Why We Oppose Privatisation of Steel And Rolling Mill Companies - Workers

RECENTLY the two workers's unions in the nation's iron and steel sector, Iron and Steel Senior Staff Association of Nigeria (ISSSAN) and its Steel and Engineering Workers Union of Nigeria (SEWUN) were said to have responded to the planned privatisation of the public rolling mills and steel companies stating why the workers are opposed to government moves to sell off public steel and rolling mills. In this interview, General Secretary of ISSSAN, comrade Didi Adodo explains the workers's view to Vanguard. Excerpts.

To start with, what informed your recent response to the planned privatisation of the public steel sector?

SEWUN and ISSSAN have been receiving conflicting signals from the Presidency, Ministry of Power and Steel, Managements and Bureau for Public Enterprise (BPE) on the way forward for the Iron and Steel Sector. While the Presidency have always assured the nation that the Iron and Steel Sector will be completed, rehabilitated, commissioned and operated before the end of' the life of this administrations. The Ministry of Power and Steel with the approval of Mr. President and the Federal Executive Council as we were told entered into agreements with counterpart funders in the following ways: a. For the Inland Rolling Mills in Jos, Oshogbo and Katsina, Nigerian business men are suppose(l to produce the resources by buying billets for them to roll and collect a fee pending when Delta Steel will come on stream in and also when there is enough resources for them to buy their own billets. b. Delta Steel Company: We're all aware that the Ministry of' Power and Steel reached agreement with VAIS of Australia and Osaka Steel towards rehabilitating and running of Delta Steel Company which will be in phases. This is still on-going.

C. Ajaokuta Steel Company: We are aware that Ajaokuta Steel Company and Forrestal of Germany have formed a Joint Company called ASFERO and the Company is already operational.

Also SOLGAS, Kobe Steel and even the TPF of RUSSIA all still have existing contracts in Ajaokuta to complete, rehabilitate and operate the Steel Complex in phases. d. The National Iron Ore Mining project (NIOMP) Itakpe National Metallurgical Development Centre (NMDC) Jos, National Steel Raw Materials Exploration Agency (NSRMEA), Kaduna and Metallurgical Training Institute (MTI), Onitsha, all have one form of on-going contract or the other and all the Companies and projects are interlinked. A dislocation of one automatically affects the others.

e. Government has committed a lot to the Rail Line linking Itakpe through Ajaokuta to Delta. This rail line is a necessary concomitant for the full operation of Delta Steel, Ajaokuta Steel, NIOMCO, Itakpe and Ipsofact the public Steel Industry in Nigeria. This project is not yet complete. How then do you really run Delta Steel and other Steel Companies?

Apart from the general climate of' infrastructural decay in the country and over devalued currency and lack of security which has made business in the country generally bad, the public sector steel companies also in addition to the above have had to add to its problems the following:

Acute under-funding, lack of completion of the Ajaokuta Steel Company, Lack of completion of Itakpe, Ajaokuta, Warri rail lines, unfavorable tariff regime, lack of government patronage of the government- owned steel companies even when approving or carrying out contracts that require high usage of Iron and Steel, government undue interference in the day to (lay running of' the companies and Lack of protection of the local steel companies.

What are the solutions to these problems?

The state of the industry has continued to generate all manners of suggestions ranging from, intelligent to unpatriotic ones. Among this category are the leasing, liquidation, communication and privatization options. In the 1996 to 1999 Budget, no appropriation was made to any of the steel companies, which would suggest that government had surrendered to the noisy arguments of well known enemies of the country's progress, especially the International Monetary Funds (IMF), World Bank and their local megaphones who insist that privatisation is the only solution. Indeed we have no arguments against private ownership of enterprises of any sector. What is unacceptable and even criminal is to hand over public enterprises to private owners under the most dubious pretexts. Those who think they can turn Nigeria into another South Korea are at liberty to do so. But they should apply for land and construct their own versions of Delta Steel instead of organising the pawning of established ones. The privatisation or leasing or liquidation option is neither new nor does it represent anything different from what the Babaginda administration had espoused. It is our candid opinion that the Federal Government has to be told that there is no shirking its responsibilities to utilise the machinery of the state to facilitate this country's technological take-off. The privatisation agenda should therefore, be put aside for now in the interest of the industry and the country for these reasons. The iron and steel sector is much too strategic to be left in private hands, local or foreign. It is crucial to national development in very many ways, including the enhancement of the country's defence, industrial self-sufficiency, given the steel sector's role as a catalyst armament development. No Country leaves such a national security priority as well as the pace and direction of its technological advancement to foreign and incapable private hands. The country does not yet posses the local entrepreneurial class, which the privatisation agenda requires. What we have is a class of hit-and-run investors mainly interested in areas of' quick returns. Besides, the industry requires vast resources, including daily overheads and personnel bills, which only state proprietorship can conveniently mobilise for now. Thus, auctioning these mills to such a still under developed business class would be a recipe for their complete collapse. As is well known, the immediate response of acquisitors of previous state-run concerns is usually to shed load, believing that by reducing personnel who are highly specialised and are mostly trained abroad from the country's foreign exchange is a positive step forward.

The joining of the power and the iron and steel sector into one Ministry has been "choking". The Steel Sector has always been the underdog in that Ministry. We are hereby calling on the government to create a distinct Ministry of Iron and Steel to take care of the Steel, Iron, Aluminium and Machine Tools sector of the economy.

It is unfortunate that the Nation has no Iron and Steel Policy despite the importance of this sector to the economy. A conference of all stakeholders should be held now to fashion out a policy for the Iron and Steel Sector.

SEWUN and ISSSAN after a careful study of the Iron and Steel Sector demand that 8.5% of the National budget be used to develop the Iron and Steel Sector for the next Ten (10) years after which the sector will be able to stand on its own. The Act provides for an inter-ministerial council that would facilitate smooth liaison among all government departments crucial to steel development, especially the completion of outstanding projects. It is recommended that the Act be implemented, as this would reduce bureaucratic hitches that might affect release of allocations and in other areas critical to the government's revitalization agenda.

Further, it is recommended that the two unions in the industry (ISSSAN and SEWUN) be allowed to represent workers who constitute a major stake-holding constituency.

Some people have argued that your opposition is the fear of job loss. How far is this correct?

Well, yes to some extent. Tied to this is the need to ensure security of tenure for Chief Executives and Management Staff as well as job security for the staff. Specific targets, with short and long term dimensions, should always be set for Managements. Capacity to meet targets and evidence of meeting targets should be the dominant means of determining the tenure of the Managers. Steel production is highly specialised and continually demanding. lt requires well-trained, motivated and remunerated staff. Although the sector can boast of well and proficient personnel, there is need for routine refresher training and enhancement of multi-skilling. Government must always realise that the real challenge is not making the sector work but in generating the capacity to build other steel plants using 100% local expertise. The current staff of the Iron and Steel Sector are well trained both locally and Internationally and all these trained staff have about ten years left in the Iron and Steel Sector to meet the retirement age. Efforts should be made to commence training for fresh graduates and recruits so that the Iron and Steel dream will not die. Fresh training must commence immediately.

Some people have talked about equity shares for these organisation. What is your position?

After government has completed, rehabilitated and operated the sector for some time, whatever government has spent on the sector and the asset base will now be turned to equity share capital. And it will serve as a basis towards mobilising resources from the capital market towards further financing and operation of the Sector. But recently, newspapers were awash with advertisements placed by the Bureau for Public Enterprise (BPE) for the privatisation of Ajaokuta Steel Complex, Delta Steel Complex and the three Inland Rolling Mills.

We frankly became confused because this advert completely negates what is currently in place in the steel sector and we believe that the BPE option of privatisation should not be an option to be considered. More so as there is not enough money in the Nigerian private hands to buy this and also the fact that the world bank and the IMF (International Monetary Fund) have said that we should scrap them, it then means no genuine foreigner will put his money there.

Also we see that this same IMF and world bank wants to mobilise funds towards buying off these companies and scrapping them ultimately as a way of making Nigerians to be fully dependent on foreigners for our economic and technological development.

We must know that a fully operational Iron and Steel Machine Tools and Aluminum Sector is the cornerstone of any Industrial development in addition to its ability to generate employment for over 50,000 Nigerians in the upstream and more in the down stream sector.

We therefore urge Government and all well meaning Nigerians to resist this attempt at further recolonisation of Nigeria through technology by making sure that the public steel, Machine Tools and Aluminum sector is well funded and operational.

The solution to the problems of the Sector is that Government should as a matter of urgency complete, rehabilitate and operate them for some time and what is spent is turned equity share capital before the issue of privatisation or private sector participation can be discussed. To advertise the sector for privatisation now is to play into the hands of our detractors who will end up buying them as scrap and at very ridiculously cheap rate before actually scrapping them.

The Trade Unions in this Sector cannot fold its hands for this to happen. We are all ready to rise to the occasion to prevent the mad man from entering the market place.

We must mobilise now.