PENGASSAN‘s Clash with Dangote Refinery Fuels Demands for Enforcement of “Cancel” Legislation
The escalating confrontation between the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) and Dangote Refinery has stirred widespread debate on social media and beyond. While some advocate for PENGASSAN’s right to collective action, others stress the refinery’s indispensable contribution to Nigeria’s economic framework.
The dispute intensified when PENGASSAN directed its members across seven affiliated firms to suspend the delivery of essential feedstock to the refinery, sparking alarm among stakeholders.
Many Nigerians have drawn parallels to the 1994 ban on PENGASSAN during the Abacha administration, calling on authorities to activate existing laws to defuse the standoff.
The Nigerian Trade Disputes (Essential Services) Act of 1976 grants the President authority to proscribe trade unions or associations engaged in essential services if they partake in disruptive activities or fail to follow dispute resolution procedures. This statute mandates referral of conflicts to an Industrial Arbitration Panel, enforces penalties for economic disturbances, prohibits the formation of new unions following proscription, and allows for seizure of assets belonging to banned unions. Moreover, officials of such unions face permanent disqualification from holding leadership positions.
Key Provisions of the Act Include:
- Union Proscription Power: The President may dissolve any trade union or association involved in industrial unrest within essential service sectors.
- Dispute Settlement Framework: The Act facilitates escalation of disputes to an Industrial Arbitration Panel for resolution.
- Penalties for Economic Disruption: Sanctions apply to actions that threaten the stability of essential services or the broader economy.
- Repercussions for Banned Unions: Confiscation of union assets by the Federal Government, loss of legal status, a minimum six-month prohibition on forming or joining new unions, and lifetime exclusion of union officials from leadership roles in essential service unions.
- Additional Clauses: The legislation also addresses property registration, indemnity provisions, and allows for indefinite detention of individuals undermining industrial peace after proscription.
Implications and Stakes in the PENGASSAN-Dangote Refinery Dispute
The ongoing impasse between PENGASSAN and Dangote Petroleum Refinery has escalated into a significant national concern with profound economic and social consequences. The federal government has stepped in to mediate and prevent a crisis that could disrupt energy supplies and economic stability.
Claims by PENGASSAN:
- More than 800 employees were reportedly terminated due to their union membership, infringing on constitutional rights to freedom of association.
- The refinery is accused of substituting Nigerian workers with expatriates and maintaining poor working conditions.
- A nationwide strike has been declared, including directives to halt crude oil and gas deliveries to the refinery.
Dangote Refinery’s Position:
- The dismissals were limited and part of an internal reorganization aimed at improving safety and operational efficiency, unrelated to union activities.
- The union’s actions are characterized as illegal, equating to economic sabotage and intimidation.
- PENGASSAN is accused of jeopardizing national projects and prioritizing leadership interests over the welfare of workers.
Immediate National Consequences:
Operational Shutdown: The refinery has reportedly halted all activities, including its fertilizer production unit. PENGASSAN has also instructed members throughout the oil and gas industry to commence strike action.
Risks to Fuel and Power Supply:
- Fuel Deficit: The refinery produces roughly 17 million litres of fuel daily. Any disruption could cause a 32% shortfall, leading to scarcity and increased prices.
- Electricity Vulnerability: The Nigerian Independent System Operator (NISO) warns that interruptions in gas supply threaten the national power grid, risking widespread blackouts due to dependence on gas-powered plants.
Economic Impact: Nigeria could incur daily losses of $110.8 million in crude oil export revenues and approximately N14.7 billion in domestic economic damages, exacerbating existing financial strains.
Government Intervention and Legal Context
The federal government is actively engaged in mediation efforts to de-escalate tensions and protect national interests.
- High-Level Dialogue: Finance Minister Wale Edun chaired a steering committee meeting reaffirming support for the naira-for-crude policy and energy security. Labour Minister National Industrial Court, which will weigh corporate operational prerogatives against workers’ fundamental rights.
A Pivotal Moment for Nigeria’s Industrial Future
This dispute transcends a routine labour disagreement, representing a landmark test for Nigeria’s ambition to evolve from a crude oil exporter to a leader in refined petroleum products.
The resolution will shape:
- Union Influence: Defining the extent of labour power within Nigeria’s privatized oil sector.
- Investment Environment: Balancing worker protections with operational stability to attract both local and foreign investment.
- Governmental Mediation Capacity: Demonstrating the state’s ability to manage complex industrial conflicts without exacerbating tensions.
At its core, this dispute pits the private sector’s “right to manage” against labour’s “right to organize,” with outcomes that will influence Nigeria’s industrial trajectory for years to come.