC) has inaugurated eight Host Community Development Trusts (HCDT) in Bayelsa State in compliance with the new template by the Petroleum Industry Act (PIA) 2021.
The HCDT is to be established, specifically, to address the developmental needs of the oil-bearing and impacted communities in the region, and while it is commendable, it creates certain challenges.
Mr Osagie Okunbor, SPDC Managing Director and Chairman, Shell companies in Nigeria, made this known during the inauguration in Yenagoa, the Bayelsa State capital.
Rresented by the Mr Igo Weli, SPDC General Manager, Corporate Relations, Okunbor said the HCDT would pave the way to access the $56 million earmarked for development of its host communities in the PIA dispensation.
Okunbor said:”Regardless of the noble intentions of the PIA as well as the moral and financial support of government, SPDC and other operators, the development of communities ultimately rests on the shoulders of community people themselves.”
He said that this bold step in the implementation of the provisions of the PIA earned commendation from the Bayelsa government, regulators, partners as well as communities for what is regarded as an industry milestone.
The eight trusts in Bayelsa are among 22 that have been incorporated in the SPDC JV’s areas of operation in Imo, Delta, Rivers and Bayelsa states, representing more than half of the total 41 which the Nigeria Upstream Petroleum Regulatory Commission (NUPRC) has so far approved for host communities.
He noted that with the company’s knowledge of the Niger Delta for over 60 years of operations, it is managing a seamless transition from the Global Memorandum of Understanding (GMoU) initiative, which it introduced in 2006, to HCDTs, a key provision of the PIA which was signed into law in August 2021.
“SPDC engaged more than 300 communities on the provisions of the PIA, their roles and responsibilities, the obligations of oil and gas companies and facilitated grouping of communities and nominations for trustees.
“It also assisted in the development of a Needs Assessment and development plan for communities. The 56.13 million dollars represents funds to be paid this year by SPDC JV and Shell’s deep-water subsidiary, Shell Nigeria Exploration & Production Company Limited (SNEPCo) as contribution to HCDTs in line with PIA requirements,” Okunbor said.
Stakeholders at the unveiling, held at the state capital, Yenagoa, charged the Community Trusts that have been incorporated to work towards development in the Niger Delta through peaceful co-existence and collaboration with oil companies.
Gov. Douye Diri of Bayelsa, represented at the ceremony by the Commissioner for Mineral Resources, Dr. Ibieri Jones, said:”This is indeed a milestone which will ensure progress of the communities.
“No meaningful development can take place without an enabling environment. With dialogue we can always resolve issues and that is the only way it will take the region to where we want it to be.”
The Chief Executive of Nigerian Upstream Petroleum Commision (NUPRC), Mr Gbenga Komolafe, commended the early incorporation of the Trusts and charged them to be guided by the provisions of the PIA in their operations.
Komolafe was represented by Mrs Omolade Awah, Manager, Host Communities Development in NUPRC.
Also, the Chief Upstream Investment Officer, NNPC Upstream Investment Management Services (NUIMS), Mr Bala Wunti, represented by Senior Adviser, Stakeholder Relations, Mrs. Joy Eguahon, said there are high expectations for communities to collaborate with industry stakeholders for peaceful co-existence.
Wunti also urged the communities to set up systems to address conflicts or grievances through dialogue that ensures resolutions that are beneficial to all the parties.
Speaking on behalf of his colleagues, the Chairman of Gbarain/Ekpetiama Trust, Mr. Ebikesee Johnson, thanked SPDC and communities for the confidence reposed in them, and enjoined trustees to ensure transparency and accountability in discharging their duties.
The eight Trusts that were unveiled are expected to appoint Management Committees in collaboration with their communities, while they will, in turn, set up Host Community Advisory Committees.
This will complete the new community development structure under the PIA and enable the trusts to begin to receive funds and commence operations.
The PIA stipulates funding of the trusts from three per cent allocation of the actual operating expenditure of an oil company in the preceding year.
The SPDC JV is working towards the incorporation of a total of 33 Trusts before the end of the year.
By Frank Shedrack