In September 2025, the Dangote Petroleum Refinery, Africa’s largest industrial project, faced its first major governance test, a labour dispute that shook confidence in Nigeria’s industrial relations framework. The conflict between Dangote Refinery and the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) revolved around the dismissal of about 800 workers who had exercised their constitutional right to join a trade union.

The episode, which sparked a nationwide strike and threatened to disrupt our nation’s energy supply, revealed deep gaps in corporate governance, stakeholder engagement, and labour relations practices in strategic industries. It also offered valuable lessons for how large corporations should balance investors' interests with employee rights.

The dispute began in August 2025, when nearly 1,000 refinery employees completed membership forms to join PENGASSAN, seeking better welfare and working conditions. Soon after the union notified management of these new memberships, the company dismissed 800 of the workers without what the union regarded as fair consultation or transparent justification.

In response, PENGASSAN ordered a nationwide strike starting 28 September 2025, directing members to halt natural gas and crude oil supplies to the refinery. The strike quickly gained attention, as it affected a facility seen as vital to Nigeria’s energy stability and economic prospects.

PENGASSAN's position was grounded in clear legal and constitutional guarantees. Section 40 of the Nigerian Constitution grants workers the freedom of association, including the right to join trade unions. The Trade Unions Act also prohibits victimisation based on union membership.

From the union’s perspective, Dangote Refinery’s action violated these rights and risked setting a dangerous precedent that could embolden other employers to suppress union activities. PENGASSAN's President, Festus Osifo, stated that the union was acting to protect workers from unfair labour practices and uphold industrial democracy.

The union viewed the dispute as a broader defense of industrial democracy, the principle that workers should have a say in workplace decisions. Without this right, employees would be vulnerable to arbitrary decisions by management. For PENGASSAN, this was not only about wages or conditions but about protecting workers’ voices in one of Nigeria’s most significant industrial enterprises.

The Management of Dangote Refinery argued that the dismissals were part of an ongoing organisational restructuring, not a form of retaliation for union membership. The company cited security concerns and the need to maintain efficiency at a $20 billion facility, which is seen as central to national economic recovery. Management maintained that it had a fiduciary duty to protect shareholder investments and operational integrity.

Supporters of the company stressed that the strike threatened national energy security and economic stability. The refinery, with its capacity of 650,000 barrels per day, had already begun to influence fuel prices, reportedly reducing pump prices from about ₦1,500 per litre to around ₦820 in some regions. Disrupting such a critical operation, they argued, risked undermining public confidence in Nigeria’s economic revitalisation efforts.

Critics of PENGASSAN's strike argued that the union did not follow legal requirements governing industrial action. Energy supply is considered an essential service under the Trade Dispute Act, which requires at least 15 days’ notice and prior mediation efforts. Therefore, the immediate shutdown of gas and crude supplies was seen as inconsistent with the law.

Following days of nationwide tension, the Federal Government intervened through the Minister of Labour and Employment, Muhammad Dingyadi, supported by the National Security Adviser and other agencies.

An agreement announced on 1 October 2025 outlined the following:

• The 800 affected workers would be reassigned to other Dangote Group subsidiaries without loss of pay.

• No worker would be penalised for participating in the dispute.

• Both parties recognised workers’ right to unionise.

• PENGASSAN suspended the strike but retained the right to resume action if agreements were breached.

This compromise preserved jobs, restored operations, and prevented further economic disruption.

The government’s swift intervention reflected effective institutional mediation and demonstrated that Nigeria’s industrial relations mechanisms can work when promptly activated. The outcome, retaining workers and restoring operations, showed that compromise is achievable when all parties act in good faith.

However, the episode exposed significant governance shortcomings. The response by the Management of Dangote Refinery to unionisation appeared heavy-handed, suggesting that there could be weak stakeholder engagement processes and limited board oversight of labour relations. The absence of a credible internal grievance or dialogue mechanism forced the conflict into the public arena, affecting corporate reputation.

At its core, the dispute revealed that good governance extends beyond financial reporting and board composition; it also demands respect for stakeholder rights, transparent communication, and fair labour practices.

Companies in key sectors should adopt clear labour relations policies covering union recognition, dispute resolution, and regular engagement. Boards could assign oversight of these matters to the Governance committee.

Independent Non-Executive Directors (INEDs) should provide impartial oversight on labour and stakeholder issues, ensuring that employee relations are managed transparently and fairly.

3. Promote Preventive Mediation

Firms should maintain open dialogue with staff representatives through regular engagement forums. Early discussion of workplace issues prevents crises and fosters mutual trust. For critical labour sectors of the economy, updates on HR issues could be included as a statutory agenda in Board meetings, so that developing labour issues can be nipped in the bud before they crystallise.

Management should sustain accessible communication channels, periodic staff briefings, and effective grievance systems to strengthen trust and reduce misunderstandings.

Organisations in essential sectors should create structured plans for handling industrial disputes, including clear escalation steps and communication procedures to minimise disruptions while protecting workers’ rights.

The definition of “essential services” under the Trade Disputes Act should be revised to align with international labour standards and ensure a fair.

Government agencies such as the Ministry of Labour and the National Industrial Court need more resources and capacity to resolve disputes promptly through alternative dispute resolution.

3. Integrate Labour Oversight into Governance Codes

The Financial Reporting Council should explicitly integrate into future updates of the Nigerian Code of Corporate Governance labour relations oversight and reporting to make employee relations a recognised element of good corporate governance, and balance between worker rights and national interest 

The Dangote Refinery - PENGASSAN dispute was a wake-up call for corporate Nigeria. It revealed that even the most sophisticated industrial projects can falter when governance overlooks stakeholder inclusion. While the government’s intervention restored calm, true progress lies in prevention through transparent, fair, and proactive governance practices.

Our nation’s path to industrial success depends not only on engineering brilliance but on governance maturity, where workers’ voices are respected, dialogue is constant, and corporate ambition walks hand in hand with social responsibility.

The Dangote Refinery symbolises Nigeria’s industrial aspirations; how it and similar enterprises handle labour relations will determine whether those ambitions lead to inclusive and sustainable national growth.

Chartered Institute of Directors Nigeria

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