According to excerpts from the bill, the aim of the trust is to foster sustainable prosperity within the host community.
It will be recalled that militants 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 charter on behalf of the settlors.
”For settlors operating in shallow waters 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 settlors would determine the members of the board of trustees 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 regulatory 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 necessarily come from any of the host communities,” the document 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.
The new PIB revealed that the board of trustees would be responsible for the management of the host communities development trust, determine the criteria, process and proportion of host communities development trust fund to be allotted to specific development programmes.
It added that the board would approve projects for which the host communities’ development trust fund would be utilized, adding that it would provide oversight of the projects for which the funds would be utilised.
“It will approve the appointment of fund managers for purposes of managing the reserve fund, and set up the management committee of the host communities’ development trust and appoint its members,” it said.
It noted that allocation of funds to host communities would be based on the matrix provided by the oil companies.
” The board of trustee shall in each year, and in pursuant of section 240 of this bill allocate from the host communities development trust fund , a sum equivalent to 75 per cent of the capital fund.
” The board shall make disbursements for projects in each of the host community as may be determined by the management committee in furtherance of the objectives set out in section 234 of this bill.
“20 per cent to the reserve fund, which sums shall be invested for the utilisation of host community development trust whenever there is a cessation in the contribution payable by the settlor,” it said.
The bill, currently before the National Assembly has also proposed the establishment of a Midstream Gas Infrastructure Fund for effective gas development in the country.
The bill revealed that the fund would help to facilitate gas infrastructure development in the country.
It may be recalled that the Minister of State for Petroleum Resources, Chief Timipre Sylva, had declared 2020 as the year of gas.
He said that Nigeria had more of gas deposit than crude oil and government was making effort to ensure full development of the country through gas.
“Undoubtedly, natural gas has the enormous potential to diversify and grow the Nigerian economy, power its industries and homes, produce ever-so-lacking wealth, create jobs, develop associated industries in the petrochemical sector, raise people out of poverty, the list goes on.
“Naming 2020 the year of gas for Nigeria has a really nice ring to it, but marketing alone will not cut it.
“Concerted governmental action is essential if we are to see true growth in the liquefied petroleum gas (LPG) sector, and first of all, we need to see a conclusion to the long delayed Nigerian Gas Flare Commercialisation Programme,” he said.
Also, the new PIB revealed that the Midstream Gas Infrastructure Fund would have a body corporate with perpetual succession and a common seal, adding that it would reside in ‘the Authority’, the proposed regulatory body for the sector.
“The Midstream Gas Infrastructure Fund shall have power to acquire, hold, and dispose of property, sue and be sued in its corporate name.
“There shall be a governing council which shall supervise and make investment decision for the fund,” it said.
It further noted that the governing council shall comprise of the minister, who would be the chairman of the council.
“The council will have representative of the Central Bank of Nigeria not below the rank of a Director, representative of the ministry of finance not below the rank of a Director and the chief Executive of the regulatory body ‘the Authority’.
It added that the Executive Director of the fund and two independent members appointed by Minister of Finance for a period of four years would be part of the council.
It said that the Legal adviser of the regulatory body, the Authority would serve as the secretary of the governing council.
On sources of revenue for the Fund, it said that it should not be more than one per cent of the levy prescribed in a regulation under the act, derived from wholesale price of petrol, electricity products sold in Nigeria and natural gas produced, sold and collected on wholesale basis.
It added that the regulatory body, ‘the Authority’ would ensure the prompt payment of all such sums directly into the fund’s account.
The bill further noted that the purpose of the fund would be to make equity investments of Government owned participation or shareholders interest in infrastructure related to midstream gas operations.