Iliyasu Gadu
Ilgad20092gmail.com
08035355706 (Texts only)
All around the world, the oil and gas industry is regarded as strategic asset for many reasons. It is a source of massive employment across its streams, revenue generation, technology and whatever else. Indeed the oil and gas industry is so much at the core of modern life that 70 per cent of the foundation of modern is centred around it.
The concept ‘’Energy Security’’ in which countries build the survival of their way of life is built around securing oil wherever it can be found and controlling its entire spectrum.
An overarching example of the strategic significance of oil to global geopolitics will suffice. The underpinning of the dollars we use in International trade is on the so-called ‘’petrodollars’’ which the United States of America secured through arrangement with Saudi Arabia to designate global oil trade in the American currency. This move which was secured in the mid 1970s proved to be the saving grace and spur for the revival of the American dollar following the decision in 1971 by the Richard Nixon administration to remove the dollar as world reserve currency. By the 1970s the dollar had lost its strength as global reserve currency following the economic recovery and emergence of several countries thereby challenging the global economic dominance of the United States of America.
It is from this context that the dispute between the Dangote Refinery and the Labour Unions can be understood.
For years since the discovery of oil in the late 1950s to date, we have managed our oil industry in ways that have fallen far short of our expectations. We cannot refine our crude to satisfy our domestic markets. We have not been able to adequately tap the abundant gas reserves in the country. We have not been able to utilize the by products of our crude oil production to establish a thriving petrochemical and pharmaceutical industry. We have not been able to solve our energy requirements from our gas reserves. Even the revenues we make from our crude oil exports have been squandered without reinvestment to expand and grow not just the oil and gas industry but our economy. We have not been able to use oil effectively as a strategic factor in our regional global interactions. We have not been able to take advantage of our location on the global shipping lanes for supply of oil and its products to Europe, the Americas and in Africa. In short over the years we have not been able to develop the capacities for the growth of our oil industry domestically and to use it as a strategic platform for regional and global economic and political engagement.
In this context the coming of the Dangote Refinery was supposed to help address some of the anomalies in the Nigerian oil industry in the short and long runs. But what has been the reception and experience of the refinery since it came to being?
First the hostility from the Nigeria National Petroleum Company Limited while expected against a potential rival has been quite beyond the pale. From the questions about the supposed low quality of the product refined at the refinery to the refusal to supply crude oil and the runaround as to whether the crude will be supplied in naira or in dollars.
The latest in the rigmarole with the Dangote Refinery is the dispute with the Labour Unions representing the workers, National Union for Petroleum Engineering Workers (NUPENG) and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN). Following the refinery’s decision to sack thousands of its Nigerian workers whom it accuses of sabotage, the two unions have picketed and threaten not just to close the refinery but to declare a nation-wide strike.
Issues that have come up in respect of the dispute are whether the Unions have any locus to determine for the refinery, a private concern, how to run its operations and whether it is within its rights to suspend, redeploy or sack its staff. Before the dispute with the workers, the Unions have questioned the rationale of Dangote Refinery’s decision to distribute its products directly to customers using its own tankers and marketers bypassing the Unions and independent marketers in the process.
The impression this has created and the questions being asked by many Nigerians are why is the Dangote Refinery which has ventured into the territory of oil operations in which both the government and other operators have failed to close the gap, be subjected to these tactics? Many Nigerians are coming to the realization that what is happening to the refinery is a gang up by powerful local and foreign interests to scuttle its operations. It is not lost on Nigerians that over the years powerful interest groups have turned the Nigeria oil industry into a cash cow. Tales of moribund refineries, fraudulent Turn Around Maintenance and other contracts and other opaque operations have become the stock in of the oil and gas industry. Nigerians ask questions as to how the NNPC still has to rely on Joint Venture operations with foreign oil companies rather than develop the technical capacity to extract, refine and distribute petroleum products. A critical question is why have the International Oil Companies (IOCs) not set up refineries in Nigeria despite being here some for over sixty years?
I think the Unions should realize that the brand of Unionism they are practicing now is outmoded. The world over trade unions have become strategic partners in industry and manufacturing. Trade Unions in most countries practice the co-determination mode where representatives of workers sit on the board of Corporations helping to define and implement strategic goals of major corporations. The best example of this is in Germany where the IG Metall Labour Union sits on the board of Mercedes, Volkswagen etc. Variants of this model also exist in many countries. Rather than see the companies as targets for Labour disruptions on account of employee/management issues, Labour unions should now work out arrangements with management and boards of companies on how to set strategic goals and take responsibilities in delivering them taking into account the rights and responsibilities of the workers they represent. The frequent resort to strikes and as the only option for settling disputes is counterproductive.
Dangote Refinery has stepped in to square the circle in our oil industry at great cost and risk which the government and other private players have refused to invest in. We keep saying that we want private sector participation the oil and gas industry. Dangote is a strategic step in that direction. The operations of the refinery may not be totally up to our expectation. But as a pioneer, greenfield project in the private sector it needs to be encouraged to succeed to the glory of the country rather than to be booby trapped by unfair and unnecessary actions.
