Oil Workers Embark on Indefinite Strike over NNPC’s Restructuring

• Corporation has not been broken up, Kachikwu insists
• Senate terms action illegal, summons minister

Workers of the Nigerian National Petroleum Corporation (NNPC) under the auspices of the two major unions, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and the National Union of Petroleum and Natural Gas Workers (NUPENG), yesterday started a nationwide strike, protest against the federal government’s restructuring of the state-run oil firm.

The action, which started with the total shutdown of operations at the corporate headquarters of NNPC wednesday morning, was initiated by the branches of both unions. 

The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu on Tuesday night at a press briefing in Abuja announced that President Muhammadu Buhari had approved the restructuring of the NNPC into seven new divisions. Kachikwu explained that under the new structure, NNPC will have five core new divisions comprising the upstream, downstream, refining, gas and power, and the ventures groups.

Two other groups – finance and services – were also created while the number of NNPC’s subsidiaries was expanded from 16 to 20. Kachikwu also explained to that the restructuring did not amount to the break up or unbundling of the corporation and assured workers during the briefing that there will be no lay offs from the new corporate engineering.

However, dissatisfied with the new corporate structure of the organisation, the corporation’s workers said that they were not carried along in the entire process, hence their decision to down tools.

First thing yesterday morning, the main entrance to the corporation was barricaded, while staff of NNPC and its subsidiaries located at the headquarters were turned back by the protesting union members.

When contacted, the national president of NUPENG, Mr. Igwe Achese confirmed the closure of NNPC by the unions, saying that the national body had tried to mediate when it realised that the strike was in the offing but its advice was not heeded.

But during a press briefing last night by the branch chairpersons of NUPENG and PENGASSAN in Abuja, they directed their members to proceed on indefinite strike nationwide starting from midnight of March 8. The branch chairman of NUPENG, Odudu Benjamin Udofia, said at the briefing that the government in embarking on the restructuring, disregarded the need for engagement with stakeholders in the corporation. He explained that it was a unilateral process which was only unveiled to them through a public pronouncement by Kachikwu.

They expressed their reservations over the restructuring, noting that there are several labour related issues that will arise as a result of the corporate re-engineering which the government failed to address.

“The whole process has been shrouded in secrecy for a long period without involving or carrying any of the stakeholders along.
“Due to lack of proper consultations, there are flaws in the final structure that could have been avoided.

Udofia stated that the union was demanding a review of the restructuring, adding that the review should include the inputs of all stakeholders.

“The in-house unions are suspicious of the intent of the present unbundling as nobody could explain its direction.
“This development even becomes clearer with the consolidation of operational units with heavy financial transactions under the office of the GMD. This include Nigerian Petroleum Investment Management Services (NAPIMS), Crude Oil Marketing Department (COMD), and crude oil trading, even the corporate social responsibility that is primarily the duty of the Group Public Affairs Department has been moved to the GMD’s office,” Udofia noted.

Speaking further, the branch chair for PENGASSAN, Saleh Abdullahi explained that the union was not against a restructuring of the NNPC but that it should be transparently done.

While disclosing that they only had one meeting once with Kachikwu before he announced the restructuring exercise, Abdullahi stated that they cannot stop government from going on with its adopted policy as long as they are carried along in the process.
He said that the minister reneged on his promise to carry them along in the process.

Abdulllahi also said that the immediate effects of the restructuring, especially on downstream operations may include further disruptions in petrol distribution and an escalation of the lingering scarcity as a result of the expected closure of the depots in the country by workers.

He maintained that the federal government should have thought this through before choosing to restructure NNPC without their input.
Similarly, the acting general secretary of PENGASSAN, Lumumba Okugbawa said in a statement that the move by the government was a policy flip-flop.

Okugbawa explained that the “unbundling” would stave off investors from the nation’s oil and gas industry at a time foreign investment is most needed to grow the industry.

He added that the government did not take into consideration the existing law that established the NNPC before planning to “unbundle” the corporation.

According to him: “There is an existing NNPC Act of 1977 that set up the NNPC. This Act has many provisions that deal with the structure and operations of the corporation.

“There are many issues such as pensions and transfer of the employees, which are provided for in the NNPC Act of 1977. What will happen to all these provisions of the law?

“For the government to do anything with the current NNPC, the Act must either be repealed or amended to accommodate the planned restructuring. If not done, it will be equal to the lack of respect for the rule of law on the part of the government.

“The Petroleum Industry Bill (PIB) that is expected to be the legal instrument for the ongoing reforms of the oil and gas industry will be meaningless if the government should introduce plans outside the reforms. The PIB is germane to the development of the nation’s oil and gas Industry.

“Above all, the various stakeholders, especially the unions, should be involved before any major change is carried out in the organisation and before any unilateral statement capable of heating up the industrial climate is made.”
However, Kachikwu yesterday reiterated that NNPC had not been unbundled.

Kachikwu, who spoke with State House correspondents after the Federal Executive Council (FEC) meeting, said more efforts would be made to explain the restructuring that had taken place in the corporation.

He admitted that the engagement between the management and workers might not have been good enough.
He said: “We had a press conference yesterday where I explained this. What we have simply done is a reorganisation. We have five business entities that will focus on the core businesses of the corporation. They are upstream, downstream, refineries, gas and power that were there before.

“There is also the ventures group that captures all our little companies that did not have proper stewardship. They are run by individuals who report to the GMD.

“The NNPC is still a whole. There is nothing new that has happened. I have tried to explain this and I am sure NNPC workers are members of one family, they will understand.

“We are going to have a meeting and they will be made to understand. Perhaps the engagement has not been good enough.
“NNPC has not been unbundled in the sense of breaking up NNPC into distinct institutions.

“I am concerned. I don’t want the industry shut down. I am sure we are going to resolve the issues very soon.”
However, THISDAY learnt that the strike may have political undertones within NNPC and may have been engineered by some group executives directors (GEDs) who are not happy that they have been removed from what they considered their fiefdoms and redeployed under the new corporate structure.

A source in NNPC pointedly referred to a particular GED who has been lobbying to supplant Kachikwu, who is also the group managing director (GMD) of the corporation.

“I am sure that you are aware that some people have not been happy that Kachikwu holds the double portfolio of Minister of State for Petroleum and GMD of NNPC. Some GEDs are not happy about it and one in particular has been undermining him in order to take over as GMD.
“The problem is Kachikwu has ignored a lot the internal politicking and remained focused on transforming NNPC, but there are many who would rather that the status quo remains unchanged. So they are the ones that are fully in support of the strike in order to create problems for him and get him out of the way,” he volunteered.

Reacting to the new corporate structure of NNPC, the Senate wednesday expressed displeasure over the decision of the federal government to “unbundle” the corporation without taking cognisance of the Act setting it up.
The parliament which noted that NNPC was set up by an Act of the National Assembly, said the law did not include any provision for its “unbundling”.

According to the Senate, if the corporation was set up by an Act, the executive arm of government must return to the National Assembly for its repeal before it can “unbundle” it.

While raising the motion through a point of order, the Chief Whip, Senator Sola Adeyeye, who noted the closure of NNPC’s headquarters following the restructuring, drew the attention of his colleagues to the move.
He described the exercise as “illegal bearing in mind that the federal government did not consult the National Assembly to repeal the enabling law that set up the organisation before unbundling it”.

In his ruling, Senate President Bukola Saraki asked Adeyeye to formally present his motion on the matter at plenary today.
However, the Senate Committees on Upstream and Downstream Petroleum and Gas decided not to wait for the motion to be presented today.
They immediately summoned Kachikwu to appear before them tomorrow to explain why he embarked on what they termed an “illegal action”.
The letter of Kachikwu’s summons, deplored the restructuring of NNPC, saying it was “incredible”.

The letter signed by the Chairman, Senate Committee on Upstream Petroleum, Senator Tayo Alasoadura, said: “We are shocked by the announcement and are in disbelief. The three committees overseeing the industry wish to invite the minister to appear before them to brief them of this critical decision in a meeting scheduled for Thursday, March 10, 2016.”

In another development, the Senate threw its weight behind Buhari’s move to recover looted funds stashed abroad and as well prosecute looters hiding in foreign countries.

Against this backdrop, the Senate passed an executive bill meant to aid the recovery of looted funds through its second reading.
Leading debate on the bill, titled: “A Bill for an Act to Make Provisions for Mutual Assistance in Criminal Matters between Nigeria and Other Foreign States and for Related Matters 2016,” Senate Leader, Ali Ndume, said the legislation would fast-track the prosecution of Nigerians fleeing from the country to escape justice after looting.

The bill was referred to the joint Senate Committee on Judiciary, Foreign Affairs and Anti-corruption for further legislation.
The committee is expected to conduct a public hearing on the bill and submit its report in two weeks.

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