By: Sunday Ameh
A legal practitioner and indigene of the oil-producing Ilaje area of Ondo State, Omolegbon Olawale Odusola, has instituted a suit against the Ondo State Government and other parties over the alleged diversion of funds meant for the development of oil-producing communities in the state.
The suit, marked HCOK/67/CIV/2026, was filed before the court with Odusola seeking judicial interpretation of the constitutional provisions guiding the administration and utilization of the 13 percent derivation fund accruing to oil-producing states.
Odusola, in the suit titled OMOLEGBON OLAWALE ODUSOLA VS. ONDO STATE & ORS, challenged what he described as the alleged diversion and withholding of portions of the derivation fund meant for oil-producing communities in Ondo State through the Ondo State Oil Producing Areas Development Commission (OSOPADEC).
According to court documents made available, the claimant argued that the 13 percent derivation fund provided under Section 162(2) of the 1999 Constitution of the Federal Republic of Nigeria was established primarily for the development and welfare of communities directly impacted by oil exploration activities.
He contended that it was unconstitutional for the Ondo State Government to allegedly deduct and allocate 60 percent of the derivation fund for use across all local government areas in the state, while only 40 percent is reportedly remitted through OSOPADEC for the benefit of oil-producing communities.
The claimant also challenged the legality of Section 10(a)(i) of the Oil Producing Areas Development Commission Law, Cap 106, Laws of Ondo State, 2006, which provides for the allocation of only 40 percent of the derivation fund to OSOPADEC.
According to him, the provision is allegedly inconsistent with the spirit and intention of Section 162(2) of the Constitution and should therefore be declared null and void.
In one of the reliefs sought before the court, Odusola asked for a declaration that the entire 13 percent derivation fund accruing to Ondo State is meant exclusively for the development of oil-producing communities in the state, particularly communities within Ilaje and Ese-Odo Local Government Areas.
The claimant further requested the court to declare as unconstitutional the alleged diversion and allocation of 60 percent of the derivation fund to accounts of government agencies and authorities for the benefit of non-oil-producing local governments and communities.
He also urged the court to hold that the relevant government authorities lack powers to withhold the funds and should be under constitutional obligation to remit such allocations directly to OSOPADEC immediately after receipt from the Federation Account.
As part of the reliefs sought, Odusola prayed the court to strike out and nullify the disputed section of the OSOPADEC law for allegedly conflicting with constitutional provisions.
Alternatively, he asked the court to compel Ondo State Government officials, including relevant authorities responsible for the management of state finances, to remit the accrued 40 percent allocation due to OSOPADEC within 30 days of receipt of funds from the Federation Account.
The claimant further requested an order of perpetual injunction restraining the defendants from further withholding, diverting, or appropriating the derivation fund for purposes outside the development of oil-producing communities in Ondo State.
In addition, he sought the sum of N10 million as cost of litigation, alongside any other orders the court may deem appropriate in the circumstances of the case.
Speaking on the legal action, Odusola said the move was part of his contribution toward addressing challenges confronting oil-producing communities, particularly in Ilaje areas where residents continue to experience environmental and socio-economic impacts associated with oil exploration activities.
According to him, communities in the region have continued to bear the burden of environmental degradation and other consequences of oil exploitation and therefore deserve access to resources intended for their development.
He disclosed that arrangements had been concluded to ensure service of court processes on all parties involved in the matter to pave the way for hearing.
As of the time of filing this report, the Ondo State Government had yet to publicly respond to the suit.
The case is expected to generate legal and political interest, especially regarding the interpretation of constitutional provisions relating to the administration and allocation of derivation funds in oil-producing states across Nigeria.
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