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Expatriate Quota Infraction: NCDMB Wields the Big Stick

-By Gideon Osaka

A disturbing trend where operators and major service providers enter into contract agreements with supply companies to source expatriates for positions, which in several cases had been denied quota and earmarked to be occupied by Nigerians, is causing serious concerns for local content regulator, the Nigerian Content Development and Monitoring Board (NCDMB).

Valuechain reports that the use of manpower license designated for Nigerian personnel to deploy expatriates as well as the refusal to “Nigerianise” expatriate positions after the statutory four years succession plan as stipulated in the Nigerian Oil and Gas Industry Content Act (NOGICD) are now emerging challenges faced by the Board in implementing and enforcing local content in the oil sector.

Our analysis show that Sections 31, 32, and 33 of the Act that established the NCDMB vested the Board with the powers relating to the administration and management of applications for Expatriate Quota (EQ), Succession Plan (SP) and deployment of expatriates in the Industry. Section 33 in particular makes it mandatory for all applications for expatriate quota approvals to be submitted to and be approved by NCDMB before any application is submitted for expatriate quota to the Ministry of Interior or any other agency or Ministry of the Federal Government.

The Board had in 2018 released a guideline on application for Expatriate Quota, Succession Plan and deployment of Expatriates in the Oil and Gas Industry, a guideline applicable to all operators: NNPC, International Oil Companies (IOCs) and indigenous operators, Service Companies, Project promoters and all companies providing services and carrying on business in the Industry.

A copy of the guideline obtained by Valuechain shows that non-compliance by any operator, project promoter, contractor stakeholder in the Industry; including companies providing service(s) or intending to provide service(s) shall be considered to have violated provisions of the Act “if it employs or permits or procures the employment of any expatriate staff either on permanent or temporary position(s) in the oil and gas industry outside of the procedures specified in this Guideline.”

The NCDMB, in this situation, “would require immediate removal of such expatriate(s) and penalize the company in line with the provisions of the Act.”

Following the release of the guideline, the NCDMB immediately inaugurated a committee constituted by its personnel and representatives of the Federal Ministry of Interior (FMI) and the Nigerian Immigration Service (NIS) with the intent to forge close collaborations in the management of expatriate quota (EQ), share information and recommend sanction levels for violators of expatriate quota approvals.
Part of the committee’s terms of reference was also to develop strategies for the issuance of Temporary Work Permit (TIP) and stemming of EQ abuse by oil and gas companies.

Despite all these, companies still find their way to abuse the expatriate quota guideline and by extention the NOGICD Act.
To this end, the NCDMB is set to go hard on serious infractions particularly repeated or persistent defaulters and/or operators who have deliberately refused to comply with directives issued by the Board.

Recently, the Ministry of Interior, the NCDMB and the Department of Petroleum Resources (DPR) raised alarm to the fact that Manpower Supply Companies that have been issued Statutory Oil and Gas Industry Service Permits by the DPR to supply ‘Nigerian Professionals Only’, are now being engaged by operators and contractors to supply expatriates in the Nigerian Oil and Gas Industry.

According to the three government agencies in a joint statement, the permits clearly indicate that they are not to be used to deploy expatriates under any circumstance or guise but these manpower supply companies have mastered the art of abusing the permit.

They also said it was disturbing that Operators and Major Service Providers promote this illegal practice by entering into contract agreements with these Manpower Supply Companies to source Expatriates for positions which in several cases had been denied quota and earmarked to be occupied by Nigerians, a practice NCDMB says circumvents laid down statutory approval processes and compliance requirements for obtaining Expatriate Quota Positions.

The three government entities therefore drew the attention of stakeholders in the Nigerian Oil and Gas Industry to note that, “Companies (Operators, Service Providers etc) engaging manpower suppliers with permits for supply of “Nigerian Professionals Only” are to ensure that no expatriates are deployed under such manpower supply contracts under any guise (whether on EQ, TWP or other processes).”
NCDMB, MI and NIS further stated that companies seeking to engage expatriates in the Nigerian Oil and Gas industry must ensure that they obtain the relevant approvals from the Board before applying for Expatriate Quota, TWP or other entry permits from Ministry of Interior, Nigeria Immigration Service or other agencies of government.

They concluded that “Companies deploying expatriates in the Nigerian Oil and Gas industry are to ensure full compliance with the guidelines and requirements of the Ministry of Interior and NCDMB including registration on the Nigerian Oil and Gas Industry Content Joint Qualification System (NOGICJQS) as well as biometrics enrolment of all expatriate personnel in their employment.

The NCDMB said it will intensify its monitoring and evaluation activities to identify companies violating the statutory provisions of the DPR manpower supply permits and perpetuating illegal expatriate deployments with a view to invoking appropriate sanctions and penalties as specified in the Immigration Act, 2015 and Immigration Regulation, 2017 as well as the NOGID Act.

Aside the warning issued by the agencies, tougher times await companies notorious for non-compliance and breach of the Nigerian content guidelines irrespective of whether they are minor or serious infractions with the draft Nigerian Oil and Gas Industry Content Development Compliance and Enforcement Regulation 2020.

The Director, Legal Services of the board, Umar Babangida, while speaking during a recent two-day workshop, said the draft Nigerian Oil and Gas Industry Content Development Compliance and Enforcement Regulation 2020 was designed to plug some of the gaps that were identified in the NOGICD Act.

The board, he said would involve the notification to other MDAs about the non-compliance of the operator/stakeholder, including request for the withdrawal of tax privileges, and/or preventing the operator/stakeholder from getting “cost recovery”, where applicable.

According to him, minor offences refer to first time defaults, not meeting deadlines for periodic reports and similar defaults and applicable sanctions which he said would include letter of warning, invitation of management team of the operator or stakeholder for corrective dialogue with the board.

On the other hand, the NCDMB said that serious infractions include repeated or persistent defaults and or deliberate refusal to comply with directives issued by the board.

Punishment for such offences, he stated, will include “naming and shaming of defaulting operator/stakeholder with publicity within national and international oil and gas communities.

He added that part of the sanctions on defaulters may also be withdrawal of certificate of authorisation issued for the project under Section 8 of the Act and withdrawal of any approval given by the board as required under the provisions of Sections 17, 19 and 20 of the Act on Nigerian Content Compliance Certificate and Prosecution of the offenders.

Explaining further, the director said the board shall first give notice in writing to any operator or other stakeholder, specifying the identified default(s) and corrective step, action and/or remediation required to address an identified non-compliance.
He added that failure to comply shall attract the imposition of appropriate sanctions and/or penalties as may be deemed applicable in the circumstances.