Give derivation fund directly to host communities, group tells Buhari

Edo State branch of the Oil and Gas Host Communities of Nigeria (HOSCON) has called on President Muhammadu Buhari to cause the direct remittal of derivation fund to host communities just as has been done in the case of state legislatures and judiciary.

In a statement issued in Abuja on Wednesday by Deacon Friday Osazuwa and Pastor Osariemen Paul Okpamen, Chairman and Secretary, respectively, the group said the move will grant the communities fiscal freedom.

The fund currently reaches the host communities through their various state governments.

HOSCON, which noted that the practice of paying the fund to state governments over the years is a contravention of the constitutional provision for the fund, reminded President Buhari that the provision for the Derivation Fund is actually done to take care of the peculiar economic and ecological side effects of oil and gas operations on the communities.

HOSCON went further to advise the President that obeying the Constitution in that regard would not be difficult, suggesting that he reached to the people for whom the constitutional provision was made by working through the Presidential Derivation Committee (PDC) and State Implementation Committees (SIC).

It maintained: “Of a truth, 13% Derivation Fund is the only first-line charge on the Federation Account. The federal government is second line charge, the state government is third line charge while the local government is fourth line charge. This is the position of law as confirmed by the Revenue formula.

“Therefore it is illegal and unconstitutional to pay the 13% derivation fund which is the first-line charge through State Governors, third line charge on the Federation Account.

“Section162(2) of the 1999 constitution as amended ‘Provided the principle of derivation shall be constantly reflected in any approved formula as not being less than 13% of the revenue accruing to the Federation Account directly from any natural resources’.

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“This position of the Constitution made it very clear that 13% derivation fund is provided constitutionally and exclusively for the oil/gas producing Communities primarily as compensation for loss of fishing rights and productive farmlands as a result of oil/gas exploration and production activities. Oil/gas is number 39 on the Exclusive Legislative List ‘’Mines and Minerals including oil fields, oil mining, geological survey and natural gas.

“It is instructive to note that any matter that is on the Exclusive Legislative List it is only the President or Head State that has the prerogative and jurisdiction on all matter on the exclusive legislative list. No governor or state assemblies can legislate on matters on the exclusive list.

“Therefore it is illegal and unconstitutional for Governors of the South-South States and their states Assemblies to legislate on oil/gas – 13% derivation fund which is the first-line charge on the Federation Account.

“We, therefore, wish to refer to our repeated advocacy and agitations through press conferences, media engagement and our recent visit to President Mohammadu Buhari and plead with Mr President to stop the illegal and unconstitutional payment of 13% derivation fund through state governors who are third line charge on the Federation Account and pay same directly to the Host communities through the proposed Presidential Derivation Committee (PDC) and State Implementation Committees (SIC).”


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