By Johnbosco Agbakwuru – Abuja
The Edo State oil-producing communities under the aegis of Oil and Gas Host Communities of Nigeria, HOSCON, has told President Muhammadu Buhari to direct that their derivation fund be paid to them directly without going to the state government.
It is illegal to pay derivation fund to state govt, pay to us
The group also pleaded with the President to stop the alleged illegal and unconstitutional payment of 13 percent derivation fund through state governors who are third line charge on the Federation Account and pay same directly to the Host communities through the proposed Presidential Derivation Committee (PDC) and State Implementation Committees, SIC.
The oil-producing communities specifically told President Buhari to replicate the recent fiscal freedom granted to the judiciary and legislature at the states’ level for the oil-producing communities.
The Edo HOSCON, in a statement issued in Abuja by its Chairman, Deacon Friday Osazuwa, and the Secretary, Pastor Osariemen Paul Okpamen, said the practice of paying the fund to state governments over the years was a contravention of the constitutional provision for the fund.
Edo HOSCON reminded the President Buhari that the provision for the Derivation Fund was actually done to take care of the peculiar economic and ecological side effects of oil and gas operations on the communities.
According to the statement, “We, therefore, wish to refer to our repeated advocacy and agitations through press conferences, media engagement and our recent visit to President Mohammadu Buhari and plead with Mr. President to stop the illegal and unconstitutional payment of 13% derivation fund through state governors who are third line charge on the Federation Account and pay same directly to the Host communities through the proposed Presidential Derivation Committee (PDC) and State Implementation Committees (SIC).”
It further said, “Of a truth, 13% Derivation Fund is the only first-line charge on the Federation Account. The federal government is second line charge, the state government is third line charge while the local government is fourth line charge. This is the position of law as confirmed by the Revenue formula.
“Therefore it is illegal and unconstitutional to pay the 13% derivation fund which is first line charge through State Governors, third line charge on the Federation Account.
“Section162(2) of the 1999 constitution as amended ‘Provided the principle of derivation shall be constantly reflected in any approved formula as not being less than 13% of the Revenue accruing to the Federation Account directly from any natural resources’.
“This position of the Constitution made it very clear that 13% derivation fund is provided constitutionally and exclusively for the oil/gas producing Communities primarily as compensation for loss of fishing rights and productive farmlands as a result of oil/gas exploration and production activities. Oil/gas is number 39 on the Exclusive Legislative List ‘’Mines and Minerals including oil fields, oil mining, geological survey and natural gas.
“It is instructive to note that any matter that is on the Exclusive Legislative List it is only the President or Head State that has the prerogative and jurisdiction on all matter on the exclusive legislative list. No governor or state assemblies can legislate on matters on the exclusive list.
“Therefore it is illegal and unconstitutional for Governors of the South–South States and their states Assemblies to legislate on oil/gas – 13% derivation fund which is first line charge on the Federation Account.”
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