Oil Companies, ESG Compliance, and the Financial Sector through the eyes of Host Communities
This cases study from Fair Finance Nigeria sheds light on the challenges faced by host communities in Nigeria's oil-rich regions. The report, "Oil companies, ESG Compliance and the financial sector through the eyes of host communities," details the experiences of communities in Akwa Ibom and Bayelsa states, highlighting the significant socio-economic and environmental impacts of oil company operations.
A key focus of the report is the Petroleum Industry Act (PIA) of 2021 and its provision for a Host Communities Development Trust (HCDT). The HCDT mandates that a percentage of oil company operational expenditure (OPEX) be directed towards community development. While this initiative aims to channel funds for social infrastructure like health clinics and schools, the report notes that many projects are incomplete or poorly executed, and in some cases, corruption and mismanagement have eroded the intended benefits. The case study also found that IOCs often use alleged community sabotage as a pretext for not providing necessary compensation to communities.
