President Muhammadu Buhari has rejected a request from his attorney-general and minister of justice, Abubakar Malami, to enforce a consent judgment made by the Supreme Court against international oil companies in Nigeria on the grounds that the said judgement was made in violation of the constitution.
The attorney-general was also directed to immediately terminate a strange contract reached with a private firm, Trobell International Limited, for the purpose of collecting as much as $43.747 billion from the said oil companies who are commonly referred to as IOCs.
Trobell had been given the power to make the recovery using whatever means at its disposal, including termination of contract and the exercise of the power of ‘shut-in’ and filing a complaint under the Foreign Corrupt Practices Act in the United States of America and other related international protocols if the IOCs failed to pay.
Buhari’s directives are contained in a one-page letter by the Chief of Staff to the President, Abba Kyari, to the attorney-general as well as the secretary to the government of the federation. The letter is a response to an 8-page memo dated January 7, 2019 which had emanated from the minister of justice.
In the letter in question, the attorney-general had drawn the attention of the president to an October 17, 2018 judgment of the Supreme Court in suit number SC.964/2016 brought by the attorneys-general of Rivers, Bayelsa and Akwa Ibom States against the attorney-general of the federation for failing to enforce provisions of section 16(1) & (1) of the deep offshore and inland basin production sharing contracts which states that the share of the Federal Government shall be adjusted under the production sharing contracts anytime the price of crude oil exceeds $20 per barrel.
Instead of fighting the case, the attorney-general was “compelled to concede to the claims of the states in the suit”, having carefully considered the merits of the case and the reliefs sought by the states and “bearing in mind that the adjustment of the share where the price of crude oil exceeds the twenty dollars benchmark is beneficial to the Federal Republic of Nigeria, particularly the benefits of the recovery of the outstanding and unpaid difference inclusive of interest over the years”.
According to the attorney-general, “From the calculations of a team of experts, the additional revenue recoverable as at December 2017 plus accrued interest on the outstanding amount calculated up to the end of December 2018 stands at $43,747,120,957.”
Claiming that the “most effective mode of ensuring enforcement and execution of the judgment in the utmost interest of the Federal Republic of Nigeria is a quasi-judicial/administrative approach”, Malami then sought the blessing of Buhari as both president and petroleum minister to “implement the recovery by whatever means possible including but not limited to directing a lien on all available profit oil or the accounts due and or receivable by both contracting parties (international oil companies and Nigerian National Petroleum Corporation jointly or severally) immediately or instalmentally until full payment”.
Malami in his letter berated the NNPC, saying the state-owned oil company as “contracting party on behalf of the Federal Government of Nigeria has over the years been derelict in its responsibility and obligation to the Federal Republic of Nigeria in this regard”.
In his swift response, President Buhari rejected the two key prayers by the attorney-general and also “directed (the) Honourable attorney-general of the federation to terminate the recovery contract the Ministry of Justice has signed with Trobell International Limited”.
The president directed his economic management team (EMT) “to review the current state of affairs and harmonise a government position to resolve the issue including setting aside the consent judgment on the basis of its violation of section 4 of the 1999 constitution as amended”. The EMT was given until March 31, 2019 to “revert with concrete steps towards unwinding the issue”.
Analysts say the present economic realities and the need to encourage investment may have weighed heavily on the president’s decision as the Deep Offshore provides for the relief sought by the attorney-general.
“In my view, the president may have been acting not to scare away investors,” said Ayodele Oni, partner at Bloomfield Law firm.
The president’s position on the legality of the attorney-general’s plot raises questions over how the attorney-general, who is the custodian of the laws of Nigeria, will enter into a consent judgment that is in violation of the country’s constitution and also how it came about that justices of the Supreme Court, the highest court in the land, will make a judgment in flagrant violation of the constitution.
BusinessDay learnt that some of the IOCs had been advised by lawyers and diplomats representing their countries to seek redress at the World Bank had the attorney-general gone ahead to enforce the judgment.
ISAAC ANYAOGU
