GRACE IN SYSTEMIC FAILURE: THE CASE OF NWA FLIGHT 253

By Louis Brown Ogbeifun | January 1, 2010

Systemic failure could be said to be the shutting down of multiple components of a system that hitherto functioned optimally or sub-optimally. In medical practice, this would involve the failure of multiple organs and the patient would be at grave risk.

Reasonable and responsible world leaders were amazed that flight NWA 253 would have been doomed but for systemic failure. But in this part of the world, systemic failure is not new in our dictum. Systemic failure sleeps and wakes with us. Our leaders believe that it is a way of life but Obama says it is totally unacceptable. The day our own leaders see systemic failure as unacceptable, that day would have started our deliberate attempt to leave the league of underdeveloped nations. Let us briefly look at what systemic failure has done to Nigeria:

Chaotic downstream Sector of the oil and gas industry. A country so blessed with oil and gas had her citizens’ sleep in gas stations to purchase scarce Premium Motor Spirit (PMS). Some Nigerians were unable to travel to their homes for the yuletide because of scarcity of PMS while others who did, paid their ways through their nostrils. Our refineries remained idle for months in 2009 because the crude lines were blown by militants. This has been a recurring decimal in our economic history. Yet, our government has been unable to proffer solutions to this malady. The original Petroleum Industry and Freedom of Information Bills that will reform our Petroleum Sector and address issues corruption in a significant manner may not likely see the light of the day.

Chaotic electoral system. One year and four months to another election in 2011, some of the cases involving politicians that contested various elections in 2007 are still on-going in court.

Our budget performance in 2009 was below 45%. How can we move on to displace the present 20^th economic state in the year 20-20 at this rate?

Insecurity of lives and properties is on the increase. Yesterday, it was Maitasine and Boko Haram sects that dealt deadly blows on innocent citizens. Today it is Kala-Kato that is wrecking havoc on the civil populace in Bauchi State, yet we are supposed to have security agencies that have pre-emptive and preventive capacities to curtail crimes.

The marginalization, economic banditry of the Niger Delta region by the elites, massive unemployment of the youths, oppression and repression of the people led to the near revolution by the militants of the  Niger Delta

Infrastructural decay. Our University system was totally shut down for more than three months in 2009 courtesy of ASUU and Federal government rift.

Our manufacturing sector, which should be a pivot for economic growth collapsed more than a decade ago.

The government promised and swore that by December 2009, the country will generate and transmit 6,000 Mega Watts of electricity. It never happened.

Our President and the avowed preacher of the rule of law has breached the fundamental rule and soul of delegation of authourity when he refused to hand over to his Vice. I just hope that the decisions of the Federal Executive Council since the President left for treatment will not be a nullity. The resultant discordant tunes from the seat of power following this act will sooner than later deal a fatal blow on our polity.

Nigerians have managed to cope with the above failures but the godmother of systemic failures is staring us in the face. It is in acting fast and quick intervention that can help our democracy out of the red alert flag in the horizon. The Chief Executive Officer of Nigeria, the President and Commander-in-Chief of the Nigerian Armed Forces, President Umaru Musa Yar’Adua has been away from his duty post for more than one month. To continue where he stopped physically, and in order to prevent Vice President Goodluck Jonathan from acting for him, he has programmed the country on auto cruise because he is too weak to press the accelerator button of governance. My worry is that when this auto cruise system fails, Nigeria runs the risk of a very fatal accident and only God knows what the end will be

The above represents the dirty and sad side of systemic failure. However, this same concept saved the passengers of NWA 253 on December 25^th 2009 from total annihilation. When I wrote “peace to the world in 2009”, I urged all those fighting in the trenches all over the world to cease fire, come to the dialogue table, and stop the senseless carnage and the spilling of innocent blood. Though wars or suicide bombings raged in the triangle of API (Afghanistan, Pakistan and Iraq); the militants in the Niger Delta region of Nigeria gracefully laid down their arms in response to President Yar’Adua’s amnesty programme. For the first time in almost a decade, the Niger Delta people celebrated Christmas without guns.

As the world focused on the deadly bombings in the triangle of API, Umar Farouk AbdulMutallab, a Nigerian was plotting to reinvent Lockerbie plane disaster on US soil. The luck the passengers of NWA 253 had was the systemic failure of the terrorist’s equipment, which staved the tide of another horrifying death in the sky.

Towards the end of 2009, systemic failure gained notoriety in use like never before, when Umar Farouk Abdul Mutallab was alleged to have attempted to blow up the Northwest Airlines (NWA) Flight 253, a subsidiary of Delta Airlines on Christmas Day. The Systemic failure in this incidence has some positive and negative connotations. His journey recorded strings of systemic failures from the time of the purchase of his ticket to his advantage.

 The father of Umar Farouk AbdulMutallab was alleged to have informed the US embassy in November and the security agencies in Nigeria of the radical posture of his son and the need to keep him under close watch. Though the UK refused him Visa for further studies, the United States did nothing to impose no fly restriction on this young man  because the information did not get to the appropriate quarters for action. Nigerian authourities on their part are still investigating the veracity of Farouk father’s claim.

Umar Farouk AbdulMutallab was said to have purchased his ticket in Ghana without any forwarding address. This is quite unusual and would have raised some level of suspicion. The airline saw nothing untoward in this. So, he walked free to board the plane in Nigeria.

 He went through security checks in Lagos. He even checked in without a luggage. This was enough to again arouse some suspicion, it did not and he was given a clean bill of passage.

 Airlines usually screen passengers at the entrance of the boarding gates shortly before boarding. Umar Farouk AbdulMutallab again passed the screening test.

Against all odds, he successfully went through the security checks at Schiphol Airport in Amsterdam. He was said to have checked in on NWA flight 253 without any luggage. This is in the character of terrorists. This would have also raised some level of suspicion but it did not. So Umar Farouk AbdulMutallab graciously headed for the United States of America.

As the plane was about making the final preparations for landing in Detroit, Umar Farouk Abdul Mutallab, the vessel of death on board NWA 253 was getting ready to detonate his weapon of mass destruction. He did, but the equipment suffered systemic failure which was the saving grace of the passengers.

Now we know that the sophistry of airports is no full proof against terrorist acts and that security is of God. To show the commitment of serious minded world leaders to avert death in the sky, I am sure that in the next few weeks, new equipment will be introduced at international airports worldwide to remedy the identified lacunae. It is sure that passengers of Nigerian origin will suffer all forms of humiliations at international airports. The days of stripping Nigerians to their undies are here again. This is what the action of a perversed person like Umar Farouk AbdulMutallab can do to a people. irrespective of what has happened Nigerians must be treated with respect because the sins of Umar Farouk AbdulMutallab cannot be visited on all Nigerians.

I hope Nigeria’s leaders will also seriously tackle the systemic failures that have plagued our country for so long. Except our politicians and leaders address these systemic failures NOW, unless we change our orientation, values and ethics as a people; I see the most unpalatable change in Nigeria happen. Will the change come through the ballot box? I do not know. Will the change be extremely revolutionaryand bloody in character? I cannot tell. Will the change that will remedy this rot ever come? Yes it will and when it finally comes, this country and the world will quake. All the treasury looters will seek hiding places to no avail. Just like the days of Noah, our leaders won’t listen to wise counsel, but I dare say that this change is imminent and may be sooner than expected. This is why we need to rise up now and use all peaceful means to redefine our corporate entity and channel a new vision, a new mission and course before it is too late. I wish all the good people of the world a very prosperous New Year.

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JONATHAN BEWARE

By Louis Brown Ogbeifun | December 24, 2009

The Nigerian President, Umaru Yar’Adua has been out of the country now for more than three weeks without a proper handing over to his Vice. This has created a leadership vacuum in our polity. This vacuum is taking a more complex dimension by the day. The act of governance has turned to “siddon look. The circumstances surrounding his exit from the country are shrewd in secrecy. This ought not to be so.

Due to Mr. President’s absence, the critical functions of the Presidency have been put in abeyance till God Knows when. One of such is the signing of the 2009 Supplementary Appropriation Bill into law. The Bill contains most of the instruments needed to give bite to the Amnesty programme of the President. Time is running out on this for the following reasons:

• The States are not in a position to sustain the Amnesty programme because of the cost implications
• Mend has promised to resume full scale hostilities with a 30 day ultimatum beginning from December 19^th because of unmet expectations.
• The promised escalation of sabotaging oil installations by MEND may further worsen the state of the economy.
• The creek may soon turn into a war zone, which the President has tried frantically to reverse.

It was on this basis I canvassed the transmission of a message to the National assembly that he is not available for duties in conformity with section 145 of Nigerian Constitution, which states “Whenever the President transmits to the President of the Senate and the Speaker of the House of Representatives a written declaration that he is proceeding on vacation or that he is otherwise unable to discharge the functions of his office, until he transmits to them a written declaration to the contrary, such functions shall be discharged by the President as Acting President”.

The reasons why this should be are that:

1. It will allow the Vice President, Goodluck Jonathan to Act on behalf of the President until he is well enough to transmit another message to the National Assembly that he is back to his beat.
2. It will allow the business of running the country go on unhindered.
3. It will allow President Yar’Adua time to take care of his health, fully recover before assuming duties and to prevent a relapse that may warrant him going back to Saudi Arabia soon after.
4. It will give credibility to our democratic experiment.

Reports have credited certain statements to the Chief Law officer of the Federation, Aondoakaa, which if true are sending wrong signals about Mr. President’s health. This is why I am asking “What is happening to my President?”

The statements are:

• That the President can rule from any part of the world.
• That section 5 of the Constitution empowers the President to delegate authourities to any of his Ministers,
• That the Vice President can go ahead and sign the Supplementary Budget into Law without any transmitted message to the National Assembly based o,

IMPLICATIONS OF AONDOAKAA’S STATEMENTS (IF TRUE)

• That the National Assembly is a mere decorative and figurative organ of government.

•  The office of Attorney General can overrule the Nigerian constitution at the whim of his office through a memo

• That the President’s condition is grave and unable to sign any document.

• That the ruling political party has other motives outside national interest.

Statements 1 and 2 are true to the extent that the President is directly delegating the authourities. In this e-world, Mr. President can be in China and transmit a message to his officers to perform some functions on his behalf. He can be in Aso Rock and direct any of his ministers to represent him at a function either locally or internationally.

From my knowledge of the Civil Service, such delegated duties are in writing through an official memo or minutes to the officer(s) concerned. In both cases Mr. President is the one directly communicating the delegation of authourity.

The scenario in our present situation is different. The man is not in the best of health. He is not in a position to give the instructions. Words have it that he is not talking to anyone yet because his doctors want him to fully recuperate before commencing state duties. We are talking of taking decisions in line with the constitutional provisions of the Constitution and not a mere representation of the President at dinner parties.

The panacea to the grid lock is for People’s Democratic Party, the Chief Law officer and all well meaning Nigerians to prevail on Mr. President to comply with Section 145 of our Constitution. Except he is in coma, please; let him do the written declaration NOW and transmit same to the relevant bodies. A trip to Saudi Arabia for this purpose will save us from the uncertainties the statements have generated.

On the third statement, I do not believe Aondoakaa will dare write such a letter to the Vice President. This will be taking the part of dishonour and should never be contemplated.  The end effect will be very disastrous and suicidal for Vice President Goodluck Jonathan who would have been led to the political hang man’s noose. As soon as he appends his signature to the Supplementary Bill without a formal message from President Yar’Adua to the National Assembly and Jonathan pronounced the Acting President by an Act of Parliament, he should be ready to return to Bayelsa State. If not, he will be impeached because such political sins are unforgiveable. So, Jonathan beware!!!

Once again Mr. President, may the good Lord grant you perfect healing mercies.

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WHERE IS MY PRESIDENT?

By Louis Brown Ogbeifun | December 21, 2009

Three weeks ago, the President of  Nigeria, President Umaru Yar’Adua took ill and was said to have been flown to Saudi Arabia. Since then, there has been open discourse on where he is, what is wrong with his state of health and the way forward for the filling the vacuum created by his absence. There are several postulations of where the President is that I am tempted to ask, where is my President? This should not be. As a citizen, I deserve updates on the whereabouts of my President because I have people outside this country that also ask me the same question. A sheep without shepherd runs the risk of straying into the lion’s territory and in no time becomes a mince meat for the king of the jungle. So it is with a country without an effective leader, such country runs the risk of straying into a lawless state with profound consequences. It is even worse if the country has myriads of societal challenges like we have presently in Nigeria.

It is often said in my place that only stones do not fall sick. The President like any other human being is capable of falling sick. In any case, several Presidents have been ill even in times of adversities without their countries going through guess games on what next as we are presently grappling with. In the United States of America, Presidents Woodrow Wilson, Franklin Roosevelt, Dwight Eisenhower, John Kennedy and Ronald Reagan suffered one form of ailment or another during their tenures. In Cuba, Fidel Castro handed over Raul Castro when he could no longer perform State functions due to ill health. So taking ill as a President is not new, it did not start with President Yar’Adua and it is not likely to stop with him. What is however new is the way Nigerian authourities are handling this matter. What is new is that while those other Presidents were ill, their countries did not have a vacuum the way we now experience. What is new is that state matters ran smoothly without any damage to their countries’ internal dynamics like we are having in Nigeria. This is the kernel of the matter.

What helped the United States and Cuba is the existence of effective structures in place to address such issues. Everywhere, the Constitution is the supreme authourity that determines how state powers are derived and used for the good of the people. Any step taken that is not in consonance with the Constitution or laid down procedures will be courting trouble.

In the case of Nigeria, there are reasons for the apprehension being expressed by the various groups. Some of the reasons are:

1. Nigeria’s democracy is still very fragile
2. The country is faced with a lot of dysfunctional ties.
3. Lack of appropriate institutional framework. Where they exist they are weak to deal with this type of emergency because of self centeredness of our leaders.

The relevant sections of the Nigerian Constitution that deal with the President’s absence either due to illness or vacation are:

1. Section 144 of the 1999 Constitution, which contains provisions on the necessary steps to be taken to determine if a President’s illness will make him or her incapable of ruling the country because of permanent disability.
2. Section 145 states ‘Whenever the President transmits to the President of the Senate and the Speaker of the House of Representatives a written declaration that he is proceeding on vacation or that he is otherwise unable to discharge the functions of his office, until he transmits to them a written declaration to the contrary such functions shall be discharged by the Vice-President”, albeit on acting capacity.

As of today, except a medical team has been empanelled according to section 144 of the Constitution, and such decision of permanent disability making governance impossible, transmitted to the Federal Executive Council, we can only hope that the President will return someday to his beat.

Since this has not been done, we are left as a people with only one option, “transmission of a written message to the President of the Senate and the Speaker of the House of Representatives declaring that he is proceeding on vacation or that he is otherwise unable to discharge the functions of his office”.

I do not think this will be too much to ask from Mr. President if he truly loves Nigeria. This is the only path of honour left for him at this time so that when he is fully recovered, he transmits another message to the Senate and the House of representatives that he is back to his beat. So shall it be.

The refusal to do this means that critical state functions cannot be performed because the Vice President, Goodluck Jonathan cannot assume such responsibilities. Some of these functions that will or have already suffered consequential setbacks are:

1. The conferment of National Honours can only be done by Mr. President. This has been stalled.
2. Execution of crucial elements of the Amnesty Programme, which Mr. President started.
3. By January 2010, the Judiciary, which is the third arm of Government, will also become a ‘sheep without Shepherd’ because the position of the Chief Justice (CJ) of the Federation would have been vacant. This is because it is only the President that can appoint and swear in any newly appointed CJ of the Federation. The CJ is retiring this December.
4. 2009 supplementary Appropriation Bill has been passed by the National assembly and awaiting Mr. President’s ascent. This has severe implication for the country because most of the Niger Delta amnesty projects are tied to this Bill.
5. 2010 Appropriation Bill if passed may also remain unsigned.
6. Representation at international fora requiring the attention of Presidents will be seriously compromised.

The fall out of (5) above will have very serious spiralling effects of unprecedented magnitude on the economy, Nigeria and Nigerians. The establishments will be totally grounded. Salaries of the ministries and the Armed Forces are going to be affected. Nigeria is presently an import dependent country. This will mean that the queues we currently witness at the filling stations will be child’s play. Banks will crumble under the yoke of a cashless environment. Pension payment to pensioners will remain largely unpaid. This will be chaotic and no one should wish this happen.

Politicking with the soul of Nigeria should stop. Every actor in the politicization of the President’s illness should consider the fate of Nigeria above all other things. Those jostling for the President’s job should remember that it is only God that gives and takes power. This situation calls for caution. If not handled with care, the explosion that will follow may seriously harm our democracy.

Mr. President, in the interest of Nigeria and in your own interest, you should without further delay transmit a message to the two leaders of the National Assembly that you are not immediately available for State duties so that your Vice can hold forth for you until you are well enough to resume State functions. I cannot forget in a hurry the peace the President brought to the Niger Delta region, the good it will do to the oil and gas industry and by extension the economy. You need to come back to finish the good work. Irrespective of this, you can only achieve the necessary results with optimum health. Therefore, you need to channel all your energies towards getting well now so that you can be of better service to Nigeria. Your immediate family and indeed the masses of this great country need you alive in other to continue to serve them. State duties will always be there for you to return to. The present discourse and the way your associates are handling the matter will only worsen your stress level and illness state.

Those asking you to take time off through the instrumentality of the Constitution are your real friends. Those who want you to hang on at the detriment of your health are sycophants and your enemies per excellence. They are only protective of the largesse they get through your goodwill or to enable them hang on to different political offices. We saw this before. They did it to IBB and Abacha. When the equation changed they also changed, not only their tongues but their whole direction. Beware of these people Mr. President. They sing different tunes during the day and at night,  The truth shall be revealed someday.

I wish you a speedy recovery Mr. President. God bless you, God bless Nigeria.

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OIL AND GAS INDUSTRY REFORMS: ISSUES AND CHALLENGES FOR TRADE UNIONS. PAPER DELIVERED AT THE WARRI ZONAL WORKSHOP OF NUPENG.At the Labour House Asaba Delta State; ON 11th September, 2009 By Louis Brown Ogbeifun

By Louis Brown Ogbeifun | November 21, 2009

I most sincerely thank the National Union of Petroleum and Natural Gas Workers (NUPENG), Warri Zone, for this opportunity to share with you my thoughts on this topical issue “OIL AND GAS INDUSTRY REFORMS: ISSUES AND CHALLENGES FOR TRADE UNIONS”. Let me also acknowledge from the outset, that that the positions of the Civil Societies   Working on Extractive Industries formed a rich resource for this paper.

The choice of your topic at this time is very apt because most reforms in the past were used to reduce the workforce to a “slim and mean” frame. Secondly, the problem with the Nigerian state is not the dearth of legislations but the political will needed to give teeth to legislations. Thirdly, the oil and gas industry has suffered its worst deprivation in the last five years. Fourthly, your anxiety is also justified because the policies of deregulation, liberalization and privatization as enunciated by the Federal Government; have been the major causes of agitations by the labour movement and the masses.

The oil workers have been psychologically traumatized by policies hastily packaged by globalizers who see the panacea to the myriads of problems besetting your sector as mergers, divestments, privatization etc. Your members have been physically assaulted by crude oil thieves, hostage takers and kidnappers. Apart from the untold hardships these and the Niger Delta crises have subjected you to; your equipments are perpetually being serially vandalized. White products and the nations’ commonwealth have been stolen with reckless abandon.  Some of the sad effects of these are unparallel daily redundancies and early retirements carried out by companies with no end in sight.

It is worthy of note that even Nigerian National Petroleum Corporation (NNPC); which is the flagship of the oil and gas sector has not been spared. The main feed line of Kaduna and Warri refineries have been blown thrice in the last six years. The capacity utilization of the refineries has been severely reduced with the end result of massive importation of dollarized petroleum products. So, we create jobs for foreign refineries at the expense of Nigeria.

At one extreme are the progressive oil and gas nations like Norway, Brazil, Kuwait, Libya and Malaysia. These countries have used oil as a socio-economic tool to transform their societies into functioning modern states. They have functioning health and educational systems, they can feed their populace, they have sustainable and enviable infrastructural development and massive investments in other countries. Despite the height of their developmental excellence, they are still adding value to their hydrocarbons through research and development in order to continuously make oil and gas money spinners for their countries.

Petróleo Brasileiro Sa (PETROBRAS of Brazil) founded in 1953 as a government-owned monopoly, Petroliam Nasional Berhad (PETRONAS; Malaysia’s national petroleum corporation established in 1974) of Malaysia, and Den Norske Stats Oljeselskap A/S (Statoil) of Norway established in 1972; were established as government’s owned National Oil companies just like the NNPC. These companies have grown into enterprises that control assets that can conveniently fend for several African States. They have even ventured into exploration and production of oil in other places including Nigeria. Petrobras is investing on Oil Prospecting Lease (OPL) 216 and 246 and Statoil have invested in Oil Prospecting Lease (OPL) 217 and 218.

On the other extreme is Nigeria that has so much wealth but confronted with extreme poverty and inability to break the shackles of underdevelopment. The bane of our underdevelopment has been leadership crises and massive corruption. The revelations of Economic and Financial Crime Commission (EFCC) since the war on corruption began have been mind boggling. Money meant to develop the country found its way into private pockets of just a few hands. As we speak, the developing story about the banking sector is frightening. Those saddled with the responsibilities of lending money for real sector development have turned banking into Christmas cake for the Directors and their cronies only. Our manufacturing sector has since collapsed, with the attendant negative impact of massive importation of everything we use and high unemployment rate.

It has been posited that the country’s present oil reserve is expected to last for about 49 years if no additional reserve is added. The country currently flares about 75% of her associated gas and hopefully would wish to have a zero flare target by the year 2010. In addition, it is also the desire of the country to increase the National Oil Reserve base from the present 36.22 billion barrels to 40 billion barrels with a daily production of 4.5 million barrels by the year 2010. Despite this wealth, we have been unable to effectively manage our oil and gas resources for the benefit of all stakeholders. For instance, the country’s four refineries that have been epileptic for several years due to:

• Unwholesome government’s intervention in the internal affairs of the NNPC
• Defective asset base;
•  Excessive Bureaucratic Control;
•  Inappropriate Technology
• Unfriendly environmental indices;
• Massive vandalism of products’ pipelines;
•  Paucity of funds;
• Corruption;
• Lack of turnaround maintenance of the refineries;
•  Smuggling;
• Niger Delta Crises and

The eventual outcomes are:

• Recurrent downtimes of the refineries;
•  Intermittent fuel scarcity and its attendant effects;
•  Massive importation of petroleum products;
• Creation of jobs for foreign refineries;
• Ancillary jobs created with the by-products of the refineries have been wiped out;
• High energy cost;
•  High rate of inflation;
• Decayed infrastructure;
•  Reduction in the country’s real income from downstream activities; and
•  Involuntary retirement of about four thousand staff of the NNPC in two tranches between 2004 and 2006.

If the downstream sector has not helped the course of the Nigerian State, the upstream has also brought tears and sorrow to the dwellers of the oil rich Niger Delta region. The field of operations of the upstream sector has an array of foreign dominance both in concept and practice. These multinationals wields so much powers within the Nigerian state and the communities. They have been able to exploit, explore and produce oil within the Niger region axis without a corresponding development. This led to the extreme contestations, agitations, youths’ restiveness and militancy that nearly consumed the entire country.

To worsen the woes of the upstream operators, oil blocs became social gifts for government apologists. This is expected because the Petroleum Act of 1969, vests the Minister of Petroleum with discretionary powers to allocate oil blocs. At a time, the Sun quoted Ofurhie (2008) as saying that “between 2001and 2006, there was no open bidding for oil blocs, but only selective bidding authourized by the Presidency”

It is not by accident that we are not able to compete and develop like others. At inception, it was a deliberate attempt to perpetrate and progress the economic interests of a few Nigerians and their foreign collaborators. For instance, Petrobras, Petronas and Statoil started as well conceptualized commercial entities, while the NNPC which is the flagship of the Nigerian oil and gas industry was only positioned as a regulator. This made it possible for the upstream investments to remain the exclusive preserve of the multinationals till date.

The need to reverse the parlous state of the downstream sector, optimize the take of Nigeria in the upstream sector and eradicate corruption in the sector led the government of President Olusegun Obasanjo to embark on some radical reforms from 1999 to 2007. These include:

•  Increases in the pump prices of petroleum products;
•  Purchase of crude at international market price by NNPC;
•  Deregulation of the downstream sector;
•  Liberalization;
• Privatization of the downstream sector of the NNPC, which saw Eleme Petrochemicals buy-over by Indorama (the PHRC and KRPC sales were later reversed)
• Creation of Petroleum Products Pricing and Regulatory Agency (PPPRA) to regulate the downstream sector;
• Creation of the Nigerian Extractive Industry Transparency Initiative (NEITI); and
• The creation of EFCC to combat economic and financial crimes;

Most of these reforms only laid the foundation for faceoff between the government, the labour unions and the masses. They led to series of mass mobilizations and strikes to reverse some of the government’s decisions.

Corruption rather than abate with the interventions of EFCC grew in sophistry, leaps and bounds. The two audit reports carried out so far by NEITI, showed wide range discrepancies in the financial books of the stakeholders,  improper record keeping and lack of adequate institutional framework to support the modernization of the Nigerian oil and gas sector.

Worried by the unsuccessful attempts to push through some of the reforms and seeking ways to derive more benefits from the nation’s hydrocarbons; the government had to put in place the Oil and Gas Sector Reform Implementation Committee (OGIC) to seek ways of running an effective oil and gas sector. This commenced in 2000 under President Olusegun Obasanjo. This pioneering effort was supervised by the then Special adviser to the President on Petroleum matters, Alhaji Rilwan Lukman. He was again brought back in 2008 as the Petroleum Minister to implement the recommendations of the Committee.

Why reform?

According to the government, some of the reasons for carrying out the oil and gas industry reform arose from the followings:

• Legal and governance structures in place cannot cater for the needs of a modern oil and gas industry; e.g. the Petroleum Act (1969) remains a forty year old document, which was designed for the industry at its infancy;
• Obsolete NNPC Act (1977);
•  Policy statements, amendments and regulations are dispersed in several documents and often difficult to locate;
•   Ill equipped Ministry of Petroleum Resources;
•   Infantile Department of Petroleum resources;
• The need to separate and clarify the roles between public agencies operating in the industry;
• The need to infuse strict commercial orientation in all relevant aspects of the industry;
•  Repositioning of the nation’s oil and gas industry in view of the contemporary challenges within the sector both globally and in the domestic market; and
• The need to enunciate the national oil and gas policy

The Nigerian Oil and Gas Policy:

• To maximize the net economic benefit to the nation from our oil and gas resources;
• Increase value addition through further commercial processing of crude oil and natural gas;
• Putting in place appropriate fiscal regimes, promoting the profitability of operations and the improvement of linkages with other sectors of the economy;
• Elimination of systemic leakages;
• Enthrone transparency and accountability in the oil and gas sector,
• Fostering an enabling business environment with minimal interference and distortions;
•  Liberalization of the sector;
• Take control of the oil and gas industry;
• Restructure in such a manner to increase levels of Nigerianization and promote greater Nigerian content;
• Continuously review the duration and terms of fiscal regimes as dictated by developments in the market; and
• Put measures in place to ensure the greater deep off-shore investments.

The work of the Committee gave birth to the Petroleum Industry Bill (PIB), which has gone through the second reading and a public hearing in the National Assembly.

 Structure of the Bill

Aturu states  “the bill was informed by the need to have all the laws relating to the industry in one simple and single form for accessibility. It deals with Fundamental Objectives, Institutions, Upstream Petroleum Joint Ventures, Downstream Licensing, Downstream Products, Indigenous Oil Companies and Nigerian Content, Health, Safety and Environment, Fiscal Provisions, Repeals and Transitional Provisions and Interpretation”.

Objectives of the PIB include:

•  Harmonization of all oil and gas laws into a single text;
• Standardization of practices;
•  Reduction of friction between the oil companies and the communities through improved developmental processes;
• Turnaround the oil and gas sector to best serve the interests of Nigeria;
•  Reduce inter agency overlapping functions;
• Breaking NNPC into smaller but effective business units;
•  Increase the participation of Nigerians in the oil and gas business;
• Set out the structures, appointments and procedures for achieving the goals of OGIC; and
• Maximization of the net benefits of Nigeria’s hydrocarbons for the benefit of Nigeria.

There are several versions of the PIB in circulation. Depending on which one that is available to you, the PIB has basically demarcated the oil and gas sector into the upstream, midstream and downstream with the following organs:

1. National Petroleum Directorate (NPD);
2. Nigerian Petroleum Inspectorate (NPI);
3. Petroleum Products Regulatory Authourity (PPRA);
4.  National Midstream Regulatory Agency (NAMIRA);
5.  Nigerian National Petroleum Company Limited (NNPC LTD);
6. The Nigerian Petroleum Research Centre (NPRC);
7. Petroleum Equalisation Fund (PEF);
8. The Petroleum Technology Development Fund (PTDF); and the
9.  National Frontier Exploration Service.

 Positive Features of the Bill

Civil Societies Working on Extractive Revenue Transparency, Accountability & Good Governance in Nigeria acknowledged that the PIB has some useful elements in so far as the implementation process is thorough, fair and unbiased. Some of the useful provisions of the PIB include:

• A clear statement of the fundamental objectives of the Bill;
• Provision for consumer protection (s.386),
• Provision of service to customers (s. 387);
• Competition and market regulation (s.391);
• Encouraging indigenous participation in the petroleum sector (ss398-402);
• Nigerian (local) Content (ss. 403-404);
• Entrenchment of principles of transparency, good governance and sustainable development, and
• Setting of minimum limits for Nigerian board membership and managerial and professional cadre.

 Incorporated Joint Venture Companies

In order to optimize the benefits derivable from the upstream joint venture operations, the need to effectively deal with the challenges of cash calls, the PIB has proposed the incorporation of the companies in partnership with the NNPC into Incorporated Joint Venture Companies (IJV)

  Issues and Challenges for Trade Unions

Community Participation and Development:

The boiling point and black spot in our national polity during the last ten years of our democratic experiment has been the Niger Delta crises. The crisis started because of the agitation for resource control, economic banditry of the region, environmental degradation, destruction of farmlands and waterways by oil spills, deprivation, and dispossession of the people, poverty and marginalization of a group of people in whose land Nigeria earns her leaving. This made life very difficult for both the oil and gas industry and the corporate citizens.

This crisis dealt severe blow to oil and gas operations with present capacity utilization declining to below 30%. Many investors and would be investors have relocated from the region. However, with the amnesty of the Federal Government it is expected that operations will gradually pickup.

The catastrophic effect of the crisis include massive redundancy of oil and gas workers, crippling of refinery operations and running round the vicious cycle of poverty, wants and deprivation with the country tuning into a net importer of petroleum products instead of the other way round.

With the agitations, one had expected that the PIB would have accommodated the interests of the oil producing communities in clear and unambiguous terms. I believe that full community participation e. g. 10% equity participation in oil businesses in the region will reassure the region, build confidence and make them buy into the post amnesty deal.

 Advocacy for enthronement of Transparency and Good Governance (Section 5):

The enthronement of the principles of transparency and good governance of the NEITI Act 2007 in the Bill is heartwarming.  This aims to eliminate corruption and by extension cynicism as they relate to royalties, fees and bonuses and taxes. However, the NEITI Act 2007 currently has some confidentiality clauses which the new Petroleum Industry Bill should address.

However, for this section to be effectual, it would require the supportive framework in the passage of the pending Freedom of Information Bill (FOI) before the National Assembly. It is the FOI that would strengthen your and insulate you from vendetta as you actively canvass for a transparent oil and gas sector.

 Functions and Powers (Sections 9-11):

 I believe that one of the challenges of the trade unions is that the Bill vested so much discretionary powers to the Ministry/Minister in charge of Petroleum, with limited oversight by the legislature. This may erode the principles of transparency and accountability.

  Multiplicity of Institutions/Agencies:

The Bill sets out to create institutions and regulatory authorities for the Nigerian petroleum industry namely: National Petroleum Directorate (s. 12); Nigerian Petroleum Inspectorate (s.37); Petroleum Products Regulatory Authority; Nigerian Petroleum Research Centre (s.148); National Frontier Exploration Service (s.174); Petroleum Technology Development Fund (s. 223) and Petroleum Equalisation Fund (s.199).

It still looks to me that some of these agencies have overlapping functions. For instance, section 13(s) provides that the National Petroleum Directorate shall ‘promote compliance with all legislation by all participants and stakeholders in the industry’. This is also a critical function of the Nigerian Petroleum Inspectorate.

The elaborate institutions tend to replicate the present large bureaucratic governance structure with all its attendant work delays, strictures and high cost.

Lastly, PPRA, NAMIRA and NPI may also have been inadvertently positioned to carry out some overlapping functions of the agencies responsible for environmental standards e. g. Federal Environmental Protection Agency (FEPA); National Environmental Standards and Regulations Enforcement Agency (NESREA).

 Nigerian (local) Content (ss. 403-404):

 Though there is a deliberate attempt to improve indigenous participation in the industry, there are no strict sanctions for non-compliance with the provision of this section. In the old dispensation, the understudy clause was never complied with. There was criminal and fraudulent collusion of the agencies responsible for approving expatriate quota in order to circumvent and abuse the expatriate quota process. Except there are clearly designed framework to check the abuse, we might just have returned to the starting block.

Health, Safety and Environment (Sections 405 – 413):

The Bill requires companies to submit environmental programmes to the Inspectorate for approval, but does not provide clear standards that they must seek, or guidance on most of the key environmental goals they pursue. Instead of leaving these key issues to companies to provide their own individual solutions, the Bill should have provided a coherent national approach to environmental management. This will ensure standardization of practice. Severe sanctions should also be put in place for breaches.

Gas flare out:

Apart from the advantages of gas flare out to the environment, it will also increase money accruable to companies and the country. Therefore, it is in the interest of all stakeholders that the current bill on Prohibition of Gas Flaring (2009) in the National Assembly be given a speedy passage. The penalties for violation of gas flare-out should be severe enough to discourage impunity. This can be deepened through regular environment audit and certification.

Corporate Social Responsibility (CSR):

The Bill tends to have made no provision for CSR. This has been a major source of friction between the stakeholders in the oil and gas industry, which would have been well addressed in the PIB. A clear CSR policy will remove ambiguity in areas of intervention by the multinational oil companies, government, NDDC and the communities and reduce the level of agitation, contestations and societal dysfunction.

This will also provide enabling environment for you to carry out your duties as employees of the various companies. In addition, there should have been a provision of a strategic plan/memorandum of understanding with which stakeholders can be held accountable and sanctioned for breaches.

Funding of the Proposed Institutions:

Section 28 of the PIB; stipulates that the newly created institutions shall be funded through ‘fiscalised’ crude or gas payable into an account of the Directorate. This will be shared by the proposed institutions for their operations. Though not a lawyer, I perceive that the constitution provides that the oil and gas proceeds are to be paid into the federation account. If this assertion is correct, this becomes a challenge for the unions because if not appropriately resolved, your operations might be hampered by litigations.

Privatization of NNPC (Section 136):

It is my candid opinion that it is a lazy idea to sell companies just because they are not performing. The non-performance of companies is tied to certain fundamentals, which must be addressed. For instance, nobody runs a car on overdrive without adequate maintenance and expect optimal functionality of that car. The refineries were neglected overtime without maintenance. In addition, four refineries are not capable of delivering sufficient petroleum products that will service the needs of about one hundred and forty million people.

Most of the privatized companies in Nigeria are worse off than they were sold. The NITEL story is a case in issue where workers have not been paid for the past 14 months. Now the Federal government has terminated the initial sales and sourcing for new buyers. This shows that our privatization process is flawed. The global economic meltdown has proven that even the private sector is not insulated from mismanagement and collapse. Governments in America, Europe, and Asia etc; had to recapitalize and acquire shares in some of their financial institutions to save them from imminent collapse. The five banks that the Central Bank just gave bailout funds were all private financial institutions. Therefore, it does not matter who owns what, what matters is the effective management of assets be it private or public. Rather than sell the refineries, government should make concerted effort to:

• Address the Niger delta crisis, which has made it impossible to get crude to run the refineries in the last six years;
• Address the issue of pipelines’ vandalism;
• Carry out effective and routine maintenance of the refineries;
• Encourage the building of more refineries by private investors;
• Build refineries by government using the NLNG model or adopting the Mega filling stations’ management approach;
• Mandatorily compel oil companies to refine some percentage of their crude in Nigeria;
• Empower the local management to perform their functions with less distractions from the government; and
• Reduce of over bearing bureaucratic governance and incessant intervention in the internal affairs of the companies;

The Bill seeks to break NNPC into smaller manageable entities and grant her financial autonomy. There may be anxiety over job losses and redundancies, but if the reform is implemented with the best of intentions, this may be minimal because of the emergence of several new business units. The major challenges for the trade union when the present NNPC transforms from Corporation to a limited liability company may be:

•  Erosion of the current union group structure;
• The thinning down of NUPENG membership; and
• Sustainability of the current pension structure even though there is a level of assurance in the Bill;

The need for social dialogue:

From all that have been said, the oil and gas industry cannot afford any more negative excitement. Therefore, there is the need for the stakeholders to embrace sincere dialogue, act responsibly, arrive at decisions through consensus building, and ensure equality in the workplace.

Legal Instruments for Social Dialogue include ILO Conventions 87 (Freedom of Association) and 154 (Collective Bargaining). The management of the human resource during transitions, mergers and takeovers are ever challenging. It gets more challenging during economic turbulence, economic depression and crisis as we just witnessed in the Niger Delta region. It requires patience and collaborative efforts of the stakeholders to reinvent the oil and gas sector of old.  Social dialogue tools should be used to resolve whatever challenges the unions may encounter during the reforms.

Ogbeifun opines that “Social dialogue ensures that there is a free flow of information among the social partners. This tool if effectively used promotes the quality of Labour-Management relations in the workplace. It may be tripartite or bipartite.  The platform commonly used for social dialogue in industrial relations is the collective bargaining process, which allows the representatives of all partners in the process to act responsibly in the pursuit of their constituents’ best interest. Succinctly put social dialogue: entails the building of consensus through the democratic involvement of stakeholders in the work place; has the objective of promoting opportunities for workmen (men/women) to obtain decent and productive work in conditions of freedom, equality, health and safety, security and human dignity; has the potential to resolve economic and social issues, encourage good corporate governance, foster social and industrial peace and stability, and boost productivity; is a means of achieving decent work rather than an end in itself.

One of the pre-conditions for effective social dialogue between labour and management include strong, independent workers’ and employers’ organizations. While your union is strong, I doubt if one can authoritatively say that she is truly independent.

Collective Bargaining issues (Convention No 154):

Section 408 of the Bill deals with the prohibition of forced labour, child labour and the upholding of the right to collective bargaining. Though already covered by the extant labour laws, this will further encourage all social dialogue partners to respect collective bargaining agreements.

ILO defines “collective bargaining as “all negotiation which takes place between an employer, a group of employers or one or more employers’ organization on the one hand, and one or more workers’ organization on the other for determining working conditions and terms of employment; and or regulating relations between employers or their organizations and a workers’ organization”.

In carrying out the assignment of CB, it is your right to demand for information that will assist you to bargain responsibly and effectively as enshrined in recommendation 94 and 192. These recommendations proffered a sincere two-way communication strategy between social partners through all the known information sharing platform.

Job security:

The transition from JV to IJV would need to be methodically handled because of socio-cultural differences between the partners. Hitherto before now, the JV partners rely heavily on the benchmarks from their home offices to do business with the Nigerian Government. NNPC through the Petroleum Investment Management Services (NAPIMS) only exercise some oversight functions in the operations of multinationals. In the new arrangement, S. 260 categorically vests the National Oil Company (NOC) with the powers to appoint majority of the Board of Directors of each IJV where it has majority shares In addition, it shall have the power to appoint more than 50% of the management team and 80% of the management team shall at all times be Nigerian nationals. From this scenario, it is clear that movement across the companies is imminent.

The Bill is also quite explicit on the rights of the employee as regards to transfers, secondment and recruitment. I believe that the newly created institutions will have the capacity to create more jobs. However, I am afraid that the politicization of the transition arrangements may lead to arbitrariness in job placements and involuntary retirements.

Another worry is that the immediate and post Niger Delta Crisis and the economic meltdown, may further lead to redundancies and job losses, while divestments that have taken place or on-going may also lead to restrictions in labour mobility.

More than anything else, what should be uppermost on your agenda now is how to sustain the jobs of your members before other things will follow. It is in this light that the issue of CBA should be taken more seriously by the unions as this is the only insulating instrument against early retirement, redundancies and breaches of the workers’ rights. From hindsight experience, several CBAs currently in place are weak and need to be strengthened.

Pension:

Staff migrating to any of the directorates shall be oblige their pension earnings prior the transfer of assets to the new company

Succession management:

To enable the union keep pace with the changing dynamics of industrial relations as it is with the reforms, it is necessary for union leaders to evolve a system of effective succession planning, especially at the unit, chapter and branch levels. It is disheartening to note that rather than encourage experience, selfless and astute unionists to continue in service, most of them are swept off because of political arrangement of “turn-by-turn”.

Intellectual capacity:

to effectively tackle the emerging concepts of privatization, liberalization, mergers and acquisitions as dictated by capitalists’, the union needs more than ever before high intellectual strength and capacity to effectively dilute the reasons for the concepts. This can be achieved through self development, capacity building for members in fora just as this, copious reading and investment in research and development.

Merger:

This may be a bitter pill, but I believe that if companies are merging to be stronger, the unions can also merge to become stronger. The relationship that hitherto exists between the two oil and gas unions in NUPENGASSAN should be nurtured and concertedly midwife towards a merger. This can be achieved over time through constructive dialogue by putting aside the “self” first attitude. If not now, time may make it an exigency.

Networking:

The next few years are going to be challenging because of the effects of the post Niger Delta and economic meltdown. It behooves on the union to build more alliances and networks across the globe beyond their immediate environment. The unions should be able to reach out to the political class, the bureaucrats and legislators to enable them unravel the negative impacts of the oil and gas reforms before passing the PIB into law.

Decent work:

The fight for bread and butter by the unions may be important but it should not be the sole objective of the movement. As the reforms progress, all manners of jobs may be created, outsourced or even destroyed in bid to avoid overheads. It is the responsibility of the unions to progress the course of their members through job enrichment and that management policies guarantees labour dignity.

Integrity pact:

It is in the union’s place and interest, to pursue the adoption of integrity pacts as a transparency tool that outlines the roles and boundaries of each social partner and sanctions put in place for breaches.

This paper has only helped to develop the skeleton for which the flesh will be built through discussions. It has also set the tone for finding answers to the following questions:

• If the downstream sector remains comatose, what are the likely impacts on union membership?
• Is it not possible to set an agenda for the stoppage of importation of finished petroleum products so that government can stimulate the country’s capacity to refine these products in Nigeria?
• With the incorporation of the JVs into IJVs; will transfer of staff be automatic into the new concerns?
• Will the terms of employment and conditions of service be harmonized throughout the entire institutions?  If yes, what is likely to be the outcome of such burden on pension liabilities?
• Will the multinational still be committed to the partnership as they were under the JV?
•  In the NNPC, will there still be the Group Executive Council of PENGASSAN and NUPENG?
• What will be the faith of NUPENG as a body since the emerging new concerns are likely to recruit workers into the senior cadre?
• Will the collective bargaining be centrally done through a negotiating council as it is in the civil service or each concern will still be able to negotiate as separate entities?
• Will the new NNPC still have the muscle to remain the rallying point for other companies as it is currently?
• To what extent will the bill bring succor to the deprived Niger Deltans that will enable you perform your roles to your companies and your members?

Concluding remarks

These are anxious moments for all employees in oil and industry as the contemplated changes are phenomenal. As a union leader, we were partners in the clamor for the re-engineering of the oil and gas sector. We agitated for a change that will guarantee pounded yam and all other Nigerian delicacies on the table for our unborn children. The change is here, let us support it.

As leaders, the true test of your effective leadership will be brought to bear during difficult times like you may soon encounter. As managers, you need to manage the emotions of your members in such a way as to give hope to their aspiration.

However, you have to be mindful of the handful hawks ready to feast on what you have laboured for. It is a truism, that most of those who served in the Committee for the reforms have been rewarded with plum appointments while others are still battling to get into top management positions in the NNPC or other agencies they created. The unions must spot this and fight the tradition and syndrome of “reform, grab, retain and plant” selves in top positions of the reformed entities. You should be vigilant to checkmate those who ran our economy aground that may resurface to hijack the reform for their selfish interests or seek to kill the PIB should it not support their selfish ends.

Let no one cow you to believe that your agitation must not extend to policy issues. Policy issues determine what happens to your take home pay. If your take home pay must take you home, if you must bequeath enduring oil and gas industry to the next generation; you must agitate for enthronement of the internal democracy in all the parties, you must canvass for a change in the way our politicians grab offices and steal votes without the consent of the people, you should advocate for transparency and accountability in governance and you must support the fight against corruption and the rule of law mantra of President Yar’Adua. Where Yar’Adua goes off limit, you should call him to order. If you fail to do these, it is most likely that the oil and gas policy may well become a tool in the hands of those that have led Nigeria to where she is today. The route may be uneasy. But you must be steadfast. You have to sacrifice in all ramifications in order to bring this to fruition, after all, no one makes omelet without breaking eggs.

Thank you for listening to me.

Solidarity! Forever

References

International Labour Organization (ILO): ((1995)); Law on Freedom of Association-Standards and Procedures.

Iyayi, F. (2009); The Global Financial Depression: Challenges for Labour – management Relations’, being address to the Labour-management Forum at PHRC, Port-Harcourt.

Civil Society Working On Extractive Revenue Transparency, Accountability & Good Governance in Nigeria (2009): Memorandum on the Petroleum Industry Bill 2009 Submitted to the House of Representatives, Abuja

Ogbeifun, L. B. (2007): The Role of Labour Unions in the Oil and Gas Industry in Nigeria: a practitioner’s perspective, Concepts Publications, Lagos.

Ojo, J (2008); No open bid for oil block, House told, Sun News online, Abuja

Owarieta, G (2009): Restructuring of Oil and gas industry prospects and Challenges’, being a paper presented at PENGASSAN Delegates’ Conference at the Confluence Beach Hotel, Lokoja.

http://www.ja.com.au/CSIR_home/article.aspx?id=13573

http://acronyms.thefreedictionary.com/PETRONAS

http://encyclopedia.thefreedictionary.com/statoil

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Amnesty for Niger Delta Militants: Interview published in Vanguard Newspaper of Tuesday 6th october 2006.

By Louis Brown Ogbeifun | October 17, 2009

Q: What is your impression about the government’s amnesty offer to Niger Delta Militants?

A: Nigeria had reached a catastrophic level of insecurity, in which all criminalities were ascribed to the Niger Delta militants. If it had continued, it would have taken Nigeria to the next phase, which would have been terrorism where all sorts of groups across the nation would have risen spontaneously to attack our commonwealth. So the government needed to halt that slide, bring stakeholders to dialogue, and restore confidence in Nigerians that the democratic experience will work. At that point, anything that would help us achieve that was welcomed. To this end, the amnesty deal is a welcome development

Q: What do you make out of the recent protest by some repentant militants who alleged that they were not paid their promised allowance after surrendering arms?

A: I am not surprised because it is a reflection of the character of our fire brigade approach system to issues as a nation. It is vivid that the amnesty process did not take all necessary precautions to reduce the pre, intra and post amnesty agitations. However, it should be noted that even if everything was done right, the amnesty process will still face some challenges. This is because of the complex nature of the whole exercise and human nature. All parties need some level of patience to overcome the teething challenges

Q: Some have argued that amnesty deal has been hijacked by politicians scheming for 2011 election. What is your take on this?

A: I may not totally say yes or no to this, because I know some persons in that committee that I worked closely with while in the services of PENGASSAN who are committed to the good of Nigeria. Secondly, I believe the government assembled those who can easily reach out to the boys and girls in the creeks. Don’t forget that it is not easy asking those guys out of the creeks. So, those that sealed the deal should be credited rather than knocks. However, the pre amnesty stage would have been better handled using professional third-party mediators that have no vested interests in what is happening now in the Niger Delta rather instead of using politicians that want to latch on this opportunity to position themselves for 2011.

The Institute of mediators and Conciliators of Nigeria (ICMC) can boast of a reservoir of credible and professional mediators that would have been engaged to do a proper pre, intra and post mediation sessions with all the stakeholders. There are other neutral professional bodies that would have also been used. This would have to a great extent removed any cynicism and suspicion from several quarters. While this is on-going, government would have busied itself with structures needed to receive the militants. This is not late; these people can still be engaged to complement the work of the committee.

Q: Some known militant leaders are yet to embrace the amnesty deal few days to the October 4 dead line and in fact, are asking for extension. Do you think the government would have achieved a total demilitarization of the region and should government grant the extension?

A: I am not convinced that the implementation process of the amnesty the way it is currently will lead to a total demilitarization of the region by October 4th. There is still so much mistrust, suspicion and lack of confidence in some of the political gladiators parading themselves as mediators. Other reasons may include:

1. Past experiences of agreements not honoured by previous administrations. So, it will be a wait-and-see attitude for a while.
2. Those that have not surrendered may be encumbered by several factors. They need to holistically carry all their ranks along.  Some of them who have seen huge sums of money in foreign currencies and may not like to give up their comfort for the stipend of government. They will prefer greater roles in oil and gas commercial activities. This may give them a cutting edge to re-channel their energies to more productive activities that will benefit them, their backers and followers.
3. Arresting and prosecuting leaders of such groups in the past. The experience of Asari Dokubo who was lured out of the creek, arrested, detained and prosecuted and Henry Okah are readily flashed as examples.
4. The fear for the lives of the leaders. This may not just be a government thing. Remember they have godfathers, and sponsors who bankrolled their operations; and lieutenants who fed fat on their leaders’ exploits. I think they are asking for time to do proper disarming and consultations so that the extreme radicals won’t be used by those who benefitted from the largesse to break their ranks, and turn the heat on them the leaders.
5. Apprehension about the ability of government to sustain the monthly stipends to this group in a country where regular salary earners like teachers, civil servants and pensioners are owed backlog of salaries for months.
6. The rent economy the country runs, where all the manna flows from the Federal Government only. Except the barons, corporate citizens, well meaning Nigerians and the country’s money looters assist in this wise, I am afraid for its sustenance especially with the country’s dwindling economic fortunes.
7. The belief that those parading themselves as mediators are politicians that have a hidden motive for future elections and therefore, do not believe that the politicians are  in a position to objectively and genuinely handle some of the complexities of the amnesty process. The perception is that some of those that feasted on the commotion of militancy are now the ones midwifing the amnesty process.
8. It takes time for confidence building and it is Impossible for those with one form of interests or the other to be successful drivers of this process. Therefore, seasoned professional, unbiased third party neutrals (mediators) should be assembled from the arrays of mediators to commence genuine mediation on this amnesty issue with the militants.
9. Encourage the leaders to form legal corporate bodies saddled with the recruitment of the re-skilled militants and the communities to monitor oil installations to forestall incessant attacks on the facilities. This will also become an employment generation strategy.
10. The militants want assurances and concrete evidence of the quick wins and the sincerity of government’s sincere resolve towards the implementation of both the medium and long term recommendations as proffered by the Niger Delta Technical Committee (NDTC). It is hoped that if the above is done, it will achieve the followings:

•   Restoration to a people friendly and quality environment through massive cleanup of the degraded land and water.

• Improvement in their quality of life. The African Charter, WHO; ILO and international laws make it mandatory for governments to ensure that citizens should have unrestrained and equal access to the basic necessities of life like food, water, health, education and employment.

• Return the people to their natural occupation of farming and fishing.

• Remediate those whose rights were violated during the faceoff between the militants and the government security agencies

• Communication strategies that will enable the people have adequate information at all times on on-going efforts to restore quality of life to the region. This will go a long way to improve the disconnection between the government and the people, and also enable the people consult constructively.

Based on all the above and possible favourable security reports, the government should take a second look at the deadline. What we all need is a lasting solution to this intractable problem. There is no use rushing over it and then come back to the starting block sometime in future. On the part of the militants, the elasticity of the process cannot be forever because further plans are needed to be put in place in order to accommodate all interests.

Q: There is this argument that government has not make adequate and concrete plans for rehabilitating repentant militants and that is a potential threat for return to creeks and violence. What is your view on this?

A: I am not too sure the government expected the kind of human traffic that have turned up at the centres and therefore not likely to have put structures in place to accommodate them. I believe it is a learning process and we need to confront it. We cannot jettison the process because of some identified flaws. What should be done now is to use situational approaches, collaboration, and more dialogue by the strategic stake holders to mitigate the collateral damages and move on. The disarmament, rehabilitation and reintegration process is not a tea party.  It will be inconveniencing for a while but the dividends will be massive if all the social partners fulfill their own side of the bargain.

One of the dividends of this amnesty is sifting the chaff from the wheat by the exposure of kidnappers who hitherto would have been taken for Niger Delta militants.  The battle has shifted from the Niger Delta to the high hills of the northern parts of the nation. So, it is no longer a Niger Delta thing.  The kidnappers have gone into the heart of governance to kidnap a sitting State Secretary to the government of a whole state (Kaduna).

Every Nigerian should be concerned and offer to help to ensure that the process of amnesty achieves its objectives. The National Assembly (NASS) has a role to play to ensure that the Petroleum Industry Bill takes into cognizance the issue of managing the communities’ interest in the Niger Delta region. NASS should also review the Nigerian constitution with a view to encourage the development of minerals and agriculture by substantially increasing the derivation element from its present 13% and institute the ideal practice of fiscal federalism.

The Federal government should evolve a way of repatriating all the stolen funds from the region and tie them to specific projects. Every State Governor and Local Government Chairmen must practice transparency and accountability in governance. There should be a synergy between the NDDC and Niger Delta Ministry to avoid duplication of efforts. Government should Curb oil theft, and identify economic terrorists for sanctions. Crude theft should be treated as terrorism against the state. There should be co-operation and collaboration between Nigeria and the international community on identification of stolen crude. The oil thief is an economic terrorist and should face the penalties terrorists face. The terrorists’ target a segment of society but economic terrorists seek to wipe out a whole generation by foisting on the people poverty, hunger and disease.

The militant leaders should be encouraged to form legal corporate bodies and be saddle with the recruitment of the re-skilled militants and the community actors to monitor oil installations to forestall incessant attacks on the facilities. This will also become an employment generation strategy. Secondly it will keep them perpetually engaged. Lasty, it should not be lost on us that chuning gun trotting young men into the streets without concrete alternative source of livelihood will breed more insecurity across the country.

It takes time for confidence building and it is impossible for those with one form of interests or the other to be successful drivers of the amnesty process. Therefore, seasoned professional, unbiased third party neutrals (mediators) should be assembled from the arrays of mediators available in the country to commence genuine mediation between the parties.

Any amnesty or intervention that will not address the fundamental questions of the provision of the basic comforting needs of the people that will enable them live qualitatively, the development of the region, empowerment of the youths through skills acquisition and employment generation, community interests, oil theft, transparency and accountability in governance; will only lay a grand design for future societal dysfunction that will be deadlier than the terrain we have just left.

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NIGERIA AT 49

By Louis Brown Ogbeifun | October 1, 2009

Nigeria is today 49. On this day last year, I wrote in www.louisbrownogbeifun.com on “Nigeria: A paradox at 48”. In that article, I observed the seeming lapses of a great nation brought to her knees by corruption and bad leadership. In addition, I made suggestions on how to move Nigeria forward. One year down the lane, our situation has grown from bad to worse in several areas identified in that article. Many Nigerians have given up on the project “Nigeria” to the extent that America is already training her troops on how to protect their economic interests come 2013; a year that Nigeria has been pencilled down for disintegration.

When I was growing up, the Nigerian flag was given to us at school a day before the Independence Day celebrations. We held on to it jealously and revered it. We looked forward with excitement to the activities of October 1st. In every regional capital those days, lavish and colourful decorations of the streets, schools and public places took place. The bells tolled at midnight. Fireworks sparkled and engulfed the sky in the jubilation and celebration of the Union Jack; the day we were decolonized. Then we had very many reasons to celebrate.

Though I am from a poor home, the free education programme of Late Chief Obafemi Awolowo enabled me to acquire primary and secondary schools’ education, without which I could not have been whom I am today. The educational systems ran uninterruptedly for decades after independence. Books were distributed free to students. Civil servants and our teachers were proud to work for humanity. Health centres worked to cater for the health of the masses. power supply was stable. There were public taps for water supply. The train system functioned. It ferried goods and humans from the south coast to the northern part of the country. Though the roads were narrow, they were motorable and regularly maintained. Doors could be mistakenly opened overnight without any fear of marauders. Neighbours stood in the gaps for each other during difficult times. The regions were self sufficient. They funded their programmes with proceeds from agriculture. Life to an extent was sweet.

Gradually, the fanfare of Independence Day celebrations began to decline. As at today, Independent Day celebration is very uninteresting and near absent. There is apathy in the land. Hunger, poverty and disease feast on my beloved country to the extent that majority do not see any reason to celebrate. Those that celebrate now, are those in the drivers’ seat of governance; who make money through contract awards; which will further enrich them but bleed the treasury dry to further pauperize the citizenry.

The fear of Nigeria’s disintegration by America is justified because the indices of failure in our polity are high and growing worse. It is sad commentaries that as we mark our 49th Independent day, public schools all over the country are on strike. The doctors have also threatened to embark on strike soon. Nigeria runs a generator powered energy sector, which cannot support any economic development. The manufacturing sector is functioning at below 40% capacity utilization. Our refineries are underperforming courtesy of sabotage of the major crude trunk lines. This has turned us to net importer of petroleum products instead of the other way round. The recent elections in Ekiti and Ondo state have proved that if care is not taken, 2011 elections will be worse than that of 2007. The rot has even crept into our sporting system. Nigeria that used to be a toast of the international community and a football playing nation is now taking the back seat. We have lost all major tournaments in recent times.

To make matters worse, majority of our leaders are carrying on business as usual, and as if Nigeria is effectively working. The revelation of economic banditry of the nation’s treasury by those in government by the Economic and Financial Crimes Commission (EFCC) is mind bogging. I am sure our leaders are also fortifying their vaults overseas, so that when the worse happens they will zoom off with their families to safe havens. For those of us who believe that Nigeria has not totally failed but incapacitated by massive failures, this is time to wake our sleeping majority to shake off their slumber.

Many corporate organizations are divesting from oil businesses here and the Asians are taking them over. From this scenario, it is safe to posit that “if” indeed Nigeria disintegrates, the fight will be among the advanced nations over economic assets and which of the region to re-colonize. The fight will not be to protect us as a people.

Should this dream and drumming of disintegration succeed; the world will witness the worst catastrophe of the century. Nigeria will turn a battle ground for the testing of new guns and war equipment that are manufactured somewhere but tested in foreign lands. Of course, such equipment is never tested by the manufacturers using their own people.

If the international community has been unable to finish whatever businesses with the human catastrophe there are, in Afghanistan, Somalia, Gaza, Pakistan; which if lumped together are not up to two geo-political zones in Nigeria, then the world should know that any disintegration of Nigeria will in perpetuity drain the blood off the economic vessels of the world. Though the advanced nations will sell their military hardware and thus generate income to run their own economies, let them know that any agreement in exchange for oil as they did during the Biafra war will fail this time around. The Ogoni resistance against the oil giant Shell will suffice as an example. Therefore, it is indeed, in the best interest of the international community that Nigeria should continue to run as an undivided entity.

First, Nigeria is so large that the wars that will be fought will be multifaceted and may never end. Take for instance the South as an entity. The East will battle to regain the lost Biafra. The Niger delta will fight to actualize the Boro vision. The ethnic nationalities will strive in that chaos to fight to regain lost identities. Recently, in trying to take charge of the nerve of oil between the militants that operated in the Niger Delta, several fractions emerged. We have countless generals and commanders leading the splinter groups. So shall it be with any disintegration. In the oil producing communities of the lower Niger, the war will be fiercer in the Urobo, Ijaw and Itsekiri areas. They will rise to ensure that they carve out distinct identities to manage their own separate oil resources.

Secondly, in the ensuing melee, I am not too sure the entire North will remain intact because the middle belt has been crying over economic, social and political marginalization for a long time. This region boasts of the best hands the military has ever produced in Nigeria. Just like there is a professor in every house in Ekiti state, so there is a general in every house in the middle belt region. So, they are equipped to strive and bring about their own identity. Time would have come for them to take their destinies in their own hands. More so, that they remain the food basket of this nation, and can survive by reinventing their agricultural might

Thirdly, the refugee crisis that will emerge will swallow the entire west coast. The Sahara desert will have more guests heading for the outside world than it had over the last two decades.

Fourthly, the world’s level of insecurity would have heightened that no foreigner can freely come into Nigeria. Somalia pirates’ situation will be a child’s play. Let every reasonable being check out the last few years of restiveness in the Niger Delta and will find out that should there be any full scale war, no oil tanker or commercial vessel can safely enter the region without paying the right price.

In this therefore, let the West not rejoice because they will never be able to control the emerging holocaust, talk less of being in a position to re-colonize the region’s oil wealth. It should remember that one of its critical challenges today is the money being used in fighting some wars outside its domain. Rather than investing heavily on armament to defend its interest in a disintegrating Nigeria, let the international community begin an aggressive drive on how to make Nigeria work again as a nation. The world should not wait to fight a reactive battle as they did in Liberia, Sierra-Leone, Somalia, and Rwanda. Some of the things the international community can help Nigerians do at this moment include:

1. Imposing subtle social and medical travel restrictions on all politicians and top government functionaries from Nigeria. When they have nowhere to run to, our politicians will sit down and make our health and social institutions work.

2. Foreign banks should ensure that their vaults are no longer made warehouses for stolen funds. They should collaborate with the EFCC to intensify the war against money laundering.

3. Ensure that all known looters and those convicted for economic crimes are ostracized and not welcomed into any part of the West and European countries.

4. The money being used for building armament that will rain bullets on our people later, should be used now for developing human capacity that will enable more Nigerians protest against misrule, corruption and bad leadership.

5. The West through its cohorts destroyed our federalism immediately after the civil war.  It was at the vanguard of guiding the Federal Government to remove the powers of self sufficiency from the regions. Gradually, the emerging military leaders were tutored on how to make the regions less powerful. Indeed, each successive military regime made a gradual u-turn from federalism to unitary system of government. The essence was to make the regions crawl to the Federal Government, begging for funds. It also served as a diversionary tactics to divert the regions’ attention from pursuing any secession agenda as the Eastern Government did. This was actualized through the destruction of the regional Development Authourities. This was the beginning of our woes. From then on, the military began a gradual balkanization of Nigeria in the name of states’ creation. Our rent economy guarantees Federal Government to be the sole distributor of manna to the States. Currently, most of the states depend solely on the Federal Government for survival.  Experience has now shown that even if the states do not rise to confront the government, militia groups will do it in a more destructive manner. So, let the West also go through the same process to reinstate the ideal fiscal federalism it took away through the back door.

To us as a people, ten years of uninterrupted democracy is enough to start harvesting some basic dividends of democracy. So, time has come to work for the actualization of the Nigeria of our dreams and everybody has a role to play to ensure that this house “Nigeria” does not fall.

President Yar’Adua.

There is no time in our history than now, that we need a principled, truthful and open leader to turn things around for Nigeria. President Yar’Adua represents this. When he was elected, he told us the process of that election was flawed. Fact number one! To rectify this, he set up a committee to advise him on how to ensure that our electoral system is flawless. He also diagnosed that Nigerian past leaders did not rule the country based on the rule of law. Facts number two! To address this he began the rule of law mantra and has not unnecessarily meddled in the affairs of the National assembly as did his predecessor. In his speech to mark this year’s Independent Day celebration, he said our dreams since independence and the promise of independence have been largely unfulfilled. Another sacred fact! Our past leaders will not do this and would not have been point blank. All that is now required, aside telling the truth, is to take the bold and radical steps needed; to give vent to the processes to right these wrongs. It is in these, Nigeria of our dreams can be born. Some of the radical reforms will include:

1. Constitution reform: This is inevitable. He has to take the hard decision of returning Nigeria to true federalism. The power at the centre is too concentrated and juicy hence the battle by every politician to come to the seat of power at Abuja. As at today, many former governors live their lives in cosy hotel rooms in Europe, their luxury homes at Abuja or in Lagos. Never are these privileged Nigerians found in their Local government areas or even their state capitals except during party primaries. They are even afraid to live in midst of those they governed for eight years because they underdeveloped the states and milked them dry. This is an irony of fate. If Nigeria must develop and make progress, we must start building from the foundation, which is the local government. If there are infrastructures at the local level comparable to those found in the cities, no one will like to migrate to the cities.

2. Political party reform/internal democracy: As the leader of the largest political party in Africa; the president must ensure that between now and 2011, Peoples’ Democratic Party (PDP) should enthrone internal democracy as a way of laying a foundation for credible elections in the country. Members of the party from the ward level must be allowed to freely elect those that will occupy political offices and those that will represent them in the larger contest. The signs from the recent Anambra  ward congresses of the President’s ruling party are ominous. Several protests, the usual thugery and lapses marred the exercise, while one of the aggrieved parties headed for the court.It was later put on hold. Instead of the selection process we witnessed in 2007, which saw the likes of GovernorsRotimi Amechi, Olusegun Mimiko, and some of the founding fathers of PDP thrown out of the party. The court later reastored Amechi and Mimiko’s mandates. PDP should braze the trail of accountability and transparency in election matters so that others will follow. It is when this is done, that a PDP led government can also give unto Nigerians free hands to elect their leaders; because nobody can give what he or she does not have.

3. Electoral reform: The electoral reform started by the President should be implemented in a way that every vote of the electorates should count. Independent National Electoral Commission (INEC) should be truly independent in all ramifications to enable it save Nigeria from the embarrassment of flawed elections. 2011 is a year of reckoning. Most of the electioneering re-run have been marred by violence. Nigerians are visibly angry at what is happening all over the country.This culture should not be allowed to continue. The springing up of ethnic militias in various parts of the country is a sign of discontent. So, it is in our best interest to allow free and credible elections.

4. Seven points’ agenda: While the President may want to address as many lapses as possible before his first tenure expires, the seven point agenda of Mr. President should be redefined to make it realisable. The one point agenda that is sacrosanct is the provision of uninterrupted power to the nooks and crannies of Nigeria. This will be the springboard for development. The President should go further to ban importation of generators into this country. When we have no new generators and we cannot afford to maintain the old ones; I am sure those in high places will climb down from their high horses to proffer solutions to our energy problems. If power generation and distribution is effectively delivered to Nigerians, the huge cost of manufacturing will reduce, and some of the collapsed industries may gradually come back to life.

5. Niger Delta Peace process: The President has started a good job in the Niger Delta region. He should continue to sustain the peace process he has started there. Again, this is an area he should be given credit for not being egocentric in addressing the issue of militancy.

6. War on corruption: The President should sustain the war on corruption no matter what it takes. The discordant tunes emanating from the Economic and Financial Crimes Commission (EFCC) and the office of the Attorney General of the Federation are discomforting. It would seem that the Attorney General is doing more damage to the image of this country with the way he is quick to defend the interests of those facing various economic crimes in the country. No country fights corruption by allowing the critical agencies involved in the process to be at daggers drawn with each other. They are supposed to be two sides of the same coin. Those that will reap from these seemingly uncooperative attitudes are the looters of our treasury thereby denying the people social justice. While the President may not wish to interfere in this imbroglio because of his belief in the rule of law, he should remember that no rule of law can be effective without social justice.

The National Assembly:

The cardinal duty of the National Assembly is to make good laws for the governance of this nation. The present crop of Senators and House members will write their names in gold in the annals of legislative service to Nigeria; if they pass the following bills into laws before their tenure expires.

1. Freedom of Information Bill: This will assist people to freely attack corruption without molestation.

2. Electoral Reform Bill: This holds the key to our survival as a nation beyond 2011. The Independent Electoral Commission (INEC) should be strengthened through the process of law to be truly independent. Except we get this right, the fierce battle to win elections at all cost will be unprecedented.

3. Petroleum Industry Bill. Our petroleum sector is parlous and in a pitiable state. The laws governing it are obsolete. The community restiveness and the Niger Delta crisis emanated from the inadequacies of the laws. NASS should therefore do all it can to turn things around through the process of law.

4. Constitutional amendment: This should be done to ensure that states are encouraged to tap the resources at their disposal. If every State knows that it will have 50% derivation from whatever it produces, it will motivate the Governors to find ways of tapping their resources rather than depend on begging for funds from the Federal Government. The Independence of INEC should be clearly redefined in line with the Justice Uwais Committee report.

These are the instruments that will promote accountability and transparency in governance by the executive. If they can do these for Nigeria, they will be remembered for good.

The Politicians

Our politicians owe us a duty to ensure that our votes count. They should not see elections as a do-or-die affair. They may lose today but win tomorrow. They should change their traditional paradigms of old (Amala politics) of using coercion to agrandize the people’s votes. They should stop using political thugs to harass Nigerians and snatch ballot boxes. They should introspect and see if their ten years in the rulership of this nation, has benefitted the masses of Nigeria. They know it that nothing could been said to have worked for the benefit of the greater society. Dividends of democracy include the right of the citizens to freely elect their leaders without molestation, access to sound education, good health, food, housing, and good environment. If they agree to this assertion, then they have failed the masses of this nation and the only way they can atone for these sins is to do it right in 2011. They should note that the king that ruled and the people prospered with a united kingdom have a name. The one that also ruled but the kingdom into shreds through maladministration and war also has a name. So the politicians should choose the name they want to be called and remembered for.

The people

Fellow Nigerians, having dealt with the issue of the selfish agenda of foreign interests in Nigeria, we have about one and half years to determine our own future. That is, between now and 2011 when general elections will take place. Nobody can do it for us. We have to do it ourselves. We cannot fold our arms and wish someone else reinvent this country for us. We have blamed the military for so long. Let us also agree as a people that we have failed Nigeria; by not standing for her at critical moments and by watching people of low character destroy our commonwealth.

I align myself with the President’s speech of today that government should renew its commitment to confronting the challenges of critical infrastructure, the Niger Delta, food security, security of lives and property, human capital development, land tenure and wealth creation.

We as citizens also have a great role to play. We should  wake up from our slumber. We have made life too comfortable for our political leaders. If Nigeria disintegrates, all the politicians will run away leaving us to die in the ensuing war and recriminations. So, why are we going to allow them wreck us and leave us to bury our dead? We should stand up to fight now. Not by carrying guns but by civil disobedience to protest the maladministration of our rulers. We should sing the praises of the governors that are performing excellently well, and make governance difficult for treasury looters.

The Labour movement should start sharpening their arsenals of mass mobilization to confront those who will want to rig 2011 elections because workers bear the brunt of empty treasuries, political truancy and economic sabotage. The market women should get ready to reinvent the great womanhood in them to salvage Nigeria from ruins. The Student activists should be ready to re-enact the Ali-must-go fire works without destruction to lives and properties. The youths should also say no to being used as political thugs.

Wherever we are, let us as Nigerians rededicate ourselves to the Nigerian project. Let us think of what we can do to make Nigeria greater than what she is now. Let us be honest and loyal to the service of our country at all times. This House (NIGERIA) must not fall. May we live to see the Nigeria of our dream, and may Nigeria never die in our time.

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IS NIGERIA A FAILED STATE?

By Louis Brown Ogbeifun | July 26, 2009

The disaster dictionary defines a failed state as “A dysfunctional state which also has multiple competing political factions in conflict within its borders or has no functioning governance above the local level. This does not imply that a central government facing an insurgency is automatically a failed state. If essential functions of government continue in areas controlled by the central authority, it has not “failed.” An example of a failed state is Somalia”. The attributes of a failed state proposed by the Fund for peace according to Wikipedia include:

• loss of physical control of its territory, or of the monopoly on the legitimate use of physical force therein,
• erosion of legitimate authority to make collective decisions,
• an inability to provide reasonable public services, and
• an inability to interact with other states as a full member of the international community.

Arising from the above postulations, a failed state can be defined as that country, whose central government is so weak, cannot make collective decisions, unable to control its territorial integrity and thereby uses coercion in her day to day activities to enforce rules and suppress human rights, having no wherewithal to provide basic welfare services and unable to interact with the international community on a scale expected of a sovereign state.In summary, the characteristics of a failed state include:

• inability of a state to provide the basic leadership functions by the central government that will stimulate the desired development of an ideal state,
• inability to make decisions that will impact positively on the lives of the citizens,
• failure of the public service to provide the basic welfare services like food, housing, health and education for the good of all.

To help countries access their ratings and risk assessment factors, the Fund for Peace carries out surveys and release her reports on annual basis. According to the Fund for Peace, “These reports assess the stability and political risk of countries by focusing on key economic, social, and political indicators, including, as applicable, their relations with other countries in the region and local issues”.

In the 2009 report released by the Fund for Peace using the Failed States’Index; Nigeria was ranked the 15th most failed state in the world out of the 177 countries surveyed. Nigeria sank deeper into the valley of the failed states from the 18th position she occupied in 2008 and 17th position in 2007; Ivory Coast was ranked 11th, Kenya was ranked 14th, Ghana was ranked 124, Norway was 177, Finland USA and United Kingdom were ranked as 159 and 161respectively.

From the above and going by the survey carried out, Ghana is the safest and the most outstanding haven in Africa while Norway is the best place to be in the world. There are twelve parameters called indicators used to assess a state’s viability to respond to the basic needs of her citizens. I strongly believe that Ghana and Norway meet the positive things said about them.

I visited Ghana and Stavanger, Norway in 2003. The workings of those two States were completely a direct opposite of what obtained in Nigeria. In those cities, things worked. The highways are motorable, the electricity supply was uninterrupted for the periods I stayed there and law and order was pervasive everywhere I went. There was sanity on their roads. In addition they also have stable, social, economic and political environments.

In Ghana, I strolled out at various times of the night to compare the night life there and in Nigeria. What thrilled me was that one was not harassed nor accosted by hostile police men that will hound innocent people into their waiting cabs to be charged for wandering. All the assignments I had there had no African time. Life there was sweet.

It is on the basis of the above I want to look into the parameters as currently obtained in my dear country, match them against the indicators and see if Nigeria has indeed failed.

Social Indicators:

1. Mounting Demographic pressures: One key indicator that would have helped in the assessment of this pressure is an accurate census figure. Unfortunately, the deliberate falsehood by the elites, communal leaders who use public officers in bid to attract more revenue allocation from the Federal government and the justification of the number of local government Councils in their States have made it impossible to have an authentic census data.

There is no denying the fact that there are the pressures deriving from high population density relative to food supply and other life-sustaining resources in Nigeria. From time to time, there have been deadly pressures from border disputes as typified by the Aguleri-Umuleri fratricidal wars of the 80s and 90s in the South East, the Eleme-Okrika clashes in the last few years in River’s State, the recent July 2009 religious upheavals claiming scores of lives in Bauchi, Maiduguri and other land disputes across the six geo-political Zones, the resource control agitation over ownership of the land where oil is produced from by the Niger Delta states, lack of access to effective transportation outlets across the nation, control of religious and serious proximity to environmental hazards in gas flaring in the oil producing state and severe erosion problems in several states make Nigeria. A recent agitation by the people of Cross River over the ceding of over 70 disputed oil wells to Akwa Ibom State by the Revenue Mobilization, Allocation and Fiscal Commission (RMAFC) and the National Boundary Commission (NBC) may pitch the two States against each other if not well handled. On this indicator, our leaders have failed to take us above the curve necessary to justify a healthy existence as a nation.

2. Massive Movement of Refugees or Internally Displaced Persons creating Complex Humanitarian Emergencies: This had at some level occurred once-in-a-while  as explained in 3 below but they have been resolved without any refugee problems over a long period of time. Maritime continental shelf challenges with our neighbours; Cameroun, Equatorial Guinea, Sao Tome and Principe and Benin Republic have been methodically resolved. This is not much of a problem to Nigeria as the ceding of Bakasi Peninsula to Cameroun did not generate serious internal or external conflict. 

3. Legacy of vengeance-seeking group grievance or group paranoia: In the last ten years, The politics of selfish agenda, contestations over ethnic inheritance of indigenous homelands, claims to religiosity, have triggered several communal and religious violence, the proliferation of ethnic militias and sectarian fundamentalism. There have been insidious communal and sectarian crisis perpetrated by dominant groups over the minorities across the nation. Few examples are: The Kano and Plateau crisis of 2004, the Zango Kataf crisis of 1998, the Ife-Modakeke crisis of 1997, Kaduna crisis of 2000 and 2002, Bauchi and Jos crisis of 2009, which are either premised on religious, ethnic and on recent or past injustices. Several hundreds of thousands were displaced in the incidents, and several thousands more lost their while others lost properties that cannot be recovered. In an attempt to put down some of these insurgencies, soldiers were used in Odi, Gbaramatu and some part of Plateau. This shows that our security system is inadequate for preventive purposes. The exclusion of the minorities in the mainstream of Nigerian political system is one of the reasons for the agitation in the Niger delta States. There is a serious concern on this indicator.

4. Chronic and sustained human flight: The brain drain syndrome is unreservedly high and alarming. Nigerians are leaving the country in droves seeking greener pastures outside Nigeria. Many of our professionals are servicing the economy of other advanced nations. They are found in every nook and cranny of the world. Human trafficking especially of the youths is unacceptably prevalent. The age bracket involved in this flight are supposed to be the bedrock of our future development.

Economic indicators:

5. Uneven economic development along group lines: There is no gainsaying that there is high level inequality in appointments and in our reward systems. Who you know gives you any appointment. As at today, key appointments are based on tribal, ethnic and religious sentiments and astronomically skewed against the minority in whose land the oil that services our economy is gotten. Gender inequality is even more alarming.In 2007, the world was alarmed with the assertion of President Olusegun Obasanjo on infant and maternal mortality rates and I quote “”When we came into office in 1999, the national infant mortality rate which was 71 deaths per 1,000 live births rose to 100 in 2003. Under 5 mortality rate also showed the same trend, starting at 133 deaths per 1,000 live births and rising to 201 in 2003”.  In 2008, indexmundi said infant Mortality rate stood at “male: 101.83 deaths/1,000 live births and female: 89.28 deaths/1,000 live births (2008 estimates.) “In July 2008, Ali Garba writing from Bauchi, said “The Bauchi State office of the Millennium Development goals (MDGS) has averred that that over 600,000 women die of pregnancy related causes in the world annually and Nigeria alone accounts for 10 percent of this figure. One Nigerian woman dies every ten minutes.  Hajiya Hajara stated further that, in Bauchi State alone, according to studies done by the United Nations Population Funds (UNFPA), the maternal mortality rate worsened from 1350/100,000 of lives birth in 2003 to 1380/100,000 in 2006. These are not good indicators for any nation.

6. Sharp and/or severe economic decline: Poverty is the inability to afford the basic necessities of life. This includes food, housing, water, inaccessibility to education and health care. Those below poverty line have been defined as individuals and households whose incomes are insufficient to provide for their basic needs (World Bank 2001). The economic meltdown has led to drop in commodity prices and foreign investment. The naira has suffered its worst devaluation in almost a decade. As you read through this, political and public officers’ salaries are going through the processes of reduction and many pensioners are owed pension arrears despite the huge sums made from excess crude oil prices in the last ten years. There is no part of the country that can boast of two hours continuous power supply every day. There is lack of portable drinking water for the masses especially in the rural areas. It has been widely accepted that majority of Nigerians live below poverty line. Access to qualitative education is a tall dream as schools never complete one full academic session without a strike. Most parents now send their children to neighbouring West African countries for studies. Our health care suffers the same neglect and decay as with other infrastructures. This has led to a flight of our leaders to India, South Africa, Ghana and other advanced nations for their and their family health needs. 

Political indicators:

7. Criminalization and/or delegitimisation of the state: The issue of endemic corruption by the ruling class is still prevalent. The EFCC and ICPC keep raising alarms over lack of transparency and accountability in governance. The confession of the President at the inception of this administration that the election that brought him to power was flawed has eroded the confidence of the people in those at the helm of affairs. The people also have lost faith in some of the social institutions like INEC. This led to the electoral reform of the present government.

8. Progressive deterioration of public services: The collapse of almost all social institutions is not in doubt. As at today, the Federal Universities and polytechnics are on strike. The Nigerian Medical association has suspended her proposed national strike till October 1st 2009. There is massive vandalism of state assets like petroleum pipelines, electricity cables and sabotaging of oil installations. Our security cannot be said to have the capacity to wade off most of these attacks as the recent bombing of Atlas Cove in Lagos has shown. In the last two weeks, armed robbers have held some states in the South East hostage. The security infrastructures are weak because of the Nigerian question.

9. Suspension or Arbitrary Application of the Rule of Law and Widespread Violation of Human Rights: The current state with regards to this indicator if matched with the military era is poles apart.

10. Security apparatus operates as ‘state within a state’: While one may not readily have the data to back up state-sponsored political killings, the high profile assassinations of political opponents between 1999 and 2007 are legion. Up till now, the Chief legal officer of Nigeria Chief Bola Ige, Marshal Harry and others were gruesomely murdered without any clue, the extra-judicial killing of the Apo six by the police in 2005, the increasing wave of militia activities in the South East, South West and the Niger Delta region are pointers to frustrations on the part of the populace calls to mind the need for government to wake up to the duty of care it owes Nigerians.

11. Rise of factionalised elites: This does not seem to me to be something to worry about in the country as at now.

12. Intervention of Other States or External Political Actors: Putting all the above together, there are glaring indicators that Nigeria has a financially strong central Government that operates more of a unitary system; but crippled over the years by the moral bankruptcy of our leaders. This has been brought to bare by the results of different probe panels and the assertions of our anti corruption agaencies. The end effect of this is a weak decision making centre and therefore unable to take decisive decisions that can catapult us to our dream state in line with vision 20:20-20. The examples of such weaknesses are legion. The privatization, deregulation and the liberalization programmes for instance is a disaster. Government has submitted her right to run an effective downstream sector of the oil and gas industry to a cabal, which President Yar’Adua has acknowledged.The insurgency in the Niger Delta has paralysed the activities of the entire upstream and downstream activities. The spate of kidnapping for ransom is alarming and our level of insecurity is totally unacceptable. Our roads are death traps and not motorable all year round. Nigeria currently provides less than 1,500 Mega Watts of electricity to service more than 140 million Nigerians and those found guilty of corruption are walking the streets free and in their affluence.

Irrespective of the above weaknesses, Nigeria still remains stable, not because of the efforts of government but because of the patient nature of Nigerians. Nigeria is still on her feet without unnecessary pressures from other countries. It is worthy to note that several nations have gone to wars over the above highlighted issues and weaknesses but Nigeria has managed to survive so far because of the resilience of the people as a nation.

Even before the failed states’ index was released, I thought we had started on the right path with the rebranding exercise carried out by the Minister of Information and Communication. But the recent events have shown that the rebranding which should start with our leaders has serious question marks. Events have shown that the rebranding of a product by name change only will not attract genuine customers to buy a bad product in a new case. Our leaders need to wake up to present day realities and rebrand in totality. Nigeria is a great nation made to stoop low amongst the comity of nations because of the unpatriotic attitude of our leaders. Change! They must and yes they can.

The rebranding exercise would have been an ideal platform to re-orientate both our citizens and the public office holders on the need to do the right things, first time and at all times. However, this campaign will suffer a serious setback because the Ministers driving the rebranding do not tend to believe in it. If not, how does one explain a situation where the Minister of education was said to have held a party in which multi millions naira was expended to celebrate 25 years of marriage in full glare of Nigerians; at a time when all educational activities were paralysed by strikes organized by the academic and non-academic staff unions of Universities?

Another setback for the rebranding process was the display of affluence on a major Nigerian electronic media by the Minister of Information and Communication, Professor Dora Akunyili, during the wedding of her daughter. Reactions of the people can be summated with the comments of the National Publicity Secretary of the All Nigeria Peoples Party (ANPP) Mr. Emma Eneukwu who was quoted as saying “it was disheartening that the minister can celebrate the wedding of her daughter with pump and pageantry when the average Nigerian is in the midst of penury and material poverty” In all the states mentioned as virile and strong, such things do not happen. If it does, the Ministers shall cease to serve the people the next morning and they would definitely face a probe panel immediately. This is a moral issue that goes with governance and service.

Is Nigeria a failed State?

Maslow had propounded five levels of human needs in a pyramidal form and he arranged them in order of importance. The first two needs, which are: Psychological Needs (food, shelter, water, clothing, breathing etc.) and Safety/security needs (financial security, health security, personal safety/security, education security, etc.) are very critical to anybody’s existence. It is in the fulfilment of these that one can be dignified, loved, respected and have self esteem. When the foundation of self respect and esteem is destroyed, a man loses his dignity to life.

To this end, the government has failed the vast majority of Nigerians. However, as an optimist, I believe that Nigeria is a great country that is well endowed in human and material resources. I also believe that she is a nation in transition and will come out of this coma so long as our leaders are ready for the necessary sacrifices. The route may be rough and rugged but if our leaders are truly repentant by shunning anti masses devices they can begin the serious business of rebuilding country. Nigeria is still alive, breathing and has enough blood in her to come out of the self imposed position she is presently occupying. Nigeria is not yet a failed state and will not be a failed state. She is but a state extremely disabled by inept and unpatriotic leadership whose stock in trade has been selfishness, lack of transparency and accountability in governance, greed and corruption.  Nigeria is a nation in perpetual motion but unable to continue on a straight path for a long time. She takes one-step forward and reverses herself at an ultrasonic speed backwards, to erode all the values gained with previous motions.

Though the indices of failure are very visible, but just like a student that failed a test can rise to make an “A” in the re-sit examination; I also believe that Nigeria can be on her feet again only if:

1. The people have the freedom to freely elect their leaders without molestation. This should be addressed by the electoral reform bill. The National assembly should not play politics with this issue. It is in this, the people can demand of their leaders transparency and accountability in governance. If Nigeria’s political future must survive beyond 2011, it shall depend on our having a true, open, transparent, free and fair elections. The people are becoming less patient and restive. Frustrations would force people to protect their votes if government decides otherwise. The youths used by politicians as thugs to rig elections should refuse to be part of the rigging syndrome because their future is being gradually destroyed. We must all stand up against snatching of ballot boxes and criminalization of our electoral process. This will be the beginning of the revision of our failures to successes.
2. The looters stop the continuous haemorrhage of our treasury. This is the singular and most culpable reason the dividends of democracy cannot be delivered to the good people of Nigeria. The political and public office holders that are less than 1% of the population should try to be truly born again democrats. This 1% has given Nigerians the bad name of a corrupt country. They should stop bleeding the nation’s economic blood for storage in private vaults at the expense of the larger society.
3. The genuine civil society organizations remain faithful to their agitations for a better governance structure.
4. The populace and indeed the masses who are the victims of any mis-management are more responsive to their responsibilities. We must start to hold our leaders accountable in all areas of governance. This should start right from the local government to the federal level. When people are fingered for allegations of corruption, it is amazing how Nigerians stand to defend them based on religion and ethnic sentiments. Nigeria remains the only country where perceived looters of our treasury are given red carpet treatment in court premises by the same losers in this game of corruption. This cannot move us forward. The looting of our commonwealth will deliver the killer punch if we all do not rise up against this evil now.
5. Our leaders uphold the rule of law as the benchmark for addressing the wrongs done to the people.
6. Our security agencies are well funded, focused on crime prevention and alert to the needs of Nigerians. The President on his way to brazil stated that surveillance has been on for years on the activities of the Boko haram sect that unleashed mayhem on police fomrmations in the northern parts of Nigeria and that this present security action will put the insurgents down once and for all. If we had a very good security network aimed at crime prevention and early arrests, the wanton destruction of innocent lives and properties would have been averted.
7. We as a nation truly change our paradigm. The tribal and religious sentiments of old cannot take us to our Eldorado. We must all say no to corruption and breaches of our laws. We must shun tribalism and sectionalism in the approach of issues and public discourse.
8. Nigerians have access to food, housing, education and health, which is their inalienable right. Our government can afford these. The looted funds that are in few hands can be recovered and used to liberate the masses from hunger and poverty.
9. There are no sacred cows in the fight against corruption.
10. Appointments into positions of authourity are on merit.
11. Our development is premised on affordable and sustainable energy supply. As a starting point, President Yar’Adua must deliver and distribute a minimum of 10,000 Mega Watts of electricity for usage before his tenure expires in 2011. If not vision 20-20 is doomed.
12. Efforts are geared towards job creation especially in the agricultural sector. The fertilizer merchants that have made it impossible for the grass root farmers to get fertilizers must be chased out of their illicit trade business.
13.  The petroleum reform is objectively carried out to serve the needs of Nigerians rather than see this as an opportunity to plant cronies in positions of authourity. The people must own the reform for it to survive. Nigeria and Nigerians must be the central focus the reform and the National assembly should be alive to her responsibilities. If this fails, at least for a while, we may jolly well say good night to oil and gas of our dream.
14. Government implements policies especially the budget, according to the designs in order to meet expected targets.
15. The Nigerian state re-engineers her Constitution, fiscal regimes and practices to reflect true federalism.

 In my own estimation, the failed states’ index is not in absolute term a “death knell proclamation” on states. It is an alert tool to a wise state that all is not well. It is a wakeup call to the reality that there is the need for the leaders to urgently put structures in place to avoid disintegration or disaster of unimaginable magnitude.

My expectation is that once these indicators are identified in a state, responsible leaders should concertedly and consciously use the facts to address her weak links. Any state found in the failed state bracket and still continue to act in self denial instead of addressing the weaknesses like Nigeria’s officials are currently doing, would be doing a disservice to her citizens.Nigerians should not lament over the failed states’ index. We are a hardworking people and I am convinced that we can make things work if our leaders change their ways and stop the corruption that thrives in high places. Change! They must and yes they can.

Let us be wise to use the index as a catapulting tool to spring from our current state into a better, viable and enviable society where everything works to the good of the people. Our leaders must conform to transparency and accountability tests. They must learn that there is virtue in service and should learn to put the people first. The era of pocketing every dime that belongs to the masses must stop. Our leaders must be selfless in service and give to the people what is truly theirs. They must churn avarice and the unrepentant looting of our commonwealth to oil the wheels of the destiny of their own families alone. Change! They must and yes they can.

Long Live the Federal Republic of Nigeria.

Notes:

Nigerian Newsday; Infant Mortality In Nigeria: Thursday, June 14, 2007.

http://allafrica.com/stories/200905150076.html

http://www.unicef.org/sowc09/

http://www.nasarawastate.org/articles/468/1/Nigeria-accounts-for-10-global-maternal-mortality-rate–Hajiya-Wanka/Page1.html

http://www.sarpn.org.za/documents/d0002272/index.php

http://www.news.dailytrust.com/index.php option=com_content&view=article&task=view&id=3154 

http://www.semp.us/publications/disaster_dictionary.php?letter=Fen.wikipedia.org/wiki/Failed state.

www.fundforpeace.org/web/index.php?option…id…  

http://www.indexmundi.com/g/g.aspx?c=ni&v=29.�

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UNDERSTANDING CORRUPTION IN THE NIGERIAN OIL AND GAS SECTOR: ISSUES AND CHALLENGES PRESENTED AT THE ANTI CORRUPTION TRAINING FOR OIL AND GAS SECTOR ORGANIZED BY AFRICAN DIASPORA INITIATIVE ON 30/03/2009; AT THE U.K. BELLO CONFERENCE CENTRE MINNA. NIGER STATE, NIGERIA

By Louis Brown Ogbeifun | May 1, 2009

I thank the organizers of this workshop for finding me worthy to deliver this paper before this august gathering. Your choosing to discuss corruption in the oil and gas industry means that there are cynicism and corruption in the sector, that all is not well with the system and that there is urgent need to put processes in place to add value to hydrocarbon production for the benefit of all stakeholders and Nigerians in general. That Nigeria is the 10^th and 3^rd largest oil producer of oil in the world and Africa respectively; yet so poor goes against any rational reasoning, methodical explanation and epistemological interpretation. It is incontestable that we are where we are because we run a spoilt system. The need to shift from our past makes the topic very apt at this time.

Introduction

For more than five decades of oil and gas exploration in the Niger Delta region of Nigeria, all we have are tales of woes and the massive negative impacts amongst which are: extreme poverty, high unemployment rate, infrastructural decay and corruption. All these have led these communities; in whose land we extract oil and gas to ask the Nigerian State to come up with the best arrangement that will reverse their awful and agonizing past.

Corruption is the deviation from the norms and ideals of transparency, accountability, honesty, truth and the engagement of people in self-serving activities to actualize selfish interests at the expense of the larger group. Corruption is a non-restrictive practice, which knows no boundary, culture or society. It is found in the nooks and crannies of every nation, whether emerging or developed. It starts from the micro level of the family as a unit and extends to the broad spectrum of society.

Therefore, corruption is not just taking and giving of bribes. It could be moral, political, social, economic and religious. It is effusive, pervasive, infectious and a highly globalized phenomenon. Corruption is human. It has voice, flesh, bone and marrow. It is highly professional. Corruption cuts across classes and strata of societies. It occupies low and high places. Those at the low level engage in it to make ends meet. Those in high places engage in it to maintain the status quo, cling on to power and eat what they do not need in the present to preserve their generation unborn. The perpetrators are conscienceless and deadly. It is on this premise that one believes that the oil and gas industry cannot be insulated from corruptive tendencies. Corruption is destructive and must be seriously tackled because where corruption thrives, nothing works. Corruption may not be totally wiped out but structures can be put in place to reduce the endemic social disease to the barest minimum. I believe that it is in the contest of trying to reverse the negative trends of corruption that the African in Diaspora Initiative is seeking a pathfinder, which will enthrone transparency and accountability in the oil and Gas industry in Nigeria.

Oil is an organic matter and also usually referred to as hydrocarbon. It is formed from dead marine organisms and plants, which were buried over several million years ago. It is transformed into oil and gas by heat, pressure and bacteria. Our economy could be said to be largely monolithic and largely dependent on the oil sector, which accounts for more than 98% of export earnings, about 85% of Federal government total earnings, 30-40% of our GDP; 90%-95% of foreign exchange earnings and between 65%-70% of government budgetary revenues. It is the most efficient natural resource that could be used for the rapid economic growth and development with the highest propensity to attract abundant foreign investment. Oil and gas are strategic to our national security, development and growth. They are even more important in our environment where we have no developed ready-made alternatives like coal, solar and nuclear energy to drive our technological development.

Brief historical perspective

• 1908: Exploration work started in Lagos and Okitipupa coastal areas by the Nigerian Bitumen Company established by a German consortium.
• 1908-1956:  Various exploration, exploitation continued in various parts of the country
• 1956: Oil discovered in commercial quantity at Oloibiri by Shell D’Arcy
• 1958: Shipment of 5,100 BOPD
• 1960:  175,000 BOPD
• 1971:   Nigeria joined OPEC
• 1979:  2.3mm BOPD
• 1958: Shipment of 5,100 BOPD
• 1960:  175,000 BOPD
• 1971:   Nigeria joined OPEC
• 1979:  2.3mm BOPD
• 1983: Oil glut led to a reduction to 1.3mm BOPDv  2008: 2.4mm BOPD
• From mid 1980s-september 2003, oil prices generally stood at $25/barrel. From then on prices rose above $30/barrel.
• August 11 2005, it rose to $60/barrel
• July 2008, it peaked at $147.30

At the end of 2008, it slumped to $33.87 and in 2009, gradually climbed to above $50 by the end of March, 2009. Currently, more than 800,000 barrels have been shut in due to youth restiveness, militancy in the Niger Delta region and the unabated vandalism of petroleum pipelines

Upstream

The upstream focuses on mining, exploration, exploitation, production and exportation of crude oil and the most important sector to the Nigerian economy. Nigeria’s average yearly production of crude oil is 710 million barrels. Present reserve is expected to last for about 49 years if no additional reserve is added. This shows that oil is a depletable asset. Nigeria has proven natural gas reserves of 187 trillion standard cubic feet, the 7th largest gas reserve and a production capacity of 34.97 billion cubic billion metres and present average gas consumption is 700Mscf. The country currently flares less than 75% of our gas is flared (it is 42.52% (2006) and 27% (2007) of associated gas and hopefully would wish to have a zero flare target by the year 2010. In addition, it is also the desire of the country to increase the National Oil Reserve base from the present 36.22 billion barrels to 40 billion barrels with a daily production of 4.5 million barrels by the year 2010.

The Downstream sector

The downstream sector concentrates on the refining of crude oil into usable products through distillation, conversion, extraction, and other special treatments to produce petroleum products and petroleum gas. It also covers the operations of the petrochemical plants. Nigeria has four refineries; two in Port Harcourt, one in Warri and one in Kaduna with a total refining capacity of 445,000 barrels (PHRC 210,000 WRPC 125,000 and KRPC 110,000) per day. However, these refineries have been unable to meet with their refining capacities because of several mitigating factors, which include decades of neglect, lack of turnaround maintenance, obsolete policy thrusts and vandalism of petroleum pipelines.

Service sector

Provides technical, engineering and consultancy services mainly to aid the upstream in the drilling, exploration and production activities.

It is noteworthy to note that NEITI has tried to instill fiscal discipline in the oil and gas industry through financial, physical and process audits. The audits reconciled figures and coherent maps of who paid what money, to whom, how much, the amount of oil and gas produced, lifted, exported within the period under review and a critical examination of extractive processes and levels of justification of capital expenditure.The reports noted weak accounting infrastructures, inefficient interfacing between the relevant agencies, inadequate financial and infrastructure to support the operations of the agencies, poor record keeping practices and lack of independent capacity to carry out independent assessment of oil companies royalty liabilities,  Like in any other sector, corruption can take place right from the planning stages to the completion phases of projects.

Therefore, there is the need to understand and appreciate how they can occur before we can begin to proffer solutions to corruption issues in the Nigerian oil and gas industry.  Our policies and laws guiding the operations of the oil and gas are so obsolete that they skew in favor of the contractors and give vent to corruption. Technical incompetence and lack of adequate manpower further compounds the inability of government to optimize the revenues accruable to the government in oil and gas business in Nigeria. It is in realization of this that the Oil and Gas Reforms Implementation Committee (OGIC) was constituted by the Federal government. The bill to support the legal framework is presently before the National Assembly.

Tender process

The beginning of any oil and gas business starts from the tendering and bidding processes. Often times, what transpired here will be the determinant of how much corruption can be perpetrated in the life of a particular project.Contractors usually seek those that can assist them with in-house benchmarks or even get the scope drawn by the internal collaborator for a fee.

This was proven in the Wilbros case in which $6million was said to have been used to secure a contract through various agegovernment. With an accomplice and a “godfather” at the top, the contractor either stays on the benchmark or a little lower. Once the job has been secured, he pushes for variation costs, which can be as high as 200-500% of the original cost.

More worrisome is that the supervising arm of government may not have recommended the companies that finally get the job, courtesy of “orders from above”From recent revelations, it has been found that winning contracts in the oil and gas industry is laced with huge corruptive tendencies. On this, Isakpa revealed “Steph, two other unnamed Wilbros executives and two employees of a multinational construction firm, were alleged in the indictment to have planned to spend $6 million to secure lucrative contracts with the construction of Eastern Gas Gathering System. The bribes were hidden as consultancy fees”. Continuing, Isakpa said “At some point US, French, Swiss and British authorities investigated allegations that Kellogg, Brown and Root (KBR), the Halliburton subsidiary, was involved in the operation of a slush fund when they secured the award of contracts worth $10 billion for the construction of the Nigerian Liquefied Natural Gas plant at Bonny in the late 1990s and early 2000s”. 

Agreements/types of agreements

The agreements drawn could give teeth to the corruption traps set during the bidding stages.

Joint Venture

The Joint Venture arrangement in which two or more oil companies enter into an agreement for joint development of jointly held oil prospecting licences (OPLs) or oil mining licences (OMLs) and facilities. Each partner in the joint venture contributes the operating costs and shares the benefits or losses of the operations in the venture.

Drawbacks

• Delayed cash calls and projects because all crude oil sales are paid into the Federation account therefore subjecting it to the whims of government bureaucracy
• The Joint Operating Agreement (JOA) which regulates the Joint Venture deal does not have review clause which makes the contract to be in favour of the operators.
• Personnel recruitment and expatriate quota are grossly abused. For instance, at this time and age of our development, some companies still have expatriates as community liaison officers.
• Perpetration of corruption through a community liaison officers. 

 PSC and Cost verification

It is because of the drawbacks of the JOA that PSCs emerged. The prospecting licences and mining leases granted in the deep water fields of the Nigerian coast have been on this term. The PSCs enable a sharing formula to be implemented which allows the operators to pay statutory tax and royalty and keeps the larger part of the profit.The contract period is usually for 30 years (inclusive of 10 years exploration and 20 years OML period and governed by the PSC agreement).

Cost Verification

It is that portion of the amortized cost for the period recovered through crude lifting. The components for consideration are capital and recurrent expenditure. The capital expenditure is amortized through a period of five years i.e. 1/5 of the total recovery while the recurrent expenditure is recovered within the year. These are the total expenditure that will be available for recovery.According to the Deep Offshore and Inland Basin Production Sharing Contracts (Amendment) Decree No. 26 of 1999 PSC “means any agreement or any arrangements made between the Corporation or the Holders and any other petroleum exploration and production company or companies for the purpose of exploration and production of oil in the Deep Offshore and Inland Basins.

Origin of PSC

According to Johnston (1994:39-40), the first PSC was signed by IIAPCO an Indonesian National Oil Company at that time (now Pertamina) in August 1996 with Permina. The concept is now used in more than thirty (30) developing countries including, Malaysia, Oman, Angola, Peru, Ivory Coast, Egypt, Libya, Gabon, Thailand, China, Nigeria, etc.The essential characteristic of PSC is that of state ownership of the resources. The Contractor receives a share of production for services performed after payment of Royalty, recovering of operating costs, and payment of tax oil. The remainder is shared as profit oil in an agreed ratio.

Emuchay in Egwuenu (2000) in a public lecture  postulated that “PSC emerged as one of the fiscal regimes in the Nigerian Oil and Gas sector as a concerted attempt to improve on the traditional Joint Venture agreement to the advantage of the government which lacks adequate technical base and sufficient financial resources”.

Johnston (1994: 242-243) posits that the 1993 PSC in Nigeria has cost recovery limit of 40%. He also defined PSC as “a contractual agreement between a contractor and a host government whereby the Contractor bears all exploration costs and risks and development and production costs in return for a stipulated share of the production resulting from this effort”.

Akomolafe in Kupolokun (2004) posits that “it is anticipated that the PSC arrangement would attract up to $10 billion in foreign investments to the upstream over the next five years. However, effective and consistent monitoring and control of costs by NNPC as well as the general supervision of the operations on a continuous basis is a necessity”.

From the above, Production Sharing Contract (PSC) could be defined as is a contractual agreement between a contractor and the host government or it’s agency. The Contractor bears all the risks, incurs all the costs for exploration, development and production. In this arrangement, a contractor is engaged to carry out operations in Government wholly held acreage. Initial exploration and risks are borne by the Contractor and recovers his costs as oil is produced, the Contractor receives shares for its services after the payment of Royalty, recovery of operating costs (cost oil), payment of tax oil and share profit in an agreed ratio.

There is usually a clause in the agreement, which states, “the operator and its auditors shall have the right to inspect and audit the books and accounts relating to the contract for any year and if such inspection and auditing have not been so carried out within two (2) years following the end of the year in question, the books and accounts relating to such year shall be deemed to be acceptable by the parties as satisfactory”.

This means that cost verification is time barred e.g. 2008 verification must be carried out from January 2009-December 2010. To ensure that the deadlines are not met, the companies dilly-dally over reconciliation meetings with the appropriate government agencies and seek ways of ensuring that the cost verification is not done with the stipulated period.Cost verification is an important tool in PSC agreement as it relates to our country because the verified and certified cost constitutes a background with which the operator puts on record its performance bond and above all recover costs through cost oil (crude entitlement).  Once a cost verification has been duly carried out and certified crude is allocated under PSC arrangement after cost has been verified and certified. Where this is delayed or not done, crude will be allocated on the contractor’s reported cost, which usually will be higher than verified cost. It has been opined by several interest groups that PSCs are increasing in number without commensurate capacity to cope.

According to Akomolafe (2007:18) ‘Timely preparation of cost verification exercises of PSC companies by skilled personnel will bring about quality verified costs devoid of misstatements and errors for cost recovery purpose of the operator.” Olamide (2008:29) posits that the delay or lack of constant cost verification gives the PSCs especially the leeway to file for unmerited costs”. This is one situation that favours the producing PSCs are very comfortable with, but a serious means of leakages to the government. Even where these costs are recovered at a later date, money loses value with time. Corruption here if detected could run into multi billions of $. If for instance a government agent had to verify and certify costs of a company and the government agency found $35 million unmerited costs.

The company in bid to keep all the profits can offer such government agent(s) $10 million while the company keeps $25. For an officer that does not earn up to $2.500 per month, your guess as to what might happen is as good as mine.

Features of PSC

• Signature Bonus $0.5-$1.0 Million per block.
• Bid Bonus $10-$30  Million per block
• Royalty Oil up to 16.67% depending on water depth
• Cost Recovery- 100% after royalty.

The Fiscal arrangement for Gas and Downstream Investment have five years tax holiday, exemptions from import duties/VAT

Petroleum Profit tax

During the NEITI audit, it was discovered that some companies were in arrears of 3-4 years. This encourages corruption and short-changing of accountability and transparency processes.

Royalty

• Paid based on volume and decrease as there is increase in water depth
• On Shore                      20% 
• Off Shore  0-100 M      18.5%
• 100-200M               16.67%
• 201-500M               12.00%
• 501-800M                 8.00%
• 801-1000M               4.00%
• Above 1000M           0.00%  

Draw backs of PSC include

• Agreement stresses cost recovery rather than paymentv  Loaded costs
• Possible underpayment of royalty, due partly to the lack of a clearly defined point of assessment of royalty.
• Possible underpayment of PPT, due to a practice of self-assessment that has not been adequately validated by FIRS 

Risk service Contract (RSC)

The RSC is a minor variant of PSC and rarely used. The contractor carries out exploration activities on behalf of the government or its agency for a fee either in cash or kind. The main features of a Service Contract are: The contractor has no title to the crude oil, but the right to be repaid the investment plus an agreed mark up if and when oil is discovered in commercial quantities and produced, each Service Contract relates to a single block unlike PSC, which may cover more than one block. The continuation of the contract is subject to the contractor meeting an agreed level of work programme each year. The major incentive for the risks undertaken is that the contractor has first option to purchase the fixed quantities of crude oil produced from that contract area.In Kuwait- the constitution forbids foreign ownership of mineral resources but government allows foreign investments in the upstream oil development in their own terms. She pays the agreed term per barrel rather than Production sharing arrangements.

Concession

This is a contractual agreement that guarantees the exclusive rights of a company to explore, produce, market and transport oil and gas in return for paying specified costs and taxes. This is contained in the Petroleum act of 1969. It is usually for 20 years.

DrawbackIt has the lowest returns in form of royalty or income tax

Bidding for oil blocks

This is an area that has been grossly abused because of obsolete laws, the spoilt system and military/government interventions in the running of the oil and gas sector. In the Petroleum Act of 1969, the Minister of Petroleum reserves discretionary powers to allocate oil blocks. To support this assertion, the Sun quoted Ofurhie (2008) as saying that “between 2001and 2006, there was no open bidding for oil blocks, but only selective bidding authourized by the Presidency”

During this period and contrary to the rules, monies for signature bonuses have been paid in naira instead of in hard currencies and monies paid were not receipted for more than five years.The House Committee noted that some signature bonuses were paid in naira contrary to the provision of the guidelines, adding that from the records available to them, there was a short fall in the payment of signature bonus of $1.6bn. according to the Committee, the records of the signature bonuses in 2005 showed a total of over $2bn but only the sum of $1.6bn was paid while some payments were made in local currency the Director of DPR admitted that some payments were made in local currency but that he was directed by the Minister of state for Petroleum to do so. “I received signature bonus in naira because of instructions from above. It was also discovered that the wired payment for $2.5 million paid for OPL. 257 in June 2003 by Vintage Oil spent five years before it was receipted on July, 8 2008”. Even with the open bidding system, which is supposed to be a more transparent system, many companies came to the panel of the House Committee investigating the oil and gas sector  accusing government of unfair treatment in the allocation of blocks while Starcrest investment Ltd said to have been represented by its Secretary Emefor Etudo, alleged that about 10 powerful individuals connived and cornered $35 million stated before that blocks were awarded after the bid rounds based on the instruction of the Minister (http://www.guardiannewsngr.com/news/….ocks%20missing); sensitive documents relating to block allocations were said to have been missing.

This was confirmed by the acting director of DPR, Alhaji Mohammed Aliyu Sabo before the Committee said “we can only give out what we have and cannot give what we don’t. We can’t find some of the documents”. More disturbing is even the reallocation of the oil block belonging to the Nigerian Petroleum Development Company (NPDC); a supposedly government’s agent, which is the exploration arm of the Nigerian National Petroleum Corporation (NNPC) to a Chinese company, the China National Oil Development Corporation (CNODC).  An oil block which NPDC has operated since 1989 as Oil Mining Licence (OML) 65 since 1989 was put in for sale as Oil Prospecting Licence (OPL) 289. The committee found that OML 65 was transformed to OPL 289 without first being first revoked therefore going against due process.

The Former Group Managing Director (GMD) of NNPC, Funso Kupolokun was said to have expressed shock when he found out that the two oil blocks were one and the same. He told the committee that he was deceived by DPR into approving the oil block which was already in the possession of NPDC for sale to CNODC. The question is, are there no ways of verifying assets before putting them on sale?.

Blocks have been found to have been allocated, withdrawn and given to another company at a lesser amount. The committee also discovered that Shell paid $210 million in December 2003 as signature bonus, but only the sum of $1 million was reflected in the records, while Statoil also made a payment in 2003 but the receipt was issued in 2004. In the case of the controversial OPL 245 won by Malabo Oil, it was discovered that while $210 million was paid, it was later withdrawn and awarded to Shell which, paid $1 million as commitment fee before Malabo went to court).

Torulagha (2006) posits that “the oil blocks is almost given freely to those who are highly connected to those in power. These individuals then sell the blocks to International Oil Companies and earn substantial income. It operates like a government-subsidized welfare program for the selected few. Translated politically, Nigerian leaders use oil blocks as a form of reward and punishment to compel or elicit certain behaviour from certain individuals”. 

From this standpoint, it can be summarily adduced that when a particular leader wants support for a particular policy or self effusing agenda, he identifies the zone where opposition will be massive and settles them with oil blocks as a pre-emptive way of eliciting their support to buy into the agenda. On the other hand, an agreement on any block so freely given can be revoked at the whim of either the President or the Minister of Petroleum as a punishment for not supporting an agenda of government. This type of system if allowed to continue perpetuates corruption and where there is corruption, nothing works.

Seismic Activities

This is the beginning of acquiring data whether in the swamp, onshore or offshore. Here, the money spent on community activities and hiring of equipment can be veritable source of overload and corruptive tendencies. Another area in which searchlights should be beamed is in the area of equipment lease agreements, which could be hyper inflated. All these increase overhead costs, make money into private pockets with slimmer margins to government. 

Lifting

The main important components under watch here should be records and metering. NEITI auditors opine that “The amounts listed may not for various legitimate reasons not correspond to the entitlements inferred in the hydrocarbon balance like the lack of standard definitions and measurement points.

Downstream

On July 20, 1999 former President Olusegun Obasanjo in his speech on the occasion of the inauguration of the National Council on Privatization at the Presidential Villa on in his speech noted that the refineries were built on quicksand and went ahead to put succinctly some of the challenges facing the refineries and listed them as:

• Defective Capital Structurev  Excessive Bureaucratic Control or intervention.
• Inappropriate Technology.
• Gross incompetence and Mismanagement.
• Blatant Corruption and;
• Crippling Complacency

What he however, refused to tell Nigerians in addition to the above is that the past leaders, the political heavyweights, proxies of those in power and the Nigerian factor led the refineries to their death knell.

The Nigerian National Petroleum Corporation (NNPC) would have been at the hob of turning around the downstream sector but the criminal crippling complacency of government in its refusal to allow the refineries run like a truly commercial venture since inception led to the coma of the refineries. The NNPC Act of 1977, which established NNPC as a statutory corporation did not provide it with the power to borrow beyond nominal sums by bank overdraft arrangement. Section 8 of the NNPC Act provides that the approval of the National Council (now the President under the present constitutional dispensation) must be sought before any substantial borrowings.

Furthermore, under general legislation affecting the borrowing of statutory corporations, the Ministry of Finance is designated as the appropriate arm of government to administer such transactions.This Act negates the core foundation principles of commercialization. For instance full commercialization means that enterprises so designated will be expected to operate profitably on a commercial basis and be able to raise funds from the capital market without government guarantee. Such enterprises are expected to use private sector procedures in the running of their businesses. Partial commercialization on the other hand means that such enterprises so designated will be expected to generate enough revenue to cover their operating expenditures. The government may consider giving them capital grants to finance their capital projects. In both full and partial commercialization no divestment of the Federal Government shareholding is involved; and subject to the general regulatory powers of the Federal Government the enterprises shall:

1. Fix rate, prices and charges for goods produced and services rendered;
2. Capitalize assets; and
3. Sue and be sued in their corporate names (Guidelines on Privatization & Commercialization, p 55).

Previous administrations paid lip service to the strengthening of the downstream sector. What they put into it with the right hand they took back with the left. The refineries were rendered ineffective through policy inconsistencies. The main share holder (government) changes the leadership at will and in less than a decade, NNPC had about 5 Group Managing Directors. With these changes, the Managing Directors of the subsidiaries also change to the effect that some of these refineries have had more than 10 Managing Directors in less than two decades. The Turnaround Maintenance, which should be done biennially was left undone for decades and where it was done, the shareholder through back hand business determines which companies should do the TAM irrespective of having the technical competence or not. Those managing the refineries were never truly empowered to effectively manage the plants. The Managing Directors had a financial authourity of N5 million ($34,000) when Managers of lesser and newer plants have signing authorities of $1-2 million. Seeking approvals for capital projects, refurbishment of spares could take more than one year in some cases. When the NNPC was still running Eleme Petrochemical Company, the officer in charge of its Materials’ Management unit had a signing authourity of N30,000 ($200). From 1999-2007, almost all the approvals for capital projects ended with the Presidency. This meant that projects were bogged down by bureaucracy and the Management was unable to react to critical emergencies. 

To turn the bad dreams into depressing nightmares, restiveness and militancy took its roots in the Niger Delta region. The chanomi Creek trunk line, which supplies crude to the Warri and Kaduna refineries have been blown up twice between 2004 and 2006. The contractors were unable to mobilize to site until they settled issues with the communities. The repairs took about one year and six months each. This meant that WRPC and KRPC were unable to perform their roles as they could not possible produce petroleum products from water. Whereas the enabling statutes setting up Petronas and Petrobras from inception made them truly commercial enterprises, the Act that set up NNPC programmed it as a merely regulatory body thereby being made to be unable to compete with any National Oil from inception.

Under the above circumstances, only magic and miracle would have brought NNPC to a world class standard of our dreams. It is in this direction that the Oil and Gas Reform Implementation Committee (OGIC) was put in place. If implemented as conceptualized, it will be a welcome development. The essence of the exercise is to put the organization in the same position as the Petrobras of Brazil, Petronas of Malaysia, and Statoil of Norway, which were established at the same time with the NNPC. These companies managed their countries’ petroleum resources and have also ventured into exploration and production of oil in countries other than theirs and they are making remarkable progress in this regards, Petrobras is investing on Oil Prospecting Lease (OPL) 216 and 246 and Statoil have invested in Oil Prospecting Lease (OPL) 217 and 218 in Nigeria.

While the Petrobras, Petronas and Statoil are busy investing in other lands, NNPC has been crippled and weighed down largely by the overbearing influence of its shareholder and unending bureaucracy. Efforts to invest in the past had been inhibited by government bureaucracy. This was corroborated by some previous Group managing Directors of NNPC. Dalhatu Bayero, a former GMD of NNPC, remarked, “I hope the government will allow NNPC to carry out successfully its process of transformation”. Another former GMD, Chambers Oyibo once said: “It was not that the NNPC never made attempt in the past to invest outside Nigeria, but it was never supported by past governments”. 

Turn Around Maintenance (TAM) Issues

Pre-90s, staff of the refineries with a very few external experts were responsible for doing TAM and on the dot of ninety days, those plants were back running. However, as soon as the military government introduced third party contractors’ arrangement that they can foist on the system, the plants went comatose. The third party arrangement was put in place as a deliberate attempt to make money for the military leaders at the detriment of effective running of the refineries. In October 1994, the government enacted the Petroleum Special Trust Fund (PTF) Decree. All proceeds from the petroleum product sales in the domestic market except for fuel oil and special products were transferred from NNPC to PTF. NNPC was then paid N1.7 per litre ($0.02) to transport crude oil to refinery, refine the crude oil and distribute the products nationwide. Consequently, they were denied access to internally generated revenue. The World Bank’s Report on its 1994 Public Expenditure Review opined that the allowed margin of N1.7 per litre was just 54 per cent of refining cost. This implies by rough estimate that refining cost should have been above N3 per litre as at 1994 by World Bank Standard. This arrangement made NNPC to go cap in hand to beg for money to run her operatoins.

On TAM, Ereyukomhen in Ola says “that the Turnaround Maintenance (TAM) of the Port-Harcourt Refinery was awarded to an Oil Services company in 1998 and was partially completed in 2001. The Oil Service Company was unable to handle the Fluid Catalytic Cracking Unit. As a result, the capacity utilization level after TAM remained below 60 per cent. The Turnaround Maintenance of Warri refinery was awarded to another French Company. Despite the completion of Tam, the company could not operate beyond a maximum of 70 percent. The TAM of Kaduna was awarded to an oil marketing company in 1997 but the bulk of the work did not start until 1999. After the TAM, the plan could not operate above 45 per cent capacity utilization”.

If indeed our past leaders were sincere about their commitments towards the effective running of the refineries and the provision of petroleum products for Nigeria’s use, all the companies that took part in the sham TAM would have been called to question. The refineries were terribly raped but the rapists are out there in absolute freedom enjoying their loot. This is against the principles of due process, accountability, transparency and the rule of law. 

Challenges

• Decayed infrastructure.
• Corruption.
• Lack of political will of government to turn around the oil and gas sector.
• Improper record keeping.
• Lack of adequate institutional infrastructural support.
• Attitudinal problems.
• Complacency by government towards genuine oil and gas reforms.
•  Manipulation of oil and gas industry to give rewards to loyalists of the government in power.

Conclusion

All said however, I want to conclude by saying that for there to be accountability and transparency in the oil and gas sector; we must all be committed to the values of honesty, transparency, patriotism and loyalty. The government should sincerely and genuinely follow through the OGIC reforms it has put in place. Anti corruption drive must be sustained at all levels. The government must find ways of shielding whistle blowers and anti corruption agents in the industry from victimization. Society should also stop eulogizing corruption made heroes and heroines. Celebrating and associating with corruption made individuals calls to question the definition of corruption and the moral principles of our leaders who wine and dine with these questionable characters in the cover of darkness. This attitude has brought to bare the kind of polarized contradictions in our society where we attempt to fight corruption but on the other hand accept it as a norm.Thank you. 

References:

Abba-Ogbodo(2006); DPR declares documents on oil blocks missing Guardian, Abuja.

Ezekwesili, O (2006); NEITI, Mining and sustainable Development, Enugu.

Ereyukomhen, S (2006); NNPC Funding Challenges, Warri.

Fadakinte, M.M. (2005): J.V cash calls and alternative Funding: The Workers’ Perspective, Port Harcourt

http://www.mbendi.com/indy/oilg/af/ng/p0005.htm

http://www.vanguardngr.com/index.phpoption=com_content&task=view&id=13325&Itemid=43

http://www.sunnewsonline.com/webpage…7-2008-003.htm

http://www.guardiannewsngr.com/news/…ocks%20missing 

http://www.neiti.org.ng/files-pdf/ExecutiveSummaryFinal-31Dec06.pdf

http://www.businessdayonline.com/index.php
Ogbeifun, L. B. (2007): Industrial relations Practice in a Dysfunctional Oil and Gas

 Ogbeifun, L. B. (2006); Oil and Gas Operating Environment: A Challenge for Labour-Management Relations, Kano.

Ojo, J (2008); No open bid for oil block, House told,  Sun News online, Abuja.

Isakpa, P (2009); Nigerians, routinely indicted abroad for corruption, are let off at home, Business day, Nigeria

Okogu, B (2006): The Nigerian EITI: Extending the Quest for Transparency to the Solid Mineral Sector, Enugu.

Opusunju, F (2008); PSC Cost Verification and Crude Oil Entitlements, Kaduna.

Usigbe, L (2008), NPDC, Chinese firm clash over $2bn oil block, Vanguard Newspaper Abuja.   

Topics: Uncategorized | 37 Comments »

LABOUR CRISES IN THE OIL AND GAS SECTOR: CHALLENGES TO DEVELOPMENT IN THE OIL AND GAS SECTOR AT THE WORKSHOP ORGANIZED BY THE NIGERIAN INSTITUTE OF MANAGEMENT (CHATERED) ON 3RD JUNE 2008 AT JOS.

By Louis Brown Ogbeifun | April 1, 2009

Conflict: A tip of the iceberg

Introduction

Oil and gas is the most efficient natural resource that could be used for the rapid economic growth and development with the highest propensity to attract abundant foreign investment. They are even more important in our environment where we have no developed ready-made alternatives like coal, solar and nuclear energy as in advanced nations. Oil and gas are strategic to our national security, development and growth.

It is an organic matter, also referred to as hydrocarbon, formed from dead marine organisms/plants and buried over several million years. It is transformed into oil and gas by heat, pressure and bacteria. Oil and gas constitute about 90% of our foreign exchange earnings and 83% of our GDP. Revenue from the oil and gas sector is the backbone for the effective diversification of our economy. Petroleum and petrochemical products constitute about 50% raw materials required for industrial development.

Brief historical perspective

• 1908: Exploration work started in Lagos and Okitipupa coastal areas by the Nigerian Bitumen Company established by a German consortium.
• 1908-1956:  Various exploration, exploitation continued in various parts of the country
• 1956: Oil discovered in commercial quantity at Oloibiri by Shell D’Arcy
• 1958: Shipment of 5,100 BOPD
• 1960:  175,000 BOPD
• 1971:   Nigeria joined OPEC
• 1979:  2.3mm BOPD
• 1958: Shipment of 5,100 BOPD
• 1960:  175,000 BOPD
• 1971:   Nigeria joined OPEC
• 1979:  2.3mm BOPD
• 1983: Oil glut led to a reduction to 1.3mm BOPD
• 2008: 2.4mm BOPD

Currently, more than 1,000,000 has been shut in due to youth restiveness and militancy in the Niger Delta.

 Key sectors

 Upstream.

The upstream focuses on mining, exploration,     exploitation, production and exportation.

The Downstream sector.

The downstream sector concentrates on the refining of crude oil into usable products through distillation, conversion, extraction, and other special treatments to produce petroleum products and petroleum gas. It also covers the operations of the petrochemical plants.

Service sector.

Provides technical, engineering and consultancy services mainly to aid the upstream in the drilling, exploration and production activities

Labour: This represents the human resource that drives other means of production in an enterprise. They are made up of two major constituencies namely: the employer and the employee.  Some employees at the higher level of the organization is called Management.

Employer: The employer is the owner of the enterprise

Employee: The employee is hired by the employer to render service to the enterprise in exchange for a determined wage, which is expressed in contractual terms.

Management: This is a group of employees that holds the enterprise in trust for the owners. It formulates the company’s policies. It oversees the day-to-day running of the organization on behalf of the employers.  It ensures that company policies are implementation through the most efficient and effective use of the three Ms (Man, Materials and Money). It acts as the bridge between employers and employees in collecting bargaining matters. This group of workers could be through direct hire or grow through the ranks. They are usually experienced bureaucrats who are always striving to maximize profit for the benefit of shareholders.

Where two or three people who differ in religion, values, culture, orientation and goals are gathered to jointly work for a common purpose, there are bound to be incompatible goals that will eventually lead to conflict

Conflict: This is a situation where two or more parties recognize their mutually incompatible goals. (Hornby 2001:239) defines conflict as a situation in which people, groups or countries are involved in a serious disagreement. Conflict cannot be said to be good or bad. It is the way we manage conflict that matters. If well managed, it could become a motivator that will spur us to achieve greater results in our daily endeavour. If mismanaged, it develops into crisis.

For conflict to occur there must be a relationship. Relationships satisfy needs, whether at work or home. Every relationship is a vehicle for delivering value to each partner. Our relationships with our bosses, subordinates and peers hold potential for satisfying our needs. We need the positive rewards of relationship to feel productive, to accomplish meaningful work, to produce widgets and to earn our pay. When these needs are met, we are happy people. If the needs are not met, we are unhappy, dissatisfied, frustrated and productivity begins to decline. This is the kernel of this study. Unresolved conflicts may not result in industrial action but may take its toll on the organization and individuals in terms of hidden costs

Causes of conflict in the oil and gas sector:

1. Human relations
2. Political
3. Economic
4. Social
5. Communal, youths’ restiveness and militancy

Human relations (Workplace):

The breach in labour-management relations, pension issues, wages, bad faith bargaining, non-implementation of agreements, expatriate quota abuse, unfair labour practices like casualization, outsourcing, contract staffing; globalization issues, which have subsets in Privatization, mergers and acquisitions;  etc. are some of the issues that cause the recurrent crises in the oil and gas sector.

 Political:

The political class at various times have seen the oil and gas industry especially the Nigerian National Petroleum  Corporation as a field for patronage to friends, political associates and cronies. This is one of the major reasons for the lack of will to carry out a proper reform in the sector and when such reforms are contemplated, they are for selfish reasons.

Lack of trust in the political class because of double-speak and inadequate consultation with stakeholders on policy framework and implementation. In addition, the incessant fuel hikes with the same old reasons of recouping such monies wasted on fuel subsidy for developmental purposes without any meaningful appreciable infrastructural development often pitched labour against the government. For instance, subsidies removed in the past were to be used in road construction, rehabilitation and agriculture. As at today, several roads in the country are death traps and agricultural sector is seriously underdeveloped.

Economic:

 The need for government to get money into its coffers and keep faith with the conditionalities of the Breton Woods’ institutions led to the proposed privatization of the refineries. The mergers and acquisitions were done to assuage the feelings of the political class hence the stiff resistance by the Unions. Government perpetually maintained that the refineries were not functioning optimally and therefore wanted them sold. On the other hand, the Unions insisted that the inability of past leaders to build new refineries and maintain the only four refineries was responsible for the refineries’ situations. The Unions agreed to the privatization of the refineries on a 51% (Core Investor)-49% (Government) basis. They reasoned that wholesale privatization of the refineries to a single individual has both security and economic implications for the nation.

Social:

The need to play some roles in carrying out social responsibilities on behalf of the populace led the Unions against the government. For instance at the wake of the Obasanjo government’s insistence on the removal of fuel subsidy, the Unions made it abundantly clear that in Europe, the European leaders heavily subsidize agriculture and sometimes pay the farmers and the excesses that cannot be warehoused are destroyed. The Unions argued that whereas there are several safety nets to cushion the effects of inflation and increased prices of petroleum products abroad, Nigerians are exposed to stark realities of market forces without any consideration from government.

Communal, youths’ restiveness and militancy:

The environment is becoming unsafe for the workers as kidnapping and hostage taking of oil workers is making working in the oil and gas industry a dangerous adventure.  The vandalism of flow stations and petroleum products’ pipelines as a way of avenging government’s neglect, marginalization, poverty, unemployment, hunger and disease have increased unabated. This has resorted in the workers putting a lot of pressures on their employers for improved wages and salaries which the employers are not willing to pay. This inability to meet with the workers’ demands, have resulted in so many strained relationships between the workers’ representatives and employers.

Actors:

The actors involved are the workers’ representatives (the Unions). The Petroleum and Natural Gases Senior Staff Association of Nigeria (PENGASSAN) represents the senior Staff or the White Collar employees while the Nigerian Union of Petroleum and Natural Gas workers (NUPENG) represents the interests of the Junior staff(blue collar workers); the Government and the Employers.

 Cost of conflicts

Dana (2005: 6) states that conflict drains the capacity of relationships to satisfy our needs. When we experience too much unresolved conflict, the relationship loses its ability to satisfy us. This leaves us alone, isolated, unable to do by ourselves what we are supposed to do and leads the organization or parties with some hidden costs.It is often said “A tree does not make a forest”. This connotes that in every human endeavour, there are interdependencies that take place in order to achieve our common goals. When monkeys are smart jumping from one tree to another, it is because of the nearness of such trees that make their escape during emergencies possible. If trees are kilometers apart in the colonies of monkeys, jumping from tree to tree becomes impossible. This analogy is drawn to bring to fore that we need others to help us achieve our goals. 

Dana (2005:15) listed the cost of conflicts as: Wasted time; sabotage/theft/damage; lowered job motivation; lost work time; decline in productivity; and health costs.

Challenges: Some of the challenges that are unfolding because of the aforementioned are: depletion of assets, divestments, insecurity, under-development, strikes and societal dysfunction.Way forward:

Union-Management relations:

The stakeholders should be open in the process of negotiation, engage in good faith bargaining and dialogue; and do everything possible to faithfully implement agreements reached.

Government/Agencies:

Usually the Ministry of labour of Labour and Productivity is the arrow head of the resolution of disputes between the Unions and the employers. This Ministry did a lot to assist the Obasanjo’s administration as it acted proactively on several issues. However, it has some challenges, which government should urgently address. These include:

• Decayed infrastructure.
• Inadequate funding.
• Delay in reacting to some ultimatum given by the unions and lack of political will by Government to implement agreements reached with the unions.
• Non-implementation of agreements reached with the Unions by Government

Legal:

Most of the oil and gas laws are obsolete. For instance the legal and governance structures designed for the oil and gas sector since the 70s and the Petroleum act of 1969 are no longer adequate for the governance of a 21^st century business endeavour. The department of petroleum Resources that should play a major role in the regulation and monitoring of activities in both the upstream and downstream sectors is incapacitated by serious infrastructural decay, inadequate funding and manpower challenges. In 1993, one of the reasons PENGASSAN embarked on strike from June 7^th was to pressurize Government to create a Petroleum inspectorate Commission strong enough to police the industry. All over the world, a very strong regulatory, research and development agencies are critical “musts” for effectiveness and efficiency.  

Civil Society Organizations (CSO):

The CSOs should assist in calling the attention of government to transparency and accountability issues in the oil and gas sector

Conclusion:

Just like all other sectors, the oil and gas has had its fair share of crises but because of the patience and maturity of the stakeholders. The rate of dysfunction has been minimal when compared to other sectors. There is the need to keep faith with agreements reached and Labour should also begin to realize that the oil and gas industry in Nigeria is gradually going into coma because of the challenges of the Niger Delta Crises. Therefore, there is the need for a new way of imposing demands on individual companies. Companies should not wait for workers to ask before giving out some of its profits to enhance the welfare of staff because these papers pass through the tables of the Union members.

References:

Convey, S. R (2004);  The 7 Habits of Highly Effective People, New York, Free Press

Dana, D (2005); Managing Differences, Prairie Village – Kansas, MTI Publications.

Ogbeifun, L. B (2007); The Role of Labour Unions in the Oil and Gas Industry in Nigeria: A

Practitioner’s Perspective, Lagos, Concept Publications.

http://www.snopes.com/photos/natural/iceberg.asp

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MANAGING SUCCESS: THE ACHILES HEELS OF SUPER BRATS IN SPORTS

By Louis Brown Ogbeifun | March 6, 2009

Success may be defined as the attainment of a status, which is measurable against a particular beginning. The journey to success takes quite a while. It spans a period of time. The yardstick of what constitutes success differs from one person to another. It comes with planning, sacrifice, self motivation, hard work, working smart, putting in some scheduled time and consciously working towards the attainment of set goals and objectives. When these goals and objectives are met, a new status emerges. Achieving this new status is one, managing it is another.

In the field of sports; the aim of all the participants is to win the overall championship medals. This does not come easy. It comes with a lot of pains and sacrifice. As a soccer player, who combined reading with playing of soccer to survive, I know what it is to sacrifice. I know what it is to train early in the morning when people are still in bed. I know what it is to go on endurance training during the cold harmattan season; to be put on track, under the rain and under the scorching heat of the sun in order to be conditioned for a particular weather. I know what it feels to train with aching muscles, empty stomach and tears. I know what it is to be an orphan when the team loses and I know how it feels to be great with several parents on winning a match.

This is why I rejoice with those who make it to the top in their chosen sporting events and idolize them in the inside of me even when we do not know each other. When renowned sportsmen and women also fall from grace to kiss the canvass of a grassy turf, my heart weeps for them knowing fully well that the success going down the valley is an unquantifiable loss not only to them but to humanity.

The memory lane of outstanding sports men that ascended the ladder of success but unable to hold on to the mace of success is legion. For this discuss, I shall use a few who saw money, fame, and success at a very early age but were unable to hold on to the top because of attitudinal challenges.

Etim Esin the “Nigerian Maradona” was a very skillful Nigerian player who represented the country in FIFA organized matches between 1987 and the 90s. He was one of the few footballers who at 21 were driving brand new 505 Peugeot cars to the training pitch when some of us trekked kilometers to reach our training venues. He rose through the ladder of hard work to the pinnacle of success. He played for Nigeria and represented the country in FIFA organized competitions. He was one of the footballers that found their ways to Europe for professional football early in their career and later played in Belgium.

Unfortunately, his life style was a reflection of that of the super brats and he soon got himself into trouble. While in Belgium, he was charged for rape and he had to hurry out of Belgium back to Nigeria. That was the beginning of the end for his outstanding football career. He has been in obscurity until he became a football analyst with a cable network hitv signed him on as a football analyst.

“Iron Mike” Tyson was just twenty years old when he won the World boxing Heavyweight Champion. Just like the Esin, he was unable to manage the strings of successes that smiled on him early in life. He was involved in several inappropriate behaviours including the raping of Miss Desiree Washington, a Miss Black American Beauty pageant in a hotel room in Indianapolis. He was committed to prison for six years. He came out of prison deflated, traumatized and knocked out. He was unable to stage a comeback. Despite his more than $300 million earnings during his career, he filed for bankruptcy in 2003.

Michael Vick is also in his twenties, very successful and an outstanding United States of America’s top football star. He was said to be one of the 10 richest athletes in the United States before his life took a dive for the valley. He also got himself involved in dog fighting operations, which led to the death of several dogs. This was a matter of youthful indiscretion. It landed him in 23 months imprisonment and three years probation. If Tyson’s experience is anything to go by, it means that leaving the four walls of the prison to stardom will take extraordinary dream, strength, sacrifice and work. One can only wish him well.

O. J. Simpson”the Juice”, a retired American football player, sports analyst and actor; also had the blessing of being successful in his twenties. At 26, he had recorded a string of successes as the first NFL player to rush for more than 2,000 yards in 1973 season. From 1995 to 1997, he was embroiled in the celebrated case of murdering his ex-wife Nicole Simpson. He was later acquitted of the charges. However, on 16th September 2007, he was arrested in Las Vegas for robbery, burglary with firearm, assault etc. This time his sins found him out and had no place to hide. He was found guilty, convicted and now cooling his heels in the prison.

Paul Gascoigne, a retired English soccer legend rose to stardom quite early in life too. He was said to have captained the Newcastle’s youth to an FA Youth Cup in the 1984-85 season. He later played for top clubs in Britain and represented his country. On the field of play, he had put up unbecoming behaviourial attitudes, which that earned him about twenty thousand pounds. He had brushes with the law, attempted suicide a couple of times, feels largely insecure, an alcoholic who has been in and out of rehabilitation centres a couple of times.

These were great and self made men that would have been role models to the youths of our time and those who had the singular misfortune of being born into poverty. They would have been the source of hope to the hopeless. They would have been a source of inspiration to those who thought life is meaningless and unfair. But they screwed up!

One common denominator in the lives of the above athletes is that they were in their teens or twenties when they hit the limelight and stardom. Unfortunately they were unable to manage their successes that would have made people believe in them. In addition, their attitudes to life, misdemeanor and indiscipline led them to their journey towards the great fall.

At 19, Michael Phelps, another outstanding American swimmer won 6 gold medals and 2 bronze medals at the Athens Olympics in 2004. Shortly afterwards he was charged and convicted for driving under the influence of alcohol. This legend at 22, also won eight gold medals in the 2008 Beijing Olympics.

Early in the year, this young man was caught inhaling from a marijuana pipe albeit in public. He has been suspended by the national sports body for three months without financial support while he stands to lose several millions of signature rights.

After these two incidents, now is the time for Michael Phelps to get fitted in the clothes and shoes of right mental attitude. According to Ziege in Maxwell,”Nothing on earth can help the person with a wrong mental attitude”. This young man will need the help of good natured coaches and mentors to remain on top and retire a happy man so that he does not end up in the boats of Esin, Simpson, Gascoigne and Vick.

Some of the things that bring people down from the citadel of success to the valley of failure include:
 Wrong mental attitude.
 Complacency.
 Dwindling inner drive.
 Increased socialization at the detriment of more work.
 Squander mania.
 Lack of respect for constituted authourities.
 Arrogance and ego trip.
 Refusal to follow up on the path of sacrifice.
 Indulgence in hard drugs and inappropriate behaviours.
 Mixing with people of easy virtues.
 Underrating opponents or competitors.

Therefore, if you are on top and wants to remain on top, you require doing some of the following tips:
 Give up vices that can destroy your concentration.
 Sacrifice more in order to stay up.
 Work extra smart and hard to remain on top.
 Invest in value addition activities.
 Smoking and excessive drinking of alcohol put extra burden on the lungs and liver, which play very vital roles in the life of a sportsman or woman, so desist from smoking and drink in moderation.
 Stay on track and don’t be too rich or too good to ignore the counsel and instructions of your coaches and mentors.
 Avoid stressful situations as sports itself is enough stress.
 Do not invest your hard earned money in gambling and non-money yielding ventures.
 Get adequate rest rather than stay long hours in “joints” (beer parlors, brothels, disco rooms etc.). The calamities that have ruined good athletes started from the joints.
 Invest in reading and mental challenging activities.
 Eat according to the advice of your nutritionist.
 Ensure you up and maintain your training schedules.
 Introspect and change all attitudes that are retrogressive.
 Do first things first.
 Do not allow the level of your success to puff you up.
 Buy only those things that are necessary.
 Be moderate in taste.
 Find time for quiet (meditation).

From my own perspective, I believe that it easier to manage and live with poverty and surely anybody can manage poverty. Failure can be managed with faith hinged on a better tomorrow; but managing success is the most difficult of the three phenomena that one may encounter during the journey through life. When you get to the top, it takes extra efforts to remain on top. At the top, several persons are competing for what you have but nobody is proud to compete with a failure or a poverty stricken person. So you are like a bait in the river infested with crocodile.

As a successful person, you no longer have a personal life. You are in the full glare of the public. Whereas failure is an orphan, success has several parents, admirers and well wishers. Hidden among these admirers are those that are working hard on “bring- him-down syndrome”. Therefore, it takes real commitment, sacrifice, work and more work to remain on top.

To all successful sportsmen and women and those on the road to stardom; they should decide quick enough to remain good, consciously removing the landmines that can bring about wrong mental attitudes and aptitudes that would hinder their success drive. They should not let their indiscretion ruin the chances of holding on to their hard earned money and; the top of the ladder of fame and success. They should maintain the right attitude that would secure their future because a time comes, when the limbs can no longer bring into the vineyard the fruits, harvests and the fortunes of old.

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Recent Posts

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• Governors and Presidential Convoys: a threat to Road Safety in Nigeria.
• The Concept of Mediation and Its Relevance in Modern Court. Paper presented by Louis Brown Ogbeifun (ChMc (Nig); CEDR accredited Med, (UK); MTI Accredited Mediator and Trainer in Workplace Conflicts (USA).) To a Workshop on Alternative Dispute Resolution (ADR) for Magistrates’ of the FCT. Organized by the Abuja Multi-Door Courthouse, High Court of the FCT in conjunction With the Security Justice and Growth Programme of the British Council. At Rockview Hotel; On 26TH November, 2008
• THE PLACE OF THE NURSE ANAESTHETIST IN THE MODERN DAY HEALTH INDUSTRY AND DISASTER/EMERGENCY MANAGEMENT:AT A CONFERENCE ORGANIZED BY NATIONAL ASSOCIATION OF NURSE ANAESTHETISTS OF NIGERIA (NANAN) ON 25TH – 26TH APRIL 2008 AT THE CONFERENCE HALL, ASOKORO DISTRICT HOSPITAL, PLOT 31, JULIUS NYERERE STREET, ASOKORO, ABUJA.
• MANDATORY SECURITY SCREENING FOR THE GROUP OF 14 REVERSED
• MUAMMAR ABU MINYAR al-GADDAFI AND DAVID MARK’S MAD MAN COMMENT
• Conflict Resolution in Religious Organizations, being lecture delivered by Ogbeifun Louis Brown on December 25th 2009 at the Pastoral Centre, Agbarho delta State Nigeria during the End of year In-gathering Seminar organized by the Divine Encounter Renewal Fellowship, Warri.
• RODHAM CLINTON’S SPEECH: A CHALLENGE TO NIGERIA AND THE CIVIL SOCIETY ORGANIZATIONS
• Democracy on trial in Nigeria
• Terrorism, extremism and fundamentalism

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