An Assessment of the President’s Power to Remove a Director under the Petroleum Industry Act 2021

Description

ABSTRACT

An Assessment of the President’s Power to Remove a Director under the Petroleum Industry Act 2021

Temple AM Damiari*

With the passage of the Petroleum Industry Act, 2021 and subsequent incorporation of the Nigerian National Petroleum Company Limited (NNPC Limited), President Muhammadu Buhari appointed members of the Board and Management of various institutional frameworks set out under the Petroleum Industry Act (PIA) 2021. This paper considers the status of NNPC Limited (NNPC) and the removal of members of the NNPC Limited Board of Directors under the PIA, the Companies and Allied Matters Act (CAMA) 2020 and the Articles of Association of NNPC Limited (Articles). The research argues that the removal of a Chairman of the Board of NNPC Ltd is guided by extant provisions of CAMA. The work contends that the provisions of section 63(3) of the PIA and Articles on the removal of the first directors of NNPC Limited by the President conflict with the CAMA. The work critiques the recent removal of the appointed Board Chairman of NNPC by the President and concludes that the removal was wrongful termination. The research proffered recommendations for amending section 63(3) PIA and the Articles, entrenching lofty ideals of International Labour Standards in termination of appointment, and upholding corporate governance principles to guard against wrongful removal of Board members.

Keywords: Directors, Removal, Disqualification, Petroleum Industry Act, Company and Allied Matters Act, and NNPC Limited.

INTRODUCTION

The Petroleum Industry Act 2021 (PIA) introduced institutional frameworks comprising of Nigerian Upstream Petroleum Regulatory Commission, Nigerian Midstream and Downstream Petroleum Regulatory Authority and NNPC Limited. In exercise of his powers under the PIA, the President of the Federal Republic of Nigeria, who doubles as Minister of Petroleum Resources, in September 2021 appointed members of the board of NNPC Limited. Subsequently, a date was scheduled for the inauguration of the board of NNPC Limited.₁ However, the inauguration of the board was suspended and later the appointed chairman of the Board was removed by the President and his name was replaced with another member of the Board.₂

* LL. B (Hons), BL. Practice Manager in ASALAW LP and can be reached via his email address te************@ni*********.ng. 

1. Obas Esiedesa, ‘Buhari appoints Ararume as Board Chairman of new NNPC Ltd’ Vanguard Nigeria (19 September 2021) accessed 5 February 2022.
2. Johnbosco Agbakwuru, ‘Just in: Buhari drops Ararume as NNPC Board Chairman’ Vanguard Nigeria (5 January 2022) accessed 5 February 2022

THE GRAVITAS REVIEW OF BUSINESS & PROPERTY LAW Vol.13 No.3