SDN’s New Project to Help Make the HCDTs Work

At SDN we know that change can happen through collective action by citizens and working with progressive leaders in communities, civil society, the private sector, and government, change can happen. 

A promising example is the creation of Host Community Development Trusts (HCDTs) under the Petroleum Industry Act (PIA). The HCDTs are expected to receive more than US$ 500 million or over 100 billion Naira per year, which presents significant opportunities to support the equitable distribution of benefits from the oil and gas industry and to meet the development priorities of host communities.  

That is why in October 2022, SDN launched a project to support communities to participate actively in the HCDT process, from planning to implementation of projects. We will also work to minimise the risks HCDTs and the associated legislative framework potentially present. This blog details our work in action in implementing this project.

To actualise the objectives of this project, SDN recognizes the significance of involving all stakeholders for success. Therefore, we convened a regional stakeholders’ forum for representatives of interest groups, host communities, oil and gas companies, and CSOs to document a shared set of recommendations for participatory and beneficial implementation of the HCDT process. These recommendations will be used to develop the HCDT Guide with the support of the Working Group.

Secondly, a HCDT Best Practice Working Group has also been set up to develop a handbook that includes practical approaches, based on the documented recommendations from the first output. The working group has held two technical working sessions in Port-Harcourt, Rivers State with the participation of concerned stakeholders across Rivers, Bayelsa and Delta State. Following review by the HCDT Best Practice Working Group, a draft version of the HCDT Guide is expected to be released.  The guide, if followed by the HCDT Management, and Advisory Committee, contains key elements that will enhance the successful implementation of the HCDT.

Furthermore, as a key partner in ensuring the seamless operation of the HCDTs, SDN was invited by the Nigeria Upstream Regulatory Commission (NUPRC) to recommend updates to guidelines, regulations, and legislation of the HCDTs, in line with the provisions of the PIA. SDN facilitated a  session with participation by other community development actors, CSOs, and regional interest groups in Rivers and Bayelsa States.

The Host Community Development Trust is a model that can contribute to the development of communities that have suffered from environmental degradation from decades of oil production. It is an opportunity to redistribute resources and provide support to communities to determine how they can benefit from the Trust in the short and long-term. It will also contribute to dialogue between communities and oil companies so that some long lingering problems such as loss of livelihoods can be addressed without resorting to violence. With an emphasis on Trust, vision, inclusivity, effective financial management, and empowerment for communities, the HCDT will be a potent instrument to achieve sustainable community development in the Niger Delta.

For more analysis of the HCDTs, please check out our policy analysis here.

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