Direct remittance of 13% derivation fund to communities – HOSCON demands

Feeling deprived of social amenities, women of Oil and Gas Producing Communities of Nigeria (HOSCON) have written to President Bola Tinubu for direct remittance of the 13 per cent derivation fund to communities.

They said it is illegal and unconstitutional to deny the oil and gas-producing communities their constitutional rights.

In a letter dated 13th December 2024, signed by Nneka Obi, Chairperson, and Hon. Izi Ann, Secretary, along with other state coordinators, and copied to the Senate and House of Representatives, they stated that such communities constitute the derivation principle as provided in the 1999 Constitution of the Federal Republic of Nigeria as amended.

They observed that all Federation Account Heads under first-line charges, except the 13% Derivation Fund, are paid directly to their beneficiaries.

Wondering why the Presidency continues to release the 13% Derivation Fund—which is a first-line charge—to the states that are on the third-line charge, they said the Constitution did not expressly or impliedly provide that the fund be handed over to the Governors of the affected states for their discretionary disbursement, as has been the practice since 1999.

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According to them, the derivation principle was provided for in the Constitution to mitigate the adverse effects of oil and gas exploration and exploitation in affected communities, and, being so, the fund should be released directly to the affected communities.

“The operation of the 3% Derivation Fund to Oil Mineral Producing Area Development Commission (OMPADEC) in the 80s was executed by the military government then, by direct release of the fund to the affected communities through a well-constituted commission assisted by a Federal Monitoring Committee.

“The 1994/95 Constitutional Conference recommended that the 13% Derivation Fund be given to an authority or agency for the development of the oil and gas-producing communities.

“Section 162 (2) of the 1999 Constitution as amended provides thus: ‘Provided the principle of derivation shall be constantly reflected in any approved formula as being not less than 13% of the revenue accruing to the federation account directly from any natural resources.’

“With the express provision for the Derivation Principle in the Constitution, it implies that the release of the 13% Derivation Fund is a first-line charge on the Federation Account, just like other similar heads.

“Oil and gas constitute part of item 39 on the Exclusive Legislative List in the 1999 Constitution, along with other items such as mines and minerals, oil fields, oil mining, geological survey, and natural gas.

“Any matter that has to do with the exclusive legislative list is the exclusive preserve of the President. The President, and not the State Governors, has the prerogative and jurisdiction on all such matters, including oil and gas, which is item 39.

“Neither the State Governors nor the State Houses of Assembly are constitutionally empowered to legislate on any matter on the Exclusive Legislative List, as oil and gas is not on the Concurrent List. It is only the National Assembly that is constitutionally empowered to legislate on any matter contained in the Exclusive Legislative List,” they posited.