The Nation, a national daily reported that the crisis of confidence in the oil sector raged on yesterday, with some associates of the Minister of State, Dr. Ibe Kachikwu, taking on the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru.
Kachikwu wrote to President Muhammadu Buhari, alleging that Baru
- awarded $25billion contracts unilaterally;
- ran a “bravado” management; and
- made appointments without consultations.
The report said Baru denied it all. He said no money was involved in the contracts and that the NNPC Tenders Board had no business reporting to Kachikwu and the corporation’s Board. The Presidency backed his position.
But Kachikwu’s “loyalists” have described Baru’s response as a potpourri of contradictions and distortions. To them, Baru’s and NNPC’s defence is “unconvincing”.
These verdicts were contained in a fact-sheet meant to clarify issues surrounding the disputed $25billion transactions by NNPC.
The Nation said it stumbled on the fact-sheet yesterday. It may have been prepared against the backdrop of NNPC’s Monday statement, which described Kachikwu as a “liar” with his August 30 memo to President.
The loyalists of the Minister raised six posers for Baru and NNPC to answer.
The six posers, based on the 1999 Constitution, the NNPC Act and the Public Procurement Act, are as follows:
- What becomes of Section 130(2), Section 148(1) of the 1999 Constitution and Section 1(1) of the NNPC Act if Baru said he did not have to consult the Minister and NNPC Board?
- How can the NNPC Tenders Board appointed by Baru be responsible for approving contracts in the light of Section 20(1) of the Public Procurement Act?
- What is the proof that Kachikwu as NNPC GMD did the same things that Baru is doing?
- How can NNPC Board oversee budget without information?
- Why was Baru silent on the controversial appointments he made without briefing the board? Did the silence confirm that the appointments were irregular or wrong?
- Are there standards of transparency and due process when NNPC awarded contracts of that magnitude without carrying NNPC Board along?
The fact-sheet reads in part: “While not joining issues, it will be worrisome if relevant section of Nigerians and keen watchers of oil and gas industry are not put through on the response of the NNPC GMD, Dr. Maikanti Baru on policies on public procurement as enshrined in the relevant laws and regulations governing procurement in Nigeria, which include Public Procurement Act 2007 and Procurement Procedures Manual.
“The Public Procurement Act 2007 provides procurement guidance to all Federal ministries, extra-ministerial agencies, departments, agencies, parastatals, corporations and other public entities set up by the constitution or Acts of the National Assembly and /or whose funding derives from the Federation Accounts, their own internally generated revenue, the Federation share of the Consolidated Revenue Fund and special allocations in the federal budget or being entities outside of the foregoing description, derive at least 35% of the funds appropriated or proposed to be appropriated for any type of procurement described in the Public Procurement Act 2007, which NNPC is one.
“The procurement Act 2007 borders on Efficiency, Fairness, Transparency, Accountability and Ethical Standards, and way and manner such procurement shall be conducted, and the entities like Tenders’ Board with powers to do.
“And any procurement system that fails to take into consideration these relevant sections stimulated hesitation to compete, submission of inflated tenders containing a risk premium, or submission of deflated tenders followed by delayed or defective performance, collusion in bribery, bad value for money, and betrayal and abuse of the public trust for personal gain.
“Dr. Kachikwu’s leaked memo to the President sought among other things, to promote application of fair and competitive standard and ethical practices.
“But in his public response to the private memo to the President, it is clear to all fair-minded persons that the attempt of the NNPC GMD, Dr. Maikanti Baru, to defend himself is unconvincing, clear embarrassment to the person of President Buhari, his dream of sanctified institutions, and our dear constitution.
“The public response to the issues raised in the leaked memo to the President is a potpourri of contradictions, distortions, and clear breach of facts and logic.”
The loyalists faulted Baru’s claim that he did not need to consult the Minister and the Board on the alleged $25billion transactions.
They asked the NNPC boss to be more forthcoming on his non-consultation of the Minister and the Board in respect to the provisions of sections 130(2) and148(1) of the 1999 Constitution, and Section 1(1) of the NNPC Act
The fact-sheet added: “The ministerial issue as viewed lacks substance. The 1999 Constitution of the Federal Republic of Nigeria (3rd alteration) is very clear on the powers of the President of the Federal Republic.
“By virtue of Section 130(2) of the Constitution, “the president shall be the Head of State, the Chief Executive of the Federation and Commander-in-Chief of the Armed Forces of the Federation,” and by virtue of Section 148(1) of the Constitution, ‘the president may, in his description, assign to the Vice-President or any Minister of the Government of the Federation responsibility for any business of the Government of the Federation, including the administration of any department of government.’
“So by the enshrinement of that Section 148(1) above, and the supremacy of the Constitution, according to Section 1 sub-section (1), Baru’s submission as regards Kachikwu’s role as an appointed Minister by Mr. President is wrong, null, void and inconsistent with the constitution to the extent of its inconsistency.
“Again apart from the fact that every Board of parastatals, extra-ministerial or corporations etc. are the supervisory entities of such, the NNPC Act in Sections below are clear
“S. 1(1) says: ‘There shall be established a corporation by the name of the Nigerian National Petroleum Corporation (hereinafter in the Act referred to as “the Corporation”) which shall be a body corporate with perpetual succession and a common seal and may sue or be sued in its corporate name.
(2) The affairs of the Corporation shall be conducted by a Board of Directors of the Corporation which shall consist of a Chairman and the following other members, that is (a) the Director-General, Federal Ministry of Finance and Economic Development;
(b) The Managing Director of the Corporation; and
(c) Three persons to be appointed by the National Council of Ministers, being persons who by reason of their ability, experience or specialised knowledge of the oil industry or of business or professional attain.”
“Sub-section (2) of the Act is clear that the NNPC Board has overall supervisory powers over the corporation. How can these supervisory powers not include some kind of oversight on contracts worth billions of dollars?”
The minister’s loyalists faulted Baru’s claim that the NNPC Tenders Board is the only legal body to approve contracts and not the NNPC Board.
The fact-sheet said: “Baru’s claim that the NNPC Tenders’ Board, not the NNPC Board, is the right body to approve such contracts in question is also false. According to Public Procurement Act’s Section below:
S.20. (1) The accounting officer of a procuring entity shall be the person charged with line supervision of the conduct of all procurement processes; in the case of ministries the Permanent Secretary and in the case of extra-ministerial departments and corporations the Director-General or officer of co-ordinate responsibility.
(2) The accounting officer of every procuring entity shall have overall responsibility for the planning of, organization of tenders, evaluation of tenders and execution of all procurements and in particular shall be responsible for.”
“Apart from the GMD as the appointor of the Tenders’ Board, which he also chairs, his duty is purely to plan, organise, evaluate, execute and supervise the conduct of ‘procurement processes’ and not to approve contracts above his threshold under the seal of the Corporation.
“He cannot plan, organise, evaluate, execute procurement process, approve and execute approved projects. He lacks the statutory capacity to be the sole determinant of due process in the corporation.
“But after the approval by the NNPC Board, President or FEC, it is worthy of note that the Tenders’ Board, according to Public Procurement Act in Section 22 (3), ‘shall be responsible for the award of procurement of goods, works and services within the threshold set in the regulations.”
“Under the seal of the NNPC Board, according to the First Schedule, Part A, Sections 11, 12 and 13 of the NNPC Act which says:
“11. The fixing of the seal of the Corporation shall be authenticated by the signature of the Chairman and any other person authorized in that behalf by the Board.
- Any contract or instrument, which if made or executed by any person not being a body corporate would not be required to be under seal, may be made or executed on behalf of the Corporation by any person generally or specially authorised to act for that purpose by the Board.
- Any document purporting to be a contract, instrument or other document duly signed or sealed on behalf of the Corporation shall be received in evidence and, unless the contrary is proved, be presumed without further proof to have been so signed and sealed.”
The loyalists claimed that it was not true that Dr. Kachikwu as NNPC GMD did what Baru is doing
The fact-sheet states: “At the inception of Dr. Kachikwu’s term as the GMD NNPC, there was no NNPC board in place, and this void Kachikwu bridged by briefing the President weekly on all key issues. All actions and activities were sanctioned by Mr. President.
“Beyond that, it is on record that Dr. Kachikwu as the then GMD of NNPC instituted a culture of transparency at all levels which culminated to monthly publications of the operational activities and briefings of stakeholders of the corporation. This practice, which is a key component of the oil and gas reform plan, has since ended with his exit as the GMD.”
The loyalists asked Baru to explain how NNPC Board oversees the budget without information.
They also challenged NNPC and Baru to explain their silence on some controversial appointments made by the GMD.
They said Baru could not hide behind illegality to justify wrong actions.
The fact-sheet said: “Baru admitted that one of the NNPC board’s statutory responsibilities is overseeing the budget. How can the board perform this function if it has no information or input about contracts to be executed?
“Why was Dr. Baru silent on the controversial appointments he made without briefing the board? It is noteworthy that Dr. Baru was silent on the appointments which he carried out without informing the NNPC board, and were not subsequently ratified by the board. His silence confirms that his appointments were irregular and wrong.
“The truth is, there are no standards of transparency and due process that will allow NNPC to award contracts of that magnitude without carrying the NNPC board along. Due process is about being open, not taking refuge behind distorted and convenient interpretations of the rules.
” Due process is not just the letter of the law. It is also about the spirit of the law. People who have nothing to hide, welcome the opportunity to share information with relevant stakeholders. As they say, transparency is the best deodorant.”