PIA: Weak governance, funding gaps threaten host community trusts

The concerns emerged during the Host Communities Development Forum 2026 and the public presentation of the Gender-Aware Host Community Development Trust Index, organised by Policy Alert.

Presenting the report, Executive Director of Policy Alert, Tijah Bolton-Akpan, said the study assessed 18 trusts in Rivers and Akwa Ibom states to determine whether the HCDT framework is translating oil revenues into sustainable development outcomes for host communities.

“This index measures whether the promise of the Petroleum Industry Act is being kept,” Bolton-Akpan said.

He explained that while some trusts have demonstrated strong governance and project delivery, many still struggle with institutional capacity, transparency and compliance gaps, raising questions about the long-term effectiveness of the framework.

“Some trusts are governing with real competence. They have professional boards, they engage their communities meaningfully, they publish their financial records, and they deliver development projects that people can see and use,” he said.

“Three trusts achieved near-perfect governance scores. That proves the framework can work when institutions choose to make it work.”

However, he noted that high-performing trusts remain the exception rather than the rule, with many institutions still operating without robust accountability mechanisms.

“Too many trusts still operate with opacity, treating transparency as optional and accountability as something to be managed rather than embraced,” Bolton-Akpan said.

The report also identified serious funding and compliance issues among some oil and gas operators, warning that delayed financial contributions are slowing project execution in several host communities.

Bolton-Akpan cited the Alam Trust, settled by NNPC Exploration and Production Limited, which he said has yet to receive statutory funding required to implement development programmes.

“The communities of Oyigbo Local Government Area have a trust in name only,” he said.

“This is not a governance failure by trust leadership. It is a compliance failure by the settlor, enabled by regulatory inaction, and it is unacceptable.”

Beyond governance issues, the index also found that host communities remain largely unprepared for the global energy transition, despite their heavy dependence on oil sector activity.

“Not a single trust in this index has developed a comprehensive strategy for preparing communities for the global shift away from fossil fuels,” Bolton-Akpan said.

“Skills development, livelihood diversification and clean energy investments are still scattered efforts rather than coordinated plans.”

Chairman of the House of Representatives Committee on Host Communities, Dumnamene Deekor, acknowledged the implementation challenges and said lawmakers are already considering legislative improvements to strengthen the framework.

“The PIA was a relief to host communities, but human laws are not without shortcomings,” Deekor said.

“As a committee, we have identified several provisions that require legislative retooling for effective implementation of the Act.”

Among the key concerns, he noted, is the delayed establishment of several trusts beyond the statutory timeline set by the law.

“The trusts were supposed to be established within 12 months of the PIA being passed, but we are already well beyond that timeframe, and it is not clear what the new deadline is,” he said.

Deekor also called for clearer guidelines on how oil companies calculate operational expenditure used to determine host community contributions.

“Establishing acceptable levels of transparency in OPEX calculations will enable communities, civil society organisations and the National Assembly to verify that HCDTs are receiving their rightful allocations,” he said.

Providing a regulatory perspective, a representative of the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, Mr Success Ikpe, said the legal framework encourages diversity in governance structures but does not mandate specific gender quotas.

“Due consideration shall be given to diversity as it relates to age, gender and physical disability in determining the criteria for appointment into governance structures of the Trust,” Ikpe said.

Also speaking, Stephen Akpan of the Nigeria Extractive Industries Transparency Initiative, NEITI, stressed that the HCDT framework represents a critical opportunity for oil-producing communities after decades of environmental and economic losses.

“We have lost so much in 70 years. The environment has been destroyed, and communities are experiencing the consequences,” Akpan said.

He warned that improving governance of host community funds is essential if the region is to achieve meaningful development before the global transition away from fossil fuels accelerates.

“For PIA to come after 70 years and attempt to help the Niger Delta take advantage of what remains, we must administer the Trust in a way that positively impacts the lives of our people,” he said.