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Multinationals and Exploitation of Citizens and Indigenous Companies



A report in Daily Trust Newspaper sometime in November 2016 declared that “ExxonMobil’s affiliate companies in Nigeria have been recognized for making significant contributions to the socio-economic development of Nigeria. The company was recognized by the Social Enterprise Report and Awards (SERAs) as the Best Company in Corporate Social Responsibility (CSR)/Sustainability West Africa category, based on the cumulative impact and reach of its community enhancement projects in 2016 in several states across Nigeria”.

The article caught my attention, not only because I am an advocate of companies giving back to the society in which they operate, it gave me the impression that a multinational company was living up to the classification of being a multinational. As posited by Litvin, (2002), “Multinational corporations (MNCs) can spur economic activities in developing countries and provide an opportunity to improve the qualities of life, economic growth, and regional and global commons”. That seemed like what Mobil was indeed doing.

A few days ago, a conversation emerged on Twitter about a multinational company maltreating an indigent family over a piece of land that it leased from the family, which the family has gone ahead to sell to another indigenous company. Further digging revealed that that multinational company in question is Mobil Oil Nigeria. Imagine my shock!

Here is a background into the story.

The owner of the land on which the petrol filling station was built is late Chief Sunday Ogunyade. Mobil took a “development lease” of this land and developed the petrol filling station, of which its possession is now in dispute, the first lease to Mobil was from 1980 to 2000, after the expiration of this lease, the landlord, late Chief Sunday Ogunyade asked for improved rent to which the tenant objected.

So Mobil initiated a court process to safeguard its position, in Suit Number LD/2360/2000, Mobil Oil Nigeria Plc v Chief Sunday Ogunyade. Part of the landlord’s grouse was the breach of the expired lease-to wit leasing part of the Land to Mr. Biggs (UAC) without the consent of the landlord.

By virtue of a term of settlement entered in Suit Number LD/2360/2000, the lease to Mobil was extended for another ten years, covering 2000 to 2010, without option of renewal, so the court ordered lease elapsed by effluxion of time on 31st August, 2010.

Towards the end of 2010, the Administrators of late Chief Sunday Ogunyade subsequently entered into a ten-year lease agreement over the property with a Nigerian owned business. The title of this new owner over the property has fully perfected in keeping with extant laws of Federal

Republic of Nigeria. So no party can dispute it.
In a bid to stop the Administrators of the Estate of Chief Sunday Ogunyade from leasing and selling the property, Mobil sued the Administrators of the Estate of Chief Sunday Ogunyade at the Lagos High Court TBS, before Justice Akapo Lawal, Mobil’s Suit was dismissed because they didn’t sue the Administrators of Late Chief Sunday Ogunyade in their personal names.

Despite several court proceedings and meetings, Mobil Nigeria refused to vacate a property that it is fully aware has been legally acquired by another business, thereby causing the Nigerian company and the family who own the land so much pressure and stress.
The question that this situation draws up is: Would a multinational like Mobil do this outside the shores of Nigeria?

Should a multinational treat members of its host community in this manner, particularly the family on whose property they are operating? Indeed, Mobil Nigeria has not conducted itself in the best interest of the host community. The fact that Mobil did not live up to the terms of its tenancy agreement is alarming to say the least for a business of global standard. Mobil Nigeria was expected to use the property without subletting it to another business but Mobil went ahead to sublet without involving the property owners, for instance.

Could Mobil’s behaviour have been tied to the fact that it recently sold its shares in the downstream business to NIPCO PLC and changed its name to 11 Plc? Or could it be a usual practice with the company? Some reports have it that Mobil Nigeria behaves in this manner as regards many properties that they operate on in Nigeria because they often occupy them on a lease basis, making it easy for them to pack up and leave whenever they feel like. It is not surprising then that Mobil Nigeria has several similar cases pending in the courts.

This issue with Mobil is a wake-up call for the authorities to properly regulate and standardize the terms of operations for multinationals. Multinationals should not be allowed to arm-twist poor citizens that do business with them; they should not be allowed to treat the law with levity; they should not be allowed to play above the law. By deceiving 11 Plc that bought a part their Nigerian operations that they have an asset when indeed they don’t, Mobil behaved in a manner that contributes to making investors view Nigeria as a difficult place to do business.

My take is that it is not enough to carry out these horrible activities and then attempt to manage these complex set of issues in the host countries by implementing corporate social responsibility (CSR) stunts. Multinationals need to do the right thing and be responsible in their dealings with indigenous people and indigenous companies.

Badmus writes from Victoria Island, Lagos