Nigeria: Govt to draw funds from JV companies for Ogoni clean up

A man samples crude oil at the bank of a polluted river in Bidere community in Ogoniland in Nigeria's delta region August 20, 2011. Picture taken August 20, 2011. REUTERS/Akintunde Akinleye

*A man samples crude oil at the bank of a polluted river in Bidere community in Ogoniland in Nigeria’s delta region. REUTERS/Akintunde Akinleye.

…Exercise expected to last decades

Oscarline Onwuemenyi

06 August 2016, Sweetcrude, Abuja – The Federal Government has said it would draw resources from joint venture companies (JVCs) as part of its counterpart funding to begin the long due clean up of Ogoni land, government officials say.

This comes as President Muhammadu Buhari on Thursday inaugurated a Governing Council and a Board of Trustees to manage the Trust Fund for the Hydrocarbon Pollution Remediation Project, HYPREP, which is responsible for the Ogoni clean up, as recommended by the United Nation’s Environment Programme, UNEP, report two months after the groundbreaking ceremony that would start the entire process.

He noted that “The funding bulk of which is going to be contributed by the SPDC JV and for clarity, the SPDC JV has Shell, Total, Agip, and NNPC. So, we would be contributing the bulk of this and over the five-year period that we expect this to last before we go into the phase of restoration to ensure that the funds based on the work programme that we approve are readily available.”

Buhari charged members of the Trust Fund to ensure the highest level of transparency and accountability in the management of the funds, expected to come jointly from IOCs and the government through the JVs.

“In appointing each and every one of you, I expect that you will give your utmost commitment to ensuring the highest standard of transparency and accountability in this important task,” the President said.

Managing Director, Shell Development Company of Nigeria, Mr Osagie Okunbor, told newsmen after the inauguration of the governing council and BoT at the Presidential Villa that, “The bulk of the funding is going to come from the SPDC JV, which has as a 55 percent partner, the NNPC. So, you have to infer that government is in there.

“But the whole process of our running our business on a day to day basis as Shell SPDC JV involves constant and revision within the JV, so to that extent you have to see the NNPC element of the JV as the government side.”

The constitution and inauguration of the governing board and board of trustees of the $1 billion fund are coming on the heels of conflicting responses on the sources of government’s part of the funding, even as the IOCs said they were awaiting a proper governance structure for the fund by the Nigerian government.

The UNEP, in its recommendation in 2014, said $1 billion would be injected in the first phase of the clean up. The report had also recommended that the oil firm behind the pollution of the area and the Federal Government contribute the money into an Environmental Restoration Fund for Ogoni, which would be a running fund.

Coincidentally, the inauguration of the council also came exactly five years when the extensive report and recommendations of the UNEP was submitted to the previous administration on August 4, 2011.

However, the project may not fully take off in another six months, as Amina Mohammed, minister of environment, also the chairman of the governing council, explained that more work had to be done in clearly articulating policies and strategies that would ensure the smooth running of the clean up, which would run for decades, adding that with all now in place “the project will not want for resources to clean up the Niger Delta.”

The BoT includes 12 members to meet twice a year, while the 13-member Governing Council will meet four times a year, the minister said.

Chairman of the BoT, Mr Olawale Edun, said the job of the board was to handle any funds provided for the clean up as well as other funds raised and to ensure that the funds were available whenever it needed.

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