- FG Should Set up Commission To Manage Fund For Communities – Emuh
- Delta, Edo, Bayelsa women make case for 100% derivation to communities
As Nigerians hope for the emergence of a better constitution from the ongoing alteration exercise of the 1999 Constitution of the Federal Republic of Nigeria, the oil and gas Host Communities of Nigeria, (HOSTCON) has strongly advocated for the amendment of Section 162 (2) of the Constitution to allow for direct payment of the 13% Derivation Fund directly to host communities producing oil and gas.
This was contained in the report presented by the body during the two-day zonal public hearing of the Senate Committee on Constitutional Amendment held in Asaba, Delta State capital earlier this week.
Section 162 (2) of the 1999 Constitution, as amended partly states: “Provided that the principle of derivation shall be constantly reflected in any approved formula as being not less than thirteen per cent of the revenue accruing to the Federation Account directly from any natural resources.”
In a 47-page document signed and presented by the National Chairman of the group, Dr. Mike Emuh, HOSTCON called on the Constitutional Review Committee of the Senate to amend the said Section 162 (2) of the 1999 Constitution to provide for a direct payment of the 13% derivation fund to the host communities through an oil and gas Commission, adding that it is the only panacea to the present crisis in the Niger Delta.
The body butressed its argument for its agitation for direct payment of the 13% derivation fund to the Communities by tracing the origin of the fund and the several efforts it has made to convince the federal government of the need for the host communities to manage the money themselves.
It argued that the 13% derivation fund is “NOT MANNA from Heaven”, adding that “Oil and Gas Producing Communities fought for it and they should benefit from it.”
“It is pertinent to recall that the advocacy and agitation for the actualization of the 13% Derivation Fund was carried out solely by the oil and gas producing communities under the leadership of Chief (Dr.) W.O. Okirika (CON), (Mr. 13% Derivation Fund), at the 1994/95 Constitutional Conference during the regime of General Sani Abacha. There was no governor or any other person that assisted us financially or otherwise”, the group said.
HOSTCON condemned the present practice by the federal government in releasing the 13% derivation fund to the governors of the oil producing states, describing it as, not only against natural justice, but illegal and unconstitutional. It further submitted that the governors were not part of the agitation for the 13% derivation fund and the struggle to ensure it was reflected in the 1999 Constitution, adding that even the 1994/95 Constitutional Conference did not recommend that the 13% derivation fund be released to the state governors to manage.
“The payment of the 13% derivation fund to the governors of oil and gas producing states is not only against natural justice, but it is illegal and unconstitutional as a violation of two mandatory provisions of the 1999 Constitution as amended. The governors were not part of the advocacy and agitation. The governors cannot reap from where they did not sow.
“The 1994/95 Constitutional Conference never recommended that the money should be given to any state governor to manage. It is therefore against the 1994/95 Constitutional Conference to disburse or allocate the 13% derivation fund to the state governors.
“We urge the Committee of the Constitutional Review to stop the payment of the 13% derivation fund to the governors of oil and gas producing states, and make additional provision to Section 162(2) of the Constitution as amended for direct payment of the 13% derivation fund to the oil and gas producing communities through an oil and gas Commission. This is the only panacea to the present complex crisis in the Niger Delta”, the group advised.
HOSTCON also drew the attention of the Senate Committee to the functions of the federal and state governments as enshrined in the Second Schedule of the 1999 Constitution as amended containing the Exclusive Legislative List, wherein item 39 provides for the federal government for the exclusive control of “Mines and minerals, including oild fields, oil mining, geological surveys and natural gas”, arguing that no State governor nor State House of Assembly can legislate on any matter in the Exclusive Legislative List.
“On any matter in the Exclusive Legislative list, it is only the President or Head of State that has prerogative and jurisdiction on all matters on the Exclusive Legislative list including oil and gas that is number 39 on the list.
“No State governor or State House of Assembly can legislate on any matter on the Exclusive Legislative list. – Oil and Gas is not in the Concurrent List.
“It is therefore illegal and unconstitutional for the govenors and State House of Assemblies of the oil and gas producing states to legislate on oil and gas producing states to legislate on oil and gas that is number 39 on the Exclusive Legislative List.
“It is therefore illegal and unconstitutional for the governors and State Houses of Assembly of the oil and gas producing states to legislate on 13% derivation fund which is a First line charge of the Federaion Account as provided in Section 162(2) of the 1999 Constitution as amended”, HOSTCON submitted.
HOSTCON further explained that, going by the provision of the Exclusive Legislative List, the President reserves the prerogative and jurisdiction of legislating on all the 68 items in the List, adding that in the days of President Shehu Shagari, when derivation principle was just 1.5%, he issued an executive order and established a Presidential Monitoring Committee and State Implementation Committee to manage the 1.5% derivation fund then.
The group recalled that even when there were state governors during the regime of President Shehu Shagari, the 1.5% was not paid to the governors because oil and gas was on the Exclusive Legislative list. According to HOSTCON, former President, Alh Shehu Shagari complied with the mandatory provisions of the Constitution just as the group submitted that there is a precedent which was set by Shagari in the use and managment of 13% derivation fund.
“President Shehu Shagari, when Derivation Fund was 1.5%, issued Executive Order and established Presidential Monitoring Committee and State Implementation Committee to manage the 1.5% Derivation Fund.
“President Shehu Shagari was an elected President and there were elected governors of the states. President Shagari did not allocate or disburse the 1.5% derivation fund to the state governors to manage, because oil and gas was on the Exclusive Legislative List. President Shehu Shagari thereby complied with the mandatory provisions of the Constitution. There is a precedent set by President Shehu Shagari in the use and management of 13% Derivation Fund”, the group noted.
Explaining the basis for the inclusion of 13% derivation formula in the 1999 Constitution, HOSTCON in its presentation to the Senate Committee, noted that the aims and objectives of the founding fathers of the 13% derivation fund were very clear, adding that by the provision of Section 162(2), 13% of the total oil revenue derivable from any oil and gas producing community should be plough back to that community for human capital development and infrastructural development. It argued that with the present practice of releasing the fund to state governors, the purpose and objectives of derivation policy is nullified.
“The aims and objectives of the principle of derivation fund are very clear. By the provision of Section 162(2) of the 1999 Constitution as amended 13% of the total oil revenue got in any oil producing community should be returned back to that oil producing community for human capital development and infrastructural development.
“With the present disbursement of the 13% derivation fund to the governors of oil and gas producing states, the principle of derivation is now nullified. The benefits and rights of the oil producing communities are now extinguished as the 13% fund is now free for all.
“This is criminal injustice to the poor and voiceless oil producing communities. If 13% derivation fund is for every community, why then is the provision of Section 162(2) in the 1999 Constitution as amended?”, the body queried.
HOSTCON further argued in their presentation referring to an indepth report of an investigation carried out by Daily Trust Newspaper on the 13% derivation fund so far released to the governors from the Federal Ministry of Finance, which revealed that the governors of the nine oil producing states have so far collected from the Federation Allocation Account Committee, FAAC, N44.68 trillion from 1999 to 2018. The group added that in spite of this humongus amount, there is nothing on ground in the Niger Delta to show for it in the oil producing communities, adding that “this huge amount of money is misappropriated, mismanaged and diverted leading to the present complex Niger Delta crisis.”
The body in its report, highlighted the huge benefits that will be accruable to the oil and bearing communities when the 13% derivation fund will be paid directly to the host communities of oil and gas, stressing that the communities will be deeply involved in the protection of oil facilities located in their areas as many of the youths will be engaged in oil and gas facilities surveillance.
“Oil and gas producing communities will protect the oil facilities in the communities that bring 13% derivation fund to them monthly. Oil and gas producing communities will take charge of the security of the facilities by engaging many of the restive youths in the oil and gas facilities surveillance.
“This is the only panacea to the complex Niger Delta crisis. As the acutual oil and gas producing communities get involved in the management and use of 13% derivation fund, criminality of oil bunkering, illegal refineries, oil theft and pipe vandalism will disappear, leading to end of the long complex Niger Delta crisis.
“It will put a stop to the current corruption and fraud that has bedeviled the present system of the management of 13% derivation fund, resulting in over N44 trillion wastage in the past 20 years of its application, as there is nothing on ground in acdtual oil and gas procuding communities for this huge disburesement of 13% allocation.
“It will be a plus to the anti-corruption campaign of President Buhari as mismanagement and outright embezzlement of the fund remains the highest fraud in Nigeria history.
“Actual oil and gas producing communities will witness massive social, economic, human capital and infrastructural development in all communities.
“Wealth and many jobs will be created in the actual oil and gas producing communities leading to social and economic wellbeing of the oil producing communities. This will ensure peace and tranquility in the communities leading to increase in crude oil production and increase in oil revenue”, HOSTCON submitted.
In a chat with The New Diplomat shortly after the group’s presentation to the Senate Committee, the major founding father of the 13% Derivation Fund, aka Mr. 13% Derivation Fund, Chief W.O. Okirika expressed optimism in the outcome of the ongoing Constitutional Review exercise, noting that HOSTCON has been able to back up its advocation and agitation for the discontuation of payment of the 13% fund to the governors and the commencement of direct payment to the host communities of oil and gas.
He expressed confidence that the Senate Committee on the review of the 1999 constitution will do the needful to strongly emphasize the agitation of the host communities in their final report, adding that entire National Assembly members know the suffering which the people of the Niger Delta are going through in terms of environmental degradation, pollution, lack of infrastructures and poverty among the people.
“I’m quite optimistic and confident that the Senate Committee on the Constitutional Review will do the needful to use this opportunity to amend the constitution with a view to empowering the federal government exercise its prerogative and jurisdiction to stop further disbursement of the 13% derivation fund to the governors of the oil and gas producing state, and henceforth set up a host community Presidential Monitoring Commission and State Implementation Committee for the effective management of the fund when it is released to the communities.
“As you can see, there is already a precedent for our agitation. We are not just advocating from the blues. Shehu Shagari set the precedent and some of us were members of the State Implementation Committee. The testimony is there”, he said.
Also speaking with The New Diplomat on phone, the National President of the Host Communities of Nigeria (Oil and Gas), Dr. Mike Emu emphasized on the need for the constitution to be amended such that the federal government should stop further release of the 13% derivation fund to the governors of the oil producing states, adding that just like in the time of Shagari, an Implementation Committee should be set up at the state level to which the 13% is to be given to manage and control for the development of the host communities.
Dr. Emuh also recommended that Commissioners who are to be appointed to run the implementation Committee should be members of the oil and gas producing communities who are familiar with the peculiar problems of the Communities which they represent.
He said: “The amendment we are seeking in our presentation is that there should be a law that payment of the 13% derivation fund should be made direct to the oil and gas producing communities. During the time of Shehu Shagari, he appointed a committee to administer the 1.5% derivation fund to the host communities.
“So, we are now saying that they should amend the constitution that money should not be given to any other person but direct to the host communities commission.
“That the appointment of whosover becomes the Commissioner or executive director of the Commission should be a member of the host community because paying 13% to state governors is an illegal act, it is unconstitutional.
“We are also saying that the payment of the 13% to the communities is a number one in line charge on the Federation Allocation Account Committee, followed by the federal government, second line charge, state government third line charge and the local government fourth line charge.
“Obasanjo knows that the 13% belongs to the oil producing communities and he believes the state government should be able to administer it properly to the host communities. In Delta State, the governor set up Delta State Oil Producing Areas Development Commission, DESOPADEC. What happens in Akwa Ibom, Rivers and Bayelsa that has no such commission?
“Even in Delta State the governor decided to share the 13% into two to release 50% of it to the Commission. But it is still the governor that is managing it because it is he who appoints Commissioners to manage the money. They report to the governor and not the host communities.”
Meanwhile, hundreds of women drawn from Delta, Bayelsa and Edo States have besieged the Asaba Centre venue of the Senate Committee on Constitution Review to demand for 100% Derivation Fund for the Host Communities producing oil and gas in the Niger Delta.
Speaking on behalf of the women, Mrs. Joyce Ogwuezi, noted that the payment of 13% as Derivation Fund to the oil producing Communities has become obsolete, adding that it was time for it to be reviewed upward.