HYDERABAD: The Hyderabad circuit bench of the Sindh High Court has directed the Badin deputy commissioner to ensure that funds deposited by exploration and production (E&P) companies in the district for their social welfare obligations were used in accordance with the guidelines issued by the competent authorities.
The division bench, comprising Justice Adnanul Karim Memon and Justice Mohammad Jaffer Raza, the other day disposed of a public interest petition filed in 2018. It observed that the petition had been pending since then without any progress and was therefore being disposed of in line with a 2014 Supreme Court order.
The court told the DC to ensure that all amounts deposited by the E&P companies towards social welfare obligations, production bonuses and other contractual commitments were used strictly in accordance with the applicable petroleum policies, petroleum concession agreements (PCAs) and guidelines issued by the authorities.
It ordered the Directorate General of Petroleum Concessions (DGPC) and the provincial government and district administration to ensure proper assessment, recovery and monitoring of all outstanding obligations of the companies. The funds, it said, must be used transparently, with the participation of local communities and periodic monitoring, so that the intended benefits reached residents of the affected areas.
The authorities were also directed to ensure compliance with obligations relating to local employment, training and environmental protection, and to act on the Supreme Court’s directives in letter and spirit. The court’s additional registrar was told to ensure compliance with the order and to call for reports from the respondents from time to time for placing before the court.
The petition was filed by Mohammad Fayaz Arian, a resident of Talhar in Badin district, who named the DGPC, the chief secretary, the Badin DC and the Hyderabad commissioner as respondents. He said that several oil and gas fields and exploration companies were violating the terms of the petroleum concession agreements they had signed with the federal government.
The companies, he said, were supposed to control environmental pollution, provide jobs and gas facilities to local people and spend specified amounts on infrastructure, including roads, schools and hospitals, and on public welfare. The PCAs contain clauses on development, capacity building and protection of the environment in the areas from which the companies extract oil and gas, and the companies were bound to fulfil the social obligations agreed with the government.
The petitioner said that under one clause of the PCA unskilled labour was to be hired from among the area’s residents, with preference for displaced landowners, and that another clause required investment in social welfare schemes and training in line with the Petroleum Policy 2012.
He added that under the guidelines on the use of the marine research fee, dated April 14, 2009, a committee, the Petroleum Marine Development Committee (PMDC), had been formed. Under separate guidelines on production bonuses, dated Oct 29, 2009, the DC was responsible for collecting the bonuses from the companies, to be managed by the local government. He asked the court to direct the respondents to take action against the companies and to furnish reports on those working in Badin, and said details of production bonuses, royalty and community development and social welfare funds should be sought.
Published in Dawn, November 12th, 2026
