NGO Urges Oil Companies to Remit 3% to Imo Host Communities, Calls for Transparent Selection of Trustees

A non-governmental organization, Connected Development, has called on oil companies, also known as Settlors, to promptly remit the 3% of their annual operating expenditure as required by the Petroleum Industry Act (PIA), to the Host Communities Development Trust (HCDT). The NGO also emphasized the importance of a transparent and inclusive process for selecting the Board of Trustees for the HCDT.

During a stakeholder training event in Owerri, Imo State, which gathered Civil Society Organizations, Community-Based Organizations, HCDT members, and the media, Hyeladzira Mshelia, Assistant Director of Programmes and Community Engagement at Connected Development, stressed the need to strengthen the governance of the HCDT.

“There’s a need to strengthen the Host Communities Development Trust Fund’s (HCDT) governance structure and formalize a more transparent and inclusive process for membership selection,” Mshelia stated. “This includes integrating training in project management, proposal writing, budget planning, financial management, and clear communication of the HCDT’s outputs and outcomes. These efforts will help build a framework that can unlock sustainable project investment opportunities across Nigeria.”

The training aimed to enhance the capacity of participants in project design, management, procurement, execution, and fund management.

Mshelia also highlighted the critical issue of delayed remittances, which have slowed development in oil-producing communities. According to the PIA, Settlors are mandated to remit 3% of their annual operating expenditure to the HCDT, but the delay in this disbursement has hindered crucial development projects in these areas.

“The delay in the disbursement of the 3% hinders the development that is expected within the host communities,” she remarked. “The PIA mandates this payment to facilitate the development of oil-producing areas, including their land and water resources.”

Chimezie Ebosie, State Support PVP Project Officer at Connected Development, also pointed out a gap in the implementation of the PIA. “There’s a gap in the implementation of the Petroleum Industry Act of 2021, particularly concerning the open selection of the Board of Trustees and the timely remission of the 3% by Settlors,” Ebosie noted. “We need to move from what’s written on paper to effective implementation for the development of these communities.”

The NGO’s call for swift action aims to ensure that the communities that host oil operations receive the support they need for sustainable development.