Crisis Looms as NNPC, DPR Workers Begin Strike over Pension Issues

Nigeria’s oil and gas industry may face unprecedented disruptions of both its downstream and upstream activities as workers of the Nigerian National Petroleum Corporation (NNPC) and the Department of Petroleum Resources (DPR) yesterday embarked on industrial action to protest the demand by the National Pension Commission (PenCom) for the two organisations to stop in-house pension fund management system and adopt the open pension system.

Other demands include immediate steps to carry out turn around maintenance (TAM) on the four refineries as agreed between government and the two unions and  restore crude supply to the refineries.

The workers, under the aegis of the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and the Nigerian Union of Petroleum and Natural Gas workers (NUPENG) yesterday barricaded the gates of the head offices of NNPC and DPR in Abuja and Lagos, respectively, preventing administrative officers from entering their offices.

The unions also directed its members to withdraw from

fuel depots and export terminals, potentially fueling concerns over a fresh fuel crisis and disruption of crude oil exports.

THISDAY however gathered that the managements of both organisations were making alternative arrangements to send chief officers to the terminals and depots to avert crisis in the event of the withdrawal of unionised staff.

This is coming as fresh facts emerged that the poor funding of the DPR and government’s huge indebtedness to the NNPC were responsible for the two organisations’ inability to properly fund the NNPC Pension Fund, which was granted temporary license by PenCom in 2006 to operate as a Close Pension Fund Administrator (CPFA), pending compliance with guidelines issued by the commission and the provision of the PRA 2004.

While the funding gap to be bridged by the NNPC and the DPR stood at N298 billion as at 2010, the deficit has currently been reduced to N85 billion, with the NNPC currently in the process of transferring additional real estate property valued at several billions of naira to the scheme.

With this huge financial commitment to the in-house scheme, the unions have vowed to resist the planned cancellation of the operating license of their in-house scheme by PenCom.

“We won’t be able to control our pension if we operate open pension and we cannot move to open pension when they are stealing pension funds everywhere,” a leader of one of  the unions told THISDAY.

He blamed the inability of the two organisations to meet the funding requirements of PenCom to government’s poor funding of DPR and huge indebtedness to the NNPC.

“DPR is not properly funded. It generates over N1 trillion yearly but is the only government agency that is not allowed to retain part of its generated revenue. The NNPC is also being owed heavily by the government,” he said.

PenCom took the decision to withdraw the license of NNPC Pension Fund Limited due to the failure of the company to meet up with the extant requirements in its operation of the fund.In a fresh directive dated 15 September, 2014, PENCOM stated: “In order to accommodate your concerns, the commission hereby grants the NNPC a transition period of 12 (12) months within which to ensure full compliance with the provisions of the PRA 2014.”

But the workers have insisted that there is no going back on their determination to operate the in-house pension system.

The NNPC in a statement on Monday said the NNPC Pension Fund Limited had complied with the provisions of the PRA 2014, by transferring assets in equities, bonds, certificates of deposits and other marketable securities to the custody of PFA for management as directed by PENCOM since 2006.

“The NNPC pension fund has demonstrated its capacity to manage the scheme successfully by managing pension assets of over N250 billion for over eight years and maintaining an excellent record of administering and paying over 9000 retirees as and when due,” the corporation said.

Contrary to the report that the NNPC has resolved the pension issue and other demands of its workers, there was total shutdown at all NNPC offices and locations across the country.

The strike also affected all the subsidiaries of the NNPC, including the Petroleum Products Marketing Company (PPMC), Kaduna Refining and Petro Chemical Company, Port Harcourt Refining Company (PHRC), and Warri Refining and Petrochemical Company (WRPC), NETCO, Nigeria Gas Company (NGC), Hyson, Nigerian Petroleum Development Company (NPDC), National Petroleum Investment Management Services (NAPIMS), Integrated Data Services Limited (IDSL) and Department of Petroleum Resources (DPR).

A statement by PENGASSAN Media and Information Officer, Babatunde Oke, said the strike will continue until there is concrete commitment from the NNPC management to find a lasting solution to the issues raised. The trade union said the management of NNPC is yet to meeting with its leadership as at yesterday.

Oke said the issue has gone beyond granting of a one year grace to the NNPC by PENCOM insisting that the NNPC management should put in place machinery that will automatically fund the pension system without any bureaucratic bottle neck.

He noted that the funding has been delayed due to the inability of the board of the NNPC to meet for over a year to approve the proposal of the management for the funding of the pension scheme.

On the issue of TAM of the refineries, PENGASSAN spokesperson said the federal government should implement without delay the memorandum of understanding between the government and the unions to carry out the TAM on the refineries.

He explained that government had earlier promised to commence the TAM in April noting that five months down the line there have not seen any commitment from the government to maintain the refineries.

He warned that the strike could affect export of crude oil, noting that “workers at the export terminals also joined the strike.”

Thisday