The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has facilitated the mobilization of nearly N200 billion for the development of oil and gas host communities in Nigeria. Chief Executive, Gbenga Komolafe, made this announcement on Monday during the inauguration of the Body of Neutrals at the NUPRC’s Alternative Dispute Resolution (ADR) Centre in Lagos.
Komolafe revealed that the commission had raised N60 billion in local currency, alongside $100 million in foreign currency, as part of efforts to support the Host Community Development Trust. However, these funds remain largely unused due to ongoing disputes and litigation between the communities and oil companies.
To address this, NUPRC has established an ADR Centre to expedite conflict resolution and avoid the lengthy court processes that have delayed development in these areas. Komolafe acknowledged the tensions between host communities and oil companies, which have hindered the optimal exploitation of Nigeria’s vast oil and gas resources.
While he avoided labeling the situation as “hostile,” Komolafe stressed the importance of creating a conducive environment for operations. He praised the Petroleum Industry Act (PIA) for introducing the Host Community Development Trust, which he said is vital for resolving these issues and fostering a harmonious relationship between the communities and oil companies.
Through the Host Community Development Trust, the host communities themselves elect trustees to manage the funds, with no government interference. Komolafe emphasized that the NUPRC plays an oversight role to ensure transparency but remains “100 per cent at arm’s length” from the fund’s management.
Despite establishing the trust and accumulating significant funds, Komolafe noted the paradox that these resources have not yet resulted in visible improvements in host communities due to unresolved disputes. He urged communities to utilize the new ADR mechanism to settle conflicts quickly and ensure the funds are used for shared prosperity.
“The expectation is that the trustees will administer this fund to create value and promote a peaceful operating environment that enhances production and positively impacts national revenue,” Komolafe said. He added that the ADR Centre is intended to be a faster and more cost-effective method of resolving disputes than the mainstream judicial system, which often delays fund disbursement.
The ADR Centre is staffed with a team of distinguished professionals, including retired judges, senior lawyers, and academics. Komolafe expressed confidence that the centre will help resolve the numerous conflicts in host communities, thereby creating a more peaceful and productive atmosphere for oil exploration.
After the Lagos centre, the NUPRC plans to establish another ADR Centre in Yenagoa, Bayelsa State. Komolafe also indicated that the commission is in talks with the judiciary to ensure the decisions of the ADR Body of Neutrals are enforceable in court.
Members of the Body of Neutrals include Senior Advocate of Nigeria (SAN) Femi Falana, Justice Andrew Omolaye-Ajileye, Isaiah Bozimo (SAN), Dapo Akinosun (SAN), Justice Babatunde Adejumo, and several other prominent figures from various professional fields.
The NUPRC hopes the new dispute resolution mechanism will lead to increased oil production, benefiting both the host communities and the Nigerian economy.
