The Nigerian National Petroleum Corporation (NNPC), has continued to be in the glare of the public for days following the allegations and counter allegations that stemmed from the fallout between the Minister of State for Petroleum Resources, Ibe Kachukwu and the Group Managing Director of NNPC, Makanti Baru.
The fallout had led to diverse interpretations of the NNPC Act with different people including the NNPC, stating that Kachukwu has no role in the award of contracts by the NNPC and that President Buhari approved N640 billion oil contracts for him while he was away in London.
Baru had stated that Buhari approved at least two separate oil contracts worth $1 billion and $780 million, respectively to counter the memo on insubordination raised by Kachikwu on August 30, 2017alleging that Baru unilaterally approved contracts without recourse to him or the NNPC board amongst other issues.
Some have argued that the confusion in the issue emanated from the presidency when it made Kachikwu the chairman of the NNPC board as the NNPC Act provides that the Minister of Petroleum must be the chairman of the NNPC board and as the president is the substantive Minister of Petroleum, he is by law the chairman of the board.
And in interpreting the NNPC Act, lawyers told Tribune Online that there is no provision for a Minister of State and Kachukwu being named chairman is merely confusing issues. They also stated that while many are quoting the NNPC Act of 1997, the 2010 Act is what is applicable.
Mr Yomi Aliu (SAN) told Nigerian Tribune that, “The NNPC Act is now 2010, not 1977. The GMD heads the tender board that supervises all contracts. Though the contract has ceilings in no way will such be referred to a Minister of State, except out of courtesy when there is a substantive Minister. It should not be forgotten that PMB merely stepped aside as president when he was sick but kept his portfolio as Minister of Petroleum Resources
Also speaking on the issue, Abuja based lawyer, Ugochukwu Osuagwu explained that “The Chairman of NNPC board is the president and petroleum minister. The Act never gave the minister much power but gave to the board. There is nothing like a minister of state under the Act hence Baru cannot report to a person not known to law. Baru is only accountable to the Board and National Council of Minister called FEC.
“By Section 6 (e) of the NNPC Act, any contract with the value of N5M and above must be taken to FEC, not the president although FEC is chaired by the president. In essence, Baru is right that Kachikwu has no role to play in contract awards. Note that by Section 2 (1) of the NNPC Act, the president can do what he has delegated to the board not necessarily Baru who is merely a member of the board.
“Like I said, the position of Kachukwu as minister of state is not known to law. How can you seek approval from an unknown person? The chairman of NNPC board is PMB, he has not complained of insubordination against Baru. If Baru has not sought approval from FEC then he is wrong but there are no allegations that he did not get FEC consent. In such a situation, Baru has done no wrong,” Osuagwu stated.
But while responding to the issue of Baru getting approval from the president while he was sick and outside the country, Osuagwu stated that “I think they are all confused. By the NNPC Act, MD NNPC refers contract of N5million and above to FEC not the president for approval. I think what he meant was FEC chaired by the president or Vice President in PMB’s absence.”
For Kole Ojo, the Chairman of the Alternative Dispute Resolution Society in Oyo state, there is too much confusion and double talk going on in the NNPC but he also insists that the Minister of State has no role in awards of contract. “What we are seeing is double talk, the NNPC is public-private listed company where rules apply but are clearly ignored. The board has powers be it vague and the Presidents do not want an independent NNPC. But if the NNPC Act is followed to the letter, the Minister of State for Petroleum has little or no role to play in awarding contracts.
“However in this instance, Kachukwu is the head of the Board of Directors of NNPC a position that is held by the substantive Federal Minister of Petroleum. Consequently, contracts awards ought to be approved by him through the Board. I think the president is the author of the confusion, with respect. The NNPC Act to my mind does not contain the fine details about contact award but the framework is very clear.
“Section 1(2) says the affairs of the corporation shall be conducted by a board whose chairman is the Minister of Petroleum Resources, Section 3(1) stipulates appointment of an MD who is the CEO and who shall be responsible for the execution of the policy of the corporation. In other words, the board formulates the policy while the MD implements. The reason why a board is in place is to avoid instances of abuse of power and wild exercise of discretion. Awarding contracts of such magnitude and making such appointments without recourse to the board do not accord with good governance. If there are internal regulations that circumvent this due process, they are to my mind improper.
“That said, the Act makes the Minister of Petroleum Resources the chairman, not the Minister of State. As it stands, Buhari is the Minister of Petroleum. He cannot appoint another to chair the board. It is his statutory obligation. However, he can delegate. But delegation does not stop him from exercising his statutory powers, albeit as chairman of the board. Section 1 (2) gives the board of NNPC the power to “conduct” the affairs of the corporation. In other words, the corporation shall always act through its board. What this means that the board of the NNPC controls and conducts the affairs of the corporation. Buhari as the Minister of Petroleum can approve contracts but the contracts must follow a due process which is that they must have got the approval of the NNPC board. Moreover, NNPC can only relate with the President through the board of Directors,” Ojo concluded.
The former chairman of the Nigerian Bar Association, Ikeja branch, Dave Ajetomobi also held that the minister of state being the chairman is a loophole. According to him, “The Act recognizes the substantive minister, not the minister of state; that is the loophole in the law. The President is the minister, not Kachikwu, who is just a junior minister. Ordinarily, the required approval is given to the minister who passes it to the President, but in this case, the President is the minister and when it comes to a category of contract or transactions, it is the FEC that can approve and not President.
“In the circumstances, it is possible to bypass the minister of state and go to the President. I have not read the whole story but I read that these transactions were approved by FEC, if approved by FEC, it means there is no need for the President’s approval. It is not possible for the President to approve when he’s not in an office, there’s an acting President. Only the acting president can approve, approval by President at that point will be null and void,” Ajetomobi concluded.
Also speaking, Barrister Olukunle Kamisi said the GMD of NNPC has more roles to play than the minister. “Informed opinion on the internal working of the NNPC and the provision of the NNPC Act confirms the executive powers of the GMD. The minister of state like every other minister merely has an advisory role to play in furtherance of the vision of the Federal Government. In the light of this, it is important to stress the need for all to abide by the provisions of the law and desist from acting without a proper understanding of the law,” he said.
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