11 November 2012

Nigeria: Petroleum Revenue Special Task Force Report - Who Has the Last Laugh?


Days before the final report was presented to President Goodluck Jonathan, labour unions and opposition parties had raised fears that the report of the 21-man Petroleum Revenue Special Task Force under the chairmanship of Mallam Nuhu Ribadu may not find favour with the government and that there were strong attempts to kill the report to cover a massive fraud. Although the report has been presented with unusual controversy, thanks to Steve Oronsaye's outburst, the bubble burst when another presidential spokesman, Dr. Doyin Okupe stated with finality that the report is shoddy. MICHAEL OCHE reports.

It took the presidency three working days to go through the entire 146-page report that took three months of hard work to put together. In Nigeria, especially considering the attitude of civil servants, you could say that was very fast.

The manner with which the report was killed now brings to question President Jonathan's sincerity in sanitising the petroleum industry. What is, however, obvious is that, despite the startling revelations from the report, nothing has changed and the country is back to the very beginning where oil cabals continue to hold the country hostage.

But even before presenting its report, the work of the Ribadu committee was dogged by controversy as a result of the leakage of the panel's report as reported by the International News Agency, Reuters. From the leakage to the lecture on courage and integrity Ribadu gave to the president while presenting his report, all point to one direction - Ribadu suspected something would happen to the report.

Though Dr. Doyin Okupe, the President's Senior Special Assistant on Public Affairs has opined that the report is inconclusive and has not indicted anyone, the report of the Malam Nuhu Ribadu-led Petroleum Revenue Task Force has further confirmed the long spoken rot in Nigeria's petroleum sector.

His statement is however, not enough to change some things about the oil industry as well as Nigerians' perception about events in the industry. Few days before the committee submitted its report, the presidency had threatened to prosecute those indicted in the report, warning that it is determined to fight corruption at all levels.

But it backtracked on its promise to the Nigerian people, choosing instead to rubbish the report, following a controversy that was started by the former Head of Service of the federation, Steve Oronsaye during the presentation of the report to the president.

While responding to the leaked report, Okupe had said the report "still requires full accent of all members of the committee and clarification." The question is, did Okupe have a premonition that members of the committee would not give accent to the report?

The hullabaloo surrounding how the Ribadu report was discredited is something that is becoming synonymous with probe committees in Nigeria - Elumelu power probe, Oteh Capital market, Farouk Lawan subsidy committee - the hunters all ended up becoming the hunted. And when the dust gathered by the controversy generated by the hunted finally settles, the real issues that led to the committees being set up in the first place are quickly forgotten.

But unlike the other probe committees, someone in the Ribadu committee outsmarted the cabal by leaking the report to an international medium, Reuters. A sign that it suspected beforehand the drama that played out during the presentation or perhaps, as most analysts now see it - lack of trust for the presidency.

When Nuhu Ribadu and Steve Oronsaye accepted to head the Petroleum Revenue Special Task Force, they knew they were walking into murky waters of controversy. The Nigerian oil industry is not a stranger to controversies. It is public knowledge that the petroleum sector in Nigerian is the most corrupt sector of the Nigerian economy.

Although not many Nigerians knew the extent of the corruption in the sector until the House of Representatives decided to expose the can of worms by setting up the Farouk Lawan committee to probe the fuel subsidy regime between 2009 -2011, which later discovered a mind boggling sleaze of N2.7 trillion.

The Nigeria Extractive Industries Transparency Initiative (NEITI) made matters worse when it later added to the figures, stating that Nigeria has lost $4.3 million over the last two years as a result of oil theft in the Niger Delta. The government has also not helped matters by repeating in its advertorial that "more than $7 billion is stolen annually in Nigeria." Such 'scary' figures are troubling to many Nigerians who feel such monies could go a long way in addressing the many challenges facing the Nigerian people.

Despite being the 7th largest producer of oil, Nigeria remains one of the poorest countries of the world with many of its citizens living below $1 (N157) per day. Social amenities such as healthcare, education, power and transport are all in a mess.

Nigeria's proposed budget for 2013 is N4.92 trillion. And the figures above show that 80 per cent of the budget is lost to corruption. A commentator puts it simply: "corruption is the only thriving sector in Nigeria".

Although, there have been several attempts in the past to sanitise the petroleum industry in Nigeria, all have ended in futility.

As the few cabals who have benefited from the sleaze smiled to the bank, poverty continued to ravage millions of poor Nigerians who looked helplessly to their government to salvage them from the cabal, which appeared to be holding the nation hostage.

Over the years, the cabal have frustrated any attempt to investigate the petroleum sector. It didn't help matters after online whistleblower, WikiLeaks, shocked Nigerians by revealing that a multinational oil giant, Shell has planted its officials into all the main ministries and every relevant department in the Nigerian government and so knew "everything that was being done in those ministries" and even boasted that the Nigerian government had 'forgotten' about the extent of its infiltration and were unaware of how much the company knew about its deliberations.

How it all started

Over the years, it has been alleged that the Nigerian government does not know as a fact, the quantity of crude oil produced everyday in the country. And if it does not know, then it cannot say precisely how much is earned from the product which accounts for over 80 per cent of the country's income.

It is also an established fact that some multinationals and their collaborators have been short-changing and exploiting Nigeria in the absence of strict regulation on how the country manage its revenue from oil and gas.

It is also a known fact that the country's refineries have been producing at less that 40 per cent capacity, while millions of dollars is being spent annually on fuel importation. It is an established fact that the Nigerian petroleum sector has an organised cabal that has been holding the country hostage.

But it was after the protest that greeted his January 1, 2012 increment of price of petrol that the president vowed to sanitise the petroleum industry. While announcing that the Federal Government had accepted to reduce pump price to N97 per litre, the president said, "Let me assure Nigerians that this administration is irrevocably committed to tackling corruption in the petroleum industry as well as other sectors of the economy. Consequently, all those found to have contributed one way or the other to the economic adversity of the country will be dealt with in accordance with the law."

The president had seized every opportunity to tell anyone who cares to listen that he is ready to fight corruption to a standstill. He was so carried away that during his 52nd Independence anniversary speech, he claimed that the global corruption watch body, Transparency International, (TI) rated Nigeria second after the United States (US) in anti-corruption efforts.

The claim was later found to be untrue after TI refuted the claim when it was contacted. The president's handlers later revealed that the President's statement was based on 'notorious facts' from a newspaper report.

In February, 2012, Mr. Nuhu Ribadu, the pioneer chairman of the Economic and Financial Crimes Commission (EFCC) was named as the head of a 21-member Petroleum Revenue Special Task Force set up by the Minister of Petroleum Resources, Mrs. Dieziani Alison-Madueke.

When Jonathan decided to appoint Ribadu to head Petroleum Revenue Special Task Force, many felt the president took a gamble, but by appointing the former EFCC chairman, the president wanted to give his anti-corruption crusade credibility.

However, the controversy that surrounded the killing of the report now raises several questions. But as leadership Sunday investigation had shown, some of the committee members and perhaps the cabal underestimated the capacity of Ribadu to do a thorough job.

A committee member told leadership Sunday that "Of course, Ribadu told the task force members that nobody would be allowed to dictate to him and I am sure that this did not go down well with certain members. Their thinking was that having been so close to Aso Rock, their views must be accepted.

"But because Ribadu has a distinct personality and some of us stood our grounds during the course of the task force, they felt threatened. I can also tell you that these members underestimate the capacity of Ribadu to manage a situation where some people have a mindset of what should be the outcome of a given assignment. Once we began the assignment, he (Ribadu) effectively took charge and told us that this was the time to leave a worthy legacy, saying that the task force must do a job that would stand the test of time."

Summary of the report

The report found out that billions of dollars of revenue was missing in unpaid debts from signature bonuses and royalties; that oil majors - Shell, Total and Eni - bumper profits from cut-price gas, while Nigerian oil ministers handed out licences at their own discretion. Hundreds of millions of dollars in signature bonuses on those deals were allegedly missing.

The report further alleged that international oil traders sometimes buy crude without any formal contracts, and NNPC had short-changed the Nigerian treasury of billions of Naira over the last 10 years by selling crude oil and gas to itself below market rates.

After the report was leaked to Reuters, stakeholders, including labour unions and civil society organisations, had accused the Federal Government of attempting to cover up the fraud. But the allegation was denied by the Presidency.

In his bid to prove his sincerity, Jonathan directed Ribadu and the chairmen of the two other task forces set up on the oil and gas sector to submit their reports to him on Friday.

The Drama

A prolonged drama played out at the Council Chambers of the Presidential Villa, Abuja, on Friday as Ribadu, and two members of the committee - Mr. Stephen Oronsaye and Mr. Ben Otti - openly disagreed about the process that produced the report and its reliability.

The presentation started smoothly with the Chairman of the Task force on Governance, Mr. Dotun Suleiman; and the Chairman, National Refineries Special Task force, Dr. Kalu Idika Kalu, taking their turns to summarise their reports and formally presenting same to Alison-Madueke.

The drama started when Ribadu was called upon to make his presentation. He saluted the President's courage for setting up the committees and expressed the hope that he would also display courage in implementing the recommendations.

He said all the issues raised in his report were the truth that would set the President and the country free if properly implemented because they would strengthen institutions and increase government revenue.

The former chairman of the EFCC frowned on the use of traders to sell the nation's crude oil, saying only Nigeria and Republic of Congo did so throughout the world.

"The FG should take action on issues of outstanding royalties, petroleum revenue tax and various penalties, for example, gas flaring penalties," Ribadu said.

"The companies that are operating in Nigeria today are making huge money from our country. Many of them are going out and investing in other parts of the world.

"We've found out that so many of them, even simple thing as royalties they don't pay. We need the money. We need them here. We need them to continue to do business but also let them also look at us and give us what is certainly our own entitlement.

The drama proper started when he concluded his remarks and made to present the report to Alison-Madueke.

As Ribadu was moving towards the minister, Oronsaye raised his hand signifying his intention to talk. Immediately after Ribadu handed over a copy of the report to the minister, the President recognised the former Head of Service of the Federation, who was at the time making frantic efforts for his raised hand to be noticed.

After the president recognised him and asked him to speak, Oronsaye fired the salvo by stating that the process leading to the submission of the report is flawed.

He said: "I want to say to you Mr. President that the process that has been followed is flawed and the report that has just been submitted to the honourable minister is the immediate reaction of the president's directive that the report be submitted.

The controversy

Commentators now believe that the protocol officers must have been acting a script when they allowed Oronsaye and Otti to break protocol, and in an unprecedented manner interjected when the President of the federal republic was seated.

It was an unusual situation for the two men to argue in front of the president, and it gave further credence that there was a grand plan from the beginning to discredit the report and the theatrical display put up by some members of the task force was to create an open show of a disagreement between members of the task force.

Jonathan, who was obviously taken aback by the drama that played out before him, said he was not completely surprised about the development because "oil business is always too oily." The President said any issue that had to do with revenue would naturally attract controversy. He said rather than the confrontation, any member of the committee who has additional issues to raise on the report should do so and forward them to his office through the minister or his Chief of Staff.

"Mr. President, you are doing well in fighting corruption but you still have to do more. With corruption you cannot get anything ... From my own personal experience which I want to share with you, carrying out reforms requires integrity, otherwise it will come to nothing." Those were the words of Ribadu while presenting his report to the president.

When Ribadu started his sermon on courage and integrity, was he suspicious of the president? He must have been, otherwise why would Ribadu educate the president on integrity during his presentation? Did he suspect the president would not implement his report? Ribadu himself has alleged that there were plans to scuttle the submission of the final report of the committee to Jonathan.

But Ribadu has accused Oronsaye, "During the work of the committee, Oronsaye got himself appointed on the board of the NNPC. The other gentleman, who spoke, Otti, became the director of finance of the NNPC and they decided to more or less bully everybody to take over. And they wanted us to write for them but the committee members refused".

The president did not help matters when he said becoming board members of NNPC does not disqualify them from being members of the task force.

Recall that the NNPC was also indicted for sundry economic crimes in the recommendations of the task force and the ACN has already capitalise on the president's remark by stating that it showed that the Federal Government has ulterior motive. If not, it would have waited for the task force to complete its assignment before naming Oronsaye into the board of the NNPC and Otti as the Director of Finance of the same body.

Oronsaye is not new to controversies. As head of a presidential committee, he had recommended the scrapping of 102 government parastatals, a recommendation that won him more enemies than friends.

Though he continues to insist that his disagreement was borne out of his inclination as a 'process man.' many believe rather than putting on a show in the presence of the president, he would have written a minority report.

The Presidency on Thursday rubbished the Ribadu-led Report on Petroleum Special Task Force, sayingn that the report was incomplete and incapable of indicting anyone.

"Due to the time frame of the assignment, some of the data used could not be independently verified and the task force recommends that the government should conduct such necessary verifications and reconciliations" Special Assistant to the President on Public Affairs, Dr. Doyin Okupe said.

Though the report has been killed and buried, the development has confirmed the rot in the petroleum industry, of which Nigerians are already aware. But it is the Nigerian people who end up as losers.

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