Busted: Nigerian govt agency uses fake contractors to execute N1bn project

A NIGERIAN government parastatal is using non-existing companies to execute over $1 billion cleanup project in a Niger-Deltan community, investigations have shown.

An establishment named Hydrocarbon Pollution Remediation Project (Hyprep) is charged with the responsibility of cleaning up the heavily polluted Ogoniland in Rivers State, South-South Nigeria, but it is using some phoney contractors to execute the project estimated at $1 billion (or over N800 billion today).

Ogoni was polluted by oil giants such as Shell, Total, Agip, and former Nigerian National Petroleum Corporation (NNPC, now NNPC Limited).

In line with the recommendations of the United Nations Environmental Programme (UNEP), the Nigerian government under President Muhammadu Buhari set up Hyprep in 2016 to specifically handle the Ogoni cleanup project.Pages 5-7 of Hyprep Herald where names of contractors are listed

The four polluters-in-chief created a company named Shell Petroleum Development Company of Nigeria Joint Venture (SPDC JV) for the purpose of funding the project.

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The group paid $180 million in July 2018 and another $180 million in 2019. It further remitted $212 million in 2022, putting its total contribution at $572 million.

For the purpose of the cleanup project, also known as remediation, Hyprep created what was known as “lots” and assigned contractors to handle each of the lots.

However, some of the contractors that remediated the lots are not found in the register of the Corporate Affairs Commission (CAC). Economy Post checked on the register of the CAC and also confirmed from the government agency that the companies do not exist. Efforts were also made to reach out to the companies but to no avail.

Lawyers say that a company does not exist in the eyes of the Nigerian laws if it is not in the register of the CAC.

“A company does not legally exist if it is not in the CAC. In fact, it can be considered a criminal act for a non-existing company to do business in Nigeria,” a lawyer with more than 21 years experience, Mr Jude Domgbam, said.

Section 16 Subsection 6 (b) of the Public Procurement Act 2007 says that “a bidder must possess the legal capacity to enter into the procurement contract.”

Section 16(d) notes that “a contractor must have fulfilled all its obligations to pay taxes, pensions and social security contributions.”

However, non-existing firms do not pay taxes as they are not legal entities.

Ogoni is made up four local governments of Gokana, Eleme, Tai and Khana.

The non-existing companies busted

Investigations show that Hyprep awarded a contract for Lot 042 to Kanny Kay Limited. Checks on the CAC register show that the company does not exist in Nigeria. The company does not have a website and does not have a digital presence.

Another non-existing firm, which was allowed to execute an Ogoni cleanup project in violation of the Nigerian laws, is Avandale Supplies and Services Limited. The firm does not exist in the records of the CAC, though Hyprep handed over Lot 007 at Nkeleoken, Alode Eleme, to the firm to handle.

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Similarly, Hyprep awarded Lot 017 project located at Bara Akpor, Botem, in Tai Local Government Area to Tip Tree Nigeria Limited, which does not exist in the CAC register.Lot 43, Ngofa

NG-Check, which keeps records of all Nigerian companies, recognises only Tip Tree Intertrade Nigeria Limited, which is in international business. The company was registered on May 12, 1993.Lot 44, Ngofa

Yet another company that participated in the clean-up exercise in violation of Nigerian laws is Louizioni Ferreti Enterprises Limited, which cleaned up Lot 018 at Buemene Korokoro Well 09 in Tai Local Government Area. It has a website which does not specify its business. The website describes it as a general contractor. However, the pictures of a pencil, measuring tape, and nails on the site show that it is in the wood/carpentry industry but not in the business of environmental remediation.Lot 45, Ngofa

Unexisting site

Hyprep also claimed that it cleaned up a lot or polluted site that does not exist.

At Aleto Ngofa in Eleme Local Government Area of Rivers State, Hyprep claimed that it cleaned up Lot 46, but our investigations show that Lot 46 does not exist.

For the records, what was found at Aleto Ngofa were lots 43-45. There was no Lot 46 as claimed by Hyprep.

Project supervisor and the traditional ruler of Aleto Ngofa also confirmed that there were three sites, not four.

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“There are only three sites there. There is no Lot 46. We have lots 43-45,” said the Traditional Prime Minister of Aleto Ngofa community, His Royal Highness Nwosu Ngofa, who has been part of the project from inception.

In the reporter’s presence, he contacted the project supervisor who also confirmed that Lot 46 was a ruse.

Also, some of the sites were poorly remediated, according to land owners, who claimed that crops were not growing in any of them.

One of the members of the family that owns Lot 012 at Debon Mogha/ Bodo in Gokana Local Government Area, Mr Nunaa Elbabariripini, said there was no compensation for the oil spillage and the remediation work done was shabby.Lot 012, Debon Mogha/ Bodo

“The promised to return in 2022 for completion of the work but they did not honour their promise. Look at the way this place is, does it look like it was cleaned,” he asked, rhetorically.

Companies without previous remediation experience

Contracts were also given to firms with no previous remediation experience in violation of Nigerian laws.

Section 16 (6) (a) of the Public Procurement Act 2007 says that contractor “must also have the potential skill, techniques and capacities to deliver the kind of job or work given to her, in order to ensure quality work done and timeliness of delivery.”

Oilserv Limited cleaned Lot 031 located at B-Dere in Gokana Local Government Area. However, it does not mention this work as one of its recent or completed projects on its website. The company is a major contractor for Shell and the NNPC. More than 100 projects mentioned on its website do not include any previous environmental/soil remediation work.

Similarly, Slot Nigeria, which handled Lot 048 at Okuluebu Ogale in Eleme Local Government Area, does not name this work on its website as one of the 23 projects it executed. All but one of the 23 projects were contracts from Shell. None of the contracts shows previous remediation experience.

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Andelsta Limited remediated the non-existing Lot 46 in Aleto Ngofa . Curiously, it did not name any contract under the “Projects” section on its website, casting doubts as to whether it has previous remediation experience.

Andelsta Limited was contacted through its official phone number on its website. The recipient of the call, who said he was a web designer at the company, contacted the project supervisor of the company.

“Yes, I was able to speak with one of the project coordinators. My project coordinator said we actually did Lot 46. Every information you need, Hyprep can provide it for you,” the web designer said.

When pressed to provide evidence of executing the contract, he said he was not in a position to do so, asking the reporter to contact Hyprep for further information.

“My project coordinator said you can feel free to publish whatever you find,” he added.

They can be prosecuted

A lawyer, Mr Samuel Oyigbo, said it was illegal to award a contract to a company that was not registered with the CAC.

According to him, it was equally possible for a company that originally registered with the CAC to cease from being a legal entity.

“You are expected to file your annual returns and pay certain fees over a period of time. If you fail to do so after some time, the CAC will remove you from its register because you are no longer, in law, a going concern,” Oyigbo explained.

A criminal lawyer, Ms Sandra Edogbo, noted that the Economic and Financial Crimes Commission (EFCC) had the power to investigate and prosecute the contractors.

“Once it is found that this type of act occurred, they can be prosecuted and can go to jail for this,” she said.

READ ALSO: How NDDC mismanaged N6.32trn received from Nigerian govt

The EFCC is responsible for investigating financial crimes in Nigeria.

Hyprep dismisses claim

Hyprep spokesman, Mr Kpobari Mafo, however, dismissed the claims, denying that fraudulent, fictitious or illegal companies got contracts to execute various remedial projects.

“Everybody has a right to say what they like. It is not true that the clean-up is substandard. It is not true that contractors were fake. This is not a phone matter because I would like to take you to the sites,” he said in a telephone interview.

When the reporter reminded him that he had visited most of the sites, he insisted that Hyprep would be happy to take him around to see the projects.

“It is better you come so that we will sort out those points,” he added.

The reporter, however, declined the request.

The bigger version of this story was first published in Dataphyte.

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