Cost of a single litigation at the Nigerian National Petroleum Corporation (NNPC), latest document shows, was inflated by $262.5 million. ADEOLA YUSUF, in this report, reveals how inflation of litigation costs is fast becoming another major source of corruption at the Corporation
Chartered Institute of Forensic and Investigative Professionals of Nigeria (CIFIPN) came visiting at the NNPC Towers in Abuja last Tuesday. During the visit, the Group Managing Director of the Corporation, Dr. Maikanti Baru, saw an opportunity to tell the world how his NNPC is faring in the tango with corruption. NNPC is faced with myriads of litigations, Baru, who was conferred with an honourary fellowship award by CIFIPN told his guests. The volume and values of crude oil, which the Corporation produces daily, as well as its presence across all the oil value chain in the country could, of course, not make it free of any litigation. The ugly trend of corruption infused into the litigations between the Corporation and many of its contractors and concessionaires is, however, a new source of worry. One of the litigations involving the Corporation gulped over N13.125 billion ($37.5 million) from NNPC’s account. An early demand of $400 million (over N140 billion) by International Petroleum Corporation (IPCO) in the same litigation was stopped based on corruption suspicion, Baru stated according to a document sourced from NNPC’s headquarters. Basically, the cost was inflated by $362.5 million (N126.875 billion) – about 300 percent inflation.
Angle for arbitration
The inflation of litigation cost by $362.5 million is very bad, but this is the worst: a $1.6 billion fraud was uncovered at the Corporation through arbitration. The Corporation, in the words of Baru, recorvered this “$1.6 billion savings” from the arbitration between its flagship upstream subsidiary, the Nigerian Petroleum Development Company (NPDC) and the Atlantic Energy Drilling Concept Nigeria Limited (EDCN). This feat was better for the Corporation, but it’s a smoking gun for a multi-million dollars sleaze rocking the Corporation through litigation. Recall that NNPC boss made the confirmation of litigation sleaze at the Corporation during a visit by CIFIPN. A brief about the group will, therefore, show the extent the Corporation could go in fight against corruption if properly monitored by it’s new friend-group. CIFIPN is an anti-fraud organisation saddled with the responsibility of providing skills to professionals from relevant fields on the use of science and technology to detect, prevent and investigate fraud and also put some measures to prevent future occurrence A by the Corporation’s Group General Manager, Group Public Affairs Division, Mr. Ndu Ughamadu, quoted the GMD as saying that the Corporation succeeded in making a lot of savings from some companies that had litigations with her. He did not disclose the total sum of the savings.
The GMD, however, declared that through his management’s determination to fight corruption, NNPC paid only $37.5 million out of the $400 million initially demanded by International Petroleum Corporation (IPCO) in a litigation, amounting to 91.5 per cent savings, adding that it was sheer act of courage for the NNPC team to follow through with the cases without compromise considering the humongous amount involved. He said most of the cases were brought to the fore through fraud and forensic investigation, which helped the Corporation to get value for money. “So, this Institute’s intention is laudable and the conferment of fellowship on me will make me more determined to support their activities and being a patron, will help me to share with them some of the knowledge and training that I have received as a certified fraud examiner,” Baru informed. He stated that the collaboration with the institute would create an enabling environment for many people to be trained in-country, saying this would go a long way to stem fraud, corruption and cybercrime in the society. Baru averred that the most important thing for any economy and any business was to make sure that fraud did not occur, stressing that the prevention aspect was key to achieving the desired result of a corruption-free Nigeria. The NNPC GMD noted with nostalgia that as the second Chairman of NNPC Anti-Corruption Committee in 2004, he ensured that all staff of the corporation and its various stakeholders were educated about NNPC’s corporate policies and the various anti-corruption acts in the country in order to avoid fraudulent transactions.
Mentioning Buhari’s name
Baru, like many of his counterparts at various government’s ministries, department and agencies (MDAs), applauded President Muhammadu Buhari, for being the source of strength of his anticorruption drive at NNPC. The president, he said, is deserving of accolades for the support he was said to have extended to the NNPC to ensure sanity in the system, amphasizing that the anti-corruption stance of the Federal Government had added a lot of value to the nation’s hydrocarbon operations. Dr. Baru also said that under his watch, the corporation had made significant progress in terms of fraud detection, prevention and control. “There is a lot of sanity that has happened in the industry as a result of this,” he said. “We have also been able to stem fraud. High profile court cases were been set up to defraud the NPDC. “ If you see the amount of money involved, if you do not have people who are determined to fight corruption, our chances would have been compromised by over 1.6 billion dollars. “We have had cases, like NNPC versus IPCO, where they are demanding over 400 million dollars, and because of their activities, we were able to settle out of court with them for 37.5 million dollars, which is a saving of several percentages, about less than 10 per cent of the total amount.” he said Baru added that the recovery was possible as all staff of the corporation and its business partners had imbibe transparency in all areas of their operations.
Support from CIFIPN
Earlier, the Pro tem President of CIFIPN, Dr. Victoria Enape, said Dr. Baru was conferred with the award because he was a champion of anti-corruption in NNPC, stressing that the partnership with the corporation would ensure effective prevention of fraud, corruption and cybercrimes in Nigeria. Highpoint of the event was the conferment and presentation of plaque and anti-corruption books to Dr. Baru as Fellow and Patron for the Institute in recognition of his contributions to the antifraud crusade in Nigeria.
The on-going reforms at the Corporation is stalled by the decline of assent to the Petroleum Industry Governance Bill (PIGB) by President Buhari. The bill has been returned to the National Assembly to effect correction desired by the President. This should be done and all other processes should be fast-tracked. Even in its present state, NNPC needs to do more to stem the tide of corruption, particularly the fresh ones that come in the toga of litigations. Lastly, CIFIPN, all anti-corruption agencies, the media and all Nigerians should keep tracking corruption cases at the Corporation and the record of management in tackling the menace.
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