Chief Wellington Okirika, (aka Mr. 13% Derivation Fund) is the founder of the Host Communities of Nigeria, oil and gas, (HOSCON). The group has been at the forefront of the agitation for a better deal for the people of the Niger Delta who constitute the oil and gas producing communities. The advocacy and agitation of HOSCON culminated into the inclusion of 13% Derivation Fund for host communities in the 1999 Constitution. The body has also been involved in the push for the actualization of the Petroleum Industry Bill which was recently passed into law by the National Assembly, with a provision for a 3% production cost fund from oil companies and the federal government for the development of the oil and gas producing host communities. HOSCON recently celebrated the passage of the PIB with a thanksgiving service and a celebration march along major streets in Warri on Sunday July 18, 2021. In this exclusive interview with The New Diplomat, Chief Okirika thanked the National Assembly for the passage of the Bill and also applauded President Muhammadu Buhari for supporting the Bill, urging him to issue executive order directing the payment of the 13% derivation fund to the Host communities the same manner the 3% fund will be paid to host communities in PIB. He, however appealed to the President to assent to the Bill speedily and inaugurate the already-screened and confirmed Board of the NDDC.
Excerpts:
Today, the HOSCON held a thanksgiving service and celebration for the passage of the Petroleum Industry Bill by the National Assembly. What is the significance of the thanksgiving and celebration march on the streets of Warri in respect of the PIB passage?
Like I said, we give thanks to God almighty for answering our prayers. For over twenty years, the host communities have been praying to God that the benefit of what He has blessed them with which is under their feet, in their land, be given to them directly by the government. The HOSCON, during the 1994/95 Constitutional Conference fought and got 13%. When they were trying to draft the 1999 Constitution, the HOSCON also fought to ensure that the 13% was enshrined in Section 162(2) of Constitution, as amended. But surprisingly, during implementation, the Presidency, instead of giving the money directly to the host communities, said the money should be given to the governors to manage on our behalf. That was the whole idea. Over time, the money became the pocket money of the governors. And since then, the host communities have been demanding that this money should be given to them, directly as it is said in the Bible that, ‘Give to God what is God’s and what is Caesar’s to Caesar’. And we have been agitating that the 13% be given directly to the host communities and not through a third party.
So, right now, we give thanks to God that one of our prayer points has been answered and that is the 3% to the host communities in the Petroleum Industry Bill, PIB, that has just been passed into law by the National Assembly. They also added provision for gas flaring fund which has been an issue. So, we thank God, we thank the National Assembly for the passage of that PIB including the 3% operating cost of the oil companies to the host communities. Our prayer is that God should touch the heart of President Buhari to return directly to the host communities, the 13% Derivation Fund which was unconstitutionally and illegally allocated to the governors.
Now, of recent, there have been a lot of communications and memos with Mr. President over the issue of moving the 13% directly to the host communities. During the administration of former President Jonathan, we also met him over this issue of taking the money from the governors and handing same to the host communities. Even in the time of Chief Obasanjo, we also approached him with this issue and he said, okay, the money should be given to the host communities through oil commission. Oil commissions were formed in some states, but they soon became an extension of Government Houses. The governors became chief executives of the oil commissions. The money was not getting to the host communities and therefore, we have been fighting over the years for the release of the money directly to the Communities.
Now, that the National Assembly has legalized Host Communities as an entity that can receive the 3% directly from the oil companies through the instrument of the PIB and, also, receive the gas flare money, then the host communities should be made to receive directly, the 13% Derivation Fund which they fought for and ensured it was enshrined in the 1999 Constitution, as amended. So, our appeal now is that the President should return the 13% derivation fund directly to the host communities. The host communities will now be having 3% operation cost of oil companies and the 13% which they fought for as derivation fund to bring it to a total of 16%. Derivation means that a percentage of what is derived should be given to the source of the derived natural resources. So, as it is now, giving the money to the governors clearly shows that the principle of derivation as enshrined in Section 162(2) in the 1999 Constitution is nullified. The rights and privileges of the oil producing communities have been extinguished because the money is now being used for everybody. It is now used on a general basis without recourse to the principle of derivation. That is the problem.
So, we are happy that God has answered our prayers because many people are turning to God now and gradually, I’m sure, the 13% will also be paid directly to the host communities, as one of the blessings that God will give to us, and then we shall be talking about 16% going directly to the oil producing communities. And the host communities will be like heaven.
Since the advocacy and agitation for the direct payment of the 13% derivation to the host communities started, the governors of the oil producing states have continued to object to it with the excuse that it will cause community crisis. How do you react to that?
The governors were not part of the advocacy and agitation for the derivation princple. We are talking about 1994/95 Constitutional Conference. When the host communities were organized enough under my leadership then, where were the governors? We didn’t see any governor, we didn’t see anybody that assisted us. We spent our money, time and energy to attend and present our case before the 1994/1995 Constitutional Conference, and it was no joke. The Committee on Revenue of the Conference then, visited the oil producing communities. That time, Delta State had already been created. And the Committee visited Delta, Rivers (including present-day Bayelsa State), Edo and Akwa-Ibom. And they submitted their report that we should be given 25%. That was the Committee Report of the 1994 Constitutional Conference. At the final Committee meeting, at that time, Late Odumegwu Ojukwu, Late General Yar’Adua and other leaders were present. At the end of the day, they said we should be given 13% instead of 25%. And that was the law. Late Gen. Sanni Abacha then promulgated a decree and gazzeted the decree. That was during Abacha regime. When Gen. Abulsalem Abubakar came on board, they started the drafting of the 1999 Constitution. The Host Communities under my leadership was there again. We struggled to make sure that the 13% gazzeted was enshrined in Section 162(2) the 1999 Constitution, as amended. So, for the governors to say that the money should remain with them is surprising because they were not there when we fought for it.
There is a precedent there already. When the derivation principle of 1.5% was approved under another elected President, Shehu Shagari, he did not give the money to the governors then, even though there were elected state governors. This was because, the 13% derivation from oil and gas is in the Exclusive Legislative list. Shehu Shagari put in place a Presidential Committee and State Implementation Committee to manage the 1.5% Derivation Fund. And when the 1999 Constitution was being drafted we the HOSCON also fought for the 13% to be enshrined in Section 162(2) and it became the 39th item in the Exclusive Legislative List of the 1999 Constitution. So, for the then President, Chief Olusegun Obasanjo to give away the 13% Derivation Fund to the governors to manage was an error because it is in the Exclusive Legislative List of the Second Schedule of the Constitution and therefore, the governors cannot legislate on it.
The governors can only legislate on items that are on the Concurrent list. No state governor or State House of Assembly can legislate on any item on the Exclusive legislative list. So, it was an illegality for President Obasanjo to hand over the 13% derivation fund which is in the Exclusive legislative list to the governors as if it is in the concurrent legislative list. It is unconstitutional and we want it corrected.
The governors know that they were not there when the HOSCON fought for the 13% to be enshrined in the Constitution. The constitition expressly states that anything in the Exclusive legislative list, it is only the President that has the prerogative and jurisdiction to legislate on it. That was why President Shehu Shagari set up a Presidential Committee and State Implementation Committee to manage the 1.5%. But this time, the type of politics we have come to see, anything goes. By giving the money to the governors, the Presidency under Obasanjo made a mistake, they violated two provisions of the Constitution, Section 162(2) and item 39 of the Second Schedule that deals with Exclusive Legislative items. So, they should correct this illegality and unconstitutionality.
That money is not for the governors. It is exclusively for the host communities. Oil production is based on quantum. It is not every community in Delta State that is oil producing. It is for oil producing communities, based on oil quantum. So, the governors do not care about production quantum, because they take it as if the money belongs to every community in the State. But the law states that you should use that money for the development of oil producing communities based on production quantum and not to the state governors. So, what the governors are saying is wrong. You see, the governors would always attempt to block any piece of legislation in the National Assembly that is not favourable to their selfish desires. But now that the National Assembly has passed the PIB into law granting 3% oil production cost of oil companies as fund to the host communities, the governors argument does not work any more. They have lost the battle.
So, we are now insisting that Mr. President should do the right thing as it relates to the 13% derivation fund since it is in the Exclusive Legislative list. If the Presidency had made a mistake before, it should be corrected now. Now that the host communities have been recognized as a legal entity to receive what constitutionally belong to them in the PIB, it is only logical that same should be applied to the 13% derivation fund and it should be given to them. This is not a matter of PDP or APC, it is the law, it is the constitution.
A few days ago, it was reported that the member representing Degema/Bonny Federal Constituency in the House of Representatives, Hon. Doctor Farah Dagogo presented a bill before the House seeking for direct payment of the 13% Derivation fund to the host communities. Lobbying is an active democratic way of getting laws passed in the National Assembly. What is the HOSCON doing to play a role in ensuring the the bill is successfully passed considering the fact that the governors are not leaving anything to chance as far as the 13% derivation fund is concerned?
You know, it is like everybody from the oil producing area have been compromised by the governors. So, I want to appreciate the courage of that young man to come forward and present that Bill in the National Assembly. Very many leaders have been compromised. They cannot tell the truth. But that young man has come forth. But we have observed that he laid his argument on a wrong legal premise. Oil and gas is on the Exclusive legislative list. 13% derivation fund is a first line charge on the Federation Account. Section 162(2) states, inter alia, that “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”. Based on this provision, oil and gas is a natural resources. And going by the provision of the same Constitution in item 39 of Exclusive Legislative List under the Second Schedule, it clearly defines what constitutes the natural resources to include “Mines and minerals, including oil fields, oil mining, geological surveys and natural gas”. He however based his Bill on concurrent arrangement. Oil and gas is not under concurrent legislative list. So, he cannot make a law in the National Assembly and ask a State governor to assent such law. It is under the ambit of Mr. President and the National Assembly. When we get to the Public hearing for that bill, we shall let him know that, fine, he has tried in coming up with the bill, but it is wrong for him to propose that each state governor should constitute a committee for the implementation of the 13% derivation. All state commissions on the management of the 13% are illegality because the law is not under the state.
As you can see, item 39 in the Exclusive legislative list contains oil and gas. Item 38 include “Military (Army, Navy and Air Force) including any other armed forces of the Federation”. If the President wants to appoint the Chief of Army Staff or the Inspector General of Police, for instance, he does not need to consult the state governors. He gives executive order. So also, the President can give an executive order on oil and gas, on the 13% derivation principle because it is within the confines of his authority and jurisdiction. He sets up the Presidential Committee and appoint a ministry or the office of the Secretary to the Government of the Federation to supervise such a committee. In the alternative, the President can create a Presidential Committee and State Implementation Committees to manage the fund for the Communities. That was what happened in the time of Shehu Shagari. You could also set up a National Oil and Gas Commission where the States could have their own structures. So, we thank him for his courage but we are going to tell him that it should not be on concurrent arrangement.
As the HOSCON is celebrating the passage of the PIB into law, who are you attributing the success to?
We are, first of all, commending God Almighty who listened to our cries and answered our prayers over the years. We have been on this for about ten years. We are thanking God for touching the heart of the National Assembly. And we are thanking the National Assembly for doing the right thing. In oil matters all over the world, people who produce the wealth are taken care of by law. Before now, the oil companies have been embarking on what they called corporate social responsibility.
That one is over. It is not a social matter, it is now a right of the host communities to 3% of whatever the oil companies are spending as cost of production.
God has also touched the heart of the National Assembly that the money paid for the gas flaring in the communities, part of it should go to the communities, not Abuja, not Lagos, because the gas flaring is not taking place in Abuja, Lagos or anywhere else. It is taking place in the host communities. But the money has been taken to Abuja and they have been spending it over the years. What a great injustice! Now that God has touched their hearts to approve that the money from the flaring of gas that has continued to cause environmental pollution and degradation in the areas be given to the oil and gas producing communities, it is a great achievement that is worth celebrating.
So, it is enough to celebrate and give thanksgiving to God. And we thank the National Assembly and the President. We are also appealing to Mr. President to return the 13% to the host communities directly. They fought for it and put it in the Constitution. There was no governor or anybody that assisted us. I was the HOSCON leader then. That is why they call me ‘Mr. 13% Derivation Fund’. So, none of the governor was there. They were not there in spirit, they were not there physically. Life has changed. Now that the truth has come out, the governors should forget the 13%. We appeal to the President to do the right thing. Some of the governors are not even from oil-producing areas. But they keep squandering our money with reckless abandon. The money was not got on the basis of APC or PDP or any other party. It was got on the basis of oil producing communities. You cannot be spending our money on our behalf. It is wrong!
