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Kachikwu/Baru: Where NNPC management goofed

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L-R: The group managing director of the Nigerian National Petroleum Corporation Maikanti Baru and the Nigerian minister of state for petroleum resources Kachikwu Baru at the Nigerian Economic Summit Group yesterday. PHOTO: TWITTER/NNPC


Nigeria, as it is today, is a troubled country. As appropriately captured by Peter Cunliffe-Jones in his book: My Nigeria: Five decades of Independence, this troubled giant of Africa, vast in size, rich in contrast, and vibrant in citizenry, is a country full of hurts. Its complexity keeps growing daily. In the last few years, Nigeria has been turned into a huge theatre where absurdities flourish freely. We are currently experiencing and witnessing one of such absurdities at the Nigeria National Petroleum Corporation (NNPC).

Karl Maier, a British journalist, wrote a book with the curious title: This House Has Fallen. The book describes our beloved country as “a byword for chaos and corruption.” It goes further to present the country as a country that has “proved to be by far the most confounding, frustrating, and at the same time engaging place…” The book says Nigeria “simply overwhelms the senses, one of those rare examples in which the sum of its parts is, at least to date, immensely greater than the whole. It is a work in progress though one is never too sure whether it is being assembled or torn apart.”

Can these two citations be said to be a true reflection of Nigeria? It is possible that foreign writers always, truthfully, tell us who we are and what we are. Most times, they boldly describe this country and the citizens more appropriately than we the indigenes have done. In a bid to play safe, we have continuously chosen to live in self-denial. We know what is wrong with us but we have always refused either to say it out or accept the totality of it. When Professor Wole Soyinka said years back that he is a member of a wasted generation, we thought he was being too negative. Maybe he was right.

 
Let’s face it. When a group of public servants in an organisation as big as the Nigerian National Petroleum Corporation (NNPC) decides to manipulate information regarding expenditure in the region of $25 billion, which is considered to be above what it is statutorily allowed to spend, then this house has truly fallen. Let it be made clear here that NNPC management, led by Dr Maikanti Baru has not been accused of stealing or misappropriating any fund as far as this issue is concerned. No, the issue in the public domain is that it awarded contracts worth this amount without following due process or applying the laid down rules.

Let’s make a direct reference to what the Minister of State, Dr Emmanuel Ibe Kachikwu cited in his memo to President Muhammadu Buhari. He had noted that, “The legal and procedural requirements are that all contracts above $20m would need to be reviewed and approved by the Board of NNPC,” but that “over one year of Dr. Baru’s tenure, no contract has been run through the Board. This is despite my diplomatic encouragement to Dr. Baru to do so to avoid wrongfully painting you as a President who does not allow Due Process to thrive NNPC.

“Given the history of malpractices and the public perception of NNPC as having a history of non-transparency, the NNPC Tenders Board (NTB) cannot be the final clearance authority for contracts it enters into. The NTB which is a collection of top level NNPC executives and COOs, with the GMD as Chairman, cannot continue to be the final approval authority for multi-million dollar contracts and transactions involving NNPC to the exclusion of the Board. Board members have singularly and collectively raised these issues to no avail.”

These were the major contracts he said had been awarded by the leadership of the NNPC without any reference to the Board of NNPC: “The Crude Term contracts- value at over $10 billion; The DSDP contracts- value over $5 billion; The AKK pipeline contract- value approximately $3 billion; Various financing allocation funding contracts with the NOCs – value over $3 billion; various NPDC production service contracts – value at over $3bn—$4 billion”

Kachikwu stated that, there were many more of such illegalities; and that, “in most of these activities, the explanation of the GMD is that you are the Minister of Petroleum and your approvals were obtained. However, the correct governance should be that the Minister of the State and the Board review the transaction and give their concurrence prior to presentation to you. As in many cases of things that happen in NNPC these days, I learn of transactions only through publications in the media.”
 
When the NNPC decided to respond to the allegations by Kachikwu on Monday last week, Nigerians were expecting facts and figures that would dismiss Kachikwu as a busy-body or as a minister who was given a job to do but did not do it well. People thought they were going to say that companies picked by Kachikwu did not qualify for the jobs and when they were not given the jobs, he raised alarm. None of these happened. Instead, NNPC management simply confirmed all the allegations by Kachikwu regarding the award of contracts beyond the statutorily permissible amount without any approval by the board.
 
After the indirect confirmation, it went ahead to state almost without any ambiguity that the management does not recognise Kachikwu as the chairman of the board since he is not the minister of petroleum. That sounds unbelievable because Baru, as a member of the board of NNPC knows that Buhari formally delegated that function to Kachikwu in his capacity as the minister of state in charge of petroleum resources. So, going directly to the President to obtain approvals without any concurrence by the board amounted to disobedience to constituted authority.
 
The NNPC team stated on Monday that it was important to note from the outset that the law and the rules do not require a review or discussion with the Minister of State or the NNPC Board on contractual matters. Are we supposed to believe that? It went further: “What is required is the processing and approval of contracts by the NNPC Tenders Board, the President in his executive capacity or as Minister of Petroleum, or the Federal Executive Council (FEC), as the case may be. There are therefore situations where all that is required is the approval of the NNPC Tenders Board while, in other cases, based on the threshold, the award must be submitted for presidential approval.”

That has left a lot of people wondering whether Baru and his team ever read the NNPC Act; or is it that they deliberately chose to act in breach of the Act. The word NNPC as used here refers to the institution, which comprises the staff, management and the board. It does not refer to any particular individual. It is the duty of the board therefore to take whatever programme of action the management must have put together, study it, approve it where necessary and take it to the President or the Federal Executive Council as the case may be for consideration.

Still, the NNPC spokesman, Ndu Ughamadu, was quoted as saying that all the allegations by Kachikwu were baseless because all due processes were followed in the various activities listed in the petition. He said, “What is required is the processing and approval of contracts by the NNPC Tenders Board, the President in his executive capacity or as Minister of Petroleum, or the Federal Executive Council (FEC), as the case may be,” he said without mentioning the involvement of the board.

Then he continued: “There are therefore situations where all that is required is the approval of the NNPC Tenders Board while, in other cases, based on the threshold, the award must be submitted for presidential approval. Likewise, in some instances it is FEC approval that is required.

For avoidance of doubt, this is what the NNPC Act says:  “There shall be established a corporation by the name of the Nigerian National Petroleum Corporation (hereinafter in the Act referred to as “the Corporation”) which shall be a body corporate with perpetual succession and a common seal and may sue or be sued in its corporate name. The affairs of the Corporation shall, subject to Part II of this Act, be conducted by a Board of Directors of the Corporation which shall consist of a Chairman and the following other members….”

That is it. The affairs of NNPC are to be conducted by the board of directors; not the tenders’ board or any other sub-body. It is therefore in breach of the Act of the Corporation and a violent disobedience to presidential directive for the GMD to bypass the board and deal directly with any other person even if that person is President Buhari or Vice President Yemi Osinbajo who, as a lawyer, clearly understands the rules. It does not matter whether the board chairman is a friend or enemy of the GMD. What matters here is the procedure, which derived from the law establishing the NNPC.

For breaching the procedure as enshrined in the Act establishing the NNPC, the GMD of NNPC and his team may have questions to answer. The President and the Senate Committee investigating this and other issues must ensure that this matter is not swept under the carpet. Whoever was a part of this breach must account for their actions. Buhari came to office on the excuse of fighting impunity in public service. That war must start now.
• Kalio, a policy analyst, lives in Abuja



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