By Ray Onwaeze
This is my personal reaction to the 3% Fund allocated to oil producing communities in PIB as signed by the President. They are my candid opinion on the Funding for Host communities in PIA. The Frontier funds will come in Part 2 .
The 3% allocated to Host Communities in the PIA (Petroleum Industry Act) is different from the 13% derivation in Federal revenue share to Oil producing states.
The 13% derivation goes to the State Govts, but the 3% goes direct to the Host communities, not the State Govts who are not involved in managing the 3% funds. The Oil companies & the Host communities will manage the 3% funds.
20yrs after, it is very clear the Oil producing state Govts had terribly mismanaged the 13% Derivation funds runing into billions. The Host communities have benefitted almost nothing. The 13% was put in place for them. But they have remained wretched, despoiled, environmentally degraded etc. Many have resorted to breaking oil pipelines, in the process polluting their environment, militancy, piracy & illicit bunkering of crude oil direct from the oil well heads, with tacit approval or acquiescence of the Oil companies who understand their plight & as payoff to the Host communities for the Oil companies to operate peacefully.
Take Delta state for example. Ex Gov Ibori laundered @least £250m in 8yrs in office, out of which he was jailed 13yrs by UK Court for £50m he plea bargained. Those looted funds were largely 13% derivation, essentially meant for Host communities in Delta state. Imagine what difference £250m (N200Bn) would have made in their lives & environment over 8yrs (1999 -07). Not to talk of the shameless looter Gov Uduaghan. Delta is my state. Same with Gov Akpabio who is still under investigation for N103Bn looted from Akwa Ibom 13% derivation (2007 -15). It was under EFCC pressure he jumped ship from PDP to APC. Same in Rivers & Bayelsa with Odili, Amaechi, Silva & Dickson. I have a dossier of all their cases.
Now let us look at the financials. Using 2m barrel per day crude production as average, NNPC & IOC (oil coys) JVC shairing is 55/45. At $60/bbl average oil price today, NNPC takes $66m daily from just crude. 3% of that is $1.98m (N990m) daily direct to Host communities, bypassing state Govts. This explains the feeble noises from the impacted Host communities & the loud noises from the Oil producing State Govs whose source of oil slush funds have been cut off. Remember these are the same state Govs who have pocketed the LGA funds in State/LGA joint accts. They have been kicking against FGN direct payments to LGAs from Federation Acct. Check that out & you realise what even 1% not to talk of 3% to Host communities would do.
Finally these are my personal thoughts from my private investigations. No funding has ever been given direct to Host Communities, never since oil was struck in 1956 @Oloibiri Bayelsa today. Nothing much, apart from the tokenist Corporate Social Responsiblity (CSR) interventions of the IOCs in oil production areas ~just mere palliatives. Amnesty Program only satiated a few not the direct Communities. Billions were also looted at the Amnesty Offices, money meant for the program!
PIB 3% is a first beginning, it will surely rise like 1.5% rose to 3% (OMPADEC), then to 13% Derivation today. It is historic. Like I keep saying ~the amount of funding is not so much of importance as how well the funding is judiciously administered. If the Host communities can get together with the Oil companies who have their Oil business environment at stake, to prudently administer the 3% funds, it could even impact on the Host Communities as 10% or more, given where we’re we are coming from regarding, the looting of 13% Derivation by oil producing state Govs.
*~My thoughts !!!*
*(To Be Continued)*