Charter of Demands: A Symposium on Corrupt Governance and Fuel Subsidy Report

Please find below a Charter of Demands which I promised to make available in a previous post Symposium on  Corrupt Governance which was organized by N-Katalyst. This charter of demands is likewise a product of N-Katalyst, posted here with their permission.

N-Katalyst

Mega-Corruption in the Fuel Subsidy Regime

Charter of Demands

 

INTRODUCTION

The Nigerian State and its people woke up to the reality of the removal of subsidy on petrol by the Federal Government of Nigeria on the 1st of January 2012. For virtually all Nigerians, it was evidence of an anti-people policy and a desperate move by the Federal Government to punish Nigerians for the corruption that that the Government itself organizes in the oil sector. This led to massive protests across the major cities of Nigeria in strong disapproval of the decision to remove the subsidy. As a result of the massive protests, the House of Representatives in an Emergency Session on the 8th of January 2012 set up an Ad-Hoc Committee to verify and determine the actual subsidy requirements in Nigeria. The Report of the House of Committee on the Fuel Subsidy disclosed that there is monumental and unprecedented level of fraud in the subsidy regime.

It was in this context that N-Katalyst, a non partisan network of individuals with a deep commitment to the promotion of Nigerian unity and progressive change organized a National Symposium in Abuja on 30 April 2012 to address the issues. The occasion was chaired by Maryam Uwais, a respected leader in the human rights community. The speakers were Dr Otive Igbuzor who reviewed the report of the Ad Hoc Committee, Prof Chidi Odinkalu, represented by Udo Ilo, who addressed the issue of corruption and the human rights of Nigerians, Dr Hussaini Abdu who surveyed the engagement of civil society in the anti-corruption struggle and Yemi Candide-Johnson SAN who reviewed the role of the judiciary and anti-corruption agencies. Bashir Yusuf Ibrahim address was focused on the imperatives on the executives on addressing the implications of the massive crimes carried out against the people of this country.

FINDINGS

The findings which covered the years 2009-2011 revealed the following. That only five companies (including NNPC) were involved in fuel importation in 2006; ten in 2007 and nineteen in 2008. By 2011 however, the number had jumped to one hundred and forty. The Ad-Hoc Committee discovered that the fuel subsidy regime was “fraught with endemic corruption and entrenched inefficiency. Much of the amount claimed to have been paid as subsidy was actually not for consumed Premium Motor Spirit (or Petrol).” The Committee reported that “contrary to the earlier official figure of subsidy payment of N1.3 trillion, the Accountant General of the Federation put forward a figure of N1.6 Trillion, the CBN N1.7 trillion, while the Committee established subsidy payment of N2.59 trillion as at 31st December, 2011, an amount more than 900 percent over the appropriated sum of N245 billion.” In addition, there are “outstanding claims by NNPC and the marketers in excess of N270 billion as subsidy payments for 2011.” The Committee, in its Report, established that “NNPC was found not to be accountable to anybody or authority”.

The Committee also found out that “some of the marketers were involved in claiming subsidy on products not supplied.” Between the 12th and 13th of January, 2009 (and within 24 hours) the Accountant General was found to have made payments of equal installments of N999 million for a record 128 companies, totaling a disbursement of N127.872 Billion.

Following a review of totally incomprehensible and contradictory presentations by Governmental ministries, departments and agencies, the Committee was able to make a credible estimate that the probable daily consumption of Petrol from the record of marketers and NNPC comes to an average of 31.5 million litres daily. It, therefore, proposed the continuation of subsidy for Petrol and Kerosene and suggested a budget of N806.766 Billion for the 2012 fiscal year. The Committee asserted that the 445,000 bpd allocation to NNPC is sufficient to provide the Nation with its needs in petrol and kerosene, with proper management and efficiency. The Committee recommended the refund to the treasury of the sum of N1.06 trillion, equivalent of $6.8 billion, fraudulently spent.

It is clear that fuel subsidy corruption has revealed a new trend of corruption in Nigeria. In the past, corrupt transactions took place mainly through contract inflation, over- invoicing and receiving of kickbacks. But the fuel subsidy corruption has witnessed situations whereby people collect subsidy payments without making any supplies, collect foreign exchange without supplying petrol and collect subsidy payments for not supplying petrol while collected foreign exchange for the purpose. The fuel subsidy probe presents a supreme opportunity for the people of Nigeria to be united in the determination to rescue our country from the stranglehold of thieves.

DEMANDS

N-Kalalyst believes that the monumental corruption unveiled by the investigation should be turned into an opportunity to create a tipping point for zero tolerance to corruption and for the institutionalization of transparency and accountability in our public life.

1) Ending Impunity for the Fuel Subsidy Cabal

Public corruption has run out of control. We are recent witnesses to the police pension scam and the unbelievable spectacle in the House of Representatives on the power probe where it was discovered that over $16bn was spent to provide electric power without commensurate results. We are looking at a pattern of organized looting of our national resources emanating from the Executive Branch. It continues because Nigerians do not stand up to fight and hold their leaders accountable for their actions. It will not be enough to insist that the culprits be prosecuted and punished. We must begin this fight by demanding the following:

i. All persons and institutions proven to have been indicted in the fuel subsidy scam should be punished. These include, but are not limited to, the Ministers of Petroleum Resources and Finance, the Board Members, MD and Management of NNPC, the Board Members and Executive Secretary of PPPRA, the Director of DPR and all public officials indicted in the Report by the House of Reps Ad hoc Committee.

ii. The freezing of the accounts and recovery of all illegal payments made to the Petroleum marketing firms, the NNPC, PPPRA and others which, according to the House Committee, amount to N1.2 trn or $6.8bn

iii. The immediate dismissal of the Minister of Petroleum Resources, Diezani Alison-Madueke as she awaits prosecution for her crimes against the Nigerian people.

N-Katalyst commits itself to push these demands by exerting maximum pressure on the Federal Government to take action.

2) Getting the Judiciary to do its Work

The spectacular failure of recent high profile criminal prosecutions relating to corruption dramatizes the collapse of the system of public prosecution in Nigeria. Public prosecution rests on a tripod – the detection and investigation of crime, the prosecution of offenders and the conviction and punishment. All levels are in crisis due to the appointment of successive Attorney Generals who see themselves as the President’s poodle rather than an independent and impartial officer of the State determined to advance the cause of justice. There is no political will at the very highest echelons of authority to fight corruption in the country. Already, the Attorney-General of the Federation and Minister of Justice, Mohammed Adoke (SAN), has described the report as mere “fact finding” while the Political Adviser to President Goodluck Ebele Jonathan, Alhaji Ali Gullack, described it as lacking credibility.

While we are conscious of the fact that government must be guided by the dictates of the rule of law and due process, the message we get from the Presidency is that they are in no hurry to identify and prosecute the culprits of this mega corruption. The President must come out openly and show commitment to ending impunity by:

i. Immediately terminating the appointment of the Attorney General Mohammed Adoke, SAN and appointing a credible Attorney General who has the skills and the will to combat and prosecute corruption.

ii. Announcing a time frame, not exceeding six months, for implementing the recommendations of the Farouk Lawan Committee report and commencing the prosecution of all indicted officials and all persons who benefitted, colluded or participated in the corruption scandal.

3) Restructuring of the Petroleum Sector

The structural conditions which allowed for the monumental fraud is that NNPC remains as the regulator, main producer and marketer of petroleum and its products, both upstream and downstream. It is a clear conflict of interest that allowed the organization to become a behemoth with no respect for laws and processes. There is a need for deregulation so as to stop NNPC from regulating the downstream sector. Oil Minister Diezani Alison-Madueke has a conflict of interest by being both on the board of NNPC – a fuel importer – and the supervisor of the subsidy regulator, the Petroleum Products Pricing and Regulatory Agency (PPPRA). We demand as follows:

I. A Judicial Commission of Inquiry should be established into the operations of the Petroleum Ministry and NNPC.

ii. The management and the board of NNPC should be overhauled and those involved in any infractions should be investigated and prosecuted. The company should be unbundled to make it more transparent and efficient.

iii. NNPC through local refining, swap arrangements and offshore processing should be able to provide enough fuel for Nigeria. Therefore the government has no reason to grant subsidy import licenses to other companies.

iv. The chairman and board members of PPPRA between 2009-2011 should be investigated for complicity or gross negligence. The executive secretaries of the PPPRA during that period should be investigated and prosecuted by anti-corruption agencies. PPPRA should conduct a full performance assessment on all companies who import fuel into Nigeria.

v. The passage, within a maximum of three months, of the original, undiluted Petroleum Industry Bill.

4) Providing Fuel at Reasonable Prices

N-Katalyst accepts the Committee’s estimate that the probable daily consumption of Petrol from the record of marketers and NNPC comes to an average of 31.5 million litres. It, therefore, proposes the continuation of subsidy for Petrol and Kerosene and suggests a budget of N806.766 Billion for the 2012 fiscal year. The Committee asserted that the 445,000 bpd allocation to NNPC is sufficient to provide the Nation with its needs in petrol and kerosene, with proper management and efficiency.

i. Kerosene subsidy should resume as a means of helping the poor and aiding the struggle against deforestation in the search for fuel wood.

ii. Government must, as a matter of urgency, privatize all its refineries because the refineries have become mere cash cows for NNPC bureaucrats. Private investors who were issued licenses for the construction of new refineries must be made to use these licenses or the licenses be withdrawn and issued to serious investors who are ready to build new refineries over the next three years to guarantee sufficient local supply of petroleum products.

5) Citizen Engagement

N-Katalyst is aware that Government will not act if citizens do not mount sufficient pressure. We Nigerians must act more as citizens and not subjects. The country belongs to us all and we can no longer leave the political space and politicians and bureaucrats, and for common thieves and crooks. The fight against corruption must be comprehensive and all encompassing; all sections of the society must stand up and fight until we bring this monster under control.

i. Pressure should be mounted on Government to engage the participation of citizens in the formulation of a plan of action towards ending impunity and corruption in our national life, including the possibility of making corruption a capital offense.

ii. N-Katalyst commits to working with other civil society groups to ensure that these demands are met.

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