Nigeria’s Oil Company, NNPCL Hides Under Petroleum Industry Act To Frustrate Demand For Disclosure, Accountability
Nigeria’s major oil company, Nigerian National Petroleum Corporation Limited (NNPCL), in what appears to be a common practice of disregard for accountability, says it is not under obligation to disclose its dealings and be accountable to the public in the way it operates.
NNPCL made this known in response to a Freedom of Information (FOI) request sent to it by the Media Advocacy West Africa – MAWA Foundation and Divine Era Development and Social Rights (DEDASRI) through its partner Falana and Falana Chambers, under the Disclose the Deal Nigerian Project.
The report was supported by Publish What You Pay.
In the request to NNPCL, the organisations asked it to provide them with the information regarding a contract awarded to Macready Oil & Gas Service Company Limited.
The information requested is related to the “maintenance of Warri-Kaduna Crude Oil Pipeline (604km), Kaduna-Kano Products Pipeline (224.3km), Kaduna-Jos Products Pipeline (166.4km), Kaduna-Suleja Products Pipeline (170.8km), Kaduna Depot, Kano Depot, Jos Depot and Suleja Depot.
“(1) The exact amount the contract is worth and the timeframe for the project to be completed.
“(2) The report of procurement/tender bid leading to the selection of Macready Oil & Gas Service Company Limited for the contract award.
“(3) How much has been released for the project and the payments made to the Macready Oil & Gas Service Company Limited regarding the project execution?”
But in NNPCL’s response to the FOI request, through its lawyers dated January 22, 2024, it says under the Petroleum Industry Act 2021, it is no longer a public institution, but a private company, and has since ceased to be an agency of government. Hence no longer under any obligation to respond to FOI requests.
NNPCL further pointed out that it cannot answer questions about its financial transaction dealings regarding contract awards because it is not a financial institution.
The organisations noted that their efforts to speak to Macready Oil and Gas Service Company Limited were unsuccessful.
The organisations said, “The non-disclosure and lack of transparency in NNPC have continued, even as Nigeria in 2003 signed up to the Extractive Industry Transparency Initiative (EITI). And, by so doing, Nigeria commits to disclose information along the extractive industry value chain – from how extraction rights are awarded, to how natural resources revenues are managed by the government for the benefit of the public.
“Worse still, the Nigerian State in her determination to promote transparency and accountability in the management of her oil, gas, and mining revenues, passed the Nigeria Extractive Industries Transparency Initiative (NEITI Act 2007) in line with the global EITI standards.
“Despite Nigeria’s efforts to promote transparency in the oil and gas sector, revelations in the way NNPCL carries out its operation with disregard for transparency and disclosure show Nigeria is not on its part to achieve transparency and disclosure in the oil and gas deals.
“Although the Petroleum Industry Act 2021 is legislation targeted at addressing the lack of transparency in Nigeria’s extractive industry, NNPCL has disagreed with it. And, has since interpreted the Act to suit its practice of non-disclosure and lack of accountability.
“A challenge facing Nigeria’s extractive industry is, with the NNPCL believing that the Petroleum Industry Act does not mandate it to be accountable to the public, the lack of transparency in the extractive industry is likely to be on the increase.
“Interventions to achieve transparency in Nigeria’s extractive industry will be a tall order. This is mainly because it will need a judicial pronouncement to get the NNPCL to comply with the FOI Act as mandated by the legislation.
“Unfortunately, Non-Governmental Organizations (NGOs), Civil Society Organisations (CSOs) the Media, Researchers, and private citizens who are at the forefront, of demanding accountability from NNPCL in the way it carries out its operations, do not have the financial requirement to take NNPCL through rigorous Nigeria’s judicial process because of its capital intensive nature.
“The NNPCL has a long history of not complying with disclosure and transparency. Its practice of engaging in bad procurement processes abuse and contract scams shows how opaque the agency operates.
“For instance, the House of Representatives in 2015 probed NNPCL over a crude oil swap deal scam awarded to Sahara Group, Aiteco, Duke Oil, Mercuria, Glencore, Taleveras Nig. Ltd., Etena Oil and Gas, Tranfigura, a Swiss firm, and Ontario Oil and Gas.”
Expert Reacts To Nnpcl Non-Compliance With FOI Act
Mr. Chima Williams, a lawyer who has spent decades working in Nigeria’s extractive sector and the 2022 Winner of the Goldman Environmental Prize for Africa spoke to MAWA-Foundation. The organisations in their report said Williams in his conversation with an official of MAWA, pointed out that the NNPLC is obligated by the law to respond to FOI requests.
According to him, NNPCL is a government company that does not belong to individuals, therefore its claim that it is no longer a government company under the Petroleum Industry Act is not true and cannot be allowed to stand.
Mr. Williams challenged NNPCL to tell Nigerians who are the shareholders if they claim the company is now private. And so long as NNPCL does not have shareholders, it belongs to the government and that is why it speaks on behalf of the government. And also manages the country’s oil and gas for the government.
Williams added that the Petroleum Industry Act and the FOI Act are two principal legislations that guarantee transparency, accountability, and openness in the way NNPCL carries out its operation. And wonders, why the NNPCL will say it is exempted from the FOI Act hiding under the cover of a private company. That is a deliberate misinterpretation of the law to deceive the public.
“With the combination of FOI Act and Petroleum Industry Act, NNPCL has a responsibility to disclose to Nigerians information sought regarding how it carries out its operations as government arm in the oil and gas industry operations,” Chimma Williams said.
NNPCL Oil Pipeline Project Abandoned
The report said MAWA-Foundation’s visit to the Kaduna-Kano Oil Pipeline project site showed that Macready Oil & Gas Service Company Limited had since abandoned it at the Rigar Duka community in the Kura Local Government Area of Kano State.
Community residents who spoke to MAWA regarding the project, say work has since stopped on the site while narrating how the abandoned pits are causing flooding and destroying their farms. A situation they appealed to the government to get the contractors back to the site and complete the project.
During a visit to the proposed gas industrial layout (Kano Depot), at Tamburawa, adjacent to Challawa Water Works in the Dawakin Kudu Local Government Area along Zaria Road, awarded to Macready Oil & Gas Service Company Limited, by NNPCL, the organisations “found that it has not commenced”.
“This is even as the Kano state government declared the location for the project,” the report added.
Although Nigeria has since 2003 signed up to EITI and in 2007 Enacted the NEITI Act to promote accountability in the extractive industry, the country has yet to make any notable efforts in ensuring disclosure and transparency in its extractive dealings.
NNPCL, the country’s company that manages its oil and gas revenue, does not pretend in its refusal to allow disclosure and transparency.
For instance, in 2018, NNPCL refused to comply with an FOI request by Nigerian lawyer, Femi Falana (SAN) to disclose how much it earned and how remitted into the federation account under Mr. Muhammadu Buhari, former Nigerian president administration.
Worried by the NNPCL’s non-compliance with the FOI request and its refusal to disclosure, the Federal Ministry of Justice through its Head for the FOI unit, Mr. Benjamin Ogu directed NNPCL to comply with the FOI request while pointing out the corporation is not a private company as it often claims.
Despite the Federal Government directive, NNPCL has continued its non-compliance with FOI requests with MAWA-Foundation and DEDASRI being the latest victims.
The organisations said their experience in the extractive industry had shown that the Nigerian state through the NNPCL was not making enough efforts to allow for disclosure.
“Therefore, we call on all the strategic stakeholders through a participatory approach to design interventions on how to get the Nigerian state and NNPCL to allow for disclosure in the management of oil and gas resources. This is fundamental because all legislations that mandate the Nigerian state and NNPCL to ensure disclosure and transparency in the extractive industry are yet to achieve the desired result.
