10% host community fund in PIB divides Senate

After months of delay, the Senate on Tuesday opened debate for second reading of the Petroleum Industry Bill (PIB). But its clause on introducing ten percent community development fund divided the upper chamber. The PIB forwarded by President Goodluck Jonathan was first read on the floor on September 19, 2012 and the Senate Committee on Rules and Business immediately gazetted the bill for circulation to members.At the commencement of debate for second reading, Senate majority leader, Victor Ndoma-Egba, in his lead debate, said when the bill is passed into law, it would “fundamentally alter the legal, fiscal and proprietary dynamics and regime of our oil sector”.

He said the bill “will harmonise and consolidate the diverse and disparate laws, about 16 of them, that today govern and regulate the sector. It is easily one of the most important bills to be considered by this distinguished and hallowed chamber”.

Ndoma-Egba, however, observed that the previous bill introduced during the last sixth National Assembly contained a provision for the source of funding for the Petroleum Technology Development Fund, saying it is missing in the new bill.

Tempers almost flared when contributions by senators commenced and Ahmed Lawan from Yobe North joined two senators from the North to oppose the 10 percent host community development fund introduced into the new bill.

Lawan from opposition party All Nigeria Peoples Party (ANPP) kicked against the fund and provided figures to show that over N11 trillion for derivation and other funds since 1999 were unaccounted for by different state governments in oil producing states.

Lawan disclosed that for over 13 years, N7.3 trillion was from derivation fund; N2.7 trillion to NDDC over 10 years; between 2007 and 2012, Ministry of Niger Delta got N50 billion; amnesty programme from 2009 till date got N250 billion; and Special Presidential Initiative, N72 billion.

Lawan argued that the people from the oil producing states had not benefited from all the funds allocated to them, saying, “Host development fund has no place; we have to go back to the constitution and rework the 13 percent derivation.

“Injustice to some is injustice to all. We are tired of seeing money go to private hands. The oil belongs to all Nigerians but you give concessions to the people whose areas produce the oil but not this host community fund. This is a wake-up call to develop other alternative sources of revenue”.

James Manager from Delta South and Heineken Lokpobiri from Bayelsa State both raised points of order to object to Lawan’s references to editorials from national dailies in making his contributions and claimed this violated their rules