By Emmanuel Onwubiko
Good governance can be proverbially likened to the act
of striking a lightning rod when it is still as hot as ever.
This simply means that the wisdom expected from persons
exercising authority over a political entity is judged by the decisive nature
of judgment that is adopted at the tipping points of our national life. This is
exactly why there can be no successful government without a unique philosophy
because philosophy connotes the love of wisdom. It is therefore expected that
for an administration to qualified to be rated as respecting the principles of
good governance, it must be capable of exercising authority imbued with
faultless wisdom. This is the reason every government needs to have the
services of professional technocrats who can stand their own at any point in
time so they are able to proffer pragmatic panacea to enable the government
meander through the mine's field of politics and all the intrigues that
characterize the body politic and to successfully navigate the nation away from
the previous or rather the tipping points that has the inherent potential to
ruin the Country.
One of these tipping points that called for the best
application of quality judgment came at the beginning of the current federal
administration in 2015 when it was reported that her predecessor amongst other
critically decisions transmitted, was this bad debt hanging on the corporate
neck of Nigeria like a sword of Damocles which required the most immediate
resolution by the incoming administration.
But it happens that the man at the helms of affairs’ was
not rendered the best of judgment by the chief law officer of the
administration apparently due to poor judgment and this clear case of poor
judgment dominated by petty politics has some few years after has snow balled
into a huge minefield of debt of $9billion default debt to a foreign entity
which won an incredible arbitration following a collapsed contractual
agreements.
As usual, Nigerian government had to wait until the head
has been clinically cut off before deciding to take off a rash of fire brigade
approaches to control the huge damage that this governmental miscalculation has
brought on us. We shall conclude by looking at this I'll wind that blows no one
any good called for brigade approach in Nigeria.
However, the story of how Nigeria sleep walked
into an avoidable pitfall of debt of $9billion sounds like a very terrible
narration of a bad dream which turned out not just as a nightmare but is a
reality that Nigeria must live with.
Those who researched on the historicity of this
controversy told us that the final
award resulted from a dispute between P&ID and Nigeria that arose under a
Gas Supply and Processing Agreement dated 11 January 2010 between the ministry
of petroleum resources of Nigeria and P&ID.
According to P&ID, the agreement provided for
P&ID to build facilities in Calabar to refine associated natural gas to be
used in generating electricity.
P&ID claims that Nigeria was to supply it with fixed
quantities of wet gas over a 20-year period. In return for supplying lean gas
to the state, P&ID would be allowed to retain natural gas liquids separated
during the refinement process and sell them for its own profit.
P&ID without any shreds of empirical evidence claims
it invested about US$40 million in the project but that the facilities
were never built and no wet gas was ever delivered.
P&ID alleged that Nigeria failed to meet its
obligations to supply wet gas or complete construction of a pipeline that was
necessary to transport the wet gas to the project site just as the company then
said these failures led to the project’s collapse, costing it 20 years’ profits
from the sale of natural gas liquids (NGLs).
The aforementioned defaults reportedly compelled this
offshore company P&ID to file for arbitration in 2012 against the Nigerian
petroleum ministry.
Legally speaking, we are told that in the original
agreement there is a clause that provides for disputes to be resolved through
ad-hoc arbitration under the Rules of the Nigerian Arbitration and Conciliation
Act 2004 (ACA), with the ‘venue’ of the arbitration to be London or anywhere
else agreed between the parties.
The three-member arbitration panel was chaired by The
Right Honorable Lord Hoffmann, a retired British judge, with Bayo Ojo SAN
representing Nigeria and Sir Anthony Evans QC representing P&ID. Chief Bayo
Ojo is a former Federal minister of Justice and an accomplished practitioner of
arbitration who is a well-known patriot.
The trajectory of this episodal events reveal that a
series of hearings in London, took place in which the Tribunal issued a first
part final award on 3 July 2014 determining that it had jurisdiction to
determine its own jurisdiction under the English Arbitration Act 1996, which it
held was the law of the seat of the arbitration.
This was because Nigeria’s petroleum ministry had not
challenged whether the Tribunal had jurisdiction on the matter at all. On 17
July 2015, the Tribunal issued a second Part final award on liability
concluding that the government’s failure to satisfy its contractual obligations
was a breach of the agreement.
Belatedly in December 2015 under the watch of the
current Federal Attorney General, the ministry applied to the Commercial Court
in London to set aside the liability award, but the Court dismissed the
application in February 2016, finding that it had been filed more than four
months out of the statutory period for such an application and that the grounds
of the action had no merit. This clearly is a manifestation of the age long
vice of fire brigade approach which this current administration has mastered to
the advantage of the corporate good of Nigeria.
Refusing to accept this, the ministry turned to the
Federal High Court of Nigeria, asking it to set aside the liability award.
The Nigerian court duly obliged and in April 2016, it
issued an order “setting aside and/or remitting for further consideration all
or part” of the liability award on the grounds that the seat of arbitration is
Nigeria and the reference to ‘venue’ in the arbitration clause is not
definitive of seat.
However, this Nigerian backyard style of forcing the
hands of the clocks angered the Honorable Lord Hoffmann who told the
parties that the Federal High Court had no jurisdiction to annul the liability
award and that the case would proceed to the ‘quantum phase’ – where the amount
to be paid by the losing party is determined. Recall that the Nigerian minister
of justice Abubakar Malami has continued to swim in the muddy waters of seeking
to use the Nigerian court system to mitigate a damage that the ministry caused by
not complying with the best global practices. The ministry of justice has
unleashed the EFCC and the Federal High Court to go after some persons in
Nigeria who are perceived to have illegally aided the foreign firm to win this
unprecedented award in a London court. This is like crying after the head is
cut off.
Why flog a dead horse? Recall that on 31 January 2017,
the Tribunal issued the final award, granting P&ID damages in the sum of a
staggering US$6.597 billion. It reportedly arrived at this staggeringly
fraudulent amount by calculating the present value of the 20-year income it
would have received for the sale of the NGLs, minus capital and operating
expenditures it would have incurred in the course of building and running the facility.
Similarly, and to compound the problems for Nigeria, the
award was to accumulate interest at the rate of 7 per cent per year, working
out at US$1.265 million per day even as statisticians by some accurate
calculations estimated that as at today, the total liability thus stands at
approximately US $9billion as the penalty has been calculated from 2013.
Sadly, the Nigeria's current government that spent the
first four years redistributing blames amongst her perceived political rivals
in the People’s Democratic party is not yet ready to govern but has resumed the
second and final term of Muhammadu Buhari with another provocative round of
blame game with specific reference to this huge indebtedness that it recklessly
brought upon us because it was busy blaming the immediate past administration
for everything bad under the Sun. The current
Nigerian government has explained that at resumption of office in 2015 the only
opinion it considered practicable regarding the controversial contract with the
Projects and Industrial Development Company (P&ID) was to negotiate.
Speaking with journalists on Justice Minister Abubakar
Malami said the leadership of the People’s
Democratic Party, which signed the deal with the British
firm, committed “fraud”. But it is clear that Nigeria is playing with fire by
dancing around politics whilst the house is on fire. This is because Process
and Industrial Developments Ltd (P&ID) has said that it would seize
Nigeria’s assets in the United Kingdom, UK, to enforce the order of a British
court against Nigeria.
Disclosing this, the firm’s representative, Mr. John
Ehiguese, said that they have the possibility of seizing Nigerian naval vessels
or oil cargoes. So why can't Nigeria once and for all terminate this national
cancer of FIRE BRIGADE APPROACH?
Areola Aderounmu seems to provide a possible response to
my poser. In a blog the writer Areola Aderounmu stated that "Fire Brigade
approach is a common expression in Nigeria. Simply put it means that in
Nigeria, people (especially when it comes to public services) always wait until
the last minute before they take action on something that they should have done
a long, long time ago. In the end, we always try to do things when it is almost
late. We rally round, try a few urgent steps and we end up messing up the
job".
Also, typically, the fire brigade or firemen will arrive
when everything is already in ruins. Sometimes, families are trapped in the
fire. This could result in death or serious burns. In Nigeria football, fire
brigade approach is the norm. Our footballers are usually not well blended
before each game or tournament. Some of them will arrive a few hours before
crucial games. Fire brigade approach is used in virtually all spheres of the
Nigeria life and the result is that things are done shabbily and results are
unexpected outcomes. We usually express surprise or dismay at each
outcome most especially when they are unfavorable.
However, this will shock well thinking persons to note
as the writer stated that: "But it is amazing how Nigerians forget and
move on with their lives. Our failures in certain areas or endeavors have not
stopped us in any way from adopting the same fire brigade approach time and
time over. Fire brigade approach is complex and intrinsic. It is like a web
that has formed part of our evil entanglement in Nigeria."
"You can see it in governance, in sports, in music,
in academic endeavors, in our dressing sometimes, in our jobs and other aspects
of our lives. We cannot always be prepared for everything but when a larger
percentage of our actions are incoherent, the results are bound to be
negative".
It is pathetic that due to bad politics compounded by
the evil of fire brigade APPROACH, the current government has led Nigeria into
a minefield of a huge debt overhang which could have been resolved if this same
government did not assume office with the mindset of political vendetta against
the immediate past administration. This bad blood and huge miscalculation
has cost us this very expensive outcome for which this government after
meandering through the wrong process in the Nigerian court finally decided to
dispatch a team of negotiators to meet in the United kingdom with this company
which this same government has called unprintable names and had choreographed a
court case in Abuja in which some persons appeared and pleaded guilty. Why do
we engage in politics of deception? Nigeria Why?
*Emmanuel Onwubiko heads Human
Rights Writers Association of Nigeria (HURIWA) and blogs @www.emmanuelonwubiko.com; www
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