Labour as Watchdog for the Economy


By Femi Falana

Industrial unions in the oil sector can play a role in re-fuelling the Nigerian economy.
However, we should realise that the Nigerian economy cannot be seriously re-fuelled as long as it is controlled by imperialism through the International Monetary Fund and World Bank. This is compounded by the refusal of successive Nigerian governments to recover royalties running to billions of dollars from oil companies and the proceeds of crime from some shipping and oil companies that have stolen several millions of crude oil from Nigeria.

In June 2015, I wrote a letter to the Management of the Nigerian National Petroleum Corporation (NNPC) demanding that urgent steps be taken to implement the Production Sharing Contracts entered into between the Federal Government and the Oil Majors. Under the PSCs a review of royalty in favour of the Federal Government was required to be carried out whenever the price of crude oil was sold above $20 per barrel in the international market.

The contracts were anchored on the provisions of the Offshore and Inland Sharing Contracts Act.
The request was ignored.
I also requested the National Assembly to review the Act with a view to amending some of the provisions.
The request was equally ignored.

Disappointed but undaunted, I continued to mount pressure on Authorities in Abuja.
Based on such pressure, the Minister of State in the Ministry of Petroleum Resources, Dr. Ibe Kachikwu, was compelled to disclose that the nation had lost a whopping sum of $60 billion due to the non-implementation of the production sharing contracts by some unnamed public officers.

Embarrassed by the disclose, three oil- producing states namely, Akwa Ibom, Bayelsa and Rivers decided to file a suit at the Supreme Court wherein they sought to compel the Federal Government to enforce the production sharing contracts.

In a historic judgment, the Supreme Court of Nigeria directed the federal government to adjust its share of the agreements without any further delay. While the Supreme Court is commended for the determining the matter expeditiously, the National Assembly should proceed to amend the Act. In particular, Section 5 of the Act which provided that royalty would not be collected from oil and gas companies operating in areas in excess of1, 000 meters depth should be amended since the section was to last for 15 years. It expired in 2008 by effluxion of time.

The implication of the automatic repeal of the section is that the Federal Government is entitled to collect the accrued royalties for the past 10 years.
On account of a study commissioned by Nigerian Maritime Administration and Safety Agency (NIMASA) under the Jonathan administration it was established that from January 2011 to December 2014, 60.2m barrels of crude oil stolen from Nigeria were discharged at the Philadelphia Port in the United States of America. The oil and shipping companies involved in the criminal enterprise have been identified but the Federal Government has been very reluctant to recover the sum of $12.7 billion being the value of the stolen crude oil.

Even the Economic and Financial Crimes Commission which is busy collecting some hundreds of millions of Naira from alleged local looters have not investigated the monumental fraud which has been traced to the foreign oil and shipping companies
It is hoped that the PENGASSAN and NUPENG will assist Nigeria to recover the said sum of $12.7 billion from the indicted companies. From the information at my disposal several millions of crude oil stolen from Nigeria were also shipped and discharged in many ports in the United States, China, United Kingdom, France, India etc. during the same period. It is estimated that the Federal Government can recover not less than $100 billion being the value and penalties imposed on the companies involved in the crude oil theft.

Apart from ensuring that the aforementioned funds are recovered the trade unions led by the Nigeria Labour Congress and the Trade Union Congress should call for an end to the national shame of running from the West to the East to beg for all kinds of loans.
It is time the labour movement mobilised the Nigerian people to take over and own the anti corruption war.
The anti graft agencies ought to be fully supported in the recovery of the nation’s looted wealth. It is in our collective interest that the war against corruption is not left for the federal government to wage alone.

If the war is left for the ruling party the war may be politicised in a manner that highly connected individuals may be excluded from prosecution.
For instance, the allegation that a sitting governor collected a bribe of $5 million should attract the attention of the anti graft agencies. This is an allegation that should not be swept under the carpet like the $5 million bribe allegedly received in the Halliburton affairs (involving $180million} by a former President through one of his aides.