Dr. Chima Ibeneche, the Managing Director of the Nigerian Liquefied Natural Gas (NLNG), is hurrying the staff of the company in Lagos into Port Harcourt within 60 days, rather than the three years recommended by the company’s board, in what must rank as one of the world’s most expensive relocations: a price tag of $70 million.
Dr. Chima Ibeneche, the Managing Director of the Nigerian Liquefied Natural Gas (NLNG), is hurrying the staff of the company in Lagos into Port Harcourt within 60 days, rather than the three years recommended by the company’s board, in what must rank as one of the world’s most expensive relocations: a price tag of $70 million.
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Ibeneche retires in January 2012, just two months from now, and his decision seems accentuated by a desire to utilize all the funds accruable from this rushed relocation not to a permanent office in Port Harcourt, but to a temporary one.
This chessboard move is in opposition to a proposal that the company relocate to another temporary office in Lagos whilst a new purpose-built headquarters on the Eastern Bye-Pass, in Port Harcourt is under construction. Of no less curiosity is that the construction of the new head office is also being handled by a contract awarded to Property Development Company Limited (PRODECO), a company that is owned by Ibeneche’s cousin. The same cousin of Mr. Ibeneche’s also owns Heliconia Park in Port Harcourt, one of the residence parks that have been paid for two years to accommodate the relocating staff of NLNG.
NLNG’s corporate head office is presently located at C&C Towers, Sanusi Fafunwa Street, Victoria Island, Lagos, which accommodates its 405 staff, of which 298 are permanent employees and those seconded from shareholding companies while the remaining 107 are contract workers. All of them are now victims of this rushed relocation, and the management is threatening that anyone who refuses to relocate will be deemed to be no longer on the staff of the oil company.
At the final staff meeting held on the 4th of October, a member of staff asked about management's plans for those who do not want to go Port Harcourt. This reportedly led to a heated exchange between the questioner and the MD, who finally declared, “those who went to Port-Harcourt would be considered as those who were willing to work and it would be assumed that anyone who did not resume in Port-Harcourt would no longer be considered as our staff.”
It was also gathered that at a recent board meeting in Dubai, the MD threatened to “sack all those who signed the petition” against the relocation. One hundred and seven contract workers automatically lose their jobs in connection with that petition, as the company’s management is known not to be involving them in the relocation plans. The MD is quoted as expressing his prejudices as a son of the Niger Delta by saying such things as: “All these jobs will go to our people when the company relocates to Rivers”.
In a press release by the company to announce the relocation, Mr. Ibeneche was quoted as describing the move as “going home to Rivers State, its operational grounds and source of the gas it exports. The board and management consider this relocation the right thing to do.”
The NLNG, which supplies 10 per cent of world LNG requirements and provides 70 per cent of the cooking gas used in Nigeria, is jointly owned by Nigerian National Petroleum Corporation (NNPC) (49 per cent), Shell (25.6 per cent), Total LNG (15 per cent) and Eni (10.4 per cent).
The company moved into Lagos’ C&C Towers in 1997 after it was converted from a block of flats for residential use to a corporate building. After a series of building audits, which commenced in 2007, the property has been confirmed to be no longer fir for its purpose as the state of the property has been steadily declining with the Company spending more funds each year on maintenance. In 2009, NLNG’s board resolved that the Head Office be moved to a permanent location in Port-Harcourt with a time frame of 24-48months (2-4years) from project kick-off (proposed from 2010), to allow for construction of a purpose-built head office. It was also resolved that another corporate office annex be built in Abuja within the same time-frame, but that has since been scuttled for such reasons as breach in due process and doubts in cost effectiveness. As a result, the company is currently leasing 2 floors in the Bank of Industry building to accommodate the 24 Abuja staff, pending resolution of all the acquisition issues.
The staff had grudgingly accepted this proposition, and had begun planning towards the end of 2013 (at the earliest) for the relocation. This was due to delays in giving the approval/final go-ahead for the commencement of construction work on the Port-Harcourt head office, but as of the end of 2010, there was still no feedback from management.
Lagos Vs Port-Harcourt temporary sites:
Without any prior warning, however, all staff received an email, a copy of which was obtained by SaharaReporters, on October 12, abruptly declaring that the head office in Lagos was to be closed down in 60 days and all head office staff were to be relocated to either Abuja, Bonny with the majority going to Port-Harcourt.
The email stated that:
• Staff are to be placed in a temporary Head office pending resolution of the issues surrounding the creation of the permanent location in Port Harcourt;
• Staff are to travel unaccompanied and would be accommodated in Intels Camp in Port Harcourt – for a period of 2 years (after which they are to fend for themselves). The camp, however, is insufficient to satisfy all staff, so some staff are also to be accommodated in Heliconia Park and in a hotel near the camp.
• The decision was the result of an extraordinary Board Meeting held on the 8th of September; and
• The current head office in Lagos is scheduled to shut down at the end of November with the first group of employees resuming in Port-Harcourt by the end of October.
This directive was actually quite illegal, as the board did not ratify it until The 29th of September at an originally scheduled board meeting.
Confirmations on the outcome of the meetings earlier in the year indicated that the board had agreed that the head office should be relocated to another temporary location in Lagos pending resolution of all issues involving the Port Harcourt and Abuja permanent sites. This, however, changed under mysterious circumstances and suddenly there were different versions of the outcome of the meeting.
SaharaReporters gathered that the initial minutes of meeting agreed on the re-location of the head office to a temporary location in Lagos, not in Port Harcourt. For some reason, that was edited by the MD to indicate that the office was to move in 60 days to a temporary location in Port Harcourt pending the resolution of the issues. Another board meeting was held on the 29th of September where the relocation was debated and a final decision taken. However, prior to the ratification of this decision, the MD had begun to make frantic moves aimed at ensuring approval by spending and arm-twisting the board to go along with his plan.
Efforts to get vast amounts of money above the MD’s approval limits were made under the guise of relocation being an “emergency” situation. Tender Board committee meetings were held where members were blackmailed into approving up to $25 million dollars to kick-off initial spending on the project, all of which went on without the required ratification by the board.
The director's approval margin is $10million, beyond which it has to go to the board for approval. The relocation costs were presented to the tender committee to approve before the ratification of the decision because according to the MD, this was an “emergency situation” and so they could not afford to “wait for the board meeting” to begin implementing the move and spending more money.
Eventually, after much debate, the decision was ratified based on the assurances by the MD and the Chairman that the staff were pleased with the move and were going along with no risk of labour attrition or decrease in staff morale.
As part of the plan, key staff members were coerced into going along with the emergency relocation effort either by threats of punishment or promises of being promoted to senior management positions. Most notable of these are Aka Nwokedi, the HR Manager from Bonny who is spearheading the project for its timely implementation, and Ifeanyi Mbanefo, the Manager for Corporate Communication and Public Affairs, who has been using the media to justify the move via a series of paid interviews in national newspapers. He released a signed statement on the 6th of October, where he stated “the decision to move the NLNG’s headquarters was taken by its Board of Directors in April 2010. The original plan was to move in two years, but issues with its current office accommodation forced a shortening of that timetable and necessitated the renting of a temporary office in Port Harcourt pending the completion of its new office complex.”
Mr. Mbanefo also stated: “Arrangements have been made for members of staff to move into company-provided lodgings pending the time they are able to provide their own accommodation.”
Board members are alleged to have blackmailed and bribed to ensure that this relocation occurs.
Cost implications and staff constrains
Evidence of sleaze by this rushed action is also affirmed by valuations from property experts, who claim that to stay in Lagos would cost the company far less than the planned amount to be spent on the relocation to Port-Harcourt. According to a property specialist the company will need just about $6million at the cost of $800 per sq. metre for another temporary property in Lagos. “NLNG occupies about in 7500sqm the C&C Towers, so this amounts to $6million on a similar property in Lagos at the worst case scenario, with another $1million on the cost of renovation and relocation,” said a prominent property valuer, who does not want to be named.
This is against the outrageous amount of $70million planned for the relocation by NLNG’s management to the Rivers state capital. This value was obtained from the commercial assessment documents, which went to the tender board from the management on the planned move.
To achieve this rate of $70,000,000, workers compensation was slashed to a portion of its initial value to two months basic salary as ‘ex-gratia’ payment. This, according to the MD, would be sufficient to take care of all unique and different problems that may come up for all staff as a result of the relocation.
In addition, commercial analysis has revealed that the cost of a room in Intels Camp (where employees are to reside) will cost the company N5, 000,000 a year for the two years that have been paid. Intel camps and Heliconia are temporary guest house/accommodation camps with office buildings usually occupied by oil companies’ project staff in Port Harcourt.
As payment has already been made for 150 rooms for one year, the management has also given preconditions to employees that chose to stay in the camp after the relocation, that “they cannot opt to leave the camp and find alternative accommodation until after 6months.” This is to justify the reckless spending and was made known to the staff only after the MD had reassured them that anyone who chooses to leave the camp would get their pro-rated housing compensation depending on the extent of their stay.
Other constraints on staff members are costs such as rents school fees, which have been paid in Lagos. These funds will have to be forfeited should the abrupt move come to fruition.
It has also been learned that an online survey conducted by the Human Resources department on the 18th of September 2011, showed deep concerns by the NLNG Staff about dislocation of their families and all the different set of risks they faced as a result of the hurried relocation without a well thought-out plan.
Most of the head office staffs comprise women; most of them single parents who need proper childcare alternatives. At present, the accommodation at Intels Camp is not sufficient for staff on the basis of the mostly “one man-one room” reason that the camp operates. In an attempt to alleviate this, the management arranged for the remaining employees to be accommodated at Heliconia Park and some hotels near both locations on the same “one man-one room” basis. “But this is not appropriate where a parent has no choice but to travel with their children,” complained a member of staff.
Also, there are no school arrangements for the children of the staff, and the MD is quoted to have publicly said that “children would have to wait until their parents find adequate schools for them before they can continue with the school year.”
Furthermore, a previously planned “Voluntary Severance Scheme” which was being developed has now been scrapped to prevent the option of resigning and the time frame for the move does not allow for employees to leave without having to pay ‘in lieu of notice’ penalties.
It is also believed that this step is being carried out with the strong encouragement of the Rivers state government, which will begin receiving the PAYE tax of about N2billion annually from NLNG. Those revenues are currently going to the Lagos state government.
PENGASSAN’s Culpability
The aggrieved staff had hoped that the NLNG Branch of PENGASSAN would happen, but to their dismay, the branch chairman, Ndukaku Ohaeri has blatantly refused to voice their concerns to the organization and did not even negotiate a generous compensation package or more time for staff to prepare.
A resolution was written and sent to them for backing but the labour union immediately dissociated itself from it and even refused to hold a meeting on the issue until much later. A shoddy "negotiation" meeting was held on the 3rd of October where they (PENGASSAN) agreed to the terms of management, after which they informed the staff that they were “satisfied with management's explanations” and that “the package was more than generous.” A rally was held and an executive member of PENGASSAN from Bonny, Idowu Adepoju, came to address the staff, asking them to show “appreciation” to the management for being kind enough to give them shelter and provide logistics arrangements.
The NLNG PENGASSAN executive, unlike its vociferous parent workers union which is always able to support the cause of its members through the use of a variety of tools, seems largely compromised and is not after the interest of the NLNG staff with their apparent endorsement of the board’s stand. Also culpable is the executive chairman of PENGASSAN, Lagos branch, Telema Penuel, who is an indigene of Rivers state, playing a pivotal role in bringing NLNG back "home" to the Niger Delta.
On the wall of NLNG board’s offices are inscriptions, such as integrity, teamwork, excellence and caring as its core values. They delight the company’s management, but in practice, the company’s bosses have clearly chosen a dishonourable and unfair path in order to line their pockets.
They are probably not counting on the trouble brewing underground as the staff members are bent on extracting concessions with or without their union, asking that the time-frame of the move be reverted to the initial schedule or at least extended by 6 months-1yr in order to enable them take care of necessary exigencies. Members of staff are also requesting that they be treated in line with the company’s claim of being “world-class” and be adequately catered for, or at least compensated as would apply to their peers in reputable international oil and gas companies facing similar sudden relocation.
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