$25bn Contracts: NNPC GMD, Baru Violated NNPC Act – Falana

Femi Falana (SAN)

Famous Lagos lawyer Femi Falana (SAN) has said that the Group Managing Director (GMD), Maikanti Baru, violated the NNPC Act by awarding contracts without the approval of the Minister of State for Petroleum Resources and the board of the Nigerian National Petroleum Corporation (NNPC).

He therefore stated that those contracts were illegal, as they violated laws that created the NNPC.

Mr. Falana rejected Baru’s defence, saying it failed to recognize the provision of Section 6 (c) of the NNPC Act, which has vested the Board of the NNPC with the exclusive power to”enter into contracts or partnerships with any company, firm or person which in the opinion of the Corporation will facilitate the discharge of the said duties under this Act.”

He said this in a statement issued in Lagos yesterday titled, “NNPC operates outside the law”.

It was in reaction to the on-going face-off between the minister of state for Petroleum Resources, Ibe Kachikwu and the GMD of the corporation, Dr. Maikanti Baru over his unilateral award of $25 billion contracts.

The activist-lawyer further faulted Mr. Baru’s unilateral appointments of key staff in the NNPC without the approval of the Board of Directors. He said that since this particular allegation was not denied, it is reasonable to conclude that it is admitted by the NNPC management, even though the appointments in question were made in total violation of the Federal Character Commission Act.

Falana called on President Muhammadu Buhari to review the matter within the ambit of the law.

On the management of the NNPC and contract awards, Falana said: “For the avoidance of doubt, Section 1 (2) of the NNPC Act states that the affairs of the Corporation shall be conducted by the Board of Directors of the Corporation. Since it is conceded by Dr. Baru that some contracts are subject to the approval of either the Board or the Federal Executive Council, he is yet to inform the Nigerian people who approved the $25 billion contracts.

“It is pertinent to state, without any fear of contradiction, that by virtue of Section 3 of the NNPC Act, the GMD as the chief executive of the Corporation, shall be responsible for the execution of the policy of the Corporation and the day to day running of the Corporation’s activities and its associated services. But, contrary to the erroneous impression conveyed by the management of the NNPC, there is no conflict whatsoever between the provisions of the NNPC Act and the Public Procurement Act, 2007 to justify the usurpation of the powers of the NNPC Board by the Tenders Board of the NNPC headed by the GMD. Therefore, the unilateral award of multi-billion dollar contracts in the NNPC by Dr. Baru or the Tenders Board is illegal, null and void in every material particular.

“With respect, the totality of Dr. Baru’s defence was anchored on the mistaken belief that the NNPC Act does not require him to report to the Minister of State but to President Buhari in his capacity as the Minister of Petroleum Resources.

“Dr. Baru must have forgotten that upon the removal of Dr. Kachikwu as the NNPC GMD in 2016, the President appointed him as the Chairman of the reconstituted Board of the NNPC in line with Section 3 of the NNPC Act. Therefore, the decision of Dr. Baru to by-pass the Chairman of the Board in the award of the contracts and appointment of NNPC staff cannot be justified either under the NNPC Act.”

He added, “Since Dr. Kachukwu was not removed as the Chairman of the Board, the President ought not to have encouraged Dr. Baru to treat him with such pompous disdain and arrogance”.

According to Falana, the argument by Dr Baru that once the President was briefed with respect to the award of the contracts, that due process had been observed in the award of the $25 billion contracts in line with the PPA was misleading.

Such a position is neither backed by the NNPC Act nor the PPA, saying that the competent authorities that have the final say in the award of contracts and disposal of public assets under the current political dispensation are the Bureau of Public Procurement (BPP) and the National Council of Public Procurement (NCPP).

“The NCPP is not chaired by the President, but by the Minister of Finance. The other members of the NCPP include some officials of the Federal Government and representatives of relevant professional bodies and civil society organisations.

“Apart from constituting the NCPP and the BPP   the President has not been empowered to approve any contract whatsoever. In fact, there is no reference whatsoever to the Federal Executive Council in the entirety of 61 sections of the PPA. To that extent, the FEC presided over by the President cannot approve the award of contracts which is the exclusive duty of the NCPP and BPP.

“Although the PPA was enacted in 2007, the President or the Federal Executive Council (FEC) has  been approving multi-billion dollar or naira contracts, albeit illegally.”

Mr. Falana regretted that the Buhari administration, which says it is fighting corruption, has ignored calls from civil society organisations to set up the NCPP.

On the constitution of the NNPC board, he advised that it be reconstituted by reducing its present membership from nine to six persons in accordance with Section 1(2) of the NNPC Act.

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