HCDT: Ekid Host Community Gets N333 million from Frontier/Savannah Energy, Highlight Expenses
By Ekemini Simon
The Ekid Host Community Development Trust powered by Frontier Oil Limited and Savannah Energy Limited has said that it has received N333 million as payments for its host communities Development Trust between 2021 and 2023.
Esit Eket Local Government Area (LGA) and a part of Eket LGA make up the Ekid Trust for Frontier Oil/Savannah Energy operating within the OML 13 asset.
The Host Communities Development Trust established by the Petroleum Industry Act (PIA) which came into force in August 2021 is aimed at fostering sustainable prosperity in the host communities, providing direct social and economic benefits from petroleum operations to the host communities, among other benefits.
The Act provides that oil/gas companies are mandated to make an annual contribution to the Host Community Development Trust Fund of an amount equal to three per cent of the oil and gas company’s actual annual operating expenditure of the preceding financial year.
The details of payments to the Ekid Host Community Development Trust was made known recently during a meeting between Frontier/Savannah Energy HCDT Trust and CSOs, which was organized by Oxfam Nigeria in collaboration with the Civil Society Legislative Advocacy Centre (CISLAC) and Connected Development (CODE
According to the Secretary of the Trust, Samuel Atara, the two oil companies had funded the Trust with N333 million for their Operating Expenditure covering 2021 and 2023.
He said for August 2021 to 2022, Frontier Oil paid N130m while Savannah Energy/Uqua paid N40m.
For 2023, he said Frontier paid N100m while Savannah paid N63m. He said Frontier Oil will still add funds to the N100 million paid noting that there was a shortfall in payment due to the fact that the Audited Financial Statements was not ready.
Giving insight into how the funds have been spent, the Secretary of the Trust said since June 2023 N66.7m has so far been invested into the reserve fund as provided for in the Act. He said the Fund Manager is Norrenberger with a 15 percent interest rate per annum.
Atara said so far, a total of 161 students have benefited from Post Secondary Scholarship totaling N40.25m spent while a total of 47 got post graduate scholarship amounting N23.5m.
The Secretary said a total of N123 people benefited from business grants amounting N18.45m while a total of 80 people benefited from skills acquisition programme inherited from the Global Memorandum of Understanding and amounting to N17.77m is spent.
In his remarks, the Board of Trustee Chairman of the Trust, Dr Macaulay Akpan said the administration fund for the Trust meant to serve three tiers of the trust, made up of the BoT committee with seven members, management committee with nine members and advisory committee with five members was grossly inadequate hence there should be a review of the law to provide improved funds for administration especially for smaller Trusts like the Ekid Trust.
He prayed that the 20 percent reserved funds should be reviewed downwards to enable the Trust to have enough funds to execute such projects.
On his part, the Program Manager/Accountable Governance, Oxfam, Henry Ushie said there is need for transparency on the part of the settlors and managers of each Trust so that communities which the Trust is meant for can appreciate the provisions and also own the Trust.
He called on the Settlors to lay out how the three percent OPEX is calculated and also promptly remit the money to each Trust.
Ushie also disclosed plans of the CSO to document all the processes of the HCDTs starting from the formative stage, expectations from the trust and how they implement projects, saying such would serve as reference materials for researchers, scholars and other upcoming oil companies that want to set up a trust.
“We want to document the process for them starting from when HCDT was formed, appointment of board members, accountability in the process of implementation of PIA, how inclusive is the process? What is the process of recruitment of the consultant? Who did the Needs assessment? The remittances by the settlers. These are the things we will document for future references,” he added.
Also speaking, Harry Udoh, the Executive Director of Akwa Ibom Tax Justice and Governance Platform said there was need for big trusts such as the Emoimee which is funded by Mobil Producing Nigeria to collaborate with smaller ones like Frontier Oil/Savannah trust and other upcoming trusts in the implementation of the PIA so that effort will not be duplicated.
According to him, “If there is a collaboration in terms of infrastructure and project execution, there would be efficient use of resources so that you don’t duplicate efforts which can lead to wastage of funds.
“Emoimee trust has the Mobil that is doing a lot more and their 3 percent OPEX is much bigger and we are thinking that there is a need for synergy especially with those Small HCDTs so that there won’t be duplication of efforts so that the little resources available with the smaller HCDTs would be maximized.”