Femi Falana, NNPC Refineries and Saipem, by Simbo Olorunfemi
Mr Femi Falana was on TV last night, follow-up to the letters he had, a few weeks back, written to companies he said had been awarded contracts for the rehabilitation of the Port Harcourt, Kaduna and Warri Refineries. His letter to Saipem reads in part:
“I am Femi Falana, a Nigerian lawyer and the Chair of the Alliance on Surviving COVID-19 and Beyond (ASCAB), a non-governmental organization in Nigeria.
I have confirmed that the Federal Government of Nigeria awarded the contracts for the rehabilitation of Warri and Kaduna refineries in Nigeria to your reputable company for the sum of US$1.5bn.
In line with the terms of the contract which was awarded sometime in April 2021, the project was required to have been completed in three phases of 21, 23, and 33 months.
As you are no doubt aware, the Nigerian National Petroleum Corporation Limited has, on several occasions, postponed the completion dates of the rehabilitation of the Warri and Kaduna refineries.
It has therefore become necessary to request the Management of your company to furnish me with information on the completion dates of the rehabilitation of the Warri and Kaduna refineries. As the request is made under the Freedom of Information Act applicable in Nigeria, you have seven days within which to respond to this letter.
Notwithstanding that Saipem is a private company, it is bound by the provisions of the Freedom of Information Act because it has utilised huge public funds to execute the rehabilitation contract. In the case of Coscharis Motors Ltd. v. The E.I.E Project Ltd/GTE & Anor. (2022) CLRN 63, the Court of Appeal held that a “private body or company would be as accountable as a public institution or body under the Act if it has provided any form of public services, or performed any form of public function or utilized public funds.”
Apparently, not everyone is of the mind that the FOI Act holds a private company accountable to provide such information as requested in the manner in which Mr Falana construes it. That must have informed the position of Maire Tecnimont SpA, the company undertaking the rehabilitation of the Port Harcourt Refinery, in declining Falana’s request.
This is the argument by Tecnimont’s Lawyers: “Our client is a private company. Being a private independent contractor, our client is not a company in which any government has a controlling interest, and does not provide public services, functions, or utilize public funds for them to be bound by the obligations in the Freedom of Information Act. On this ground, our client regrettably cannot provide the information you have requested.”
Well, from industry sources, the work on the Port Harcourt Refinery is largely done, with roll-out of products expected in a few months time. The controversy has more to do with the Kaduna and Port Harcourt Refineries, over which Mr Falana addressed a letter to Saipem, which
responded through its Managing Director, Poggi Michele thus : “Please be informed that Saipem Spa, directly or through its affiliates, was not awarded any contract for the restoration of Warri and/or Kaduna refineries. We are therefore not in a position to answer your request, and we suggest you address it to the relevant person.”
The Company also warns Mr Falana to desist from further reference to Saipem. “It has been brought to our attention that you may have been referring to Saipem in certain public statements you have made. Saipem requires that you immediately refrain from making any references to the company and from disseminating or attempting to disseminate any false information which might harm Saipem’s reputation in the eyes of reasonable third parties who are dealing with the organisation.
If you fail to comply with this request, Saipem will have no other alternative but to pursue all available legal remedies within its rights to protect its reputation and integrity.”
I am not sure of the extent to which Mr Falana took this warning into consideration in his TV interview yesterday. He said: “Concerning the more embarrassing situation, in fact, where Saipem is threatening to sue me for causing reputational harm by alleging that this contract was awarded to them to fix the Warri and Kaduna refineries, my colleagues at the law firm of Ajumogobia and Okeke have also written to me, stating that these contracts were not awarded to them. Why are you still demanding information on the completion date of the contract?”
“I have replied that this announcement was made by the Federal Executive Council in August 2021. After three years, you have just denied to me; you have never denied the fact that this contract was awarded to you. Up until now, the Federal Executive Council has not revoked the contracts and awarded them to another company. Our country must get to the root of what can be described as a case of monumental corruption. We are talking about $2.9 billion for a country that is said to be broke. We must escalate this matter by inviting the relevant anti-corruption agency to assist the country in tracing these funds.”
Falana further argued:
“In this case, I am alleging fraud and the government has a duty to the Nigerian people to indict any contracting firm that has messed up the country regarding the repairs of the refineries. If Saipem is saying, to the colossal embarrassment of the government, that you never awarded this contract to us, then you are deceiving the Nigerian people by claiming these contracts were awarded to us. We are going to ask the Federal Executive Council: if you approved the award of this contract in 2021, how can the company you approved it for now say they know nothing about it? It is a very serious embarrassment for any modern state.”
While it is difficult to fault Mr Falana for his passion, however, concerning his assertions about Saipem, haste might have gotten in the way of due diligence in his interrogation of the matter. He might, in fact, be on slippery grounds in terms of his conclusion.
Anyone familiar with the the workings of government, public procurement, and history of contracts execution will be wary of coming to conclusion of the existence of a contract on the basis of newspaper reports of resolutions from a Federal Executive Council meeting.
A newspaper report is not and cannot be sufficient proof that a contract was awarded for a fact.
It will take a knowledge that agreements were duly executed between parties, payments made and a timeline, which might be different from the original one, was agreed upon, before one can assert as Mr Falana did, in saying, “I have confirmed that the Federal Government of Nigeria awarded the contracts for the rehabilitation of Warri and Kaduna refineries in Nigeria to your reputable company for the sum of US$1.5bn.”
Well, who knows what he saw, even if he only made reference to the FEC Resolution. But this is what we know.
- In August, 2021, following a meeting of the Federal Executive Council (FEC), Minister Timipre Silva announced that contract for the rehabilitation of Warri and Kaduna refineries WILL BE AWARDED to Messrs Saipem SPA and Saipem Contracting Limited at the combined total sum of $1.484 billion and WILL BE rehabilitated in three phases of 21, 23 and 33 months.
- In October 2022, NNPC and Daewoo, the Korean company, signed a Memorandum of Understanding on the sidelines of the 2022 World Bio Summit in Seoul, South Korea for the rehabilitation the same Kaduna Refinery.
- On February 3rd, 2023, the NNPC signed a contract agreement for maintenance services for quick-fix repairs for Kaduna Refinery & Petrochemical Company (KRPC) Limited with Daewoo Engineering & Construction Nigeria Limited. “This project shall be executed in three work packages as a Maintenance Services contract by Daewoo E&C Nigeria Limited at an estimated maximum cost ceiling of $740,669,600.00 with a duration of Twenty-One (21) months. The construction schedules for Packages 1 and 2 have been finalized, but Package 3 construction will be carried out under consultations with and approval from the client in the future.”
- On June 27, 2022, Daewoo Engineering and Construction Nigeria Limited (DECN) announced that it had won the WRPC Refinery quick fix project from Warri Refinery & Petrochemical Company (WRPC), a subsidiary of Nigerian National Petroleum Corp. (NNPC), with the total construction cost put at approximately US$492.3 million.
“Among the three construction packages, deadlines for Packages 1 and 2 have been confirmed. The two sides will set the deadline for Package 3 through consultations in the future.”
From what I have seen, the contracts for the rehabilitation of the Warrington and Kaduna refineries were awarded to Daewoo and not Saipem as the Senior Advocate has argued.
Whereas there was indeed an announcement after a FEC meeting to the effect that Saipem WILL BE AWARDED the contracts for the rehabilitation of the refineries, a deal was obviously not reached. Saipem will then be right in the manner in which it responded to Mr Falana.
Facts before me suggest that the Senior Advocate might have been misled in directing a letter to Saipem over the rehabilitation of the Kaduna and Warri refineries. The allegation of fraud and “monumental corruption” based on this misdirected letter and assumptions founded around it might be misplaced.
As well-intended as Mr Falana’s advocacy might be, it will help to invest more effort in research so that assertions and the facts can relate in more friendly terms