The social licence to operate in the Nigerian Oil and Gas Industry: A new approach to governance under the Petroleum Industry Act 2021

Abstract

In 2021, the erstwhile primary law regulating the oil and gas industry in Nigeria – the Petroleum Act 1969 – was abrogated, and a new law – the Petroleum Industry Act (PIA) – was enacted. A major development enshrined in the PIA is the creation of the Host Communities Development Trust (HCDT). The HCDT is mandatory and is premised on fostering sustainable prosperity in the petroleum host communities in Nigeria. Furthermore, this chapter argues that social license to operate (SLO) is one of the strategies that has been utilised by oil producing communities and other stakeholders to improve access to justice and improve the plight of oil producing communities in Nigeria thereby promoting accountability and transparency in the sector. This chapter suggests that the HCDT has the potential to improve the ability of companies to achieve the requisite SLO from host communities in the Niger Delta if successfully implemented. However, the provisions of the PIA on host communities suffer from some inadequacies and this chapter proffers some recommendations to enhance the potential of the PIA in this regard