Oil and Gas Producing Communities of Nigeria (HOSCON) ladies have written to President Bola Tinubu, expressing their dissatisfaction with the lack of social amenities and demanding the immediate transfer of the 13% derivation cash to their communities.
Depriving towns that produce oil and gas of their fundamental rights, they argued, is both illegal and unconstitutional.
Nneka Obi, Chairperson; Hon. Izi Ann, Secretary; and other state coordinators, in a letter dated 13th December 2024, signed by themselves and copied to the Senate and House of Representatives, proclaimed that these communities constitute the derivation principle as provided in the 1999 Constitution of the Federal Republic of Nigeria, as amended.
Beneficiaries get payments immediately from all Federation Account Heads under first-line charges, with the exception of the 13% Derivation Fund.
In response to questions about why the 13% Derivation Fund, a first-line charge, is still being distributed to states on the third-line charge by the president, they cited a lack of a clear or implied provision in the Constitution directing that the funds be distributed at the discretion of the affected state governors, a practice that has persisted since 1999.
They argue that the impacted communities should get the funds directly because the derivation principle was established in the Constitution to help lessen the impact of oil and gas exploration and extraction on such communities.
In the 1980s, the military administration oversaw the 3% Derivation Fund to Oil Mineral Producing Area Development Commission (OMPADEC) and dispersed the money to the impacted areas via a well-organized commission that received oversight from the Federal Monitoring Committee.
An authority or agency should be granted the 13% Derivation Fund to assist in the development of communities that produce oil and gas, according to the recommendation of the 1994/95 Constitutional Conference.
“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,” reads Section 162 (2) of the 1999 Constitution as amended.
The Constitution’s Derivation Principle provision means that, like other comparable headings, the 13% Derivation Fund disbursement is a first-line charge on the Federation Account.
Along with other topics including oil fields, oil mining, geological surveys, natural gas, and mines and minerals, oil and gas are included under item 39 on the Exclusive Legislative List in the 1999 Constitution.
The President has unfettered authority over all issues pertaining to the exclusive legislative list. All such items, including oil and gas (item 39), are within the authority and competence of the President, not the state governors.
Given that oil and gas are not subjects of concurrent legislation, the constitutional authority to legislate on any subject on the Exclusive Legislative List does not rest with the state legislatures or governors.
They argued that the power to pass laws pertaining to matters on the Exclusive Legislative List should solely rest with the National Assembly, as stated in the constitution.