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“Fuel subsidy probe Oil marketers tried to bribe us – Farouk Lawan” – Daily Trust

The Chairman of the House of Representatives ad hoc committee on fuel subsidy probe, Hon Farouk Lawan, didn’t prepare his mind to encounter the massive fraud at the Nigerian National Petroleum Corporation (NNPC). Though the committee has completed public hearing and is working on its report, Lawan is still in shock. He explained why in this interview. Excerpts:

The ad-hoc commitee you head has been looking into the subsidy controversy for a few weeks now. What do you consider as the most shocking revelations for now?

I believe that Nigerians are conversant with the public hearing being conducted on the issue of subsidy by the ad hoc committee set up by the House of Representatives. It came to pass as a result of the resolution passed by the House on the 8th of January, which itself was as a result of the complete withdrawal of the petroleum subsidy by the government, which led to the overheating of the polity for several days.

Since the commencement of the hearing, a lot of issues have come to the fore, a lot of them quite revealing, some shocking, some tinted with a lot of drama. But the bottom line is that the opaqueness that has characterised the oil industry over the years has now been unmasked. When we started, there were a lot of assumptions which we have been able to dispel. The first was when the federal government was campaigning for the removal of subsidy. They alluded to the fact that N1.3 trillion was supposed to be the total amount of money that would be paid as subsidy in 2011.

Now, in the course of this exercise, we have discovered that from the figures made available by the Central Bank of Nigeria, more than N1.75 trillion was actually paid in 2011. And as I speak, NNPC itself has an outstanding of over N150 billion. The other marketers have over N100 billion as outstanding. So, I believe that the total money that would have been spent as subsidy in 2011 over PMS and kerosene would stand at over N2 trillion. The other assumption was that the subsidy payment was based over an average daily consumption of 35 million litres per day.

We have been able to discover that the payment of subsidy was done over an assumption of 59 million litres per day, though for planning purpose, the figure of 35million liters per day was used. The third assumption is that of some people in some quarters that there is no subsidy at all. I believe from what has come out as our findings that there is subsidy paid particularly on PMS, whereas the payment of subsidy on kerosene remains debatable and controversial because, according to information available to us, there was a directive withdrawing subsidy from kerosene. There has not been any counter presidential directive reinstating subsidy on kerosene.

Despite that the NNPC has continued to deduct monies as payment for kerosene. The findings have also brought out the fact that the process used in awarding contracts to importers of diesel actually became like a bazaar. The process was abused to the level that people who clearly lacked the capacity to handle the imports were given those contracts. We also strongly believe that a lot of manipulations and sharp practices attended the whole process. Due to the fact that we are still compiling our reports, I have only mentioned some of the issues of importance, especially those that are known to the public.

Obviously, there are others not known to the public yet, which we will strive to establish in due course. The exercise has been quite revealing. It has exposed the very colossal amounts of money this country has been losing in the course of the subsidy regime.

Looking at the fact that the amount you mentioned, N2 trillion, is actually extra budgetary, how did those involved explain the expenditure? What laws did they use to justify this spending that was clearly not approved?

Attempts were made to try and provide some explanations, but the issue remains that, for 2011, the amount of money that was appropriated in the budget meant for subsidy was N245bn. So, when over N2 trillion was spent, what that means is that the money spent was extra-budgetary. The Appropriation Act is very clear that you cannot spend any money without appropriation and approval of the National Assembly. Another issue of serious worry is the system of direct deductions, which may not be the best in terms of openness and transparency.

Explanations were given but it is left for those of us in this committee to retire and examine the various reasons given so that, in the end, we will determine whether violations have been done and the laws that have been broken and recommend accordingly to the whole House.

Why couldn’t the standing committee responsible for oversight on the petroleum sector discover this earlier?

I may not be able to speak on behalf of the committee you mentioned. Since 1999, I have not been a member of the committee. At no time was I a member of the committee on gas or that of the downstream or that of petroleum resources upstream. It is, therefore, difficult for me to explain the role or lack of it that the committee members have played in the process. There is one thing we need to bear in mind, though.

For a very long time, Nigerians, especially those highly placed, have always had the impression that the petroleum sector has remained closed, out of public scrutiny and has not operated in openness. I think that, perhaps, the inability to properly conduct investigations to open up that sector lies not only in the legislature, but also in some public institutions. I am not in the position to explain this.

The bottom line is that we have been given an assignment as an ad-hoc committee and, of course, it was constituted because of the peculiar nature of the issue at stake at those critical moments when subsidy was removed and there was so much restiveness in the country and the House was forced to take a proactive step to calm nerves. Since we were formed under peculiar circumstances we owe it to the public to perform our job and also do it openly so that even before we finish our assignment, those following it will be able to appreciate what is happening in that sector and also draw their own conclusions based on the information that has been made available in the public domain.

Would you recommend that when the committee on petroleum is constituted again, the membership be made up of persons of some professional background, who will be able to address these issues in future due to the sensitivity of the industry?

As you know, the responsibility of constituting committees in the House lies with the leadership of the House. I think the leadership recognises the need for them to do the proper thing. But don’t let us forget that the inauguration of these committees was done about six months ago. Perhaps, with the benefit of the information that has been made available by the findings, they would be more proactive.

And I must also tell you that there is no committee, particularly in our polity, that is not sensitive. It all depends on the nature of the assignment and the passion that someone has to contribute to the sector. For example, in the education sector where I head a committee, when it was constituted, I had an opportunity to discuss with the leadership and they gave me the option to choose any committee of my choice. But I told them that wherever they put me, I would be ready to serve my country.

I was given education and I told them I don’t have a problem. Wherever I find myself, I do the best I can. I don’t think it is a matter of putting certain people in certain committees because of the sensitivity of the assignment. Every committee of the National Assembly entails very important responsibilities. I believe the standing committee might have done a lot but the public may be unaware of the efforts of the committee.

What is the link between what the EFCC is doing and what your committee is also doing?

The president’s directive to the EFCC to look into the subsidy regime and also the directive for external auditors to look into its books are proof that all of us in government are on the same page as regards this issue. Before we commenced our own investigations, the Senate equally constituted a committee to look into the issue.

While we were on, the executive equally decided to refer the matter to the EFCC. It means that everybody has come to the realisation that it cannot continue to be business as usual. This, to me, is the response of those in position of authority to the pressure by the public and to the yearnings and aspirations of the Nigerian people.

During the protest, the Nigerian public actually demanded for greater transparency and openness in the sector, and for better management of the subsidy regime as well as the oil sector. Nigerians challenged most of us in office to be proactive in fighting corruption. And I believe it is the response by the various arms of government to this pressure that has led to where we are at present. This simply means that we are all on one page and are working for the same purpose, a better system that will guarantee more value for the money that is being spent on behalf of the Nigerian people.

For now, we have not had any direct relationship with the EFCC, possibly because we have not sought their assistance so far. But we are aware that the Commission has sent its officers throughout the hearings we’ve held, to monitor all we did because the outcome of what we do will equally aid their own investigations. If, in the course of our work, we discover that there are areas where we require the assistance of the EFCC and even need prosecution assistance, we will definitely do that. The relationship at this stage is not exactly formal. Also, there are some of their actions that will require legislative action. Of course, we will initiate such.

Do you think the EFCC can successfully unravel the rot in the industry?

My exposure to the oil industry has left me more enlightened now. We set out to investigate the subsidy regime. But along the line, it gave us the opportunity to glimpse several windows related to the operations that daily take place in the oil and gas sector of the economy.

Almost all the windows we looked into appeared to be overrun by rot. There were moments we felt quite enthusiastic and felt like pursuing those windows, but we had to restrain ourselves to focus on the assignment on hand.

We knew that if we decided to continue to open more windows there would be no end to the exercise. We may end up reaching a position where we would be in no position to tender a report as we would have too much on our plate. We had to consciously curtail our investigations to the main issues at stake.

If you look at every aspect of the investigations, it will leave you with deep concerns.

Do you think the EFCC can handle the investigation?

I think it all depends on the way and manner they decide to handle it. Their assignment is similar to our own. If we who are not entirely trained investigators can make progress, I do not see why the EFCC cannot do so too.

They have experts, men and women trained for this kind of work. None of us at the committee is trained to do the work. That, everybody knows. If we can achieve a little with our scant experience, especially our trial and error knowledge of the industry, I believe that they should be able to do it. My only worry is, will they be given the free hand to do the job dispassionately?

In the heat of the crisis, you were quoted saying that subsidy should be brought back into the budget. Do you still maintain that position?

My position then was that it was anticipated that when the House of Representatives would eventually meet on the crisis, they would make provisions for subsidy in the 2012 budget. If you noticed on the day the deliberations on the matter was done in the chambers, I was deliberately not allowed to speak because the leadership had already made up their mind that they wanted me to handle the investigations and they didn’t want my views to be prejudicial to the outcome.

One of the mandates that was given to the committee was to determine what should constitute subsidy in 2012. We are conducting an investigation. We are yet to put our report together. I believe that whatever I say on the matter would also be prejudicial to the outcome. So, my personal view has to give way to the larger findings of the committee that I head.

What do you make of the fact that several companies indicted were unable to account for the subsidy funds they received. What do you make of that?

That shows that the management of the subsidy regime was shoddy. It was not transparent. It was messy. It gave a lot of room for abuse. These are some of the things we just have to find a way of putting behind us. We have to find ways of managing the subsidy regime so that in future, we would not find it difficult managing any of our resources.

So what are you recommending about the lost resources?

I am not recommending anything now because investigation is still going on. Whatever our recommendations will be will come to the fore when it is concluded. Sometimes, the testimonies and presentations made during the hearings are at variance with the documents submitted to us.

So, it is when you try to reconcile the presentations and the documents at our disposal that you will discover that there may have been some abuses perpetrated.

Nobody can deny the fact that the whole subsidy regime was characterised by a lot of abuses. The degree of such abuses, who was involved, the amount of monies lost and the processes that were violated would all have to wait until we finish looking at the materials that are before us before we can conclude. At this stage, I cannot talk about any recommendations with you.

Will the setting up of the Nuhu Ribadu committee pre-empt your report?

There is no relationship between the committees. The Ribadu committee is required to recover lost revenue. How do you recover lost revenue when you don’t even know you have lost revenue? Our work is more vital than theirs. Their work is very important no doubt, but you need to even know what you have lost and how before talking of recovery.

Also, with the list of people on that committee, I don’t think they have much powers to seriously conduct any investigations like we did because we draw our powers from the constitution and what the EFCC is doing is equally more important because it is established by law. But the committee is one set up by the minister. She can wake up one day and disband. Their work is important, such as the other four task forces set up by the minister. But I hope the task force succeeds in recovering the monies mismanaged.

What advice would you give Ribadu, if he seeks your support?

I will wish him luck. I will ask him to do his best. He believes in service. I will advise him to give it his best so that ultimately, Nigerians will appreciate all he does. This whole issue is about Nigerians, the ordinary people. It is about our resources that should go into development that should improve lives but are being diverted by selfish people for their aggrandizement.

So anybody who is called upon to come and contribute to ensure that the resources become available for the people, I wish such person luck. But he should remember that as a former head of the EFCC, he doesn’t have as much backing of the law as he is used to. The things he could do as head of the EFCC he may not be able to do in the new task. This is an ad hoc task. His work will be determined by what the minister wants them to do. If the minister wants them to go far, then they will go far.

What assurances do we have that the report of your probe will not be swept under the carpet, like similar ones in the past?

We decided to stick our names and reputations and to stick our integrity and honour to conduct this exercise. Some of us have built our names over the years and we are not willing to jeopardise that. If we are not willing to tender a report that will go far we wouldn’t have conducted the exercise in the first place. We decided to go public so that the Nigerian populace will follow up on the exercise.

When it is concluded, those who monitored what we did will also have the opportunity to reach their own conclusions. I think, to a large extent, we have already succeeded. I think whatever the outcome, we have succeeded in bringing to the public domain, the kind of things that were happening in that sector.

Secondly, I believe this time it will be different even though I recognise the apprehension and cynicism of some people due to several things that happened in the past. I believe things will be different. The actors, those of us on the committee, are different.

Two, the House itself is a different House. This is a House of Representatives that elected its leaders without the influence of outsiders. This is a House of Representatives that convened on a Sunday to deliberate an issue that we felt was very dear to our country.

Thirdly, the issue of subsidy is one many Nigerians hold passionately. I believe that Nigerians would not allow this matter to die out.

Finally the public will continue to exert pressure on us to do the job appropriately. Also, given the fact that both the legislature and executive are operating on the same page, I believe the outcome of the investigations will be implemented. I do not see any reason why anybody will shy away from doing the right thing.

What pressures have you faced during the probe?

There have been pressures but I must thank my colleagues. We had to resist a lot of pressure on this matter…

From your party?

No, there have been no pressures from my party. Not a single member of the party for or against what we are doing. There have been pressures from some people in the industry, overtures even from the marketers, especially at the beginning. When they realised they were meeting a stone wall, most of the pressures simply fizzled out at the end. But the pressure that has been sustained is actually the public’s.

And that is positive because Nigerians have demonstrated deep interest in the matter. They have been expressing pressure that we conclude the job to the best of our ability and the pressure has been encouraging.

What would you tell President Jonathan if you were to advise him on the way forward on this subsidy matter?

I will suggest that he must work to make the oil industry more open and transparent. Two, he must ensure that those who manage the industry are more accountable. Thirdly, he must ensure the quick assent to the Petroleum Industry Bill (PIB) because the outcome of that bill will unbundle the NNPC and transform it into a competitive and more corporate concern.

It will make it more business-like rather than an agency of government that is literally controlled by the government and subjected to abuse by various administrations. He should take a general look at the oil industry and act in the best interest of Nigerians.

How do you get the energy to do the job?

My energy comes from God. I have a very happy family. When you are out there and you know that you have an understanding family willing to support you and then you are not under pressure from friends or associates, you perform well. That gives me the encouragement to do my job.

Equally, I have the support of the leadership of the House. We have not had any cause to be told either to ‘do this’ or ‘not do this’ by the leadership of the House. That does not mean that some members have not been coming with friends wanting to be excused from attending the hearings for one reason or another.

But we made it clear that anybody who fails to appear without genuine reason would be indicted by the committee. If you do not produce relevant documents supporting your claim for subsidy payment or refuse to appear, then we will have no option than to indict you or recommend that you refund whatever monies you collected as subsidy payment.

We discovered that while we were working on a number of 114 oil companies the Executive Secretary of PPPRA provided a list of 128. This means that we still have some that we didn’t know about, so we didn’t invite them.

But because we are winding up our work, we have decided to publish the complete list of beneficiaries and they will be mandated to present the relevant documents backing their claims to payments. We have collected from others. The whole idea is to ensure that fair hearing is given to all involved. We, from the onset, decided that we will not go into the investigations with any preconceived mindset and would not seek to crucify anyone and we will not run down anyone. It is the facts that will be presented for scrutiny.

We will equally not shy away from the issue at stake and will not be intimidated by anyone from asking the relevant question. At the end of the day, no report of ours will be swept under the carpet.

One Response to ““Fuel subsidy probe Oil marketers tried to bribe us – Farouk Lawan” – Daily Trust”

  1. Abeni A.O says:

    My commendation goes to Nigerian people for carrying a burden imposed by their own people, our fellow men not foreigners so selfish, so corrupt, so heartless and wicked! This subsidy payments have opened our eyes and will be a yardstick to measure GEJ willingness and resilience to fighting corruption untill then we keep our fingers crossed. Thank you Farouk Lawan and your committe members.


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