House of Representatives’ NNPC Investigation – The right steps needed to take.

No Comments » May 24th, 2008 posted by // Categories: Energy Development Project



House of Representatives’ NNPC Investigation – The right steps needed to take.

On April 22, 2008, the House of Representatives of the Nigerian National Assembly constituted an ad-hoc committee and mandated it to investigate the affairs of the Nigerian National Petroleum Corporation (NNPC), its subsidiaries and the Department of Petroleum Resources (DPR) – the oil and gas sector and industry regulator. The period to be covered by the exercise is from 1999 till March 208. The 26-member Ad-hoc Committee is headed by Hon. Mr. Igo Aguma as Chairman. A ten (10) items Terms of Reference (TOR) is to guide the Committee in its work and it has two months within which to accomplish its given assignment.

In my Thursday May 15, 2008 piece on this matter, I touched on the previous antecedent or attempt by the same House of Representatives but under the leadership of former Speaker Rt. Hon. Ghali Umar Na Abba to investigate the affairs of the NNPC, its subsidiary companies and the DPR. What happened then is now history. In that article, I raised some posers; which ask whether the current attempt by the dashing and enigmatic Rt. Hon. Dimeji Bankole will not be a repeat of history and also, if there are lessons the present initiative can learn from the earlier Ghali Na Abba’s pioneering effort in this direction.

Before I delve into the issue of learning from the previous experience of probing the NNPC, its subsidiaries and the DPR, I would digress at length to say some things regarding the way and manner the Ad-hoc Committee intends to carry out its Herculean assignment. In a recent press briefing, the Committee Chairman, Hon. Aguma did informed the Nigerian public and the world at large that, his Committee would adopt appropriate procedures, mechanisms and frameworks to guide them in conducting the exercise. The Committee would also engage the services of international and local consultants according to Hon. Aguma.

On the issue of procedures, mechanisms and frameworks to guide the Committee’s work, the best place to start is to look at the Terms of Reference (TOR). This is where the building blocks for establishing procedures, mechanisms and frameworks of analyses reside. As Hon. Aguma rightly stated that his Committee will stick to the TOR, getting it right from the start is the key to the success of the Committee. Therefore, the following basic advice and suggestions may be of help:

The first litmus test will be recruiting the right local and international consultants who will guide the Committee on technical and methodical issues; including analysing the memoranda submitted to it. This is a very crucial aspect of the Committee’s overall success and integrity.

The appointed consultants should be able to give expert advice and recommend to the Committee the best technical approaches and procedures to adopt in obtaining the right and correct data and information from those organisations that the Committee would invite to make inputs by way of supplying data and information. Also, the Consultants should be saddled with organising and digesting the huge memoranda that will flood the Committee.

Experiences show that there will be attempt by some unscrupulous people and or organisations with sinister motives to deluge the Committee with irrelevant data and information in order to make the work of the Committee extremely difficult. This they can do by deliberately inflicting the Committee with what I would call “information overload syndrome” – dump loads of trash as requested data and information. It is very costly in terms of time and money dealing with this type of deliberate attempt to sabotage investigative work. Smart Consultants can easily nip this type of action in the bud.

With the right set of Consultants in place, the Committee can concentrate on designing and planning how to conduct its public hearings; who to send special invitation to come physically to shade more light and why etc.

The task of the Committee may require designing methodological, procedural and analytical frameworks that take into consideration breaking the main Committee into sub-Committees with the following suggested structure:

a)      A Sub-Committee (Legal & statutory issues) to handle all corporate and institutional issues; including statutory/legal provisions and requirements for the existence of the agencies being investigated. The Sub-Committee should be interested in looking at compliance with the enabling Statutes of the agencies among other issues.

b)      A Sub-Committee (Legal & contractual issues) to handle all upstream and downstream oil sector/industry issues concerning specifically compliance with all legal instruments such as Joint Venture Operating Agreements (JOAS), Production Sharing Contracts/ Memorandum of Understanding (PSC/MOU), Turn Around Maintenance (TAM), contract tendering processes and procedures etc.

c)      A Sub-Committee (Technical/Upstream) to handle all upstream oil sector/industry issues concerning specifically with crude oil production from oil producing well-heads to storages facilities and export terminals.

d)      A Sub-Committee (Technical/Downstream) to handle all downstream oil sector issues particularly oil refineries and petrochemical complexes; including examination of the technical health (i.e. Turn Around Maintenance (TAM) of the 4 refineries & petrochemical complexes, installed versus current operating capacities utilizations; “white” petroleum products slates and derivatives; etc.

e)      A Sub-Committee (Commercial) to handle all issues dealing with exports of national (federal) share of crude oil produced (i.e. national/federal share: crude oil lifting); exports of unutilized crude oil destined for local refineries for domestic consumption; import of petroleum products to meet domestic refining shortfalls etc.

f)        A Sub-Committee (Finance/Accounts Audit) to handle all issues pertaining to financial and accounting transactions traversing all the issues examined but not limited to the work programmes of the above listed Sub-Committees (b) to (e). This Sub-Committee should examine and analyse audited and un-audited Annual, quarterly and half-yearly financial Reports and other mandatory financial and accounting reporting obligations of the agencies being investigated. Joint Venture Cash Calls Accounts, Equalization/bridging and Petroleum Products Subsidies/Support, Petroleum Technology Development (PTDF) Funds allocation and utilizations etc. and last but not the least,

g)      A Sub-Committee on Public Policy, Regulatory and Institutional Integrity – to handle and examine all subsisting government policies and regulatory provisions governing the operations and management of the oil sector and industry; pubic and private agencies involved; examine compliance and or breach etc.

The structure outlined above is just suggestive and does not necessary mean that the Committee should adopt it as presented above. However, the Committee stands to maximise on time and benefit tremendously from the quality of the output that can come out from a well structured and coherent operational structure that is dynamic and at the same time constrained by the terms of reference (TOR) that needs to be strictly adhered to.

The lessons that the current initiative can benefits from the previous exercise and or similar exercise outside the oil sector (e.g. the power sector and FCT probes) are many. However, I would outline just a few as follows:

a)      Conflict of interest: This is a very important and sensitive issue that can dangerously destroy all the good intentions, aims and objectives of the exercise. Therefore members of the Committee should declare and purge themselves of all matters pertaining to conflict of interest, if any;

b)      Investigative Capture (analogous to Regulatory Capture syndrome): The Committee should avoid being financially and materially assisted/and or induced by the agencies being investigated. For example, No free flight tickets, gifts of any sought under any protocol tradition should be entertained by the Committee and its members. This is to avoid being compromised etc. All members of the Committee are persons of high integrity and need not allow shadowy forces to destroy their personal integrity for pittance. The same standard test of personal integrity and requirements should apply to the Consultants and Committee Secretariat administrative/technical Staff as well.

c)      Working at Cross Purposes: This normally arises in situations where conditions of conflicts of interest and investigative capture are allowed to prevail.

Finally, in order to placate and insulate the Committee from all of the above and other temptations, sufficient funds and other material resources needed by the Committee should be made available at all times. Funds constraints can lead to all manners of integrity compromises which may lead to catastrophic total collapse of the integrity of the whole exercise and by extension, the esteemed institution itself – The National Assembly. We don’t pray for that.

There are crises all over Nigeria ranging from public and corporate misgovernance; breeding hunger, misery, insecurity and general societal decadences. These happenings have shattered national hopes and aspirations of Nigerian citizens. Why have these things happened and why are these things allowed to continue happening are serious questions and collective indictments of Nigeria’s leadership and followerships alike. The time is ripe for change and the whole nation looks up to the National Assembly, Aso Villa and the judiciary.

What is needed to redress the situation in Nigeria is an entire new level of thinking and leaderships. To this end, the small efforts being done through the numerous investigations of the past misdeeds of the previous administration that draws from the best democratic practices and thinking worldwide, can serve as enabler and help us get there. What is needed is total support and encouragement to the National Assembly, the executive and judicial arms of government to do just the right things for the overall benefits of the country and its citizens. The whole world is watching us. We must get it right this time around or forget it and be condemned by the present generation of hopeful Nigerians and generations yet unborn.

Abubakar Atiku Nuhu-Koko

Friday, 16 May 2008

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