Exclusive: NLNG accused of tax evasion, job inequity, and contract bias against Rivers State since 2011 relocation. Will justice be served?
Nigeria LNG and the Mirage of Its Head Office Relocation: A Deceptive Tale of Unfulfilled Promises
Thirteen years have passed since the Nigeria Liquefied Natural Gas Company (NLNG) relocated its head office from Lagos to Port Harcourt, Rivers State. The decision, which was heralded with much fanfare, has proven to be a mirage of economic and social benefits for the people of Rivers State.
What was initially celebrated as a monumental victory for the host state of NLNG’s production facilities has instead revealed a deeply entrenched pattern of neglect, inequity, and systemic exploitation.
This investigative report examines the glaring contradictions in NLNG’s operations, particularly in areas of taxation, employment, community engagement, and contract allocation.
It exposes how the promises made during the relocation have largely been unfulfilled, raising serious questions about the company’s commitment to its host communities and adherence to its own proclaimed core value of integrity.
The PAYE Taxation Conundrum: Who Truly Benefits?
When NLNG moved its head office to Port Harcourt in 2011, it was expected that the relocation would significantly boost Rivers State’s internally generated revenue (IGR) through Pay-As-You-Earn (PAYE) taxes paid by its employees. However, there is mounting evidence suggesting otherwise.
Despite the physical relocation, it remains unclear whether all PAYE taxes for NLNG staff working in Rivers State are remitted to the state’s treasury. An independent audit by the Rivers State Accountant General and Auditor General could potentially unearth a web of deceit in the company’s tax remittance practices.
If PAYE taxes are still being paid into Lagos State’s account or diverted to other jurisdictions, it would amount to a monumental betrayal of the people of Rivers State.
This is not merely a technical oversight but a deliberate scheme to deprive the state of its rightful economic benefits. The Rivers State Government must take immediate steps to investigate and hold NLNG accountable for any discrepancies in tax remittances.
Employment: A Tale of Broken Dreams and Systemic Exclusion
The promise of employment opportunities for Rivers State indigenes was one of the most alluring aspects of NLNG’s relocation. Yet, 13 years later, the reality paints a very different picture. The same individuals who controlled NLNG’s employment processes in Lagos continue to wield significant influence, perpetuating a system that systematically excludes Rivers State indigenes.
The excuse often given by NLNG is that Rivers State applicants fail to meet the required standards during recruitment exams. This justification is not only patronising but also deeply insulting.
As rightly pointed out by a former Rivers State Governor, if indigenes fail to pass the exams, the company should invest in training them to meet the standards. The refusal to do so suggests a deliberate effort to marginalise the host community.
A forensic audit of NLNG’s employment records from 2011 to date would reveal the extent of this exclusionary practice. Rivers State’s Ministry of Employment should demand data on the proportion of Rivers indigenes employed relative to other states in Nigeria.
Moreover, the distribution of management positions should be scrutinised to determine whether Rivers indigenes have been fairly represented at the decision-making level.
The stark inequities in employment practices beg the question: Why is Rivers State good enough to host NLNG’s production facilities but not good enough to supply its workforce?
Contracts: A Monumental Disparity in Distribution
The issue of contract allocation is yet another area where NLNG’s operations have fallen short of expectations. Between 2010 and the present, NLNG has awarded billions of naira in contracts, yet only a meagre fraction has gone to Rivers State indigenes or businesses. This is particularly troubling given that Train 7, the largest ongoing project in Nigeria, is expected to inject billions of dollars into the economy.
While non-indigenous contractors have reportedly secured lucrative deals worth millions of dollars, Rivers State contractors are left to scramble for crumbs. This glaring disparity is not only an affront to the host community but also a violation of the principles of equity and local content development.
The Rivers State House of Assembly must take immediate steps to investigate NLNG’s contract allocation practices. A public inquiry should compel the company to disclose detailed records of all contracts awarded since 2010, including the names of contractors, contract values, and the geographical distribution of beneficiaries.
Integrity in Question: The Silence of Community Leaders
NLNG’s core value of integrity is prominently displayed on its website, but its actions tell a different story. The company’s operations in Rivers State reveal a pattern of exploiting the goodwill and peaceful nature of its host communities, particularly Bonny Island, where its production facilities are located.
The silence of some community leaders suggests that NLNG may have employed financial incentives to suppress dissent. This raises serious ethical questions about the company’s relationship with its host communities and its commitment to genuine partnership.
The Role of the Rivers State House of Assembly
The Rivers State House of Assembly has a critical role to play in addressing these issues. It must summon NLNG’s Managing Director to provide comprehensive data on employment, tax remittances, contract allocation, and the distribution of management positions. Such transparency is essential to hold the company accountable and ensure that the host community receives its fair share of benefits.
Call to Action
NLNG’s relocation to Port Harcourt was supposed to herald a new era of economic prosperity and social equity for Rivers State. Instead, it has become a tale of broken promises and systemic exploitation. The time has come for the state government, civil society, and the media to demand accountability from NLNG.
Nigeria LNG and the Mirage of Its Head Office Relocation: Structural Failures and the Way Forward
Having established the glaring inequities and failures in NLNG’s operations in Rivers State, it is imperative to examine the structural and policy frameworks that enable these systemic issues.
This second half of the report delves deeper into the root causes of the problem, exposing the underlying flaws in governance, corporate accountability, and community engagement while suggesting actionable remedies to ensure Rivers State is no longer shortchanged.
The Structural Foundation of Exploitation
At the heart of the NLNG saga lies a deeper structural issue: the lack of enforceable local content policies and weak oversight mechanisms by state and federal authorities. While Nigeria boasts a Local Content Act (2010), designed to promote the participation of host communities in oil and gas operations, its implementation remains inconsistent and often skewed in favour of corporate interests.
Local Content Act: A Tool Ignored in Rivers State
The Local Content Act mandates that oil and gas companies operating in Nigeria prioritise the engagement of local contractors, employees, and suppliers from host communities. However, the application of this law in Rivers State has been lacklustre at best. NLNG, while benefiting immensely from the resources and infrastructure of Rivers State, has largely circumvented its obligations under the Act.
For instance, the low proportion of contracts awarded to Rivers State-owned businesses demonstrates a blatant disregard for local empowerment. This not only undermines the economic potential of the state but also fuels resentment among its people.
If NLNG were operating in more assertive host states like Akwa Ibom, such gross neglect of local content requirements would likely trigger immediate governmental intervention.
The Rivers State Government must leverage the Local Content Act to demand a full audit of NLNG’s operations, particularly its compliance with provisions on employment and contract allocation.
The Nigerian Content Development and Monitoring Board (NCDMB) should also be called upon to investigate NLNG’s adherence to the Act and impose penalties where violations are found.
Taxation: Exploiting Legal Loopholes
One of the most contentious issues in the NLNG saga is the question of tax remittances. If PAYE taxes for employees in Rivers State are not fully remitted to the state’s coffers, as suspected, it reflects a deliberate exploitation of legal and administrative loopholes.
NLNG’s status as a joint venture between the Nigerian government and international oil companies may provide it with certain tax exemptions or privileges. However, such privileges should not override the legitimate revenue entitlements of Rivers State.
The Rivers State Government must push for a comprehensive review of NLNG’s tax obligations, including PAYE, Value-Added Tax (VAT), and other levies, to ensure full compliance with state and federal tax laws.
Policy Failures: A Government Complicit in Injustice
The complicity of government institutions, both at the state and federal levels, cannot be ignored. Successive administrations in Rivers State have failed to hold NLNG accountable for its actions, often prioritising short-term political gains over long-term benefits for the people.
The Role of the Rivers State Government
While NLNG’s actions—or inactions—are reprehensible, the Rivers State Government must also share the blame for its failure to enforce corporate accountability. The silence of some state officials and community leaders suggests a troubling pattern of complicity, where individual benefits take precedence over collective welfare.
The Rivers State House of Assembly has an opportunity to redeem itself by instituting a robust inquiry into NLNG’s operations. This should include public hearings where NLNG officials, contractors, employees, and community representatives can present their perspectives.
The findings of such an inquiry should form the basis for legislative and executive actions to address the identified gaps.
The Role of the Federal Government
As a majority shareholder in NLNG, the Nigerian government bears a unique responsibility to ensure that the company’s operations align with national and state development goals. However, federal authorities have often turned a blind eye to the grievances of host communities, prioritising revenue generation over equity and justice.
The Ministry of Petroleum Resources and the NCDMB must take a more active role in monitoring NLNG’s compliance with local content and community development obligations.
Additionally, the Federal Inland Revenue Service (FIRS) should collaborate with the Rivers State Government to resolve any disputes over tax remittances.
Community Betrayal: The Bonny Island Paradox
Bonny Island, the site of NLNG’s production facilities, epitomises the paradox of resource-rich communities plagued by underdevelopment. Despite hosting one of the most profitable gas ventures in the world, Bonny Island remains largely underdeveloped, with inadequate infrastructure and limited economic opportunities for its people.
The peaceful nature of the Bonny people has been exploited by NLNG, which has used financial incentives to silence dissenting voices. However, the patience of the community is wearing thin, as evidenced by growing discontent over the marginalisation of Rivers State indigenes in employment and contract allocation.
Bonny Island’s plight highlights the need for a more assertive approach to community engagement. NLNG must move beyond token gestures of corporate social responsibility (CSR) and invest in sustainable development projects that address the core needs of its host communities.
Train 7: A Test Case for Accountability
The ongoing Train 7 project represents a litmus test for NLNG’s commitment to equity and local empowerment. As the largest gas infrastructure project in Nigeria, Train 7 has the potential to transform the economic landscape of Rivers State. However, the current trajectory suggests otherwise.
Reports of meagre contract awards to Rivers State contractors and the exclusion of indigenes from key employment opportunities are deeply troubling. The Rivers State Government must ensure that Train 7 does not become another missed opportunity for the state. This requires proactive engagement with NLNG, backed by legislative oversight and civil society advocacy.
The Way Forward: Demanding Justice and Equity
The time has come for Rivers State to assert its rights as the host of NLNG’s production facilities. This requires a multi-pronged approach involving government, civil society, and the media.
- Audit and Transparency: The Rivers State Government should commission an independent audit of NLNG’s operations, focusing on employment, contracts, and tax remittances.
- Legislative Action: The Rivers State House of Assembly must enact laws to strengthen corporate accountability and enforce local content requirements.
- Community Mobilisation: Host communities, particularly Bonny Island, should organise peaceful but firm campaigns to demand greater inclusion in NLNG’s operations.
- Federal Collaboration: The Rivers State Government should engage with federal authorities to resolve tax disputes and enhance local content enforcement.
Conclusion: Restoring Integrity and Equity
The relocation of NLNG’s head office to Port Harcourt was meant to be a game-changer for Rivers State. Instead, it has exposed the systemic failures that continue to marginalise resource-rich host communities.
NLNG must move beyond rhetoric and demonstrate genuine commitment to its host communities through equitable employment, fair contract allocation, and transparent tax practices. The Rivers State Government, for its part, must rise above complacency and prioritise the welfare of its people over short-term political gains.
This is not just about holding NLNG accountable; it is about redefining the relationship between multinational corporations and host communities in Nigeria. For Rivers State, the time for silence is over. The time for action is now.
Mark Olise
Atlantic Post Special Correspondent.
