P&ID: Malami Calls For Standard Operating Procedures In Africa To Avoid Nigeria’s Mistake

–Says Country Due For Arbitral Proceedings Hub

Attorney-General of the Federation and Minister of Justice, Abubakar Malami SAN, said on Thursday that Nigeria must put standard operating procedures in place to avoid signing contracts or agreements that might trap it.

Malami stated this in reference to the Process and Industrial Developments (P&ID) gas contract of 2010, which failed and later caused huge embarrassment for the country.

He spoke at a virtual International Program on African Arbitration, powered by the British Institute of International and Comparative Law in cooperation with the School of International Arbitration at Queen Mary University of London and Babcock University.

Reuters reports that P&ID, set up to carry out a gas project in Nigeria, won a $6.6 billion arbitration award after the 2010 deal collapsed.

Arbitration is a process in which a dispute is submitted, by agreement of the parties, to an arbitrator(s), who issues a binding decision on the dispute, and it is usually administered in huge financial issues.

Malami stressed that African states could prevent such scenarios as in the case of the P&ID award, by making sure that due process was strictly adhered to in any economic dealing.

“The whole hitches of saga associated with P&ID was indeed a product of corruption, fraud and non-compliance with processes and procedure.

“Take for example, a situation whereby a company comes over to Nigeria, perhaps, interested in establishing a facility and a gas plant facility for example.

“The starting point is acquisition of land. A company in the circumstances of P&ID has not succeeded in acquiring the land upon which such facility is established; associated processes and procedures that are required from the Department of Petroleum Resources, associated approvals and permit were not obtained.

“The agreement in its own right was not subjected to necessary processes associated with vetting by the office of the AGF, associated with the approval of the Federal Executive Council, and yet it was signed without allowing these processes and approval to be consummated,” he said.

The AGF maintained that going forward and for any nation to advance forward, it must strengthen and implement a standard operating system for all of its engagement.

He added that relevant institutions must be empowered to clamp down on corrupt elements and practices, that sought to compromise the integrity of the nation.

“The greatest lesson is that to ensure that we have in place standard operating procedures relating to each and every agreement that has the potential of affecting our national economy and interest and ensure that at the end of the day, the stated standard operating procedures are indeed followed.

“And ensure that at the end of the day, there are consequences for corrupt practices relating to the officials of government that are saddled with the responsibility of processing agreements and ensuring that due processes and procedures are complied with,” he said.

He spoke further, “It is a component of tightening our situation within the context of compliances, within the context of procedure and ensuring that at the end of the day, there are consequences for wrongdoing associated with officers that are found wanting or perhaps compromising along the line, one way or the other.”

Furthermore, Malami was of the view that the country had come of age to be an arbitral proceedings hub, instead of looking up to foreign jurisdictions.

“I think our arbitration proceedings are coming of age, we are indeed significantly making steady progress as far as arbitral proceedings are concerned.

“But one gap that is visibly apparent is working towards making Nigeria, an arbitral proceeding hub, rather than maybe working towards a direction of submitting to other jurisdictions as far as the seat of arbitration is concerned.

“To see what we can do in terms of encouraging the choice of Nigeria as a seat of arbitration so that what we are doing in terms of strengthening our arbitration within the context of making Nigeria as a hub of arbitrary proceedings,” he said