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Dynamic labour leadership – refueling the economy by Femi Falana

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I must begin by saying that the theme for  this year’s anniversary-Dynamic Labour Leadership-Fuelling the economy is timely and insightful.

However, I became close to Pengassan and National Union of Petroleum and Natural Gas Workers (NUPENG) when we jointly waged the battle for the restoration of democracy in Nigeria. I can say, without any fear or contradiction, that both unions gave impetus to the titanic struggle against one of the most corrupt military regimes  that ruled any country in Africa.

Femi Falana

My short address is going to centre on the role that PENGASSAN and NUPENG and the other industrial unions can play in refuelling the Nigerian economy. However, we should realise that the Nigerian economy cannot be seriously refuelled as long as it is controlled by imperialism through the International Monetary Fund and World Bank.   Permit me therefore to limit my address to the refusal of successive Nigerian governments to recover royalties running to billions of dollars  from oil companies and the proceeds of crime from some shipping and oil companies that have stolen several millions of crude oil from Nigeria.

Supreme court’s order to adjust production sharing formula

In June 2015, I wrote a letter to the Management of the Nigerian National Petroleum Corporation demanding that urgent steps be taken to implement the Production Sharing Contracts entered into between the Federal Government and the Oil Majors. Under the PSCs a review of royalty in favour of the Federal Government was required to be carried out whenever the price of crude oil was sold above $20 per barrel in the international market. The contracts were anchored on  the provisions of the Offshore and Inland Sharing Contracts Act. The request was ignored. I also requested the National Assembly to review the Act with a view to amending some of the provisions. The request was equally ignored. Disappointed but undaunted I continued to mount pressure  on Authorities in Abuja.

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Based on such pressure,  the Minister of State in the Ministry of Petroleum Resources, Dr. Ibe Kachukwu was compelled to disclose  that the nation had lost a whopping sum of $60 billion due to the non-implementation of the production sharing contracts by some unnamed public officers.  Embarrassed by the disclose, three oil producing states namely, Akwa Ibom, Bayelsa and Rivers decided to file a   suit at the Supreme Court wherein they sought to compel the Federal Government to enforce the production sharing contracts.  In a historic judgement delivered , the Supreme Court of Nigeria directed the federal government to adjust its share of the agreements  without any further delay. While the Supreme Court is commended for  determining the matter expeditiously, the Federal Government should proceed to amend the Act. In particular, section 5 of the Act which provided that royalty would not be collected from oil and gas companies operating in areas in excess of 1,000 meters depth. Since the section was to last for 15 years it expired in 2008 by effluxion of time. The implication of the automatic repeal of the section is  that the Federal Government is entitled to collect the accrued royalties for the past 10 years.

Refusal of the federal government to collect penalties from oil and shipping companies indicted for stealing the nantion’s crude oil

On account  of a study commissioned by Nigerian Maritime Administration  and Safety Agency (NIMASA)  under the  Jonathan  administration,  it was established that from January 2011 to December 2014, 60.2 barrels of crude oil stolen from Nigeria were discharged at the Philadelphia Port in the United States of America. The oil and shipping companies involved in the criminal enterprise have been indentified but the Federal Government has been very reluctant to recover the sum of $12.7 billion being the value of the stolen crude oil. Even the Economic and Financial Crimes Commission which is busy  collecting some hundreds of millions of Naira from alleged local looters have not investigated the monumental fraud which has been traced  to    the foreign oil and shipping companies.

Allegation of oil theft

It is hoped that the PENGASSAN and NUPENG will assist Nigeria to recover the said sum of $12.7 billion from the indicted  companies. From the information at my disposal several millions of crude oil stolen from Nigeria were also shipped and  discharged  in many ports in the United States,  China, United Kingdom, France, India etc during the same period. It is estimated that the Federal Government can recover not less than $100 billion being the value and penalties imposed on the companies involved in the  crude oil  theft.  I am compelled to call on the management of NIMASA to ensure that the serious allegation of oil theft by well known oil and shipping companies is fully investigated.


Apart from ensuring that the aforementioned funds are recovered the nation’s trade unions led by the Nigeria Labour Congress and the Trade Union Congress should end the official shame of running from the West to the East by government officials to beg for all kinds of loans. Another area that the trade unions ought to monitor is the award of scholarships by the Petroleum Training Development Fund to qualified Nigerians to acquire requisite knowledge in the field of engineering, geology, science and management in the oil and gas industry. In July 2007, the Senate alleged that the criminal diversion of the billions of Naira from the PTDF Account under the Olusegun Obasanjo administration. The diverted money should be recovered without any further delay and paid into the PTDF Account. Owing to lack of proper monitoring the federal government has allowed the oil majors to continue to employ expatriates notwithstanding that Nigerian has produced experts in all aspects of the oil and gas industry.

Take over and own the anti corruption war

Finally, it is high time that the labour movement mobilised the Nigerian people to take over and own the anti corruption war. The anti graft agencies ought to be fully supported in the recovery of the nations looted wealth. It is in our collective interest that the war against corruption is not left for the federal government  to wage alone.   If the war is left for the ruling party the war may be politicised in a manner that highly connected  individuals  may be excluded from prosecution. For instance, the allegation that a sitting governor collected a bribe of $5 million has not attracted the attention of the anti graft agencies.

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The governor who has been linked with the scandal should resign without any further delay. If he decides to sit tight in office the State House of Assembly should commence proceedings for his impeachment. If the allegation is a hoax as the governor has maintained he should be prepared to defend his integrity by cooperating with the house of assembly in the investigation. But if the allegation is true it should not be swept under the carpet like the $5 million bribe allegedly received from the Halliburton gate of $180 million by a former President through one of his aides.

(Being the solidarity message delivered  by Femi Falana SAN at the 40th anniversary of the Petroleum and Natural Gas Senior Staff Association of Nigeria at Abuja on October 18, 2018)

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