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NDDC Vs stiff-necked debtors

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Ndoma-Egba

The paradox of the Niger Delta region has been firmly etched in the psyche of the people who inhabit it. It holds stupendous oil and gas wealth in its bowels but its people are extremely poor and deprived. The twin functions of oil exploration and exploitation have polluted the water, fouled the air, killed the farms and the fishes and reduced the region to a soul-stifling entity with a perpetual frown. This cash cow can be compared to the man who lives on the banks of a river but washes his hands with spittle. Since the discovery of oil in the region 61 years ago and its exportation two years later the fate of the people and its ecosystem has received life threatening knocks. The people’s misery was stinking like an untreated sore. The region could be described without much exaggeration as the headquarters of sorrow. After several pitched battles, several protests and several political permutations by several governments at the centre the Niger Delta Development Commission (NDDC) was born. Its mandate was for it, along with other development partners, to make a positive intervention in the region’s development process as well as cure it of its environmental and ecological deficiencies. But this baby was not exactly a bouncing baby boy or girl. It was a baby born with some defects and those defects were to manifest themselves later. They have now come to bite us.

At present there is a conflict between the NDDC and the NLNG Limited, a gas processing company in the region. The Niger Delta Development Establishment Act of 2000 stipulates specific contributions to be made by the Federal Government as well as oil and gas companies to the NDDC to enable it execute its statutory mandate. By the provisions of Section 14 (2) (6) of the NDDC Act, “gas processing companies” operating in the petroleum industry are specifically required to pay to the NDDC fund “3% of their annual budgets.”

Some of the oil companies manage to find ingenious ways of paying less than they ought to pay, thus short-changing the NDDC. Some default by not paying at all for one reason or the other. The NLNG Limited belongs here. This company is the biggest natural gas liquefaction company in Nigeria and every year it posts a profit of not less than N500 billion. There is nothing with a company making humongous profits. Both the NDDC and NLNG Limited have gone through the entire gamut of our court system all the way to the Supreme Court. It appears that the NLNG Limited had managed to find some technical lacuna in the law and used that canopy to evade its responsibility to the NDDC, and the Niger Delta people. This problem apparently arose from some terminological inexactitude in the law. The NLNG says it is not a “gas processing company” in the context of the NDDC Act but in what context is it a gas processing company? It also claims that it is not subject to any new laws, taxes, dues or other obligations enacted or prescribed in Nigeria after 1993 except such taxes, laws or obligations are generally applicable to all companies registered in Nigeria because a special exemption was granted to it under the Nigeria LNG (Fiscal Incentive, Guarantees and Assurances) Act of 2004. The NLNG has added a third reason for non-payment which sounds ridiculous namely that the NLNG does not have an “annual budget” as envisaged by the NDDC Act from which it would be expected to pay 3%. Is there any limited liability company in the world that does not have an annual budget or is this just an exercise in legal sophistry to enable it evade its financial obligation to the NDDC? It appears that the NLNG wants only the roses without the thorns, the profits without the responsibility. By the laws of its universe the company prefers to stay in a steady hum of happiness while its operating constituency wallows in discontent that can lead to an uncontrollable explosion that may even affect its operation.

However, the House of Representatives’ decision to amend the NLNG Act is commendable. This is the end of an error. On May 9, 2017, Mr. Leo Ogor, the Minority Leader of the House, presented an amendment bill to adjust the Nigeria LNG (Fiscal Incentives, Guarantees and Assurances) Act. In the amended bill a provision called section 7b which is an addition to the Principal Law states that “Notwithstanding section 7 or any other section of this Act, the Nigeria Liquefied Natural Gas Limited shall pay 3% of its total annual budget to the Niger Delta Development Commission Fund as required by section 14 subsection 1 and 2b of the NDDC Establishment Act, 2000.” In making his presentation, Mr. Ogor said that “the amendment to this Act is aimed at redressing the great injustice that the NLNG has meted out to the people of the Niger Delta region for almost 27 years now.” Now that the House of Representatives has passed the amendment bill it is up to the Senate to do its own legislative duty by giving its nod to the bill. This will bring the legal gerrymandering that provided the NLNG the alibi for the artful evasion of its responsibility to a closure.

In February last year, the Senate Committee on the Niger Delta headed by Senator Peter Nwaoboshi did an investigative hearing of the whole shebang and invited oil and gas companies operating in the region. Nwaoboshi said that some of the companies are paying less than they ought to pay. “When they came before our committee I read out the Act to them and some of them started apologising. They said they thought that they were supposed to pay three percent of the proceeds of projects that they execute in their communities. There has been a total disregard and disrespect for the NDDC Act and nobody will allow that.” If Senator Nwaoboshi and his colleagues show the sensitivity that the matter demands and put their stamp of approval on the amendment bill soon there will be a ringing impulse of hope for the gradual restoration of the region through the exertions of the NDDC.

Many critics of the NDDC complain about its underperformance and of the fact it is simply doing minimal jobs that are not life-changing or territory-transforming. They apparently arrive at their conclusions by either doing some number-crunching or some wild guesstimation. Unknown to them the numbers don’t add up because most of those who ought to pay are not paying and some of those who are paying pay far less than they ought to pay. As K. O. Mbadiwe, the flamboyant politician and word-smith, used to say “if you want greatness you must be ready to finance it.”

The Federal Government is owing the NDDC N1.8 trillion in unpaid statutory allocations in the past 15 years while the Ecological Fund, a Federal Government outfit, also owes the Commission more than N45 billion. By what magic can the NDDC do big projects that can transform the ecology of the region and the well-being of its people when the Federal Government is its biggest debtor? Every year, the federal Government makes a lot of drama about the billions it budgets for the NDDC. People take this in and hope that the Niger Delta will soon become some new-fangled Eldorado. Who sai, as Niger Deltans would say in their much adored lingo, pidgin. That Eldorado is still far away because the commitment to the region by various federal governments over the years has been half-hearted to put it lamely. I suggest that some of the defaulting oil and gas companies are looking at the dance steps of the big masquerade and therefore find the excuse to follow its uninspiring example.

But you don’t do what is wrong because somebody else has done it. It does not offer you the gift of forgiveness or exculpation or exoneration from your statutory responsibility. Besides, the failure to fund the NDDC properly to meet its responsibilities to the Niger Delta region certainly has unintended consequences. In that region trouble is never fully buried below the surface and when it rears its ugly head everybody including the Federal Government, the oil and gas companies, the economy and people generally are in trouble.

It is in everybody’s interest to have peace in the region. The current problem of institutional disregard for financial obligations is really not, make no mistake about it, in the best interest of anybody including the stiff-necked defaulters. We are lucky to have an experienced team at the NDDC totem pole now. The Chairman of the Board, Victor Ndoma-Egba was Senate Majority Leader, and is a five-star Senior Advocate while Nsima Ekere, the Managing Director is a Real Estate expert and a former Deputy Governor of Akwa Ibom State. With a team like that we have a good chance, all things being equal, of getting reasonable results from their exertions at the Commission. While we have the opportunity to make a new beginning after the destabilising politics of the last few years, let us use now what Abraham Lincolm called the “silent artillery of time” to win the development war in the region.


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