November 22, 2019

Averting oil sector strike this Yuletide


A COMMON belief in Nigeria is that when the Nigeria Union of Petroleum and Natural Gas Workers, NUPENG, and the Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, sneeze by way of a strike threat, the rest of the country catches cold.

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Past experiences of industrial actions embarked upon by these oil sector unions were indeed bitter as they grounded most economic activities, with Nigerians and the economy suffering greatly.

The recent 14-day ultimatum (which has already expired) issued by the leadership of the two unions to relevant authorities to immediately resolve the lingering dispute between the General Electric International Operations in Nigeria, GEION, and Arco Petrochemical Engineering Company (an indigenous oil services company) before it escalates into an industrial action should be taken seriously, especially as the yuletide season draws near.

In their joint statement, Nigerians were put on notice of a possible strike action which can only be averted by the Federal Government directing GEION, a multinational company, to reimburse the money it arbitrarily and wrongfully deducted from Arco Group PLC as “withholding tax”.

Arco had during a meeting convened by the Ministry of Labour and Employment to resolve the dispute said the nonpayment of the amount by GEION was the reason it (Arco) has been unable to settle the terminal benefits and allowances of some of its workers who were laid off in August 2016.

ARCO claims that GEION is indebted to it to the tune of N1,891,752,241.48; $7,326,125.99 and €328,189.32, being sums comprising over-deduction of withholding tax at 10 per cent instead of the statutorily stipulated five per cent.

It supported this claim with a recent letter by the Federal Ministry of Labour and Employment which declared thus: “All deductions made by GEION on behalf of Arco substantiated with documentary evidence with the objective of remitting to FIRS, but which were not remitted to FIRS, should be refunded to Arco within three weeks.”

But while the resolution of the dispute still hangs in the balance, the leadership of NUPENG and PENGASSAN say they may resort to industrial action to ensure that the terminal benefits of their members who were laid off by Arco Group PLC are paid.

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This is an alarm bell government must not ignore. The country cannot afford to go through another oil sector industrial action.

Nigerians have suffered a lot in recent times, especially against the backdrop of the closure of the country’s borders.

The Ministry of Labour and Employment and other relevant agencies of government should immediately take steps to avert a strike.

The Federal Government must also defend struggling indigenous companies in the oil and gas sector from the predatory antics of multinationals as mandated by the local content laws and policies.

A stitch in time saves nine.