If proposals contained in the new Petroleum Industry Bill (PIB) were approved by the National Assembly, oil communities in Nigeria would, from next year, share $600 million annually from contributions made by oil firms in the country.
The amount may be adjusted pursuant to subsection 334 of the new Act, “to allow for inflationary increase.”
The Accountant-General of the Federation is being proposed to oversee the account.
The proposal is contained in the 707-page report of a Bill seeking for an Act to provide for the establishment of a legal, fiscal and regulatory framework for the petroleum industry in Nigeria and for other related matters being considered by the Senate.
The Senate Joint Committee is made up of six standing committees, which are the committees on Petroleum Resources (Upstream and Downstream), Gas, Finance, Environment and Ecology, Judiciary, Human Rights and Legal Matters.
The voluminous report, a copy of which was sighted by Daily Sun at the weekend, proposes in clause 144 (1) (a) that every company involved in upstream and downstream petroleum operations or both shall remit on a monthly basis impact funding amounts to the Petroleum Host Community Fund based on the regulations pursuant to paragraph (1)(b) of the section of the Act.
Justifying the proposal, the joint committee noted: “Specific funding amount, totalling approximately $600 million annually is included to provide certainty of contribution whichwould grow as facilities grow with the PIB.”
In clause 142 of the report, which talks specifically about the Petroleum Host Community Fund (PHCF), the joint committee proposed that the PHCF, “be restructured as a social impact fund including all host communities in the country ameliorating the social impact that petroleum operations foist on the host communities.” It added: “The Fund shall transfer money directly to community organisations, to be defined in regulations, all in impact areas based on allocation procedures established in regulations.
“The regulations will determine how the funds are to be distributed. In order to allow for sufficient consultation on regulations, one year after the effective date of the Act is envisaged.”
The joint committee also recommended that, “any payment to the Fund shall commence not later than three months from the commencement of this Act and disbursement from the Fund shall commence not later than 12 months after the commencement of the Act.”