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A GE scandal•The FG should not allow a multinational ride roughshod over a local firm

The question of economic freedom has not often been associated with the relations between a Nigerian firm and a foreign multinational. And that is because that term comes up in the strict province of politics.

Even the concept of local content flares when we bicker over how many Nigerians occupy high-flown posts like managing director; or how many engineers bear Nigerian names.

On rare occasions do we interrogate malignant narratives, in which a major multinational breaks our laws, especially when it breaks our laws in the process of suffocating a smaller firm, which happens to be a Nigerian firm.

This is the story of the United States-based multinational, General Electric (GE), and local firm known as ARCO Group PLC. The furore has been a source of corporate unease in the oil industry for quite a few years.

Yet the Federal Ministry of Labour and Employment, including the minister and the Federal Inland Revenue Service, are still clutching at straw to bring this matter to a peaceful and logical conclusion.

News reports, commentaries and other efforts to negotiate the matter into resolution have failed to keep this matter off the burner. Recently, workers of ARCO picketed in front of the GE office until intervention of the Labour and Employment minister.

So far, a solution is not in the offing. Yet, the issue is simple. ARCO was assigned to work with GE to maintain the gas plants and turbines of French giant AGIP in Delta and Rivers States.

The contract was all written in black and white, but the money paid by AGIP went to GE. GE was obliged to pay ARCO its share after a five percent withholding tax. But for nine years, GE paid ARCO its shares, less 10 percent of withholding tax.

In the final analysis, ARCO was going to account for its earnings, and so would GE. ARCO brought the inconsistency to the notice of its multinational partner and asked for the balance of the five percent it has clearly purloined.

Figures did not lie, and the mathematics was clear. GE owed the Nigerian firm lots of money.

They amounted to different tranches in different currencies. They were 142,543.97 euros, US$2, 036, 411.15 and N184, 064, 567.91 in local currency to amount to about N3 billion.

Owing to the failure of GE to pay ARCO, the Nigerian firm has been incapacitated and says it cannot pay outstanding gratuities and overhaul allowances to its staff. Hence, the recent picketing at GE gate.

It is not as if the FIRS has not intervened. Records show that the tax agency has written about three letters to GE to reconcile its accounts and pay ARCO its due.

But the company has not. The point is that GE has now acquired the common Nigerian trait of impunity, and thinks it is above the law.

GE flexed a false muscle in France when it refused to make 1000 jobs available to the market and begrudged the French only 25. France fined it 50 million euros for unacceptable behaviour.

What is not acceptable in France should not be acceptable in Nigeria. It is a case of power flexing, and a dark face of imperial power between a western firm and an African.

Its sense of power has been exercised in other ways. No one can stop it from poaching talents from ARCO as it did, because it is part of the mechanics of capitalism.

ARCO could only congratulate itself in a moral sphere, when it stood in for GE in the heady days of militancy, when expatriates fled the Niger Delta because the goons saw a kidnapped white man as a huge cash cow.

But justice is justice. The ball lies in the court of the minister of Labour and Employment who should intervene.—The Nation

 

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