Nigerian government has directed
the Nigerian Ports Authority (NPA) to terminate the boats pilotage monitoring
and supervision agreement that the agency has with Intels Nigeria Limited, a
company co-owned by former vice president Atiku Abubakar.
Government says the contract with
Intels, a leading integrated logistics and facilities services provider in the
maritime and oil and gas logistics sectors of the country, was void ab initio.
Attorney General of the
Federation (AGF) and Minister of Justice, Mallam Abubakar Malami (SAN), in a
letter dated September 27, 2017 to the Managing Director of the NPA, Ms. Hadiza
Bala-Usman, said that the agreement, which has allowed Intels to receive revenue
on behalf of NPA for 17 years, violates the Nigerian Constitution, especially
in view of the implementation of the Treasury Single Account (TSA) policy of
government.
Intels, also co-owned by Mr.
Gabriel Volpi, an Italian national who also has Nigerian citizenship, will lose
several millions of dollars in the cancelled deal.
In the maritime industry,
pilotage is compulsory for all ships of 35 metres overall length or greater
unless a valid Pilotage Exemption Certificate is held by the ship’s master.
In return for the service, ship
owners/companies are required to pay a pilotage fee, which Intels collects on
NPA’s behalf and retains 28 per cent of the revenue as commission for the
services rendered.
In the memo obtained by Thisday,
Malami stated that the agreement violates Sections 80(1) and 162(1) and (10) of
the constitution, and wondered that the parties – NPA and Intels – did not
avert their minds to the relevant provisions when they were negotiating the
agreement in 2010.
Section 80(1) of the constitution
states: “All revenues or other moneys raised or received by the Federation (not
being revenues or other moneys payable under this Constitution or any Act of
the National Assembly into any other public fund of the Federation established
for a specific purpose) shall be paid into and form one Consolidated Revenue
Fund of the Federation.”
Section 162(1) states: “The
Federation shall maintain a special account to be called ‘the Federation
Account’ into which shall be paid all revenues collected by the Government of
the Federation, except the proceeds from the personal income tax of the
personnel of the armed forces of the Federation, the Nigeria Police Force, the
Ministry or department of government charged with responsibility for Foreign
Affairs and the residents of the Federal Capital Territory, Abuja.”
While sub-section 10 of the same
section states: “For the purpose of subsection (1) of this section, ‘revenue’
means any income or return accruing to or derived by the Government of the
Federation from any source and includes: (a) any receipt, however described,
arising from the operation of any law; (b) any return, however described,
arising from or in respect of any property held by the Government of the
Federation; (c) any return by way of interest on loans and dividends in respect
of shares or interest held by the Government of the Federation in any company
or statutory body.”
In the letter titled: “Request
for Clarification of Conflict Between Executed Agreement and Federal Government
Treasury Single Account Policy,” the attorney general said: “I refer to your
letter dated 31st May 2017, ref: MD/17/MF/Vol.XX/583 in respect of the above
subject matter wherein you sought clarification on the legal issues implicated
by the continuous implementation of the Managing Agent Contract Agreement dated
11th February 2010 executed between the Nigerian Ports Authority (NPA) and
Intels Nigeria Limited for the provision of boats pilotage operations, in the
light of the Federal Government of Nigeria’s Treasury Singe Account (TSA)
policy.
“Upon my review of your letter
under reference and the relevant agreements, I have been able to conclude
inevitably that the terms of the agreement as agreed by parties and the
dynamics of its implementation which permits Intels to receive revenue
generated on behalf of NPA ab initio, clearly violates express provisions of
Sections 80(1) and 162(1) and (10) of the 1999 Constitution of the Federal
Republic of Nigeria, 1999 (as amended). It is thus curious that parties did not
avert their minds to the above provisions of the constitution whilst
negotiating the agreement.
“The inherent illegality of the
agreement as formed has since been expounded by the TSA policy issued by the
Head of Service of the Federation on behalf of the Federal Government of
Nigeria directing all ministries, departments and agencies to collect payment
of all revenues due to the federal government or any of her agencies through
the TSA.
“The objective of the
presidential directive (TSA policy) in exercise of the executive powers of the
president under Section 5 of the 1999 Constitution (as amended) was in
furtherance of the spirit and intent of Sections 80 and 162 of the constitution
and to aid transparency in government revenue collection and management.
“NPA being an agency of the
federal government is bound by the TSA policy and has not howsoever been exempt
therefrom. Due to the constitutional nature of the TSA, where there is a
conflict between the TSA and the terms of the agreement, the TSA shall prevail.
“Therefore all monies due to the
NPA currently being collected by Intels and any other agents/third parties on
behalf of NPA must henceforth be paid into the TSA or any of the sub-accounts
linked thereto in the Central Bank of Nigeria (information of the account will
be communicated in due course) in accordance with the TSA policy.
“For the avoidance of doubt, the
agreement for the monitoring and supervision of pilotage districts in the
Exclusive Economic Zone of Nigeria on terms inter alia that permits Intels to
receive revenue generated in each pilotage district from service boat
operations in consideration for 28% of total revenue as commission to Intels is
void, being a contract ex facie illegal as formed for permitting Intels to
receive federal government revenue contrary to the express provisions of
Sections 80(1) and 162(1) and (10) of the 1999 Constitution of the Federal
Republic of Nigeria (as amended), which mandates that such revenue must be paid
into the Federation Account/Consolidated Revenue Fund.
“In the premise of the above, the
conflict between the agreement and the TSA policy presents a force majeure
event under the agreement, and NPA should forthwith commence the process of
issuing the relevant notices to Intels exiting the agreement which indeed was
void ab initio.”
Recall that in 2014,
Atiku disclosed how he co-founded Intels.
His words: ”Of all the
businesses into which I would venture, the most successful and the most
lucrative would be a small oil services company I established with an Italian
business man in the early 1980s.”
“I met Gabriel Volpi when he was
working at Apapa Ports in 1982. The Genoa, Italy-born Volpi was a director in
MED Africa, a shipping company.
“Volpi suggested we go into oil
and gas logistics. He knew Nigeria’s future was in oil and gas. We registered
the Nigeria Container Services (NICOTES), operating from a container office at
Apapa Ports. I was not involved in the running of the company.
“NICOTES relocated later to the
Federal Lighter Terminal in Port Harcourt when the business began to grow. The
company, now known as INTELS (Integrated and Logistics Services), has grown
into a multi-billion naira business providing over 15,000 jobs in Nigeria and
other African countries, and paying hefty dividends to its shareholders.”
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