Oil Workers Take Battle to GE

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Business/Labour

Members of the Nigeria Union of Petroleum and Natural Gas Workers and Petroleum and Natural Gas Senior Staff Association of Nigeria who last Monday picketed the Lagos office of General Electric are hoping that the intervention of the Ministry of Labour and Employment, Dr. Chris Ngige, will permanently lay to rest the lingering dispute between the company and ARCO Group, Davidson Iriekpen writes

Corporate organisations on Aboyade Cole, Victoria Island in Lagos and those, who constantly use the road where shocked to see a disruption of activities in the neighbourhood when oil and gas workers under the umbrella of the Nigeria Union of Petroleum and Natural Gas workers (NUPENG), Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and the Trade Union Congress of Nigeria (TUC) last Monday picketed the Lagos office of General Electric (GE).

The protesting workers in their large numbers as early as 4 a.m. blocked the entrance into the company with their private cars, associations’ branded vehicles and a petrol tanker. The protesters, who wore red attire, chanted solidarity songs, and carried placards with various inscriptions, were simply protesting the alleged non-refund of excess withholding tax and gratuity of employees of ARCO Group Plc.

They said their action was not only to demonstrate their frustration, but the failure of the federal government to come down hard on GE in order to lay the dispute, which started since 2016 to rest permanently.

Before the protest last Monday, the unions had on October 28, 2019 written a joint letter to the Minister of State for Petroleum Resources, Timipre Sylva, and Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, seeking their intervention in resolving the lingering dispute between GEION and ARCO Group Plc over the non-payment of terminal benefits and allowances for which nothing has happened. They also threatened to embark on strike.

In the letter signed by the General Secretary of PENGASSAN, Lumumba Okugbawa, and the General Secretary of NUPENG, Olawale Afolabi, the unions had said they had reached their wit’s end over the inability of the concerned authorities to resolve the dispute between GEION and ARCO Group.

The letter, which was also copied to the minister of labour and employment; and the director general of the Department of State Services (DSS), was to compel GE to fulfill all the agreements reached at various meetings held on the payment of severance entitlements to their members.

They felt that since nothing reasonable came out of the meetings, it was time to go to the streets in order to drive home their demands.

“The patience of our members is at the breaking point as they see their colleagues from ARCO wallowing in deprivation and hardship after tolling for several years due to deliberate ploy of some unscrupulous individuals and organisations to elope with the fruits of their labour,” they noted.

During their protest last Monday, the Head of Administration, Lagos Zonal Council of NUPENG, Mr. Lanre Badmus, had told THISDAY that they decided to embark on the protest and picketing to prevail on GE to pay their members their entitlements as agreed. According to him, the matter had lingered enough and that all efforts made by the unions, Ngige, and even the director general of DSS could not yield any results.

The NUPENG leader, however, noted that if the Lagos protest and picketing did not make GE to act accordingly, they would implement their Plan B, which he said would be a nationwide protest.

The Lagos Zonal Chairman, NUPENG, Mr. Tayo Aboyeji, said that since 2016, the ex-staff of ARCO, a contractor company to GE, who were dismissed from service were yet to be paid their entitlements. He added that since their dismissal and over the years, many of the ex-staff had had health challenges and some had to withdraw their children from school.

“We have been to the Ministry of Labour to sign a memorandum of understanding, and they agreed to pay. We also went to the DSS and they mediated, yet, GE has refused to do the needful. That is why we are here to picket them,” he said.

Just when many thought the protest would continue the next day, THISDAY was informed that it was suspended due to the intervention of the Minister of Labour and Employment, Dr. Chris Ngige.

The Administrative Head, Lagos Zonal Council, NUPENG, Mr. Badmus Aiyedun, said Ngige had invited the leadership of NUPENG, GE management and ARCO officials to a meeting on February 10 to resolve the lingering issues. Aiyedun, however, added that if the meeting was not able to resolve the dispute, the unions would resume their action.

ARCO had explained that its inability to pay the terminal benefits and entitlements of some of its members, five of whom have died while waiting, was because of the deliberate refusal of GE to refund taxes “illegally and unilaterally deducted at 10 per cent, instead of the five per cent permitted under the contract.” It added that GE has ignored letters by the Federal Internal Revenue Service (FIRS) that five per cent is the applicable rate.

Records indicate that the FIRS had flagged significant discrepancies in remittances made by GE between 2009 and 2015. After a reconciliation meeting between May 17 and June 21, 2019, for example, the former FIRS Chairman, Tunde Fowler, had written a letter dated August 7, 2019 in which he noted wrongful withholding taxes deducted by GE from ARCO amounting to N328,855,903.10 between 2009 and 2015.

In the same letter, Fowler also noted that between 2011 and 2015, the dollar differential of withholding taxes wrongfully deducted by GE was $1,716,976.96.

Before then, in a letter dated January 14, 2019, the FIRS had given GE a seven-day deadline to defray its liabilities or provide evidence of payment. Its letter to GE with ref: FIRS/SCLI/ARCO/1/2019/14/1, said, “Failure to defray the above liability (225,097.11 euros; $2,626,970.38; N237,443,292.60) or provide evidence of payment within the stipulated time will result in enforcement action taken against you.”

The figures above do not, however, cover all the said illegal deductions disputed by ARCO and for which it has repeatedly presented evidence.

Sources close to the company said, for example, that the value of 12 of invoices for which GE could not provide credit notes in 2014 stood at $563,861.05; and that the dollar value of its wrongful deductions over the years could be as high as $3million, apart from the excess in other currencies.

Following protests by PENGASSAN and NUPENG, the ministry of labour and employment had hosted a second stakeholders’ meeting to settle the lingering dispute. After the meeting on September 24, 2019 involving GE and ARCO, also attended by members of the unions, and the FIRS, it was decided in a letter dated October 4, 2019 signed by a director in the labour ministry, Mrs. O.U. Akpan, that, “GE should within seven days apply to the FIRS and request for the refund of the over-deducted sums paid to FIRS as agreed during the reconciliation exercise.”

Akpan also said: “All deductions made by GE on behalf of ARCO substantiated with documentary evidence with the objective of remitting to FIRS, but which were not remitted to FIRS should be refunded to ARCO within three weeks.”

The seven days had since expired, with GE remaining defiant. The September 24 meeting was the second hosted by the ministry last year. The first was on May 24.

Insiders familiar with the dispute said GE had been inventing different delay tactics, including using consultants to scuttle or repudiate decisions previously reached and accepted by the parties.

“They just feel they are above the law and no one can do them anything,” one source said.

This assertion was confirmed when after the meeting, rather than comply, GE in a letter dated October 9, 2019 addressed to the executive chairman of the FIRS, again asked the revenue service to review its records for details of the withholding tax remittances it made on behalf of ARCO from 2006 to 2008 in naira and dollars in order to enable it close the outstanding balances. It said it did not have information for the years, and was relying on the FIRS to provide it with the details of the taxes it remitted for the period.

“As earlier communicated, we do not have information for those years, and we are relying on the FIRS to provide us with the details of the taxes we remitted for the above period,” GE said.

The FIRS on its part, responded with a letter dated October 17, 2019 wherein it requested it to respect agreement reached with the federal ministry of labour and employment.

The letter signed by Dick Irri read: “I draw your attention to your commitment at the held at the Federal Ministry of Labour and Employment wherein you agreed to make request for refund on behalf of ARCO Group. The agreements are clearly summarised in the letter by the ministry.

“You are therefore requested to immediately respect your commitment by requesting for refund on behalf of ARCO considering the fact that the time agreed has lapsed.”

Nothing has been done since.

An industry source in Nigeria said: “It appears that it’s only in Nigeria that GE thinks it can do what it likes without consequence.”

This is why many are hoping that the intervention by the federal ministry of labour will lay the dispute to rest permanently.