Is GE Still Guided by Global Best Practices?

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Nduka Nwosu

It is just relevant to ask how much of global citizenship does the great General Electric still adorn given the Nigerian factor. In other words, does GE operate under the strict regulation of global best practices in corporate governance? If the response is in the positive, it deserves a handclap from its admirers since it started its operations here.

On the contrary the critical audience can only allude to the picketing last April of GE’s Victoria Island office by the Petroleum and Natural Gas Association of Nigeria (PENGASSAN). Abel Agarin, PENGASSAN Lagos Zonal chairman who led the picketing workers of Arco Plc, said GE had given its commitment to the Minister of Employment, Labour and Productivity, Chris Ngige, to settle its outstanding debt to the workers last February but suddenly retreated at the moment of living up to its obligation. No reason was given for this condescending act but this is Nigeria and we live in a period where workers easily get short changed for the flimsiest excuse. But must GE, which Forbes Global 2000 in 2012 mentioned as the fourth largest company in the world, also be caught playing the Nigerian game?
Thomas Edison America’s great inventor whose works on Electricity and corporate amalgamation brought GE to where it presently stands (all thanks to JP Morgan and Anthony Drexel’s company-Drexel Morgan & Co), would be weeping in his resting place to see his vision of what a Fortune 500 Company ranked 68th by gross revenue and 14th in profitability in 2011, should be – an ambassador of goodwill, being dragged to the local league.

Make no mistakes about it, GE in spite of its past legal issue back home, with a regulatory agency like SEC, remains a giant multinational that has benefited immensely here in Nigeria while making its own contributions. However should we be forced to ask if Donald Trump’s alleged currency manipulation of the US by China and a trade imbalance that favours the latter is also applicable to foreign multinational companies plying their craft in this Lugardian Republic?

GE’s action is a sore reminder of how a corporate citizen seemingly protected by the much celebrated and expected local content act was shortchanged in the selection of a less competent bidder for contract renewal. This brings to question the effectiveness of the local content act and the regulatory body – the Nigerian Content Development and Monitoring Board (NCDMB). How effective are the laws put in place to accord “first consideration” in the award of Oil and Gas related contracts and “exclusive consideration” in the award of contracts and services? When the Arco/Agip case came up was the NCDMB laid back or did it play a maximum role in defending the hallmark vision of giving exclusive consideration to local players who have distinguished themselves with content whether in the acquisition of intellectual property or technology or both?

But that is where its comedy of the absurd begins. Otherwise how does one explain a situation where issues of local content are decided in faraway countries outside the shores of the country the same way Chinua Achebe wondered why the fate of African literature and its content had become the exclusive decision of foreign experts and panels. Take the case of the Practical Nigerian Content meeting (PNC), which is an annual event initiated in 2010 with the aim of creating a meeting point for stakeholders in government and industry for discussions and debates on key issues surrounding the Local Content Act.

The PNC arrangement, if it still exists, remains a partnership between Nigeria and a British group – CWC described as, a UK based global company that has for over a decade been providing top quality information and opportunities for government and industry players to come together and promote commerce and develop relevant skills. The registration fee for this meeting is 1890 pounds payable in a British account or bank. Now what value added of such offshore expenditures accrue to the local content players who are continuously shortchanged by the multinationals with the tacit participation of indigenous surrogates? Are appointments to such lofty offices that drive organisations such as the NCDMB designed to work to the superior advantage of the foreign companies already dominating the system or to the advantage of indigenous companies for whom the act was passed?

All that is being postulated about the NCDMB and the local content act applies to the Petroleum Industry Bill (PIB) or the Petroleum Industry Governance Bill (PIGB). Just recently the NNPC helmsman Maikantu Baru lamented the inability of the country’s legislative body – the National Assembly to pass the bill into law creating uncertainty in the oil and gas sector with the attendant loss of business opportunities.

Baru’s lamentations must have been prompted by the revelations contained in the policy brief of the Nigerian Extractive Industries Transparency Initiative (NEITI), that the country has so far lost $200billion in business opportunities for non-passage of the PIB into law.
According to NEITI, projected but deferred investments yielded a loss of $120 billion over time. Does NEITI’s observation that the lack of clarity and ambiguity of the rules, predictable policy-making and efficient regulations of the oil and gas industry, remind both players and keen watchers of the sector how long it took our country to stop flaring gas now another huge foreign exchange earner for the country?

It is interesting to hear Baru complain that the ongong review of the NLNG Act is a bad signal to the international community about how business is done in the country. Expectedly, the global LNG market could be taken to the next level of higher earnings with the passage of the PIB into law. Therefore, one can hardly fault Baru’s line of contention; so can we for once challenge ourselves and begin to pull the wool in our eyes rather than play to the gallery of a rentier state?

Having watched the growth of Arco from a one man’s dream that was planted as a seed in 1980 to a public limited company acquiring along the way both manpower and technology, it is only state support that can bring it and other indigenous companies of its kind to the same level if not greater height that was set in motion by Edison’s dream, the dream that is today the giant corporate octopus – General Electric.

While living in Somerset New Jersey and working in Manhattan, I took daily train rides from New Brunswick on the Northeast corridor of the New Jersey Transit to Penn Station and one of the stops was Edison Station a few stations to Newark, the border town between New Jersey and New York. That was where Thomas Edison brought about his great inventions and the birth of GE just as our own Arco Plc took root in Warri an oil city and port like Newark with its huge port complex, a city of commerce where a Nigerian Ugochukwu Nwaokoro is its deputy mayor.

GE over the years has become a giant and continues to prosper contributing two Nobel Laureates just as Arco, a good corporate citizen, has sponsored hundreds of Nigerian students to greater academic accomplishments as well as initiating a Hall of Fame for accomplished Nigerian scientists home and abroad among many other corporate social responsibility initiatives

That is the type of news we expect from GE and Co, not owing peanuts it knows will cost it nothing to dispense with. Only recently GE’s global Chairman and CEO Jeff Imelt led a delegation on a visit to the NNPC CEO Baru, intimating him that GE was keen investing in Port Harcourt, Warri and Kaduna refineries, pledging its readiness to work with the NNPC to make production in the off-shore fields profitable for the benefit of both companies and other stakeholders.

This is cheery news; while its lofty proposition is commendable, the multinational giant should condescend and pay the crumbs it has left on the master’s table.