NUPRC Moves to End Friction between Oil Operators, Host Communities

·   Unveils ESG Reporting Platform

Emmanuel Addeh in Abuja

The Nigerian Upstream Regulatory Commission (NUPRC) at the weekend moved to put an end to the perennial altercations between oil and gas operators and their host communities, with the introduction of a digital interface for both parties.

In a statement in Abuja, the Gbenga Komolafe-led organisation said the online platform was designed to ease regulatory compliance, oversight functions and enable operators in the industry to meet regulatory requirements in a timely, efficient and cost-effective manner.

Known as HostComply, the commission said the platform will help to streamline reporting of Environmental, Social and Governance (ESG) management for operators, host communities, and the regulators, describing it as a cardinal requirement of the Petroleum Industry Act (PIA) 2021.

Given the friction often experienced between operators in the petroleum sector and their host communities, the NUPRC stated that the platform was developed to offer comfort to Host Communities Development Trusts (HCDT) by providing a robust technological tool to interface and engage with the settlors (operators).

“The digital solution revolutionalises HCDT management and ESG reporting and is fully transparent and eliminates human interference,” it added.

It pointed out that HostComply offers numerous advantages to the operating companies and the host communities, including streamlining reporting and monitoring obligations, building trust and credibility as well as providing a centralised system for managing data related to community development and ESG reporting.

Besides, the NUPRC stated that it will ensure compliance with regulatory requirements and build trust with communities, investors, and other stakeholders.

Furthermore, the industry regulator noted that it will help to ramp-up oil production and revenue for the settlors and the federal government as well as provide business analytics that will help settlors, regulators and other stakeholders identify trends, opportunities, and areas for improvement in their community development and ESG reports.

“The portal will enable the settlor to upload the incorporated HCDT registered, upload the 3 per cent operating expenditure (Opex) by assets for verification by the regulator; track, analyse, and report on the use of funds for community development initiatives and foresee failure points by leveraging the data insights and mitigate against them.

“For the HCDT, the portal provides a consistent and predictable administrative environment for interfacing with the settlors and the regulator, allows the HCDT to upload and showcase projects to be executed by the communities, provides easy proof of 3 per cent Opex to be paid by settlors as verified by the regulator, as well as provide an opportunity to measure and monitor distributional equity amongst the communities.

“The HostComply allows the regulator to detect and identify non-compliant situations through IT forensics and compliance intelligence tools, real-time monitoring of the progress of projects being executed by the HCDT, issue demand notices on the payment of the 3 per cent Opex contribution by the settlors and verify the 3 per cent Opex contribution and its distribution,” it said.

For civil society organisations and the public, the NUPRC noted that the portal allows it a common framework for information gathering to monitor accountability and probity in the management of the Opex at the community level, as well as public education, enlightenment, mobilisation, monitoring, oversight, whistle-blowing, observation and feedback.

Urging stakeholders to fully utilise the portal to ensure regulatory compliance with the provisions of the law, the NUPRC indicated that failure of compliance has serious implications and attracts sanctions, which include revocation of licence or lease.

“Pursuant to the following sections of the PIA, 2021, and for the avoidance of doubt, the licence or lease of a settlor may be revoked if it fails to comply with the host communities’ obligations under Section 96(n) of the Act,” the commission said.

According to the commission, when fully deployed, the portal will have other capabilities including enabling approvals of the constitution, winding up and dissolution of the Trust and fund; verification of account details of the trust, annual audited report of the 3 per cent Opex computation and contribution to the fund.

“It is also a platform for the review of all reports generated by the trust; enables the annual registration of the fund managers with the commission and allows for the monitoring of the management of the reserve fund.

“It will be an interface for submission of complaints and petitions, reporting of fraud, breaches, and malpractices; and an administrative module which will act as a performance evaluation and analytics dashboard for each user group and general overview, management of access rights and permissions as well as review of audit trails,” the NUPRC added.

The NUPRC reiterated its commitment to fostering stronger relationships between operators, host communities and regulators and enhancing the dividends of petroleum resources for the prosperity of all stakeholders.