Court upholds PIA host community liability provisions, dismisses CHURAC suit

The Federal High Court in Warri, Delta State, has dismissed a suit challenging key provisions of the Petroleum Industry Act (PIA) relating to host community liability, affirming the legal framework governing Nigeria’s oil and gas sector.

Join the Premium Times WhatsApp Community For Quick Access To News and Happenings Around You.

Open in WhatsApp

Delivering judgement, the judge, Hyeladzira Nganjiwa, threw out all claims filed by the Centre for Human Rights and Anti-Corruption Crusade (CHURAC), which had sought to invalidate sections of the PIA on constitutional and human rights grounds. The judge delivered the judgement on Friday, details of which PREMIUM TIMES gathered on Tuesday.

CHURAC had approached the court to contest Sections 257(2) and 257(3) of the PIA, which impose liability on host communities for acts of vandalism, sabotage, or unrest affecting petroleum infrastructure.

The group argued that the provisions were unconstitutional, discriminatory, and violated the right to a fair hearing, effectively amounting to collective punishment without trial, a practice they likened to a “bill of attainder.”

Stay Ahead with Premium Times

Add as a preferred source on Google

At the hearing, B. E. Oghenekaro represented the plaintiff, while K. K. Akpule stood for the Attorney-General of the Federation (AGF), the 1st defendant.

Also, Abiodun Adesanya and A. A. Affe represented the Senate President, the 2nd defendant. The Speaker of the House of Representatives, listed as the 3rd defendant, did not appear in court.

The defendants had initially raised a preliminary objection, questioning CHURAC’s locus standi to sue on behalf of host communities.

The court, however, overruled the objection, ruling that it would consider the substantive issues raised by the plaintiff.

Judgement

Upon examining the merits of the case, the court held that CHURAC failed to establish that the impugned sections of the PIA were unconstitutional or discriminatory, or that they violated the right to fair hearing.

The court further ruled that the National Assembly acted within its legislative powers in enacting the PIA, noting that the host community liability provisions are part of a broader statutory framework designed to balance the interests of host communities, oil operators, and the Nigerian state.

As a result, all of CHURAC’s prayers were dismissed, and the court affirmed the validity and enforceability of Sections 257(2) and (3) of the PIA.

Background

CHURAC’s suit, filed earlier in 2025, challenged a series of perceived irregularities in the PIA, signed into law in 2021 to reform the Nigeria petroleum industry. The law was expected to help improve the inustry’s fiscal framework, transparent governance, and regulation.

Part of the issues challenged by the plaintiff is the PIA’s revenue allocation formula, arguing that it unfairly disadvantaged host communities.

While the Act allocates only 3 per cent of oil companies’ operational expenditures to host community development, it dedicates 30 per cent of NNPC Limited’s profit to frontier oil exploration.

CHURAC sought an amendment to ensure that at least 10 per cent of NNPC profits would be allocated to host communities.

The ruling comes amid ongoing legal debates over host community rights in Nigeria’s oil-producing regions.

In a similar case in 2023, the Federal High Court in Abuja recognised the Buoye Omuso (Brown) Major House of Finima and the Finima Community in Rivers State as the lawful host community of Nigeria LNG Limited under the PIA and the Nigerian Oil and Gas Industry Content Development (NOGICD) Act.

READ ALSO: NDIC to commence payment to depositors in Aso, Union Homes Savings & Loans

The court granted the community representation over its lands and ordered compliance with statutory and regulatory guidelines for host community engagement. Legal analysts note that cases like Finima illustrate the courts’ dual role in both enforcing host community rights and upholding statutory obligations, such as infrastructure protection.

The case spotlighted long-standing concerns over the marginalisation of oil-producing communities, who often bear the environmental and social costs of oil extraction while receiving minimal benefits.