FG cancels operating licences of 2 oil firms over unfair labour practices, other infractions

THE Federal Government, through the Department of Petroleum Resources, DPR, the regulatory agency in the Nigeria Oil and Gas Industry,   has cancelled the operating licences of two oil firms; NOV Oil and Gas Services Nigeria Limited as well as Nov Oilfield Solutions Limited (National Oilwell Varco) over alleged breach of terms and conditions of the  Oil and Gas Industry Service Permit, OGISP.

The companies were accused of failing to abide by the rules and regulations governing the release of staff, failure to put in place a Collective Bargaining Agreement, CBA, and for contravening the extant laws within Nigeria Oil and Gas Industry with regards to committing anti-labour infractions and lack of respect for due process.

NOV Oil & Gas Nigeria Limited and NOV Oilfield Solutions Limited are subsidiaries of Houston, Texas-based multinational National Oilwell Varco (NOV) Incorporation with total assets $20.21 billion and a revenue of over $10 billion.

NOV Nigeria has participated in many projects in Nigeria including the Total Egina project which fetched the company over a billion dollars in the last five (5) years. It currently has ongoing contracts with IOCs in Nigeria.

The cancellation of the licences was the height of the sanctions against the company for its perceived lack of respect for national and international labour laws, conventions, rules, and regulations, including the Trade Union Acts, the Nigerian Constitution and Regulation 15A of the Petroleum Drilling Act (as amended) 2019.

The company paid a fine $250,000 for the infraction in early 2021 and was imposed a fine of another $250,000 on September 29, 2021, with a deadline for payment on October 6, 2021, for deliberately flouting extant laws, procedures and guidelines, while the DPR directed that the terminated workers should be recalled and reinstated.

In a letter titled “Cancellation of Permit to operate as an oil industry service company, Director/CEO of DPR, Engr. Sarki Auwalu, dated October 5, 2021, to the Managing Director, National Oilwell Varco(NOV), insisted that “the permit shall not be re-issued until such a time that your companies are in compliance with the law and statutes.”  

Recall that NOV Nigeria has been having a running battle with Organised Labour under the aegis of the Petroleum and Natural Gas Senior Staff Association of Nigeria, PENGASSAN, and regulatory authority and Federal Ministry of Labour and Productivity over anti-labour and unprocedural practices in the country.

The DPR directed the NOV Nigeria Management to put in place a Collective Bargaining Agreement (CBA) and discuss with the union before embarking on redundancy in 2014, which the Management refused to adhere to but went ahead to severe the employees’ employment and a similar thing happened in 2019 when 23 employees who were members of PENGASSAN were sacked in 2020.

Since June 2020, Management and PENGASSAN had engaged in CBA discussions at various times with the intervention of the Federal Ministry of Labour and Productivity, and the DPR.

A CBA was however concluded on July 27, 2021, and signed by all parties including PENGASSAN, NOV Human Resources Manager in Nigeria and DPR representatives except the offshore Management representatives, Mr Francisco Cruz, Human Resources, HR, Director, the Middle East/Africa; Mr Pierre Yves Palud, Vice President, Africa Finance; Mr Juanita Olivier, Africa Regional Counsel and Mr Cesar Velasco, Vice President, Well Services, Middle East and Africa who refused to sign the agreed CBA/Minutes and this culminated in the industrial relations crisis and breach of the industry regulations.

Speaking on the anti-labour practices, Lagos Zonal Chairman of PENGASSAN,  Eyam Abeng, said that the management had been engaging in harassment, victimisation, intimidation and sacking of its workers without following the laid down procedures for releasing of staff.

“This has been the practice of the NOV Management in all its countries of operations. They will come into the country with over 100 local staff and within two years of operations, it will tactically reduce to 4 or 5 staff, while all jobs are gradually off-shored.

“The Union is not averse to redundancy or release of its members but must be carried out in line with the signed CBA and extant laws of the industry in Nigeria. Offshoring of jobs by NOV Oil & Gas Nigeria Limited and NOV Oilfield Solutions Limited or any other company operating in the Oil & Gas industry in Nigeria will not be allowed henceforth. This action/practice is against the Nigeria Petroleum Act.”

(Courtesy Vanguard)