Designed To Fail: Monopoly Capitalism And The Oil And Gas Industry

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by Adesina Agboluaje

Over the years, the Onne/Ikpokiri, Oil and Gas Export Free Zone Authority, OOGEFZA, seem to be obsessed with acquiring powers and jurisdiction not given to her to control and monopolise operations in the Oil and Gas industry.
The Authority has consistently attempted to alter her enabling Act and deliberately avoided the legislative process to give herself powers and responsibility not given to her by law. Each alteration has been designed to achieve an intended objective to further entrench her monopoly of the Oil and Gas sector and mislead the public to the extent of reprinting and editing the decree that established, now wrongly referred to under a nomenclature different from what was initially enacted.
The true title and the name of the authority is Onne/Ikpokiri, Oil and Gas Export Free Zone Authority Act. There is now a need for the Federal Ministry of Justice to amend the title correctly for citation. Onne/Ikpokiri, Oil and Gas Export Free Zone Authority Act was enacted on 29th March 1996 and created the Onne/Ikpokiri Oil and Gas Export Free Zone Authority.
Without legislative amendment she has changed the name to Oil and Gas Free Zones Authority (OGFZA). Section (1) of the 1996 Act provides that “The President designates the Onne/Ikpokiri Area in Rivers State as an “export free zone”. This section expressly designates Onne/Ikpokiri area of Rivers State as OOGEFZA’s area of operation; they are now illegally claiming to be in Warri, Calabar and Apapa Ports Terminals as Oil and Gas Free Zones without legal or constitutional authority. It is unfortunate that when lies and fraud is continuously perpetuated and aided, it tends to sound as if it is the truth.
However, no matter how long the truth shall overcome. UBI JUS, IBI REMEDIUM, a Latin maxim that states that you cannot put something on nothing and expect it to stay there, it will not stand.

Interest as a stakeholder
The oil and gas sector is of interest to many Nigerians and it is easy to understand why. For someone like me, it is quite imperative. Let me introduce myself from the point of view of my professional background. I was appointed as the Nigerian Trade Commissioner to Asia based in Shanghai overseeing about 11 countries in the period of 2012-2016.
Prior to that, I was the Managing Director/Chief Executive of Nigeria Export Processing Zones Authority (NEPZA) from 2004-2012. Subsequently, before then, I was the pioneer General Manager of the Calabar Export Processing Zone, later changed to Calabar Free Trade Zone. I had a unique opportunity in participating in drafting and publishing most of the regulations and guidelines, some of which are still in operation today.
I had a unique opportunity also, of assisting in the take-off of the Onne Oil and Gas take off management operation at Onne working with consultants as at that time INTELS Nigeria Limited while I was the General Manager in Calabar. There are issues currently before the Senate Committee on Trade and Investment considering bills on NEPZA and Onne Oil and Gas Amendment.

In attempts to implement the self-amended laws of Onne Oil and Gas Authority, earlier than 2016 and in particular in 2016, Onne Oil and Gas Free Zone Authority, OOGFZA, approached several zones licensed by NEPZA with the intention of regulating and taking over their operation based on their interpretation of their self-created Act, the offers were rejected by the Zones and that remains the status quo up till today because notwithstanding their self-amendment of their law, the provisions are not enough to take over operations that NEPZA has been overseeing and this was brought to the knowledge of the supervising ministry NEPZA.
The matter went through different levels of government interventions, particularly between 1999 and 2004, and NEPZA advised the zones to ignore their overtures.
In resolving the issues, there is a Federal Executive Council resolution on the matter by way of a directive from the Secretary to the Government of the Federation to the Minister of Trade and Investment for NEPZA to take over all activities of Onne Oil and Gas and we should operate a single authority. For reasons best known to the ministry, this directive was not implemented, I guess this emboldened the Onne Oil and Gas authority to continue seeking for self-help, legal opinions, procuring opinion from Minister of Justice and NEPZA response to the opinion, all ignoring the fact that there is a standing Federal Executive order on the matter which has not been reversed and still stand up till today and several other comments here and there, none of them has helped them in this situation.
National Assembly current issues
The Senate Committee on Trade and Investment invited the public for Senate Hearings on the proposed NEPZA Amendment Bill on Monday, 20th December, 2016. At the Public Hearing in the Senate Building, participants called for the repeal of both NEPZA and OOGEFZA Acts to make way for a single Free Zones Authority to sanitize the free zones environment as was done with the Nigeria Communication Commission where the various wireless communication service providers were brought under one single regulatory Communication Commission.
On Thursday, 26th January, 2017, there was also another Senate Public Hearing on OOGEFZA proposed amendments Bill. At the hearing, participants especially NEPZA licensed zones who are tailored as targets of take-over by OOGEFZA, in December, 2016 were specifically mentioned in the draft proposed Bill as free zones under OOGEFZA regulation which was fraudulently inserted.
Illegal designation of NPA ports as oil and gas free zones ports
The other issue on the Bill is the designation of certain ports as dedicated oil and gas ports in Nigeria to the disadvantage of stakeholders within and outside the free zones scheme. There are Port Terminal Operators and Port Concession schemes both under the NPA statutory responsibility.
However, the claimed of dedicated oil and gas ports in the proposed Bill are all in the Eastern District leaving the Western District without such dedicated ports. The representative of the NPA at the Hearing revealed, first that there was no such designation done on ports on the basis of commodities, goods and/or articles in the concession of ports and secondly there was no designation of any port as dedicated for oil and gas cargoes. This pattern of illegality and recklessness continue unabated. Been left unchecked, the Oil and Gas Free Zone Authority continue to be more emboldened, believing they can do anything from one generation of management to the other. This must stop and continuous embarrassment of the Federal Government and the Federal Ministry of Trade and Investment.
The above NPA position is consistent with the Federal Government position and policy since 2006 where Mr. President declared that “importers of oil and gas related cargoes should be free to choose port of preference”, appendix 4.
In 2008, late President YarAdua restated the Policy through the Minister of State for Transportation Public Notice Ref. No. T. 4316/ST3/24 of 7th August, 2008, appendix 5 re-confirming Presidential directive on choice of preferred port by importers of oil and gas related cargoes subsists. The current proposed fraudulent OOGEFZA amendment Bill being peddled in the National Assembly and now part of it brought here also for us to discuss cannot stand because the basis of the amendment is false, the contentious issues raised are not acceptable, is in conflict with other existing laws of NEPZA, if such is allowed to pass, it will go against the FEC resolutions, President policy directive and natural justice in a competitive market place.
At the last Senate Public hearing on this matter, the stakeholder present made relevant submissions that OOGEFZA exceeded her mandate and authority as conceived in her enabling Act in operations. The proposed amendments are a self-help attempt to usurp the authority of NEPZA and NPA and make nonsense of the investments in the Free zones by both government and individuals into unending litigation by both local and foreign investors and make ridicule of the federal government and laws of Nigeria.
Conclusion
In line with the stakeholder recommendation at the last senate committee hearing on trade and investment that harmonization of the following bills which at one time or the other were before the National Assembly over the past years resulting into one single regulating agency in Nigeria will be in the best interest of Nigeria and Nigeria Free Zone development to have a single regulatory agency like we have with the Nigeria Communications Commission. No matter how much how much they try, they will never be able to take over operations of ventures, licensed by NEPZA.

Adesina Agboluaje is a Principal Partner at Sinolat Company Lagos.

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