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Nigeria: Oil Companies to Incorporate Host Community Development Trust – PIB

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Oil companies operating in Nigeria are expected to incorporate a host community trust for social and economic benefit from petroleum operations in the host communities.

From excerpts in the new Petroleum Industry Bill (PIB) obtained by the News Agency of Nigeria ( NAN) in Abuja, the aim of the trust is to foster sustainable prosperity within the host community.

It will be recalled that milliants over the years had disrupted the exploration of oil in Nigeria over the inability of oil companies to develop the region.

Experts are of the opinion that a good legislation would help to ensure that both the oil companies and host communities work together to achieve required development in the oil host communities.

The new PIB said ” Settlors ( oil companies) shall incorporate a trust for the benefit of host communities for which the settlor is responsible.

” Where there is collective of settlors operating under a joint operation agreement with respect to upstream Petroleum operations, the operator appointed under the agreement shall be responsible for compliance with the chater on behalf of the settlors.

” For settlors opearting in shallow water and deep offshore, the littoral communities and any other community determined by the settlor shall be host communities for the purposes of this act.”

It added that the settlor would appoint and authorise a board of trustee that would be registered by the Corporate Affairs Commission as a corporate body under the Companies and Allied Commission Act.

It noted that the name of the corporate body to be registered would be “Host Community Development Trust”

The new bill noted that settlor would determine the members of the board of trustee and criteria for their appointment.

” The membership of the board of Trustees of the host communities development trust shall be subject to the approval of the commission or the regualtory body, ‘the Authority’.

“The settlor shall in determination of membership of the board of Trustees, include persons of high integrity and professional standing who may not neccessarily come from any of the host communities,” it said.

It added that the members of the board would serve a term of four years in first instance, and may be reappointed for another term of four years and no more.

It said that the board would also have as Secretary one that would be appointed by the settlor to keep the books of the board.