Host Community Development – Chapter (3) of PIA 2021 & Policy Brief

The Petroleum Industry Act 2021 was passed to remedy the failure of the Petroleum Act, it commercialized the NNPC and established new regulatory agencies. It also aimed to solve the age-old problem of oil-bearing communities being devastated by the activities of oil companies through the establishment of the Host Communities Development Trust (HCDT). The host community development provisions in the Petroleum Industry Act 2021 (PIA) is a well-known topic amongst stakeholders in the Nigerian oil and gas industry. The reason for this is not far fetched as before the PIA, there were no laws imposing host community development obligations on oil and gas companies but chapter 3 of the PIA in S.235 mandates the incorporation of the HCDT which will be a corporate body able to sue and be sued aimed at fostering sustainable prosperity in host communities and encouraging peaceful coexistence between licensees and host communities. It goes on to mandate the contribution of three percent of the total annual expenditure of the ‘settlor’ to the trust. The HCDT is to be established, specifically, to address the developmental needs of the oil-bearing and impacted communities in the region, and while it is commendable, it creates certain challenges. Below are some of the gains and perceived challenges that can arise from the act.


Connected Development is an initiative that is passionate about empowering marginalised communities.

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