Mr. S. P. Lohia, Chairman, Indorama
Conflicts between multinational companies and their host communities have been a common phenomenon in the oil rich Niger Delta region since the discovery of black gold in the region.
The unhealthy relationship has snowballed to non- oil exploration firms which has made the region notorious for restiveness and militancy in the past decades.
The phrases Memorandum of Understanding (MoU) and Corporate Social Responsibility (CSR) are known English language phrases often used by host communities of multinational oil companies in the Niger Delta region to demand for royalties extracted from their soil.
It is the supposed social actions or incentives the multinational companies use (or should use) to render or implement social services to their host communities.
Most conflicts between oil bearing communities and multinational companies have either brewed from not signing MoU, or not implementing the CSR that are contained in the already signed MoU.
Examples abound that it has been the take-off points of all hostilities emanating in all the oil bearing communities in the Niger Delta region.
Analysts wonder why communities should not approach the court of law to demand for their ”bonafide” entitlements, if MoU is statutory (binding by the law), instead of resorting to phantom and indiscriminate blockade of multinational company’s operations gates, and the disruption of oil exploration, and business activities of the multinational companies in their enclave.
Last time I checked, MoU is not a statutory function that is binding by law. Rather it is a gentleman’s agreement hence it is consistently flouted by the multinational companies in the region.
In 2006, Indorama Corporation of Indonesia bought over the old Eleme Petrochemicals Company Limited (EPCL)’ a subsidiary of NNPC through the privatisation programme of the Federal Government.
After massive turnaround maintenance, and continuous improvements, the company now called Indorama Eleme Petrochemicals Limited (IEPL), has in the past 13 years, become Nigeria’s engine room of Industralisation, especially in the petrochemicals and plastics sectors of the economy.
In 2016, Indorama-Nigeria also added a flagship world class Fertilizer plant Train-1, Indorama Eleme Fertiliser and Chemicals Limited (IEFCL), which produces 1.5 million metric tons of Urea fertiliser per annum. Train-2 of the plant is currently under construction and would also produce another 1.5 million metric tons of Urea — bringing Indorama’s total urea production in Nigeria to 3 million MT.
Indorama is the main source of fertiliser for over 20 million farmers across the country. Indorama-Nigeria is managed by globally acclaimed administrators: Mr. S. P. Lohia — Chairman, Mr. Amit Lohia — Vice Chairman, Mr. Manish Mundra — Managing Director / CEO Africa and Mr. Munish Jindal — CEO Indorama Fertiliser.
The team no doubt has demonstrated high profile managerial aptitude and acumen in handling the affairs of the company in Eleme, Eleme LGA, Rivers state, in materials production capacity, human resources, and above all company’s and host communities’ relationship.
A comparative assessment of the Indorama host community relationship and other multinational companies in Niger Delta region posited the fact that their methodologies are more real than ideal.
This is because they approached the much dreaded problem of not signing MoU or non-implementation of already signed MoU with pragmatism, sincerity of purpose, and the penchant of developing the Eleme people and the six Eleme communities that are their hosts.
Indorama Eleme Fertilizer and Chemicals Limited, developed a template of company and host community relationship that is adjudged second to none in host community relationships in the Niger Delta region, nicknamed ”Eleme Model”
The company strongly believes in partnering with the communities and providing opportunities for them. They have implemented several developmental projects and human capacity building projects that are statutorily binding by law, and which can be challenged in court of law, should it not be complied by any of the parties.
These includes; 7.5% equity for the host communities, first of its kind in Africa, annual dividend of more than N4 billion Naira per annum for six communities, annual Corporate budget allocation of more than N100 million Naira for sustainable community development projects.
Others are scholarships for human capacity building amongst indigenes. micro-credit finance on special drive for women in agriculture, special focus on employment of indigenes, and 23% of total workforce of the company are indigenes.
More than 10,000 contract jobs have been carried out by Nigerian service providers, youth skills development programme, and construction of youth ICT centre.
In an interview with Ledum Mitee, former President of Movement for Survival of Ogoni People (MOSOP),a lawyer and activist, on how Shell Petroleum Development Company’s CSR to their host communities in Ogoniland in their years of oil exploration and exploitation has developed Ogoniland.
He said: “The Eleme model on hosts community and multinational companies’ relationship is something that people should look at, because today the Eleme model on company and their host community relationship has brought about relative peace in that area, why can’t we duplicate that model in another place where there is oil.
“Am one of the people that advocate that the Eleme community model with Indorama is the way to go!”
In an interview with Wisdom Dike, CEO Afrisource Vision and Development Centre, he distinguished between MoU and Development Partnership Agreement (DPA)
.He said: ”An MoU is an understanding reached between two people. In the context of its use in the Niger Delta, an MoU is an agreement reached between a host community and a company; an understanding pushed around a social development process. It may be written or unwritten.
”And a Development Partnership Agreement is a written legal document based on negotiations between the two parties with agreed terms of reference and implementation procedures for which either party if it faults is liable.
”MoU may not be enforceable in a law court, but a development partnership agreement is enforceable in a law court.
“Before now, communities did not understand this. If you enter into MoU, the multinational company knew what they are doing, they call it GMoU. They knew that you cannot legally enforce it, because is just an understanding, but Development Partnership Agreement hold them responsible with timelines, which you can contest in law court and it is signed by the highest echelon of both parties.”
He stressed further that ”the awareness of host communities departing from signing MoU to DPA has to be initiated from the elites of oil bearing communities.
“Your opponent can not empower you to subdue him. They should study and understand the operational mechanism of these legal terminologies, which unfortunately most of our legal practitioners did not understand it.
“ If you sign an MoU with these companies they will deny you tomorrow and you can’t take them to court. But the development partnership agreement gives you a social license to operate. The communities are maintaining the peace process also notice that they will enjoy the benefit of the oil they are taking from their land which becomes legal.”
Dike advised oil bearing communities to opt for DPA which can be contested in the law court.
”The oil bearing communities should begin now to reinvent the development process with these companies. That engagement will begin with you getting properly organized. I studied the Eleme Clan Model with Indorama Eleme Fertilizer & Chemical Limited, it is a master piece.” he concluded.
The IEFCL CSR Model is as well extended to their out-station facilities host communities. In an interview with Mr. Solomon-Wokoma Innocent, the incumbent Community Development Committee (CDC) Chairman of Egbada Community, one of the community nine communities that make up the ”Cluster 5” in schedule of IEFCL along Ogba, Egbema, Ndoni Local Government Area of Rivers state axis, he attested that “Egbada Community is one of the nine communities that make up “CLUSTER 5” of the Indorama Eleme Fertilizer and Chemicals Limited.
“The Company completed a gas pipeline from Agip OB/OB through these CLUSTER Communities to Eleme between 2015 & 2016 and since then, I will say that they have done better compared to other multinationals that has been existing in my area.
“Between 2015-2016, they completed a N5m project in each of the communities from CLUSTER 1-5 as agreed in the construction MoU.
“In 2017, they signed MoU’s with each of the clusters for three years period, 2016-2019 which also has been completed.
“The MoU for each of the cluster communities includes; Six tertiary student’s bursary (two students each year) completed, six skills acquisitions centers, now completed.
“Any choice project of the community worth N8m now completed. Their end-of-year homage to communities is also reasonable compared to other multinationals in the area.”
The Egbada CDC Chairman concluded thus: “in their less than five years of facility presence in our community, one can authoritatively say that Indorama Eleme Fertilizer and Chemicals Company has done well in community relationship though we look forward to seeing them improving in human capacity building, such as award of scholarships, direct employment of qualified individuals from the area and increasing their starter pack for skills.”
Indorama conglomerate was established in 1975 in Asia. They operate in four continents of the world, and manufacture a wide range of industrial products including Polyethylene, Polypropylene, Polyester, Spun Yarns, Fabrics, Medical Gloves, and Fertilizers.
Indorama has built a mega-sized fertilizer plant in Nigeria, under the helm of Indorama Eleme Fertilizer & Chemicals Limited. Their project consists of 2,300 TPD Ammonia plant, 4,000 TPD Urea plant, 83 km long gas pipeline, and an export terminal.
The ongoing construction of the new IEFCL’s fertilizer plant commenced in early 2013, started urea production of 4,000MT/day from May 2016.
The management under the leadership of Mr. S. P. Lohia, believe that everyone must be treated with respect regardless of position, ethnicity, gender or age stressing that the part to excellence requires introspection, honesty, positive attitude, accessibility, openness to ideas and feedback.
Their managers and leaders ultimate goal is to ensure high motivation level of all employees, with the believe that fully motivated and engaged employees drive company to success
They believe in seamless teamwork that collaborates in harmony across functions, business groups and boundaries.
IEPCL strongly believe that without innovative ideas they cannot get ahead by doing things the same way as other establishment does.
They insist on always being visionary and uplifting a culture of idea generation and implementation.
Their business model must be creative innovative and renovation. They always desire to see innovation across all their businesses and functions. Their slogan is staying ahead.
The company exploited the increasingly deficiency in key soil nutrients such as nitrogen, phosphorus, potassium and sulphur that needed to support the yields and healthy nature of Nigerian crops.
As core business economy conglomerate, Indorama tapped from the low yields in Nigeria poor soil condition when compared to other developing countries.
Narrating the secret behind the successes of their company, according to IDORAMA ELEME FERTILIZER & CHEMICALS CORPORATE BROCHURE, especially in the area of company/community cordial relationship, and their produce high rise in the global economy, Mr. P.S. Lohia, posited thus: ”IEFCL has proven that the desire to achieve, and the sense of ownership are the best strategy for broadening the vision for attaining leadership.
”With the inclusive consisting of Indorama Corporation, the Federal Government of Nigeria, Rivers state Government, employees and communities, IEFCL is today an excellent model of Public Private Partnership in Nigeria.
”We have no doubt that IEFCL Urea will become an iconic brand and a symbol of Nigeria’s prosperity. We have our eyes fixed on becoming market leaders with the largest market share in Africa.
“IEFCL is today well known for its WIN (World Class Indorama Nigeria) philosophy. Our passion is to build a truly world-class organization. This is simply a matter of using the best practice in everything we do.
”I am proud to be leading a team of over 1,200 employees. Team work has made us what we are today! I am proud of our people, our products and our processes.”
In a chat with Dr. Jossy Nkwocha, Group Head, Corporate Communications of Indorama-Nigeria, he said that the company from the onset has taken its host communities as partners in progress and major stakeholders in the company.
“That was why the Managing Director Mr. Manish Mundra, worked hard to ensure that the host communities were allocated 7.5% of the shares of the company. That’s why also that we enforce all our MOUs to the letter. That also explains why Eleme people support Indorama at all times.”
Dr. Nkwocha disclosed that many post-graduate students in universities use the Indorama model as their case studies in excellent company-community relations, and indeed the panacea for lasting peace in the Niger Delta region.
With IEFCL and their host communities CSR model, the company has established the fact that host community and multinational company’s cordial and smooth relationship is achievable, and restiveness and militancy in the Niger Delta region could be a forgone phenomenon.
The Eleme model host community and multinational conflict settlement mechanism invented by Indorama Eleme Fertilizer and Chemicals Company should be adopted by the Federal Government to curb the militancy and restiveness witnessed in the region.