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Award of $25 billion contracts: Baru violated NNPC Act, says Falana

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Wsj
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Award of $25 billion contracts: Baru violated NNPC Act, says Falana

Unread postby Wsj » Thu Oct 12, 2017 10:21 am

Activist-lawyer Femi Falana (SAN) has said that the defence of the Group Managing Director (GMD), Dr. Maikanti Baru, that he has powers to award contracts to the exclusion of the Minister of State in the Ministry of Petroleum Resources and the board of the Nigerian National Petroleum Corporation (NNPC) is illegal and violates the NNPC Act.

Falana contended that the defence of Dr. Baru failed to recognise of the provision of Section 6 (c) of the NNPC Act, which has vested the Board of the NNPC with the exclusive power to”enter into contracts or partnerships with any company, firm or person which in the opinion of the Corporation will facilitate the discharge of the said duties under this Act.”

Falana stated this in a statement issued in Lagos yesterday titled, “NNPC operates outside the law” in reaction to the on-going face-off between the minister and the GMD of the corporation, Dr. Maikanti Baru over the unilateral award of $25 billion contracts by the latter.

The lawyer also noted that Dr. Baru failed to respond to the unilateral appointments of key staff in the NNPC without the approval of the Board of Directors, pointing out that since this particular allegation was not denied, it is reasonable to conclude that it is admitted by the NNPC management, even though the appointments in question were made in utter violation of the Federal Character Commission Act.



Notwithstanding the report that the Presidency has thrown its weight behind the NNPC GMD in the face-off with the Minster, Falana stressed the need to review the matter within the ambit of the law.

On the management of the NNPC and contract awards, Falana said: “For the avoidance of doubt, Section 1 (2) of the NNPC Act states that the affairs of the Corporation shall be conducted by the Board of Directors of the Corporation. Since it is conceded by Dr. Baru that some contracts are subject to the approval of either the Board or the Federal Executive Council, he is yet to inform the Nigerian people who approved the $25 billion contracts.

“It is pertinent to state, without any fear of contradiction, that by virtue of Section 3 of the NNPC Act, the GMD as the chief executive of the Corporation, shall be responsible for the execution of the policy of the Corporation and the day to day running of the Corporation’s activities and its associated services. But, contrary to the erroneous impression conveyed by the management of the NNPC, there is no conflict whatsoever between the provisions of the NNPC Act and the Public Procurement Act, 2007 to justify the usurpation of the powers of the NNPC Board by the Tenders Board of the NNPC headed by the GMD. Therefore, the unilateral award of multi-billion dollar contracts in the NNPC by Dr. Baru or the Tenders Board is illegal, null and void in every material particular.

“With respect, the totality of Dr. Baru’s defence was anchored on the mistaken belief that the NNPC Act does not require him to report to the Minister of State but to President Buhari in his capacity as the Minister of Petroleum Resources.

“Dr. Baru must have forgotten that upon the removal of Dr. Kachikwu as the NNPC GMD in 2016, the President appointed him as the Chairman of the reconstituted Board of the NNPC in line with Section 3 of the NNPC Act. Therefore, the decision of Dr. Baru to by-pass the Chairman of the Board in the award of the contracts and appointment of NNPC staff cannot be justified either under the NNPC Act.”

Falana contended that “since Dr. Kachukwu was not removed as the Chairman of the Board, the President ought not to have encouraged Dr. Baru to treat him with such pompous disdain and arrogance”.



He argued that the impression given by Dr Baru that once the President was briefed with respect to the award of the contracts, that due process had been observed in the award of the $25 billion contracts in line with the PPA was misleading.

He maintained that such a position was neither backed by the NNPC Act nor the PPA. He said the competent authorities that have the final say in the award of contracts and disposal of public assets under the current political dispensation are the Bureau of Public Procurement (BPP) and the National Council of Public Procurement (NCPP).

“The NCPP is not chaired by the President, but by the Minister of Finance. The other members of the NCPP include some officials of the Federal Government and representatives of relevant professional bodies and civil society organisations.

“Apart from constituting the NCPP and the BPP the President has not been empowered to approve any contract whatsoever. In fact, there is no reference whatsoever to the Federal Executive Council in the entirety of 61 sections of the PPA. To that extent, the FEC presided over by the President cannot approve the award of contracts which is the exclusive duty of the NCPP and BPP.

“Although the PPA was enacted in 2007, the President or the Federal Executive Council (FEC) has been approving multi-billion dollar or naira contracts, albeit illegally.

The activist lamented that the Buhari administration, which has loudly undertaken to fight corruption, has ignored calls from many civil society organisations to set up the NCPP.

He said since neither the President nor the Federal Executive Council was competent to approve the award of contracts under the PPA the claim of the NNPC GMD that the controversial contracts were approved by the President could not be justified under the PPA.

To avoid a situation whereby the $25 billion contracts and others being awarded by the Buhari administration are annulled and set aside on the grounds that they were awarded by either the President or the FEC without any legal authority, Falana counseled President Buhari to constitute the NCPP without any further delay.

“If this call is ignored, once again, the civil society anti-corruption bodies ought to approach the Federal High Court for a writ of mandamus to compel the President to inaugurate the NCPP,” he said.

He also noted that apart from breaching the NNPC Act and PPA, the NNPC had conveniently ignored the National Extractive Industries Transparency Initiative Act and had refused to comply with the directive of the NEITI to remit $21.7 billion and N376 billion illegally withheld from the Federation Account.

Though Dr. Kachukwu recently disclosed that the nation had lost $60 billion due, he noted that the NNPC has refused to recover same by implementing the provisions of the Deep Offshore and Inland Basin Production Sharing Contracts Act and instead of directing the NNPC to recover and remit the huge fund to the Federation Account, the Federal Government was busy piling up external loans.

He also noted that the NNPC does not subject its budgets to the National Assembly for appropriation as stipulated by the Constitution and the Fiscal Responsibility Act.

H recalled that shortly before proceeding on its annual vacation, the Senate disclosed that the NNPC and 33 other agencies of the Federal Government had failed to submit their 2017 budget to the National Assembly but that the NNPC management ignored the disclosure knowing that the Senate would not pursue the matter.

Falana contended that Dr.Ibe Kachukwu owed it a duty to the country to react to the allegation of the management of the Nigerian National Petroleum Corporation (NNPC) that he engaged in the unilateral award of multibillion dollar contracts during his tenure as Group Managing Director (GMD).

He remarked that even if the allegation of the NNPC GMD against the minister is true, it cannot justify what he described as the reckless impunity that has characterized the management of the affairs of the NNPC since 1999.

He contended however that the allegations and counter-allegations of Dr. Kachukwu and Dr. Baru over contract awards had reinforced his earlier call on President Muhammadu Buhari to relinquish the post of the Minister of Petroleum Resources and appoint a full-fledged minister to run and coordinate the affairs on the oil and gas industry in strict compliance with the law.

He said the board of the NNPC should be reconstituted by reducing its present membership from nine to six persons as provided for by Section 1(2) of the NNPC Act.


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