THE EMPLOYEE’S COMPENSATION ACT 2010 AT A GLANCE BY GERALD AJOKU ESQ

INTRODUCTION

The Employee Compensation Act 2010, was an important piece of legislation passed in order to provide for employees who were injured, disabled, or died during the course of their employment. The Employee’s Compensation Act is a social security/welfare scheme that provides comprehensive compensation to employees who suffer from occupational diseases or sustain injuries arising from accidents at the workplace or in the course of employment. The basis or justification for ‘compensation’ is the employer’s duty of care. The idea of compensation suggests that someone has suffered a wrong for which he has to be compensated monetarily. This implies that another person has a duty to prevent the occurrence of the wrong suffered.

Payment of compensation by the employer to the employee is rooted in the accepted principle that the employer has a duty of care, a duty to protect the health, welfare and safety of workers at work. Where the worker sustains injuries, gets ill or dies in work-related circumstances, the employer is liable to pay compensation to the worker or to his dependents, in the event of death. The foregoing forms the underlying philosophy behind the enactment of the Employee’s Compensation Act, 2010.

The Objectives of the Act:

These are laudable objectives that should bring reliefs to many employees in the country. These objectives are specifically provided by the Act.

By the provision of Section 1 (a) of the Employee’s Compensation Act, 2010 the objectives of the Act states and provides for an open and fair system of guaranteed and adequate compensation for all employees or their dependants for any death, injury, disease or disability arising out of or in the course of employment; 

(b) provide rehabilitation to employees with work-related disabilities as    provided in this Act; 

(c) establish and maintain a solvent compensation fund managed in the interest of employees and employers; 

(d) provide for fair and adequate assessments for employers; 

(e) provide an appeal procedure that is simple, fair and accessible,with minimal delays; and 

(f) combine efforts and resources of relevant stakeholders for the prevention of workplace disabilities, including the enforcement of occupational safety and health standards.

Further to the objectives laid out above, the act took into consideration the broad application of the Actors who would be required to facilitate the effective dispensation of the fact as well as some tools that could be utilized in the course of applying the letter of the law. Specifically:

1.     The Law is applicable to all employers and employees in the public and private sectors throughout the Federal Republic of Nigeria. See section 2 [1] of the Act

2.     The Nigeria Social Insurance Trust Fund Management Board is empowered to implement the Act and the Fund established under it. Section 56 of the Act.

3.     The Employer must report this information to the NSITF Management Board within 7 days of receiving notification from the employee or his/her dependants. In the case of a death it must be reported immediately. Failure to make a report is an offence under the Employee’s Compensation Act.

4.     An application for compensation must be made by the employee or his/her dependants within one year after the date of death, injury or disability arising from an occupational accident or disease, or else the claim will be refused (except if special circumstances for the delay existed). Section 6 [1][2][3] of the Act. 

5.     Any employee who suffers any disabling injury out of or in the course of employment is entitled to compensation, whether or not it occurred in the workplace. See section 7, 11 of the Act.

6.     An employee is entitled to payment of compensation with respect to any accident sustained while on the way between the place of work and –

• The employee’s principal or secondary residence
• The place where the employee usually takes meals, or
• The place where he usually receives remuneration provided that the employer has prior notification of such employee

7.     An employee is entitled to compensation for mental stress arising from an acute reaction to a sudden and unexpected traumatic event arising out of or in  the course of the employee’s employment. See section 7 of the Act.

   Subject to sub-section (2) of this section, an employee shall be entitled to compensation for mental stress not resulting from an injury for which the employee is otherwise entitled to compensation, only if the mental stress is – 

(a) an acute reaction to a sudden and unexpected traumatic event arising    out of or in the course of the employee’s employment; or 

(b) diagnosed by an accredited medical practitioner as a mental or physical condition amounting to mental stress arising out of the nature of work or the occurrence of any event in the course of the employee’s employment.

In WesternNigeria Trading Co. Ltd v. Busari Ajao [1965] NMLR 178,  a splinter of steel entered into the eyes of Ajao, causing injury. The employer argued that it was not liable as the employee was negligent in not using the goggles provided, the court, relying on Nolan v. Dental Manufacturing Co. Ltd, held that it was the duty of the employers, not just to supply Personal Protective Equipment such as goggles, but to also ensure that they are used by strict orders and effective supervision. The employer’s defence of not being liable on grounds of employee’s negligence and self inflicted injury in refusing to use personal protective equipment was rejected.

8. Section 14[1] No employer shall, either directly or indirectly, deduct from the remuneration of an employee any part of a sum which the employer is or may become liable to pay into the Fund established under section 56 of this Act, or to require or permit the employee to contribute in any manner towards indemnifying the employer against a liability which the employer has incurred or may incur under this Act. 

(2) Any person who contravenes the provisions of sub-section (1) of this section, commits an offence and shall –

 (a) be liable on conviction to imprisonment for a term not exceeding I year or to a fine of not less than N100,000.00 or to both such imprisonment and fine; and the course of the employee’s employment.

9.   In the case of death of the employee, compensation is paid to the employee’s widow(er) and/or child(ren) on a scale ranging from 30%- 90% monthly of the employee’s remuneration depending on the circumstances of the dependants. See section 56 of the Act.

10.    Every employer is to make a minimum monthly contribution of 1% of the total monthly payroll into the Employee Compensation Fund.

   Note that without prejudice to the generality of the provisions of this Act, this Act shall not apply to any member of the armed forces of the Federal Republic of Nigeria other than a person employed in a civilian capacity. 

PROCEDURES FOR MAKING CLAIMS  

     The procedures for making claims are contained in Section 4(1) of the Act. It provides that in every case of an injury or disabling occupational disease to an employee in a workplace within the scope of this Act, the employee, or in case of death the dependant, shall within 14 days of the occurrence or receipt of the information of the occurrence, inform the employer by giving information of the disease or injury to a manager, supervisor, first aid attendant, agent in charge of the work where the injury occurred or other appropriate representative of the employer, and the information shall include – 

(a) the name of the employee; 

(b) the time and place of the occurrence; and 

(c) in ordinary language, the nature and cause of the disease or injury if any

     It is important to note that failure to provide the information required under sub-section (1) of this section is a bar to a claim for compensation under this Act, unless the Board is satisfied that the – (a) information, although imperfect in some respects, is sufficient to describe the disease or injury suffered; 

CONCLUSION:

The Act was enacted to give an employee the wider coast of indemnity and compensation in the course of his employment. The Act gives human face to employer/ Employee contractual relationship.The Act represents a major step in the right direction in respect of labour rights and protection in Nigeria. I am convinced that the Act has enhanced the productivity of Nigeria workers as a result of the motivation it has derived from many of its provisions. It has safeguarded the rights, well being and moral of the workforce not only in the interest of the workers themselves but also that of the employers and the economy. Though must employers of labour are oblivious of the Act.The new Employee’s Compensation Act is a laudable and commendable social security system, it is however, one thing to have a scheme in place with an elaborate legal framework, it is another thing to drive the scheme to fruition. I therefore urge the Federal Government, Non-governmental Organizations (NGOs), and other civil society groups to organise workshop, seminars to tutur both the employer and employee on the provisions of the Act. 

REFERENCES

1. The  Employee’s Compensation Act, 2010
2.  www.lawpadi.com via http://lawpadi.com/11-things-every-nigerian-know-employee-compensation-act
3. Oshin, W. (2010). NIA tackles FG on workers’ compensation scheme in Tribune, 27 May 2010, Lagos Nigeria.
4. Alagler Okorie, A critical review of the employee’s compensation ACT, 2010

LEGAL FRAMEWORK AND CHALLENGES OF DATA PROTECTION/PRIVACY IN NIGERIA. By OMOBOLAJI O. OYENIRAN ESQ.

The prevalence of data processing in the modern global economy has made it imperative for its protection. Presently, data protection is regarded as an extension of fundamental human rights which is aptly protected under the Constitution of the Federal Republic of Nigeria, 1999 (as amended) and other statutes. This article gives an insight on the nitty-gritty of data protection as well as an overview of the legal regime of data protection in Nigeria. It further outlines the legal issues involved in protecting data in the country as well as the challenges faced by data controllers/administrators in protecting the personal information in their care. The article concludes with workable solutions for data controllers/administrators as well as regulatory bodies on methods to adopt in protecting people’s data.

DEFINITION OF TERMS

1. Data: Generally, data is information collected to be used to help in decision-making or information in an electronic form that can be stored and used by a computer.

The Nigeria Data Protection Regulation 2019 (NDPR) defines the word as:

“Characters, symbols and binary on which operations are performed by a computer, which may be stored or transmitted in the form of electronic signals, stored in any format or any device”

2. Personal Data: Personal data is defined by Section of the NDPR 2019 as:

“Any information relating to an identified or identifiable natural person (‘Data Subject’); an identifiable natural person is one who can be identified, directly or indirectly, in particular by reference to an identifier such as a name, an identification number, location data, an online identifier or to one or more factors specific to the physical, physiological, genetic, mental, economic, cultural or social identity of that natural person; It can be anything from a name, address, a photo, an email address, bank details, posts on social networking websites, medical information, and other unique identifier such as but not limited to MAC address, IP address, IMEI number, IMSI number, SIM, Personal Identifiable Information (PII) and others.”

From the above, the personal data of a natural person is any information serving as an identifier of that person, whether with reference to their name, identification number, location, their physical appearance, information regarding their physiology, genetics, mental health, economic/finances, culture or social identity. It could be a name, address, photo, email address, bank details, medical information, posts on social media website. It extends to MAC address, IP address, IMEI number, SIM card, and any other unique identifiers.

3. Data Collector: A data collector is someone that enters information into a database and ensures that the data collection sources are accurate.
4. Data Processor: The data processor processes personal data only on behalf of the controller. The data processor is usually a third party external to the company.
5. Data Controller: The data controller determines the purposes for which and the means by which personal data is processed.
6. Data Subject: A data subject is the person whose personal data is being processed. The NDPR 2019 defines it as “an identified or identifiable natural person”

DATA PROTECTION/PRIVACY: Data protection is the process of safeguarding important information from corruption, compromise or loss.  It “includes mechanisms, laws and regulations that make it illegal to store or share some types of information about people without their knowledge or permission.”

Data privacy, otherwise known as ‘Information Privacy’ deals with the ability a person has to control his personal data shared with third parties.

The need for data protection arises with the upsurge in the creation and storage of data in the global community. The internet has brought the whole world together through exchange of information and most of the world’s organizations have resorted to digital operations of their activities thus increasing the amount of data stored.

The aim of protecting the data of a person (whether natural or corporate) is to minimize the risk of identity theft, exploitation, and manipulation, and the objective of data protection is to enable individuals and companies to control the dissemination of their personal information, that is, to enjoy data privacy.

LEGAL FRAMEWORK OF DATA PROTECTION/PRIVACY IN NIGERIA

Currently, the major statutes for the enforcement of data protection and privacy in Nigeria are the Constitution of the Federal Republic of Nigeria, 1999 (as amended) and the Nigeria Data Protection Regulation 2019 which may be used correlatively to achieve a common purpose. However, there are minor provisions scattered in several legislations on data protection in the country. These provisions are adumbrated below:

1. The Constitution of the Federal Republic of Nigeria, 1999 (as amended): Section 37 of the 1999 Constitution provides that:

“The privacy of citizens, their homes, correspondence, telephone conversations and telegraphic communications is hereby guaranteed and protected.”

Even though the provision above does not specifically mention “data”, it argued that information on homes, correspondences and telephone conversations are captured in the definition of personal data. This provision was given judicial credence in the case of Emerging Market Telecommunication Services v Barr Godfrey Nya Eneye (2018) LPELR-46193 in which the Claimant/Respondent (a legal practitioner) sued the Defendant/Appellant (operators of Etisalat mobile line) for sending his telephone number to persons which sent him unsolicited text messages in violation of section 37 of the Constitution. The Court of Appeal, upholding the judgment of the Federal High Court held that the Appellant company, by giving the phone number of the respondent to a third party, who sends unsolicited messages to the respondent, has breached the fundamental right of Privacy of the Respondent.

2. The Nigeria Data Protection Regulation (NDPR) 2019: This regulation was issued by the National Information Development Technology Agency (NITDA) on the 25^th day of January 2019, with the aim of safeguarding the rights of natural persons to data privacy; foster safe conduct for transactions involving the exchange of Personal Data; and to prevent manipulation of Personal Data. Highlighted below are salient provisions of the Regulation:

1. Definition of data and personal data – section 1.3(iv) and(xix)
2. Duty of care owed by data controllers/administrators to data subjects – section 2.1(2)
3. Consent: No data must be obtained except the purpose is known to the data subject – section 2.3 Consent must be obtained with fraud/coercion
4. Privacy Policy – Data collectors must publish privacy policy to reflect
5. Description of personal information collected
6. Technical methods used to collect
7. Remedies in the event of violation etc – section 2.5
8. Objection to data processing – section 2.8
9. Advancement of right to privacy – section 2.9
10. Penalty of 2% of annual gross revenue of data controller. – section 2.10
11. Rights of data subject: This includes the right to access to information on data free of charge, right to request rectification, right to withdraw consent, right to information on further processing, right to request deletion (an encapsulation of right to be forgotten)

3. Freedom of Information Act No. 4 of 2011: Generally, the Act stipulates that Public institutions are to make information available to anyone who applies for it. However, under section 14 of the Act, information that relates to private/personal data of individuals are excluded from the category of the information that should be made available.

4. The Child Rights Act of 2003: Section 8 of the Act provides for the right to privacy of a child in Nigeria.

5. The HIV and AIDS (Anti-Discrimination Act) 2014: Section 13 (1) provides that:

“All persons living with HIV or affected by AIDS shall have the right to protection of data with respect to their health and medical records.”

Any violation of this provision amounts to an offence, and the offender, upon  conviction, can be liable to fine or/and imprisonment.

6.The Cybercrimes (Prohibition, Prevention etc.) Act of 2015: Section 14 and 16 of the Cybercrimes Act prohibits the dealing of data stored on a computer or in a network in a fraudulent manner and for fraudulent purposes.

7.The National Identity Management Commission (NIMC) Act: By virtue of Section 26 of the Act, prior authorisation of the NIMC must be obtained before accessing data or information contained in the National Identity Database.

8. The National Health Act, 2014: Section 26 (1) of the Act prohibits the disclosure of the information of a health care user without the consent of such user. It provides:

“All information concerning a user, including information relating to his or her health status, treatment or stay in a health establishment is confidential.”

9. The Immigration Act, 2015: Under section 101 of the Act, the Immigration Service is mandated to treat as confidential the identity and information provided by a volunteer and to take all reasonable measures to protect such information.

10. The Credit Reporting Act, 2017: Under section 9 of the Act, the right of a data subject to privacy and confidentiality with respect to his/her credit information , is guaranteed. 

11. The Consumer Code of Practice Regulations 2007 issued by the Nigerian Communications Commission (NCC) mandates the licensees in the telecommunication sector to ensure adequate protection of customers information.

LEGAL ISSUES IN DATA PROTECTION/PRIVACY

1. Ignorance of Data Privacy Rights/Laws: The primary factor mitigating against the protection of data privacy in Nigeria is the lack of knowledge about rights and the institutions in charge of its protection, as well as the inadequate understanding of the gain attached to the enjoyment of such rights. It is so sad that even some government agencies in charge of collection/processing of Nigerian data are totally oblivious of the existence of a data protection law in the country.

How then do Nigerians enforce rights they are not aware if they are aware of such rights? How then will the agencies in charge of data processing obey these laws when they are oblivious of their existence? 

We believe that the National Information Technology Development Agency (NITDA) which is the agency saddled with the responsibility of coordinating and monitoring the processing of electronic data in Nigeria can tackle the above issue with massive sensitization of the citizenry through workshops, seminars, education on popular radio stations across the nation, newsletters, and discuss on popular TV stations.

Furthermore, the agency can mandate other stakeholders in the industry, such as the Data Protection Compliance Organizations (DPCR) to engage in active sensitization of Data Subjects of their rights while educating date processors of their duties under the NDPR.

2. Limited Data Privacy and Protection Legislation: As it stands, the primary legislations on data protection and privacy are the CFRN 1999 and the NDPR 2019. However, these laws do not provide a comprehensive legal framework for the protection of data privacy and the enforcement of the rights where there is a violation. For instance, the NDPR is limited to electronic data thereby leaving paper-based data violations without remedies or protection.

This is important to note that the NITDA can further issue more regulations to address this lacuna. 

3. Lack of Judicial Decisions on Data Privacy Violations: The Nigerian judiciary thrives on judicial precedent whereby the lower courts rely on the decisions of the upper courts in making their own decisions. Currently, there are few judicial precedents on data protection which makes it difficult both the bar and the bench to find judicial authorities to rely on in deciding cases on data protecting. 

However, we are of the opinion that the Nigerian court could address this issue by making reference to authorities from other Common Law jurisdictions like the United Kingdom. Even though these authorities are not binding on Nigerian courts, they however have persuasive effect. 

CHALLENGES FACED BY DATA COLLECTOR/ADMINISTRATOR.

Section 2.1 of the NDPR stipulates that data controllers/administrators owe the data subject duty of care which in turn makes it compulsory for the former not to breach data privacy of the latter. However, there are some factors that make it difficult, if not impossible, for a data collector collector/administrator to maintain the duty of care behoved on him.  Adumbrated below are some challenges faced by data collectors in protecting personal data in their care:

1. Unethical usage of data storage hardware such as sharing of flash drives, external hard drives, computer and other gadgets.
2. Lack of restrictions and security codes mechanisms to data storage hardware which encourages third-party breach.
3. Power blackouts and failures which affect the functionality and efficiency of software and hardware like processors & servers. 
4. High Costs of the technological expertise and infrastructure to fulfill the obligations reposed on SMEs by the various data protection regulations.

RECOMMENDATIONS

In conclusion, the writer here suggests the following remedies to the legal issues raised:

1. In managing the Ignorance of  Data Privacy Rights/Laws in the country, there needs to be adequate sensitization on the existence of the laws and its content. Targeted informative sessions need to be organized by the gatekeepers of the law, so as not to allow web-stalkers freely prey on unsuspecting users of data facilities and mediums.
2. Specialized courts need to be set up to support the task force that may/not be in existence to implement the content of the law. Some other MDAs with seemingly specialized areas of focus have been able to see to the designating of judges within certain jurisdictions of the Federal presence of the Judiciary to fast-track cases within their spheres of endeavor (i.e. such as the AMCON law that allows for certain divisions of the Federal high courts to Designate judges for the hearing of their matters). 
3. On the Limitations posed by the inadequacy of the existing Data Protection Legislations. There will be a need to consistently and frequently lobby for an upward review of the laws to ensure that they come up to par with the ever evolving online regulations passed in advanced climes such as the EU and Americas. Because, asides from the agitation across the globe for data protection to be viewed as a fundamental right, it is a novel area that consistently faces masked attacks by identity thieves who cause a lot of damage, and it behoves on various countries and continental authorities to ensure that these liberties are protected at all costs.
4. Considering that our jurisprudence is a creature of Precedents, we as legal practitioners need not be shy in testing the waters to create precedents that push the limits of the law and its ability to accommodate our juxterpositions.

CONCLUSION

This article has successfully reviewed the meaning of data protection, the legal framework of data protection in Nigeria, and the challenges faced by stakeholders in protecting data in the country. It further provides recommendations for stakeholders in resolving the challenges highlighted. 

In conclusion, the writer believes that even though data privacy is an emerging area in Nigeria, the stakeholders in the sector should be at the top of their games in ensuring progressive monitoring and coordination of the processing of data, protection of data, and easy access to the enforcement of data privacy in the country.

Omobolaji O. Oyeniran Esq is an Associate at Path Solicitors.

Statutory Mandate of the Corporate Affairs Commission And Implementation Of CAMA 2020. By John Demide Esq &; Gerald Ajoku Esq.

The Companies and Allied Matters Act, 2020 [The Act], repeals and replaces the  Companies and Allied Matters Act of 1990. The new Act now seen as Nigeria’s most significant legislation passed three decades after CAMA 1990, is targeted at injecting the much needed innovation required to jumpstart the economy. The Act has been copiously analysed by various articles and has been seen to have introduced new provisions that promote the ease of doing business whilst reducing regulatory hurdles and also bringing the provisions in tandem with the technological realities of the 21^st century. This is expected to ultimately promote investments, create more jobs, and especially promote a friendly business climate in Nigeria. This article is aimed at reviewing the Statutory mandate of the Corporate Affairs Commission and the possible hurdles and/or novel steps that would impede or advance the full realization/implementation of the Act.

Stages of Enacting A Law (The LAW-MAKING Process)

However, for us to appreciate a law, we need to know the stages a law goes through before it comes into being and it is available for all to see, criticize and utilize. As is customary for every law in existence in Nigeria today, they all have a process they go through before coming into force. There are the legislative steps known to all that are taken by the legislative arms of government and there are the executive steps that are provided for under Part II (Miscellaneous Provisions) of the 1999 constitution, more specifically under Section 305 that can be exercised by the President exclusively in certain instances. However, for our swift discourse, we will be focused on the Legislative steps. Every law follows a process before becoming effective/live for implementation. The law goes through the crucible of notification, every bill must receive three readings before it can be adopted and no more than one reading can occur on the same day, there are however exceptions which are not for our discourse today. As culled from the Library of Congress, the stages are set out below:

1. First Reading: At the first reading, the person sponsoring the bill presents it and the clerk reads its short title aloud.
2. Second Reading: The second reading is the stage at which debate of a bill occurs. Here, the sponsor of the bill (the Majority Leader in the case of executive bills) explains its basic aspects and benefits. Members wishing to participate in the debate are accorded five to seven minutes to speak, at which time they argue for the bill’s rejection or amendment; if, at the end of the debate, the bill receives the support of the majority of the house in which it is being considered, it passes to the next stage. 
3. Committee Stage: The bill is next assigned to a select or standing committee for a more thorough examination. The relevant committee examines each provision and holds public hearings; however, while anyone may make suggestions, only members of the committee may propose an amendment. The committee then reports its findings on the bill with all the amendments, if any, back to the House of Representatives or the Senate for deliberation. Bills deemed important are referred to and examined by the entire house constituted as a committee of the whole in place of the select or standing committee. 
4. Third Reading: Typically, there is not much debate and no amendments are made at the third-reading stage. However, a member who wishes to seek to amend the bill or introduce a provision may make a motion that the bill be recommitted before the motion for the third reading is acted upon; if the motion is agreed to, the proposed amendment is considered by the committee of the whole. This is followed by the third reading, where the bill is voted on and passed if it garners majority support. 
5. Joint Conference Committee: If the House of Representatives and the Senate adopt different versions of a bill, a Joint Conference Committee is constituted to reconcile the differences.  Members of the Committee deliberate only on the parts of the bill where there is disagreement; no new item may be introduced at this stage. If either chamber of the National Assembly refuses to accept the decision of the Committee, the bill dies unless it is a money bill, in which case it is referred to a joint sitting of the National Assembly for a vote and enacted if it garners majority support. 
6. Assent: The Nigerian President plays a crucial role in the lawmaking process through the constitutionally guaranteed veto power, which may be exercised over any legislation adopted by the National Assembly.  The Constitution states in Sections 58(3)&(4), [w]here a bill has been passed by the House in which it originated, it shall be sent to the other House, and it shall be presented to the President for assent when it has been passed by that other House and agreement has been reached between the two Houses on any amendment made on it. 

Now, after reviewing the processes listed/highlighted above, there is no doubt that the CAMA 2020 as a law is now in existence. However, the next question that lays before us is “is the CAMA 2020 in force?”.

Is CAMA 2020 in force?

The Act as it is today, has scaled all the steps outlined above. Now the question that burdens the mind and the entire commercial populace as it stands right now, is when the amended act (CAMA 2020) comes into force or becomes effective and how can its implementors (CAC)  take up the mantle and drive the innovations therein. In this light, we have had a plethora of reportage having the RG positing that the new Acts enforcement is not yet active as it has not been officially transmitted to be Gazetted for the commencement date to be clear for all to commence implementation.

In Ogboru & Anor vs Uduaghan & Ors (2011,SC) the question as to the commencement of the then amended 1999 constitution came under the same view of discussion and then it was held that to resolve the issue one had to look at Section 2 of the Interpretation Act, Cap 123 Laws of the Federation of Nigeria, 2004 to determine the grounds for this to be reviewed. The act states that:

1. An Act is passed when the President assents to the Bill for the Act whether or not the Act then comes into force. 
2. Where no other provision is made as to the time when a particular enactment is to come into force, it shall, subject to the following subsection, come into force-
   1. In the case of an enactment contained in an Act of the National Assembly, on the day when the Act is passed,
   2. Where an enactment is expressed to come into force on a particular day it shall be construed as coming into force immediately on the expiration of the previous day.”

Now bearing in mind this provision of the law as outlined above, one can safely deduce from the letter of the law that the CAMA 2020 which is the Act under discourse is in essence in force and for lack of a better definition of the law commenced from the date when the President was widely televised and reported as having assented on the 7^th day of August 2020. However, the assenting and documentation of the law has been an issue of controversy as there has been a trail of discourse to which this article will most likely be joined into as trying to determine the commencement date of the new Act.

The Gazetting of the law for purpose of clarity is meant to be a documentary proof of the date of commencement as reflected on the face of the document that was signed by the President and the Federal Republic of Nigeria Official Gazette. 

According to Wikipedia, A government gazette (also known as official gazette, official journal, official newspaper, official monitor or official bulletin) is a periodical publication that has been authorised to publish public or legal notices. The Black’s Law Dictionary equally states that the gazzete, is the evidence of acts of state, and of everything done by the king in his political capacity. It is usually established by statute or official action and publication of notices within it, whether by the government or a private party, is usually considered sufficient to comply with legal requirements for public notice. This helps to douse the source of any law under reference by anyone. 

Thus, for the purpose of clarity and unambiguity, it is the opinion of this writer that it is always safer to refer to a gazetted law. However, the non gazetting of the law does not dispense with the validity of the fact of its enactment and existence.

Thus the Corporate Affairs Commission which is the parastatal created by the Act to effectively implement the letter of the law in regards the implementation of the CAMA are duty bound to be ahead of the curb in preparing for the implementation of the novel innovations contained in the new instrument enacted.

Impediments Slowing down the Implementation Of Cama 2020 

In the opinion of this writer, the Corporate Affairs commission as custodian of the Act are abreast of the issues that have bedeviled the system and its implementation since its inception and operation. However, there are a few issues that we foresee as being probable issues that could impede the implementation of the Act. They are:

• Gazetting: In the myriad of copies that have been circulated in the general public, the CAMA 2020 has not been officially gazetted, for it to fully and effectively come into force. In an interview granted by the Registrar General of the CAC, Garba Abubakar to a Newspaper tabloid, he was reported as saying that the commission in operating the global best practices and standard on Companies and Allied Matters and is still waiting for the Federal Government to gazette the new CAMA for its implementation to commence. 
• No- Commencement Date: Section 2 of the Interpretation Act provides that if an enactment does not state or provide for a commencement date, the enactment comes into force on the date of its certification and sealing, or in the case of a regulation, on the day on which it is made. It is important to note that the new Act does not contain a commencement date as has been seen from the multiplicity of copies in circulation. The commencement date is abundantly important as it states the period from when a law comes into force and its application commences. This is because a law ordinarily needs to have a timeline that gives its effect a degree of reasonability and effectiveness.
• Slow Implementation: it has been said that the Corporate Affairs Commission(CAC), the Agency mandated to implement the CAMA is ready to implement the law. However, it can be seen that the CAC has been grovelling with its internal processes to catch up with the novel advancements that they are meant to have commenced implementing. On the registration portal of the CAC as at the time of publication of this article, the CAC still has not streamlined most of their registration processes to align with the provisions contained under the CAMA 2020.
• Non-Appreciation of Business Etiquette by the CAC: Considering the fact that the CAC is responsible for the efficient and effective implementation of the Act, and its attendant role stated in the law. There is a need to orient the staff of the commission on the need to evolve a better means of interaction/engagement with the end-user(s) with whom they transact with. This is owing to the fact that the CAC being the repository of all registered businesses in the country, is put in a sensitive position that requires a degree of personal interactivity with the agents of the Commission and likewise business owners that come to seek the services of the commission.

SUGGESTED MEASURES TO BE ADOPTED

GAZETTING

Gazetting is the process of notifying the general public about the existence of the Law. As was noted earlier in the article, when a law is going through its formative process, it is gazetted to notify the public as to the fact that it is going to be discussed/considered for a debate in the National Assembly. Likewise, once it has gone through the complete process, it is meant to be Gazetted again, now not as a work in progress, but as a final product/law that has the full flavour of existence and can be referred to .

The CAMA 2020 being a Law that is meant to guide the business operations of companies in Nigeria, needs to be speedily Gazetted to enable its immediate and swift implementation. This law guides the business operations of multi levels of the economy and every day that the law stays in limbo, it has a ripple effect on the internal governing structures of the Private sector which equally drives the economy of the country.

IMPROVED APPRECIATION OF THE ROLE OF THE COMMISSION

A careful perusal of the CAMA 2020 reveals that it is in every sense a revolutionary piece of legislation containing many corporate legal innovations geared towards not only enhancing the ease of doing business in Nigeria but also profoundly influencing the direction of corporate activities and their regulations in order to promote millennial entrepreneurship and economic prosperity in Nigeria.

The Commission is advised to stop creating unnecessary bureaucracies which encourage redundancy and in effect delay the completion of pending jobs put before the commission. For example, to dispatch certificates and documents to customers upon completion of registration processes is not a procedure meant to become an issue of contention. For Example, recently the CAC introduced the policy of dispatching certificates/inquiries made via courier services at a premium. If the CAC wishes to become efficient in the managing of this critical aspect of the registration process, it must set out a clear guideline that sets out the terms of reference for the courier companies to be utilized and use courier companies to do so effectively with a stated timeline to cover dispatch to whatever location the document(s) are to be delivered to.

CREATION OF TIMELINES FOR EXECUTION OF ACTIVITIES: As most business ventures are engaged in time bound events, the Commission has to rise up to the challenged and equally set actionable deadlines for treating applications put before it. Timelines for action and resolution of activities, queries etc should be specifically spelt out and adhered  to. Once the Commission realizes that it’s  a vital tool in the growth and effective economic health of the Nation, it will realize that all departments of the commission cannot afford to have any redundancy and must be functional at all times. 

CREATE AN EFFICIENT AND EFFECTIVE FEEDBACK MECHANISM: the CAMA 2020 has set before us a new paradigm of doing business in the country. As such the CAC is duty bound to set up an efficient and effective feedback mechanism that must as of necessity be customer/consumer friendly. This is because every person/company/agent that comes to the commission to transact, is a customer and must be treated with the utmost level of respect and professionalism. The commission through the chosen medium of feedback, should be able to efficiently and effectively communicate the state of affairs of the commission to the consuming public to avoid unnecessary misinformation. 

Conclusion:

Enacting a revolutionary piece of legislation such as the CAMA 2020 is one thing, getting the Corporate Affairs Commission (CAC) to discharge its functions diligently is a different thing entirely. After all, the CAMA 2020 is not an autonomous self-operating robot capable of giving life to itself, It requires a diligent CAC to make it work. In fact the efficient implementation of the CAMA 2020 is dependent to a large extent on the functionality of CAC and vice versa the continued existence and operation of the CAC is dependent on the CAC’s ability to step up to the plate and own up to its attendant responsibility of animating and enforcing the provisions of the CAMA.

Overall, the repeal of the CAMA 1990 with this 2020 Act is a welcome development for businesses in Nigeria. This will boost commercial transactions and the laws and accompanying practices.  It is hoped that in implementing the law, the Corporate Affairs Commission and other relevant government agencies will keep to the spirit of the amendment, which is to enhance the overall ease of doing business in Nigeria. Companies, individuals and anyone doing business or intending to do business in Nigeria are advised to seek professional advice on the impact of the amendment to their business operations.

REFERENCES:

1. The Triumph Newspaper of Wednesday, 23^rd 2020.
2. Thisday Newspaper: Interview with RG Corporate Affairs Commission, September 8^th, 2020.
3. https://lawpadi.com/11-steps-to-how-a-law-is-made-in-nigeria/ 
4. Reforming the Corporate Affairs Commission, August 12, 2020.
5. Enhancing the ease of doing business in Nigeria by Micheal Dugeri, August 20, 2020.
6. Covid 19 Pandemic and new reform initiative by CAC, August 22, 2020.
7. Companies And Allied Matters Act.
8. The Black’s Law Dictionary, 2nd ed.
9. The Legislative Process, National Assembly, http://www.nassnig.org/page/the-legislative-process (last visited Jan. 6, 2017), archived at https://perma.cc/DEF7-4W.
10. Senate Standing Orders, supra note 59, § 78; Standing Orders of the House of Representatives, supra note 55, Order XII; Ogbonnia, supra note 16, at 258.
11. [116] The Legislative Process, National Assembly, supra note 106.
12. [117] Id.; Ese Malemi, The Nigerian Constitutional Law: With Fundamental Rights (Enforcement Procedure) – Rules 2009 at 208 (3d ed. 2008).
13. [118] The Legislative Process, National Assembly, supra note 106.
14. [119] Malemi, supra note 117, at 208.
15. [120] The Legislative Process, National Assembly, supra note 106.
16. [121] Malemi, supra note 117, at 209.
17. [122] Id. at 208.
18. [123] The Legislative Process, National Assembly, supra note 106; Malemi, supra note 117, at 209.
19. [124] The Legislative Process, National Assembly, supra note 106; Malemi, supra note 117, at 209.
20. [125] Id.
21. [126] The Legislative Process, National Assembly, supra note 106.
22. [127] Id.; Constitution of Nigeria § 59.
23. [128] Constitution of Nigeria § 58.
24. https://en.wikipedia.org/wiki/Government_gazette

AN ANALYSIS OF THE LEGAL STATUS OF CRYPTOCURRENCY II: THE SEC STATEMENT ON DIGITAL ASSETS by -Odigbo Ugochukwu Sandra

The Securities and Exchange Commission(SEC) released a statement (“The Statement”) for the purpose of catering to the regulation of cryptocurrency in Nigeria. The statement announced that all cryptoassets are now considered securities thereby putting it under the regulatory authority of the SEC and the Investment and Securities Act (ISA) 2007. The statement made further provisions as to the registration, ownership and regulation of cryptoassets.

In an article previously published at www.pathsolicitors.com (“AN ANALYSIS OF THE LEGAL STATUS OF CRYPTO-CURRENCY IN THE NIGERIAN FINANCIAL SYSTEM”)^[1], we analyzed the existent legal regime on cryptocurrency in Nigeria and stressed the need for standard regulations to be put in place as the cryptocurrency world is a steady-rising area in line with internet related innovations constantly developing. Thus, this article provides insight into the meaning of securities, the import of the provisions of the statement, the legal effect of it.

The SEC Statement^[2]

On the 11^th of September, 2020, the management of the SEC signed a statement which was subsequently released on the 14^th to the effect that the SEC in the exercise of its powers intended to regulate the ownership, purchase, transfer and all matter incidental to cryptocurrency. The Statement provides that all cryptocurrency is considered a security and thus, falls under the purview of the SEC’s jurisdiction. This postulation is however declared to be subject to proof otherwise by the issuer or sponsor of said assets.

The purport of this provision is that all Cryptoassets are securities to be regulated by the SEC unless proved otherwise by the owner or handler. Thus, the burden is upon the person claiming that their crypto asset is not a security and does not fall under the SEC’s jurisdiction. The statement refers to a “two-pronged” approach for determining and registering the nature of cryptoassets. First, an initial assessment filing must be done to discharge the burden of proof. This is the interested party’s opportunity to present an argument about whether or not their crypto asset is a security or not. After this is done, the Commission will determine whether or not the asset qualifies as a security or not after which it will communicate its decision to the interested party either excluding the asset or declaring that the asset is indeed a security and must be registered.

Where the Commission determines that the asset is a security, the interested party must then file for registration. This step will also directly apply where the interested party does not dispute the status of the asset and desires to go directly to registration.

Existing crypto-owners have a period of three (3) months within which to begin the process above, as the case may be.

What will be regulated?

The Statement provides that the following shall be regulated by the SEC:

• Virtual crypto assets,
• Digital Assets Token Offering (DATOs),
• Initial Coin Offerings (ICOs),
• Security Token ICOs and
• other Blockchain-based offers of digital assets within Nigeria

Who will be regulated?

The Statement also provides that the following people shall be regulated:

• Any person, (individual or corporate) whose activities involve any aspect of Blockchain-related and virtual digital asset services, must be registered by the Commission and as such, will be subject to the regulatory guidelines. Such services include, but are not limited to, reception, transmission and execution of orders on behalf of other persons, dealers on own account, portfolio management, investment advice, custodian or nominee services.
• Issuers or sponsors (start-ups or existing corporations) of virtual digital assets shall be guided by the Commission’s regulation. The Commission may require Foreign or non-residential issuers or sponsors to establish a branch office within Nigeria. However foreign issuers or sponsors will be recognized by the Commission where a reciprocal agreement exists between Nigeria and the country of the foreign issuer or sponsor.
• A recognition status will also be accorded, where the country of the foreign issuer or sponsor is a member of the International Organization of Securities Commissions (IOSCO).

The Statement also goes further to provide how each virtual digital asset shall be treated.

• Cryptoassets i.e. non-fiat virtual currency shall be treated as commodities if traded on a Recognized Investment Exchange and/or issued as an investment, and is subject to Part E of SEC Rules and Regulations and any other relevant sections and subsequent Rules which will be enacted in future
• Utility Tokens or “Non-Security Tokens” (e.g., virtual tokens.) shall be treated as commodities. However, spot trading and transactions in Utility Tokens do not fall under SEC purview unless conducted on a Recognized Investment Exchange and therefore subject to Part E of SEC Rules and Regulations and any other relevant sections and subsequent Rules which will be enacted in future.
• Security Tokens” (e.g., virtual tokens that have the features and characteristics of a security) shall be Deemed to be Securities pursuant to Section 315 of ISA, “definition of Securities’’. 
• Derivatives and Collective Investment Funds of Crypto Assets, Security Tokens and Utility Tokens shall be Regulated as Specified Investments under the ISA & SEC Rules and Regulations. Market intermediaries and market operators dealing in such Derivatives and Collective Investment Funds will need to be registered/ approved by SEC.

Commodity, Currency or Security

In Article 1, we analyzed extensively the issues with classifying cryptocurrency as either a commodity or a currency and the problems arising from the confusion with classification as to the regulation of same. This poser has been expanded to include consideration of cryptocurrency as a security. First, we must determine what a security is.

A security is a tradable financial asset that has monetary value. It represents an ownership position in a publicly-traded corporation (via owning shares), a creditor relationship with a government body or a corporation (via owning bonds), or rights to ownership as represented by an option.^[3]

In determining whether cryptocurrency is a security, different rules apply to different kinds. Bitcoin cannot be classified as a security because Bitcoin came into existence as mining began as an incentive in validating a distributed platform, with no initial token offering, no pre-mined coins, and no kind of common enterprise. Bitcoin has never sought public funds to develop its technology and it does not pass the Howey Test^[4]. The position is less clear when it comes to other cryptocurrencies such as Ethereum (ETH) and Ripple (XRP). “Cryptocurrencies are replacements for sovereign currencies…[they] replace the yen, the dollar, the euro with bitcoin. That type of currency is not a security…… A token, a digital asset where I give you my money…[in exchange for] providing a return…that is a security and we regulate that. We regulate the offering and trading of that security,” ”^[5]

Currently, the answer to the question “is cryptocurrency a security?” seems to be “it depends” or “sometimes”. In determining whether cryptocurrencies are securities, the United Stated Supreme Court has developed a test called the Howey’s test. In SEC Vs W.J. Howey Co.^[6], it was stated that a transaction is an investment contract if:

1. It is an investment of money
2. There is an expectation of profits from the investment
3. The investment of money is in a common enterprise

Any profit comes from the efforts of a promoter or third party^[7]However, their fundamental goal of being autonomous and distributed networks that are designed to be decentralised is at odds with the regulated nature of securities.

Legal effect of the SEC statement

The SEC is the body mandated to make regulations regarding securities, investments and innovation in Nigeria. This power is granted by the investment and Securities Act, 2007. The SEC has made several regulations including the Rules and Regulations of Derivative Trading, Rules of Central Counter Party, etc.

The above mentioned Regulations and all other regulations have the force of law drawn from Section of the Investment and Securities Act, 2007. However, a mere statement does not. The statement of the SEC is similar to several statements previously made by both the SEC and the CBN on the subject of cryptocurrency and other subjects. These statements merely convey the future intentions and concerns of the SEC and the CBN and were copiously referred to in Article 1.

Subsequently, a regulation may be made encompassing the content of the statement which Regulation shall then have force of law. Thus, the statement as it currently stands is merely that: a statement. It does not constitute a binding legislation and has no force of law. Thus, it does not currently regulate the cryptocurrency world at all.

Legal Issues with the Statement

• Jurisdiction Issues

The statement expressed the intention of the SEC to create regulations for crypto-tokens/crypto-coin investments based on the regulatory powers conferred by Section 13, ISA. Thus, to do this, the SEC had classified all virtual currencies as securities until proven otherwise. This means that the Commission has placed itself in a position to regulate all cryptocurrency in Nigeria. However, it may be argued that this is a gross expansion of the Commission’s powers as the classification of all cryptocurrency as security is unfounded. Certain cryptoassets do not pass the Howey’s test.

Although sometimes, cryptocurrency falls under this classification, it is often used as mere currency to transact businesses and transfer funds in which case it would be difficult to classify as a security. There is also an emergence of online investment schemes and businesses issuing cryptocurrency as forms of participation and “party favours”. These other crypto trade businesses can neither be classified as issuers or sponsors of cryptoassets as they mostly deal with cryptocurrency as a currency and means of exchange.

Furthermore, there is a lack of centralization with cryptocurrency unlike other regular securities. There is no central authority and this may prove problematic for the tracing of crypto ownership. Also, as discussed in Article 1 is the issue of anonymity. Ownership of cryptocurrency is usually registered in codes and numbers and not in a bank account like regular currency or in the Nigeria Stock Exchange as regular security. How does the Commission intend to track ownership and thereby regulate it except by imploring the public to submit to their jurisdiction?

• Ambiguity

The failure of the Commission to clearly delineate the factors determining the qualification of crypto assets as security has left the interpretations wide open. This confusion is further widened by the provision that crypto-owners have to prove that their assets do not qualify to be exempt from the registration process. The lack of specificity of the statement  creates a lacuna which can be exploited.

Also, the attempt to regulate all transactions relating to all the existing forms of cryptocurrency is quite wide. Some usage of cryptocurrency can clearly be classified as commodity while some are currency; in both situations, bodies different from the SEC are empowered to handle it. However, the attempt by the SEC to regulate it all may be confusing. The Commission needs to expressly stipulate the powers it shall have over cryptocurrency and the businesses and transactions it shall cover relating to same.

• Bindingness

As stated earlier, the document released by the SEC is merely a statement and has no force of law. It is similar to previous statements made by the SEC, CBN and other bodies and cannot be enforced against anybody as of yet. Thus, the declarations and provisions contained in the Statement do not have any legal backing and shall have the effect of an announcement merely made.

Conclusion

The innovation by the SEC is a timely one and it caters to an unregulated sector which sorely needed regulation. However, in making the statement, the SEC has made some overgeneralizations which have been highlighted in this article. Fortunately, the Statement is not a binding one and has no force of law. Thus, the SEC can correct the mistakes made when drafting the final regulation.

The SEC can specify a definition of the securities which cryptocurrencies, on fitting with the definition, become subject to the jurisdiction of the SEC. This way, the SEC does not seek to regulate all cryptocurrencies; rather, it provides criteria which align with the meaning of securities and puts that cryptoasset under its purview. This will also resolve the jurisdiction issues by delineating the application of the Regulation to cryptoassets that are securities.

In the meantime, we await the codification of the statement into a regulation. Until that is done, the legal regime as explained under Article 1 subsists and all cryptocurrency transactions are governed by pre-existing laws like the Cybercrime Act.

[1] Available at https://pathsolicitors.com/an-analysis-of-the-legal-status-of-crypto-currency-in-the-nigerian-financial-system/

[2] The SEC Statement on Digital Assets and their Classification and Treatment; available at www.sec.gov.ng/statement-on-digital-assets-and-their-classification-and-their-classification-and-treatment-/ accessed on 5^th October, 2020

[3] Definition available at <https://finance.yahoo.com/news/cryptocurrency-security-140020233.html#:~:text=The%20crypto%20security%20debate&text=SEC%20chairman%20Jay%20Clayton%20has,currency%20is%20not%20a%20security.%E2%80%9D> accessed on 5^th October, 2020.

[4] SEC Vs W.J. Howey Co., 328 U.S. 293 (1946)

[5] Chairman Jay Clayton; SEC chairman, United Stated of America on CNBC: Nature of cryptocurrency”

[6] Supra

[7] “Is Cryptocurrency a security” available at https://finance.yahoo.com/news/cryptocurrency-security-140020233.html#:~:text=The%20crypto%20security%20debate&text=SEC%20chairman%20Jay%20Clayton%20has,currency%20is%20not%20a%20security.%E2%80%9D accessed on 5^th October, 2020.

AN OVERVIEW OF THE NAICOM AND PENCOM GUIDELINES ON EMPLOYEE GROUP LIFE INSURANCE POLICY; RETIREE PACK; AND RETIREE LIFE ANNUITY. By OMOBOLAJI O. OYENIRAN Esq.

The Regulators of the Pension and Insurance sectors -National Pencom Commission (PenCom) and the National Insurance Commission (NAICOM)- on 1^st September, 2020 issued some guidelines and regulations to govern the stakeholders in the sectors. The guidelines include: (i) the Revised Guidelines on Group Life Insurance Policy for Employees; (ii) the Retiree Pack for retirees under the Contributory Pension Scheme (CPS); and (iii) ) the Revised Regulation on Retiree Life Annuity (RLA). The aim of the guidelines is to safeguard the retirees’ life annuity funds and assets and to guide them to make informed decisions about their retirement benefits. The guidelines also raise the issue of de-marketing by pension and insurance operators in the country and further provide more clarification on the provisions of the Pension Reform Act 2014 (the PRA), especially those relating to group life insurance policies for employees and retiree life annuities. This article gives an exposition of the guidelines as listed above seriatim.

THE REGULATORS

1. NATIONAL INSURANCE COMMISSION(NAICOM)

The National Insurance Commission (NAICOM) is established under Section 1 of the  National Insurance Commission Act 1997. By virtue of Section 6 of the Act, the principal object of the Commission is to ensure the effective administration, supervision, regulation and control of insurance business in Nigeria. Section 7 of the Act empowers the Commission, amongst other things, to approve standards, conditions and warranties applicable to all classes of insurance business and protect insurance policy holders, beneficiaries and third parties to insurance contracts.

2. NATIONAL PENSION COMMISSION (PENCOM)

The National Pension Commission(PenCom) is established under Section 17 of the Pension Reform Act 2014 with the objectives of regulating, supervising and ensuring  the effective administration of pension matters in Nigeria. Section 23 of the Act outlines the functions of the Commission which include issuance of guidelines for the investment of pension funds; approving, licensing, regulating and supervising pension fund administrators, custodians and other institutions relating to pension matters as the Commission may, from time to time, determining, and establishing standards, rules and guidelines for the management of the pension funds under the Act.

REVISED GUIDELINES ON GROUP LIFE INSURANCE POLICY FOR EMPLOYEES 

Under the Pension Reform Act(PRA) 2014, every employer is expected to maintain a Group Life Insurance Policy for each of its employees. Section 4(5) of the Act provides:

“…every employer shall maintain a Group Life Insurance Policy (GLIP) in favour of each employee, for a minimum of three times the annual total emolument of the employee and premium shall be paid not later than the commencement of the cover”. 

Based  on the above provision, the PenCom and Naicom  issued the Revised Guidelines on Group Life Insurance Policy for Employees the GLIP Guidelines) which mandate employers to provide minimum necessary information of its employees and beneficiaries, as required in the Know Your Customer (KYC) guideline issued by NAICOM. Under the guideline, where an employer fails to notify the insurance company of an employee’s death, it shall be liable to pay the death claim from its resources. The prescription of this sanction is not applicable in the old guidelines which doesn’t prescribe any sanction. Furthermore, where an employer fails to take out a GLIP on behalf of its employees, and death occurs in active service, the employer will be liable to pay 300% of the gross emolument for the Group Life Insurance Policy to the beneficiaries of the deceased employee, and to pay the difference where the employer fails to insure its employees up to 300% of their gross emoluments as stipulated. The GLIP guidelines further empower PenCom and NAICOM to impose administrative sanction against employers and sanctions on insurance companies, for noncompliance with the GLIP Guidelines respectively. 

Under paragraph of the guideline on missing employee, where an employee is missing, the employer is mandated to report to the employee’s Pension Fund Administrator (PFA), and the latter, after due diligence and confirmation, must notify and request PenCom to set up a Board of Inquiry into the missing employee. Where the Board presumes such employee dead, the provision of Section 8 of the PRA 2014, which mandates that the entitlement of such deceased employee be paid to his/her beneficiary, shall apply.

These provisions seek to hold insurance companies to a higher standard of operation and accountability and ensure that employers uphold the requirement of the PRA in respect of Group Life Insurance Policy for their employees.

 RETIREE PACK FOR RETIREES UNDER THE CONTRIBUTORY PENSION SCHEME 

Section 7(1) of the Pension Reform Act provides two (2) modes of withdrawal for retirees from their RSA: (i) Programmed Withdrawal (PW) and (ii) Retiree Life Annuity (RLA). In a bid to guide prospective retirees make informed decisions in selecting their preferred mode of withdrawal under the Contributory Pension Scheme (CPS), the new Retiree Pack for Retirees under the CPS was released. The Retiree Pack confirms that a retiree who is subscribed to PW may change to an RLA; but may do so after at least one (1) year of its PW subscription. This is to address the practice of Pension Fund Administrators (PFAs) from rejecting RLA Provisional Agreements presented by retirees who are already prescribed to PW but wish to transfer to RLA as their preferred mode of retirement. However, under the Retiree pack, if a retiree transfers from PW to RLA, they may not transfer from RLA to PW, as “RLA is for life”. It is good to note that the retiree pack shall be displayed on the websites of all Retiree Life Annuity Providers, Insurance Agents and Insurance Brokers.

REVISED REGULATION ON RETIREE LIFE ANNUITY 

The Revised Regulation on Retiree Life Annuity is issued by the Regulators for the purpose of giving effect to the provisions of Section 7(1)(c) of the PRA which provides that:

 “7(1) A holder of a Retirement Savings Account (RSA) shall,  upon retirement or attaining the age of 50 years, whichever is later, utilize the amount credited to their Retirement Savings Account for the following benefits:

(c)annuity for life purchased from a life insurance company licensed by the National Insurance Commission with monthly or quarterly payments in line with guidelines jointly issued by the Commission and National Insurance Commission.”

By virtue of the provision above, a retiree can purchase a life annuity from a licensed life insurance company, in line with guidelines to be jointly issued by the Regulators.

The Revised Regulation on Retiree Life Annuity provides modalities for the operation and administration of RLAs. These include:

1. New Eligibility Requirements for Insurance Institutions: The new Regulation requires the insurance companies and insurance brokers to obtain the approval of NAICOM before marketing or selling their RLA products, and NAICOM shall notify PenCom of such approval. They must also comply with all statutory filings required by NAICOM. In addition, the new regulation requires NAICOM to provide to PenCom, details of RLA Providers and RLA products that have been suspended; been recalled from suspension; that have had their license withdrawn; that are under liquidation; and companies that takeover RLA portfolios of RLA providers in consequence of the foregoing events. 
2. Waiver of Lump Sum and Pension Arrears by Retirees – Under Paragraphs 5.1.17 of the Revised Regulation, a retiree can waive his lump sum and pension arrears, if any, such that he is able to receive a higher monthly or quarterly annuity. However, where a retiree waives his rights, and subsequently has his total RSA balance transferred as premium to an RLA Provider of his choice, the retiree is prevented from reversing such waiver. 

Conversely, where a PFA transfers the lump sum and pension arrears of a retiree who has not waived his right to same, the PFA shall be liable to repay the retiree’s lump sum and pension arrears from its Statutory Reserve Fund. 

3. Change of Retiree Life Annuity Providers: The new Regulation permits retirees to change their RLA Provider after two (2) years of commencement of their RLA contract and further stipulates that such changes “shall be permissible where the monthly or quarterly annuity payment is not less than the amount being received from the previous RLA Provider” The aim is to guide retirees to make informed decision.
4.  Duty of Care to Annuitants: Consistent with the collaborative efforts of the Regulators to ensure the safety of RLA funds and assets, the Revised Regulation has introduced provisions on the duty of care owed to annuitants by PFAs and RLA Providers. These include, inter alia, the duty to: (i) act competently and diligently in regard to all transactions; (ii) provide professional advice or exercise discretion in the interest of the customer; (iii) avoid sale products which are inappropriate to customers’ needs; and (iv) deal with customers’ complaints in a fair and timely manner.8 The Revised Regulation in essence, provides an additional layer of protection to annuitants, by codifying the duty of care owed by PFAs and RLA Providers, thereby holding them to a higher standard of care than under the Old Regulation. 
5. Detailed Complaints Handling and Dispute Management Procedure: The revised regulation requires each Retiree Life Annuity Provider to have complaint desk, a specified timeframe for RLA Providers to send a final response in writing to the complainant, and inclusion of the complaints procedure in the RLA Provisional Agreement 
6. Investment of Retiree Life Annuity Funds: The new regulation expands the scope of investments that can be made using RLA Funds to include infrastructure projects through eligible bonds or debt securities, as long as the project is not less than Five Billion Naira in value; is awarded to a concessionaire with a good track record through an open and transparent bidding process which is in accordance with the Infrastructure Concession and Regulatory Commission Act (ICRC Act), and it is a core infrastructure project with business plans and financial projects which indicate that the investment is economically and financially rewarding for pension funds.

The revised regulation further stipulates new criteria that must be fulfilled before the RLA funds can be used for particular investments. In the event that the Funds is to be invested in financial instruments issued by State Government, such instrument shall be backed by irrevocable standing payment orders (ISPOs), external guarantees by eligible banks or Development Finance Institutions (DFIs), or Multilateral Financial Development Organisations (MFDOs) with a minimum credit rating of ‘A’ by a recognised rating agency. 

       7) Prohibition of Loans and Advances to a Retiree:  Paragraphs 11.1 and 113 of the Revised Regulation prohibits granting of loans and advances to retirees as well as pledging RLA related funds and assets as collateral for any loan by a life insurance company or their officers, related party or any person.

       8) Provisions on conducts of Retiree Life Annuity Providers on Marketing: Paragraph 18.1 of the revised regulation mandates RLA providers, Insurance Brokers and Insurance Agents to ensure that their products are marketed by their employees who have undergone a ‘retirement planning competency training’ certified by NAICOM 

In a bid to curb unfair and unethical practices such as misinformation, de-marketing and mis-selling by PFAs and RLA Custodians, Paragraph 18.3 of the regulation provides for Code of Ethics and Business Practices. A breach of the code attracts sanction.

CONCLUSION 

The issuance of the guidelines is a commendable attempt from the regulators of the Pension and insurance sectors. From the above, it is clear that the guidelines will aid in safeguarding the retirees’ life annuity funds and guide them to make informed decisions about their retirement benefits. It will resolve the issue of de-marketing by pension and insurance operators in the country and further provide more clarification on the provisions of the Pension Reform Act 2014 (the PRA), especially those relating to group life insurance policies for employees and retiree life annuities.

A Legal Analysis of the Legal Regime on Cyberstalking in Nigeria -Odigbo Ugochukwu Sandra

Introduction

The crime of cyberstalking is relatively new to the criminal legal system of Nigeria. It has developed and grown into a very rampant crime as the exposure on the internet constantly places people in positions to be victims. People put private information on the internet for public viewing. The internet has become a part of our everyday lives such that everyone who uses the internet, runs a social media account with any of the numerous social media applications, or simply uses the net for research is exposed to threats from cybercrimes and by extension, cyberstalking.

This article analyses the intricacies of the crime of cyberstalking before and after the enactment of the Cybercrime Act. It goes further to provide insights on cyberstalking being a limitation on the constitutional right to freedom of expression and attempts to define the ingredients of a crime of cyberstalking. Thus, this article is intended to increase awareness of the public of the legal regime relating to cybercrime as it is clear that many internet users neither know the provisions of the law as per cybercrime, nor know that there are legal steps available to them where they are victims. 

Cyberstalking

Cyberstalking has been defined as the repeated use of electronic communications to harass or frighten someone, for example by sending threatening emails. Cyberstalking is the use of the Internet or other electronic means to stalk or harass an individual, group, or organization. It may include false accusations, defamation, slander and libel. It may also include monitoring, identity theft, threats, vandalism, solicitation for sex, or gathering information that may be used to threaten, embarrass or harass.

Cyberstalking is stalking that takes place using electronic devices or the internet. It is the technological harassment directed towards a specific individual. Thus, to get a full picture of the meaning of cyberstalking, the necessity to analyse the meaning of the word “stalking” arises. According to the Cambridge online dictionary, stalking refers to the crime of illegally following and watching someone over a period of time. It was defined as the act or an instance of stalking, or harassing another in an aggressive, often threatening and illegal manner. Stalking is a form of mental assault, in which the perpetrator repeatedly, unwantedly, and disruptively breaks into the life-world of the victim, with whom he has no relationship (or no longer has), with motives that are directly or indirectly traceable to the affective sphere. Moreover, the separated acts that make up the intrusion cannot by themselves cause the mental abuse, but do, taken together (cumulative effect).

The Violation Against Persons Act 2015 made Stalking a crime. It specifically provides in section 17 that a person who stalks another commits an offence and is liable on conviction to a term of imprisonment not exceeding 2 years or to a fine not exceeding N500,000.00 or both. An attempt to even stalk another person attracts a jail term not exceeding one year or a fine not exceeding N200, 000 or both. See Section 17(2) of the Act Section 17(3) makes liable any person who incites another person to commit stalking to imprisonment not more than one year or a fine of N200, 000.00. To also aid a stalker makes the perpetrator an accessory after the fact and such person is liable to a jail term not exceeding a year imprisonment or fine not exceeding N100, 000.00 or both

From these definitions, it is clear that several similarities exist between the traditional meaning of stalking and the more recent crime that is cyberstalking. However, for an act to transform from regular stalking to cyberstalking, it must be internet based i.e. in cyberspace. 

The recognition of cyberstalking as a crime became expedient with the rising access to the internet and the constant exposure by persons to danger by displaying private information to the general public. Thus, the crime of cyberstalking was created to protect persons in their use of the internet from malicious harassment and targeting and to protect users’ privacy.

Before the Cybercrime Act

In the Nigerian legislative clime, the word “cyberstalking” was first used in the Cybercrime Act which was enacted in 2015, long after the advent of the internet which ushered in the crime of cyberstalking. Thus, the Nigerian judiciary, in catering to the crime of cyberstalking, was saddled with the interpretation of pre-existing laws which could be interpreted and stretched to cover the crime of cyberstalking. These laws included the Section 233D of Criminal Code Act and Sections 200, 202 of the Penal Code which prohibited the doing of obscene or indecent acts in public places. 

However, from the nature of these provisions, it is clear that the crime of cyberstalking was not adequately catered to. A lot was left to interpretation and speculation by the judiciary. The lack of a legislation expressly making cyberstalking a crime prevented a lot of victims from approaching the Courts as a lacuna was evident. Several laws provided for several other cybercrimes but none provided for the crime of or the punishment for cyberstalking and the provisions relating to other cybercrimes cannot be applied to cyberstalking as there       are several dissimilarities. Thus, it became increasingly necessary to enact an Act to provide for and criminalize illegal actions being perpetuated on the internet but not adequately covered by the other laws providing for traditional crimes.

Cyberstalking under the Cybercrime (Prohibition and Prevention) Act

The Cybercrime Act [“The Act”] was signed into law on the 15^th of May, 2015. The Act was created for the following purposes:

1. provide an effective and unified legal, regulatory and institutional framework for the prohibition, prevention, detection, prosecution and punishment of cybercrimes in Nigeria; 
2. ensure the protection of critical national information infrastructure; and 
3. promote cyber security and the protection of computer systems and networks, electronic communications, data and computer programs, intellectual property and privacy rights.

In Section 58, cyberstalking is defined as “a course of conduct directed at a specific person that would cause a reasonable person to feel fear”. The Act is designed to operate all through Nigeria and it provides for several cybercrimes including cyberstalking, cyberbullying, child pornography, identity theft, etc. In providing the crime of cyberstalking, the Act provides the following acts as constituting cyberstalking:

“Any person who knowingly or intentionally sends a message or other matter by means of computer systems or network that – 

1. (a) is grossly offensive, pornographic or of an indecent, obscene or menacing character or causes any such message or matter to be so sent; or 

(b)he knows to be false, for the purpose of causing annoyance, inconvenience danger, obstruction, insult, injury, criminal intimidation, enmity, hatred, ill will or needless anxiety to another or causes such a message to be sent:…..

2. Any person who knowingly or intentionally transmits or causes the transmission of any communication through a computer system or network – 

(a) to bully, threaten or harass another person, where such communication places another person in fear of death, violence or bodily harm or to another person; 

(b) containing any threat to kidnap any person or any threat to harm the person of another, any demand or request for a ransom for the release of any kidnapped person, to extort from any person, firm, association or corporation, any money or other thing of value; or 

(c) containing any threat to harm the property or reputation of the addressee or of another or the reputation of a deceased person or any threat to accuse the addressee or any other person of a crime, to extort from any person, firm, association, or corporation, any money or other thing of value…….”

The Act goes further in subsequent sections and subsections to prescribe punishment ranging from seven million Naira or three years imprisonment to twenty-five million naira or ten years imprisonment.

This section clearly spells out the actions to be considered cyberstalking and allocated punishment to each of the offences. This is a long way from the vagueness that previously existed as per the legal procedures for a crime of cyberstalking. This enactment by the National Assembly was a good and necessary one and clears a lot of ambiguity, making the Nigerian cybercrime laws clearer and more applicable.

Cyberstalking Vis-à-vis the freedom of expression

Section 39 of the constitution provides for the freedom of expression which belongs to every Nigerian citizen. This provision is a reflection of the provisions of the United Nations Declaration of Human Rights and other international declarations and treaties. The provisions of Section 39(1) are reiterated in the case of President, FRN Vs Isa where it is stated as follows:

“Every person shall be entitled to freedom of expression, including freedom to hold opinions and to receive and impart ideas and information without interference….”

Everyone has a right to freedom of opinion and expression; this right shall include freedom to hold opinions without interference and to seek, receive and information and ideas through any media regardless of frontiers either orally, in writing or in print, in the form of art or through any other media of his choice. Freedom of expression is sometimes used synonymously with freedom of speech some countries and it includes an act of seeking, receiving and imparting information or ideas, regardless of the medium used, also refers to the right to speak , write or do anything in order to allow for one’s feeling, opinions and ideas without any restriction. This pertains to the fact that an individual can give his own thoughts on a particular issue on what he thinks or feel about it.

However, the right to freedom of expression is not absolute. Section 39(3) provides the following:

“Nothing in this section shall invalidate any law that is reasonably justifiable in a democratic society –

(a) for the purpose of preventing the disclosure of information received in confidence, maintaining the authority and independence of courts or regulating telephony, wireless broadcasting, television or the exhibition of cinematograph films; or

(b) imposing restrictions upon persons holding office under the Government of the Federation or of a State, members of the armed forces of the Federation or members of the Nigeria Police Force or other Government security services or agencies established by law.”

This provision provides limitations on the right to freedom of expression. In addition to these provisions, there are also limitations such as  libel, slander, obscenity, pornography, sedition, incitement, fighting words, classified information, copyright violation, trade secrets, food labeling, non-disclosure agreements, the right to privacy, dignity, the right to be forgotten, public security, and perjury.

The International Covenant on Civil and Political Rights (ICCPR) permits limitations on the rights recognised in Article 19(2), but those limitations must be:

1. provided by law and
2. necessary for respect of the rights or reputations of others, for the protection of national security, public order, or public health or morals.

These permissions are further expanded as follows:

1. freedom from discrimination (article 2 of the ICCPR)
2. freedom from cruel, inhuman or degrading treatment (article 7 of the ICCPR and article 37(a) of the CRC)
3. the right of children to special protection (article 24 of the ICCPR and article 3 of the CRC)
4. freedom from arbitrary interference with home, family, correspondence or reputation privacy (article 17 of the ICCPR).

Whether particular restrictions on freedom of expression which are designed to protect these rights are justifiable will depend on more specific consideration of the restrictions concerned and the circumstances.

From the foregoing, it can be surmised that a person’s claim to the right of freedom of expression cannot be a defence where the person is found guilty of cyberstalking or several other forms of infringement. The saying “where one person’s rights end, another person’s begins” is very apt here. By virtue of the exclusion of all cyberstalking acts by the provisions of the Cybercrime Act, a person’s freedom of speech and expression do not constitute a right to infringe upon a person’s rights to their social media space.

Ingredients of Cyberstalking

The crime of cyberstalking is largely subjective in nature. Because of the constantly changing nature of the internet, it is difficult to lay down parameters defining the extent of overt action that will constitute cyberstalking. Thus, it will mostly lie to the judge to determine the validity of an action in cyberstalking. However, the following constitute the points an act accused of constituting cyberstalking should fit: 

1. Must be on the cyberspace/internet,
2. Must infringe upon the complainant’s privacy,
3. Must be intended to bully, harass or/and discomfort the complainant,
4. Must be threatening and menacing, intentionally or otherwise,
5. Must have affected the complainant’s mental health, etc.

These ingredients in no way exhaust the things to be proved in a case of cyberstalking. In proving a case of stalking, the prosecution has to prove that a reasonable person would have known that the behaviour would create distress or fear in the circumstance of the case and the harassment must have happened on enough occasions to lead to a reasonable conclusion of stalking. This also applies to the crime of cyberstalking.

Conclusion

The Act was a great innovation, responding to changing times in the development of the world. Its enactment was a timely innovation to curb the rising rates of cyberstalking in Nigeria. Before the Act, there was  and conflicts about which laws applied to this crime but the Cybercrime Act has adequately cured that. 

However, despite the greatness of the innovation, there is currently no court decision on any cases relating to cyberstalking. The only ongoing cases of cyberstalking are cases relating to journalists  and politicians who have been accused of cyberstalking as a by-the-way amongst other crimes and cybercrimes. This makes it obvious that the Nigerian populace is still ignorant of the remedies available to them when they have been cyberstalked. An urgent sensitization of Nigerians is very necessary if the Cybercrime Act will reach its full potential. Several blatant cases of cyberstalking and cyberbullying are seen on social media daily and it may be a good prerogative to encourage Nigerians to pursue legal action, thereby increasing the public knowledge on the meaning and punishments of cyberstalking.

Unlike the crime of internet fraud and related offences, cyberstalking gets little or no recognition or application of the laws applying to it. Any of the acts listed by the Act to constitute cyberstalking have one thing in common: the stalking must be perpetuated on the internet. This is a condition precedent for the crime to switch from regular physical stalking and fall under the purview of the cybercrime Act. 

A person’s freedom of expression shall not be a defence for any act which is classified as cyberstalking under the Cybercrime Act. The limitations to the freedom of expression include acts prohibited by the law. Thus, the mere inclusion of those acts under the Cyberstalking Act takes away any claim by an accused person that the act done was done in furtherance of his rights to expression.

From all the above, it is clear that the creation of the Cybercrime Act was a great move. However, many more needs to be done. A law that people are ignorant or oblivious about cannot be applied as it was intended by the enacting body. The Nigerian government needs to  begin sensitization programs and workshops to further integrate the implications of the Act into the hearts of Nigerians to inform them of the extent of protection afforded them by the Act.

A Legal Analysis of the CBN Global Standing Instruction Policy -U. S. Odigbo [Miss] Esq.

In 2019, the Central Bank revealed plans of a collaboration with the Nigeria Inter-Bank Settlement System (NIBSS) and the Bankers’ Committee to launch an initiative allowing lenders to recover loans from deposit accounts of loan defaulters from any bank or financial institution in the country. This was a process that started in May 2019 by the bankers committee “declaring war” on non-performing loans.

The Bankers’ Committee at its 345^th meeting held on the 26^th of August 2019 resolved that banks shall have access and utilize deposits of defaulting customers across the banking industry to regularize their nonperforming facilities.

Questions have arisen as to the legality of this venture by the CBN. Thus, this article analyzes the Global Standing Instruction (GSI), the powers of CBN to make same and the legality of the phrases to be added to loan agreements on the instruction of the CBN,

CBN powers/ legal basis of the circular

The CBN Act provides the objects of the CBN. In Section 2 of the Act, it is stated thus:

The principal objects of the Bank shall be to –

(a) ensure monetary and price stability;

(b) issue legal tender currency in Nigeria;

(c) maintain external reserves to safeguard the international value of the legal tender currency;

(d) promote a sound financial system in Nigeria; and

(e) Act as banker and provide economic and financial advice to the Federal Government.

The power of CBN to make regulations regarding and relating to other banks is contained in Section 51 of the CBN Act and Section 57, Banks and Other Financial Institutions Act (BOFIA). These Sections provide the authority of the Central Bank to make regulations for all other Nigerian Banks which it believes will promote or secure any of the objects listed above. The policy is to promote a sound financial system and enhance loan recovery across the Nigerian banking sector.

It is in furtherance of these powers that the Central Bank made the Guidelines on Global Standing Instructions (individuals). The GSI is aimed at facilitating an improved credit repayment culture, reducing non-performing loans in the Nigerian Bank System and watch-listing consistent loan defaulters.

Salient Provisions of the GSI

The GSI is a service of last resort which can be employed by a Bank to recover outstanding debts from its customers who borrow money from it and default. A Bank is able to activate a Global Standing Instruction without recourse to the customer, by a direct set-off against deposits/investments held which the customer has in accounts with other banks.

The Guidelines provide that at the point of executing loan agreements, borrowers must also execute a GSI mandate in favour of the participating financial institution (PFI)^[1]. The effect is that a creditor bank (also known as a participating financial institution [PFI]) after entry into the loan agreement with the borrower may, where the borrower defaults, can reach out to other banks in which the defaulter maintains an account and retrieve sums to the tune of the debt owed by the defaulter without further recourse to the defaulter. For instance, where Mr A borrows money from Bank A and he defaults in paying, Bank A may reach into his accounts with Bank B and retrieve the sum he owes without further recourse to Mr A.

The biometric verification number (BVN) system shall be used to track linked accounts in other financial institutions. The Guidelines however provide that where a borrower’s BVN is not linked to any of the qualifying account types listed above, such an account will be “watch-listed”. The GSI as it is only applies to individual accounts and not to corporate accounts and can only be triggered in relation to the principal amount and accrued interest. It applies to

1. Individual Savings Accounts;
2. Individual Current Accounts;
3. Individual Domiciliary Accounts;
4. Investment/Deposit Accounts (Naira & Foreign Currency); and
5. Electronic Wallets.^[2]

Where a person defaults, the PFI shall inform the NIBSS who shall send a balance enquiry to banks with which the defaulter holds an account requesting information as to the extent of funds in that account. Where said bank responds, the NIBSS shall trigger the GSI and give a debit directive to the bank.

The GSI provides for the roles of the NIBBS and the reports to be prepared for the CBN. It also creates the offices of the Chief Risk Officer and the Chief Information/Technology Officer whose jobs it would be to enforce the GSI^[3]. It also provides the penalties^[4] to apply where the GSI is wrongly triggered or a PFI fails to honour a trigger by the NIBBS.

Legal Issues with Enforcement

By the nature of the GSI and the provisions to be enforced therein, the following will be issues that may arise. Of particular interest are the provisions that give the PFI the authority to offset the debt from any accounts maintained with other banks. There is also a possible contravention against Sections of the Constitution protecting the fundamental human rights of citizens.

1. Waiver of confidentiality

The widely applied English court of appeal case Tournier v National Provincial and Union Bank of England 1924^[5] is the legal authority responsible for the common law stance that a duty of confidentiality is implicitly owed to the customer by the banker. This means the banking contract need not contain express terms about the fiduciary duty of confidentiality. This precedent has been used for over ninety years and substantiates that a duty of confidentiality is owed by the banker to the customer beyond the date of termination of the banker/customer contract and prohibits the banker from sharing customer information with third parties like credit agencies.

Tournier’s case further substantiated that the duty of confidentiality is not absolute; Bankes LJ points out that a breach of confidentiality is permissible in four particular circumstances. These exceptions^[6] are:

(a) compulsion by law to disclose the customer’s information,

(b) where there is a duty to disclose the information to the public,

(c) instances where the customer consents the disclosure or

(d) where it is in the interest of the bank to make such a disclosure for their sake.

The exception in cases of compulsion by law relates to orders of court and statute. The question arises whether a circular/guidelines made by the CBN falls under this purview. I do not believe that it does. The provision of the law is that the CBN or indeed any organization or agency must approach the court for an order before a person’s account can be intruded into in such a manner. Thus, the attempt by CBN to bypass this provision under the guise of an exercise of the powers under Section  57, BOFIA is an obvious attempt to stretch the interpretation of that section. Furthermore, is a GSI strictly “law”? Perhaps it is, perhaps it isn’t. But the safe classification is a one under the CBN’s power to create regulations to regulate other banks in which case, it may be regarded as a subsidiary legislation.

Second, the question of the customer’s consent arises. One exception is where a customer gives consent to the intrusion. But can a customer waive their right to confidentiality perpetually? The right to confidentiality owed to customers by bankers is an extension of the right to privacy which is a constitutional right^[7] and cannot be waived perpetually. Financial institutions must balance the contractual interest of the customer in keeping his affairs confidential with the duty to disclose imposed by the Guidelines.

2. Waiver of fair hearing and the law against compulsory acquisition

Questions have been raised on whether or not the Guidelines breach Section 44 of the 1999 Constitution which provides that no law shall allow for the compulsory acquisition of any property without allowing the property owner the right to access a court or tribunal for the determination of his rights. Merely requiring a borrower to execute a GSI in favour of the creditor PFI does not take the construction of rights out of the realm of constitutional law. A contract cannot alter the provisions of the constitution and wherever such a contract is inconsistent, it is void to the extent of its inconsistency. The provision of the law as per compulsory acquisition is to the effect that compulsory acquisition shall not be taken except in strict accordance of a law that among other things, provides for compensation and gives the person aggrieved right to court for the determination of the amount of compensation.^[8]

The GSI is designed to operate as a form of power of attorney donated by the borrower in favour of the PFI. The question to then ask is what happens where the borrower disputes the indebtedness? Will the creditor PFI and the other PFIs still go ahead to attach the borrower’s other accounts? If yes, will this not amount to a usurpation of the power of the court to determine citizens’ rights and obligations? The creditor PFI also appears to be in a position where it is the accuser, prosecutor and judge in its own cause. This is likely to be viewed by the courts as a breach of the customer’s right to a fair hearing^[9] as provided under Section 36, Constitution of the Federal Republic of Nigeria, 2010.

Further legal concerns

1. The law relating to Joint account

It is my view that the implementation of the GSI will infringe on the constitutional rights of a co-joint account holder. The Constitution as we have seen provides explicitly that no moveable property of a person shall be taken possession of compulsorily except in the manner and for the purposes prescribed by a law.

It is my opinion therefore that a GSI cannot override the long-established principle of law that execution cannot be levied against a joint account where the debt is only due from one of the holders of the joint account. Both individuals hold joint interest in that account and a GSI cannot purport to attribute a portion to one party and another percentage to another. It is irrelevant that all the deposits into that linked account may have been made by the defaulting borrower. The Guidelines fail to state how monies jointly owned with unconnected third parties who are not loan defaulters as seen in the scenario above will be dealt with. This omission may allow for the encroachment by PFIs on an unconnected third party’s constitutional protection from compulsory acquisition under Section 44 of Constitution.

2. Retroactive application of the GSI?

GSI’s are not entirely novel. Loan agreements by banks usually contain clauses similar in effect to a GSI. Similarly, the CBN circular titled: New Offer Letter Clause for Credit Facilities which was issued on 26th August 2019^[10] authorized banks to include clauses similar to the GSI in their loan offer letters. The Guidelines merely give bite to the GSI and other similar clauses – provided the banks and other financial institutions subscribe to the Guidelines and execute the GSI Master Agreement.

It is foreseeable that[1] [2] [3]  PFIs will begin to re- examine their loan agreements to ascertain whether they contain clauses similar in effect to a GSI and whether they can now be used within the framework of the Guidelines.

3. Issues of Privity

The doctrine of privity of contract states that only parties to a contract shall have the right to claim any benefit from that contract^[11]. An account opened by a customer is premised on a contract between the customer and the financial institution. Therefore, the right of a creditor PFI to access monies held by a defaulting borrower in another PFI under a separate agreement with another PFI is questionable.

Furthermore, the Guidelines fail to provide any protection to the PFIs in the event that they release monies in the borrower’s account upon any GSI trigger and a court subsequently finds in favour of the borrower. The transfer of a borrower’s money with a PFI to a creditor PFI does not validly discharge the PFI from any subsequent liability to the customer.

Conclusion

The innovation by the CBN with the introduction of the GSI is great and quite timely in the current times of debt delinquency. There is no doubt that the Guidelines, if effectively implemented, while taking into careful consideration its legal implications, have the potential of addressing the problem of loan delinquency in Nigeria. The CBN however needs to be cautious in implementing these Guidelines so as not to create a bigger problem whilst trying to resolve the issue of loan delinquency. To achieve effectiveness, it may be necessary to review the GSI taking into consideration the concerns above. Consultation of experienced lawyers should be sought by the CBN in effecting the review to avoid years of litigation. As the GSI currently stands, several disputes will arise from it with the Court having to decide which way to swing. This confusion and uncertainty can be avoided by protecting the rights of citizens whilst still retrieving owed sums. The GSI is a great introduction to the Nigerian banking sphere. It could be better! Until the gaps are bridged, the Courts will be saddled with the responsibility of deciding what applies.

^[1] Section 1.0, Guidelines on the Global Standing Instruction, 2020

^[2] Section 2.0, Guidelines on the Global Standing Instruction, 2020

^[3] Section 5.0, Guidelines on the Global Standing Instruction, 2020

^[4] Section 6.0, Guidelines on the Global Standing Instruction, 2020

^[5] [1924]1 KB 461

^[6] CAC Vs UBA (2013) 5 CLRN

^[7] Section 37, CFRN 2009

^[8] Opara Vs N.C.S.B (2011) 8 NWLR (pt 1248)

^[9] Ndukauba Vs Kolomo (2005) 4 NWLR (pt 915)

^[10] BSD/DIR/GEN/LAB/12/054 signed by Ahmad Abdullahi, Director, Banking Supervision Department

^[11] Osoh Vs Unity Bank PLC (2013) 9 NWLR (pt 1358); Mohammed Vs Mohammed (2012) 11 NWLR (pt 1310)

POST NO DEBIT DIRECTIVE: LEGAL DUTIES AND LIABILITIES OF BANKS.

-Omobolaji O. Oyeniran [Miss] Esq (Associate Counsel)

A Post-No debit (PND) is usually issued on a bank account for several reasons; when a customer’s account has been hacked, or they lose their ATM card, they can rush to the bank to get a post no debit on the account. Post No debit Order/ directives are also issued by government agencies like the Economic Financial Crimes Commission and the Central Bank of Nigeria. This article expounds the nature of  post- no debit vis a vis the effect of  a placing PND directive on an account; the  duties and liabilities of Banks  where such directives are issued. The article concludes with recommendations for bankers to avert several lawsuits.

NATURE OF POST NO DEBIT

Simply put, Post no debit means a block on a bank account to prevent any form of withdrawal- such as ATM, Debit Cards, cheques, Over-the-Counter(OTCs)- from such an account.  

Post no debit is usually done when customers lose access to their bank accounts details, either through hacking or loss of ATM card, whenever this happens, the customer can inform their bank to place a post no debit on their bank account. The effect of this is that a customer’s access to withdraw from such an account is restricted, however deposits are allowed into the account. The reason for the latter in the banking industry is to ensure that commercial activities are not stalled due to the PNB placement on such accounts.

WHO CAN POST A PND?

Asides the reasons mentioned above, some government agencies like the EFCC, CBN, SEC, AMCON are empowered to direct any bank to place a post no debit on a customer’s account provided some condition precedents are fulfilled (I.e obtaining a Court order). For instance, Section 34 (1) of the EFCC Act empowers the Commission to direct a bank to place a PND on the account of a customer where there is suspicion of financial fraud, provided that it has the fiat of the Court to do so . The section provides as follows: 

“34 (1) Notwithstanding anything contained in any other enactment or law, the Chairman of the Commission or any officer authorised by him may, if satisfied that the money in the account of a person is made through the commission of an offence under this Act and or any of the enactments specified under Section 7 (2) (a)- (f) of this Act, apply to the Court ex-parte for power to issue an order as specified in Form B of the Schedule to this Act, addressed to the manager of the bank or any person in control of the financial institution or designated non-financial institution where the account is or believed by him to be or the head office of the bank, other financial institution or designated non-financial institution to freeze the account.”

This means the EFCC is expected to have obtained a Court order granted ex parte, to effectively direct a bank to place a PND on a customer’s account. 

Similar provisions are contained in the Banks and Other Financial Institution (BOFI) Act. Section 60B of the Act empowers the CBN to direct a bank to place a PND on a Customer’s account 

“where the Governor has reason to believe transactions undertaken in any bank account with any licensed bank as such as may involve the commission of any criminal offence…he may make an ex parte application, for an order of the Federal High Court… and on obtaining such Court Order direct…the Manager of the bank where the account is situated… to freeze forthwith all transactions.”

LEGAL EFFECT OF NOT OBTAINING A COURT ORDER

Failure of these agencies to obtain a Court order before freezing the account of a customer renders such action unlawful. This is the position in the case of Megawealth Ltd Vs SEC (2017) 13 NWLR (Pt. 1583) 345 in which the Securities and Exchange Commission(SEC) failed to secure a court order before freezing the account of the appellant, the Court held that such failure makes the freezing unlawful:

 “The Securities and Exchange Commission must seek judicial order to freeze the account of any person whose assets were derived from the violation of the Act. In the instant case, the respondent did not obtain judicial order before Freezing the appellant’s account. In the circumstance, the action was declared unlawful.” (Pp.378 paras D-E; 380, paras. A-C) 

Apart from being unlawful, freezing of Customer’s account without an order of Court also constitute a violation of the Customer’s right. In the case of GTB Plc Vs Mr Akinsiku Adedamola (2019) 5 NWLR (Pt. 1664) 30 the Court of Appeal held;

“Where there is allegation of commission of crime against a customer of a Bank in relation to the funds in his account, the Commission is empowered by law to set in motion the process of investigating any such funds perceived to be derived from proceeds of crime. In conducting the investigation, the commission is required to observe due process and satisfy the requirements of the law. The Commission or its officers must go to court and obtain an ex parte order before Freezing the account, any failure to follow due process will render the action taken by the Commission a violation of the rights of the customer. (P. 41, paras. F-G)”

Tijani Abubakar JCA emphasized this point in the case of GTB Vs Adedamola where the Honorable justice stated that; 

“the Economic and Financial Crimes Commission has no power to give direct instructions to banks to freeze the account of a customer without an order of Court, so doing constitutes a flagrant disregard and violation of the rights of a customer. ..the Judiciary has an onerous duty of preserving and protecting the rule of law…Whenever there is brazen violation of the rights of a citizen, the Courts in the discharge of their responsibility to the society, must speak, frown and condemn arrogant display of power by an arm of government.” pg. 43 par. E-F

The essence of this is to protect the right of the customer from being violated.

DUTIES OF BANKERS IN PLACING PND ON CUSTOMER’S ACCOUNT.

1. DUTY OF CARE.

As much as some government agencies are empowered to direct the placement of PND on a customer’s account, it is clear, from the above, that such a directive must be accompanied by a Court order directing such banks to place the PND. However, there are instances where banks are simply directed to place the PND without an accompanying court order, and due to fear of disobeying constituted authorities these banks go ahead to freeze their customers’ accounts. The court has emphasized that there is a duty on Bankers themselves to ensure that a Court order is first had and obtained before freezing their customer’s account. This requirement has been given judicial flavor in plethora cases. In GTB Plc Vs Mr Akinsiku Adedamola (2019) 5 NWLR (Pt. 1664) 30 where the respondent bank, while acting under the directives of the EFCC, placed a PND on the account of the appellant without an accompanying court order,  the Court of Appeal,  per Hon. Justice Tijani Abubakar held that;

“Before freezing a customer’s account or placing any form of restraint on any bank account, the bank must be satisfied that there is an order of Court.”pg 43 par. E

Generally, a banker can only deal with a customer’s bank account to the extent of the express or implied authority given it by such a customer.  However the law recognizes certain exceptions which include acts done in the ordinary cause of business and acts required by law. For the latter to be activated, a court order must be secured . Therefore a Banker owes its customer a duty of care to protect the customer’s property, that is under its care from being violated by a third party, even from statutory jingoisms. 

Most times, Bankers argue that they only acted as agents of the particular authority that gave the PND directives, and usually seek to join the agencies as parties to suit. The Court has held that, while acting as agents of the issuing agency, the Banks also have a duty of care  towards their customer to ensure that the duty is not breached except where the iron hand of the law demands, and where it does, they must do so with due process. In the words of Tijani Abubakar J.C.A in GTB PLC Vs Adedamola,

“Our financial institutions must not be complacent, reticent, and toothless in the face of brazen and reckless violence to the rights of their customers.” Pg 43 par. F

In Adetokunbo Odutola Vs Diamond Bank Plc suit No. LD/ADR/800/17 (unreported)  the Court held that the Defendant Bank owes a duty of care to the Claimant/Customer and was therefore liable for the injury that arose from freezing the Claimant’s account. 

2. DUTY OF DUE DILIGENCE.

Apart from ensuring that the PND directive is accompanied by a court order, there is need for a banker to take due diligence in ascertaining that the PND placed on the bank account does not exceed the duration of the order. In other words, the PND can only subsists within the number of days the court order subsists. Upon the expiration of the Court order, the bank is expected to either apply for renewal of the court order, or remove the PND placed on the account. In UMEZULIKE vs. CHAIRMAN , EFCC (2017) LPELR (43454) 1, the court held that;

“However, I need to state that by the terms of the order, the order made on 23/2/17 should have automatically lapsed after 60 days on 23/4/17. As the ruling at the lower Court was given on 2/6/17, the order had abated and no longer existed. The records do not reveal that any other subsequent order was sought for nor obtained. In effect, there is no existing lawful order of the Court freezing the account of the appellant as at now.” Per HELEN MORONKEJI OGUNWUMIJU ,J.C.A ( Pp. 11-27, para. B )

Therefore, unless a court order is renewed, a banker is expected to unfreeze the account of the customer.

LIABILITIES OF BANKERS

1. BREACH OF TRUST

Since a banker has a duty of care towards its customer to ensure that before any action is taken contrary to the authority given it by the customer, the banker must obtain a Court order, failure to do this amounts breach of that duty of care. Interestingly, the Nigerian Courts have granted some  aggrieved customers  damages against their banks for breaching the duty and  the court will be glad to do so in a bid to enforce the rule of law and by following the infallible doctrine of stare decisis. 

In Adetokunbo Odutola Vs Diamond Bank Plc suit No. LD/ADR/800/17 (unreported)  the Court held that the Defendant Bank failed in its duty of care to the Claimant/Customer and was therefore liable for the injury that arose from freezing the Claimant’s account. The court further awarded the sum of 25milliom naira as damages for unlawfully freezing the Claimant’s bank account. 

2. TORT OF DEFAMATION

Bankers can be liable in tort for defamation to their customers whenever they freeze their customers’ account is regardless of whether or not the freezing is published to the whole world or in the press that the customer was fraudulent. In Royal Pet. Co. Ltd Vs F.B.N Ltd (1997) 6 NWLR (Pt. 510) 584 

“The tort of defamation is committed when a customer’s account is frozen regardless of whether or not the Freezing is actually published to the whole world or in the press that the customer was fraudulent. [Allied Bank (Nig.) Ltd. v. Akubueze (1995) 4 NWLR (Pt. 390) 493 at 508 referred to.” (P. 599, para. H)        

The effect of this failure is that banks are bombarded with cases from aggrieved clients, and in most cases, they are found liable for breach of care. Consequently, several amounts are awarded as damages in favor of the customer. Many banks have lost a few millions in suits of this nature. The ripple effect is a drop in the profit margin of such banks which in turn affects the remuneration or job security of their employees as well as their Corporate Social Responsibility (CSR) to the public. 

Apart from the effect on the profit margin of a bank, recurrent failure stimulates the institution of legal suits in Courts on the issue. The Nigerian courts are known to be plagued with backlogs of cases, both relevant and frivolous, where banks fail to put their houses in order, their actions would be a catalyst to bringing in  more suits before the already overburdened courts, suits that could be avoided.

More so, the negligence of bankers on placing PNDs without due process has caused a lot of customers their source of livelihood. Such actions at times ruin business empires built over the years due to the fact that the customer is suddenly rendered financially handicapped which prevents them from meeting up with business obligations both nationally and internationally. Some even become objects of law suits for issuing DUD-Cheque to several clients, while some have to sell valuable properties at lower prices just to fulfill their financial obligations and not be submerged in the unforeseen circumstance thrust on them by their bankers.

RECOMMENDATIONS 

The issue in discourse being a fundamental one cutting through different facets of the society and affecting many stakeholders, there is need for the main players, especially the banker and the customer to actively play some roles so as to reduce, if not possible to forestall, casualties. Hence, it is recommended as follows:

1. All Bankers should send circular to all their branches educating them on PND directives and the importance of obtaining court orders before placing a customer’s account on PND.
2.  To effectively supervise the execution of the circular,  the Legal Unit in the Banks and/or other Financial Institutions (OFIs)  should ensure that any PND directive sent to them is scrutinized and well profiled to ascertain whether such directive has a court order attached to it, and where none is attached, to obtain one immediately. Furthermore, the Legal Unit should ensure the PND placement on the account does not exceed the duration of the court order, and upon the expiration of such order, apply for renewal of  the Order or unfreeze the customer’s account (s).
3. Placement of PND on customer’s account should be done with utmost discretion to prevent customers from withdrawing all the monies that are sought to be frozen. Where no discretion is displayed, Bankers may have to be answerable to the agency that issued the directives.
4. Compliance strategies should be put in place by Banks to ensure that no members of staff do not run afoul of the Bank’s policy on confidentiality by divulging the news of an impending PND placement to a customer. Also, measures are to be put in place to ensure that the Legal Unit efficiently supervises the execution of placement of PNDs in line with legal requirements.
5. In order to prevent gross financial catastrophe, a customer whose account is frozen  should approach the court for variance or vacation of the court order. This, of course, would be better done with the help of a legal practitioner.

In conclusion, all parties have a role to play. A duty on the Banker’s part, is a corresponding right on the customer’s part. Both parties, apart from being objects of statutory biddings and judicial pronouncements,  are also key players in a contract that is statutorily  flavored, thus the need for each one of them not to breach the other’s trust, except as required by due process of the law. Therefore, it is imperative for bankers to ensure that anytime they are directed by the EFCC or CBN or any other government agencies to place a PND on a customer’s’ account, such should be accompanied by a court order, and where a Court order is not attached to the directive, the Bank must take further steps to obtain one before doing so. Failure to do this amount to violation of the Customer’s right, and the act of freezing is unlawful.

About the Author

Omoboolaji Oyeniran (Miss) is an Associate at the firm of Path Solicitors.

THE NBC AMENDED CODE: LEGAL IMPLICATIONS TO THE CONTENT CREATION INDUSTRY IN NIGERIA.

By Path Solicitors.

The entertainment and broadcasting industry is one of the most fantastic sectors of the Nigerian economy, witnessing rapid growth and development both in creativity, innovation and revenue stream. So, it’s no wonder that the Federal government of Nigeria has cast its radar on the broadcasting sector, with the Nigerian Broadcasting Commission (hereinafter referred to as the NBC) leading the charge. Just last month, the NBC announced a set of amendments to the NBC Code. This Article provides a breakdown of the code, its legal implications and how it affects content creators, both indigenous and international.

Aim Of The Amendment

The Amendments are armed with the following goals and aspirations:

• Promote local content and inclusion of local talent in broadcasting projects
• Increase advertising revenue for broadcasters and content producers
• Restrict and discourage monopolistic and Anti-competitive practices
• Establish effective codes of practice relating to content acquisition.

Key amendments of the code directly or indirectly apply to providers of motion picture, prime sports and musical content. Providers include Pay TV (DSTV, Gotv, Startimes etc), Video-on- Demand/Streaming platforms (iRoko TV, Netflix et al), etc.

Highlights Of The Code

Highlighted below are the salient amendments to the code:

1. Exclusive Licensing:

According to the Code, the exclusivity of content is anti-competitive and monopolistic. Section 9 of the NBC Code provides:

“The Broadcaster or Licensee shall immediately after the coming into force of this Amendment be prohibited from entering into any form of agreement, contract, concerted practices or take any decision which have as their objectives and intendment the prevention, restriction or distortion of competition in, or in any part of, the broadcast media industry in Nigeria ; and for this purpose , no broadcaster or licensee shall enter into any form of broadcasting rights acquisition either in Nigeria or anywhere in the world to acquire any broadcasting right(s) in such a manner to exclude persons, broadcasters, or licensees in Nigeria from sub-licensing the same.”

The above provision explicitly prohibits restriction of competition by content producers. Licensees and broadcasters are prohibited from acquiring sole broadcast rights that excludes any group/individual, broadcaster/ licensee, in Nigeria from sub-licensing or accessing same rights. In this vain, the NBC has opened the flood gates of sub-licensing all and any broadcast content on the airwaves. Any agreement that excludes broadcasters from sub-licensing is rendered a nullity under the code.[1]  

• Local Content/Local Talent:

Section 3.15 provides:

“The Broadcasters shall ensure that for a programme to qualify as Local content, its conceptualization, production, target audience which in every case should be Nigeria, satisfies all the following:

1. The producer of the programme is or their producers of the programme who must be responsible for creative control, monitoring and decision making pertaining to the programme are Nigerians residing in Nigeria;
2. The director of the program is, or the directors of the program are, Nigerian(s); or
3. The author of the programme is or the writers of the programme are, Nigerian(s)
4. At least 75% of the leading authors and major supporting cast, including voice actors, or on-screen presenters appearing in the programme are Nigerians…”

The above provision mandates broadcasters to promote contents that are reflection of the Nigerian character and Nigerian life. The contents are to be directed at a Nigerian target audience, and should include local talent in the production of such content in Nigeria.[2] The section further requires at least 75% of lead and supporting casts, presenters, production and post-production crews to be composed of Nigerians whether the production is in collaboration with a foreign entity or not.[3]

• Web/Online Broadcasting:

By virtue of Section 2.0.3 of the Code:

“All persons who wish to operate web/online broadcasting services in Nigerian territory shall be registered with the Commission.”

The section further provides thatweb/online platform owners shall bear liability for the contents posted on their platforms, and they must conform to the provisions of the code on programming standards, especially as it relates to hate speech and fake news.

Where a service provider or platform provider breaches any or all of the provisions of the Code on web/online broadcasting, sanctions as provided in the Code, including a take-down order, a block, or a shut-down shall apply.[4]

• Sports Content Acquisition:

Owners of broadcast rights to prime sports events are now required to offer such rights and make it available for retail to interested broadcasters on any platform, be it Internet, satellite, mobile, cable, radio, etc.

The preamble to Section 6 of the Code states:

“It is the policy of the Nigerian Government to promote local entrepreneurship in the creative industry in Nigeria. In the actualization of this policy, the broadcast industry in Nigeria shall promote the full exploitation of Rights to Sport and other programming content for the broad benefits of Nigerian.

Therefore, the exclusive exploitation of rights, even when acquired is not permissible in Nigeria.”

Furthermore, section 6.2.10 of the amended code requires broadcasters or right owners of Prime Foreign Sports contents/events to invest 30% of the cost of acquiring such rights in a Prime Local Sports content/events of the same category.

What Does It Mean To Content Creators?

The interpretation of the code, as it affects broadcasters, has caused furor and uproar amongst producers of content. While the code will enable local talents get more attention, and music artistes will be given the opportunity to realize full monetary compensation for their work, Pay TV, video on demand platforms and broadcast rights owners have been hit with the hammer of government intervention in private enterprise. Center to this is the provision that explicitly gives the NBC the right and regulatory powers to mandate a content producer in any broadcast platform to sub-license its broadcasting rights to another broadcaster, content producer or licensee in Nigeria, on terms and conditions dictated by NBC.

Section 9.0.3 of the amended code lists the factors to be considered in determining whether an agreement is exclusive in nature or not thus:

• The relevant economic market
• Global trends in the relevant market.
• The impact of the conduct on the number of the competitors in a market and their market shares
• The impact on the barriers to entry into the market, on the range of services in the market, and the conduct on the cost and profit structures in the market.

Drawbacks To The Code

Some provisions of the amended NBC Code have raised constitutional and legal concerns as well as issues surrounding the possibility of enforcement.

1. Contradicts Certain Provisions of the Copyright Act:

The amendment threatens the provisions of the Copyright Act that a broadcaster or owner of a copyright has the freedom to enter into exclusive contracts, license or sell his work in any manner he or she chooses. By virtue of Section 6 of the Copyright Act[5], a broadcaster or owner of copyright has exclusive rights to do certain acts in respect of the work. Section 11 subsection (3) of the Act[6] also makes provision for exclusive licensing of a work so far such act is in writing.  Furthermore, Section 8 of the Act provides that a broadcaster shall have the exclusive right to control the doing in Nigeria the recording and re-broadcasting of the whole or a substantial part of the broadcast; communication to the public of the whole or a substantial part of a television broadcast either in the original form or any other form; and distribution to the public, for commercial purposes, copies of the work.

The implication of this contradiction is that the provisions of the Copyright Act being an Act of the National Assembly, supersedes that of the Code which is a subsidiary legislation.  Under the Nigerian jurisdiction, where there is a contradiction between the provision of an Act and a subsidiary legislation, the provision of the act prevails.[7]

Thus, it is imperative for the National Assembly to amend these sections of the Copyright Act to reflect the amendments in the Code in order to achieve an unhindered implementation of the NBC Code.

• Enforcement of The Code:

As earlier stated, there are also concerns emanating from the feasibility of enforcing the code, chief of which is how the commission hopes to efficiently regulate multinational and multijurisdictional streaming platforms such as Amazon TV, Apple TV, Netflix, etc. Would the NBC have to go through the production portfolio of each content creator or broadcaster for each programme, in each category, to ascertain compliance with the directive to include 75% of local talent in conceptualization, production and post-production?

Being an ITU member state, Nigeria can adopt the measures provided by the ITU[8] on international telecommunication coordination. One of these measures is the promotion of Digital Object Architecture (DOA) for Information Technology (IoT) which enables tracing of online communications thus allowing levying of fees and taxes on financial transactions as well as content streaming among other online communications.

• Overstretches the Powers of the National Broadcasting Commission (NBC):

By having anti-competition, intellectual property, and local content as its aim, the Code has exceeded the powers given to the NBC and have delved into areas that have other statutory bodies established solely for that purpose. The powers of the NBC under section 2 of the NBC Act[9] among other things, is the regulation and control of the broadcasting industry. This power doesn’t include anti-competition which is under the purview of the Federal Competition and Consumer Protection Commission (FCCPC) established by the Federal Competition and Consumer Protection Act (FCCPA) 2018 to promote fair, efficient and competitive markets in the Nigerian economy.[10] Matters relating to intellectual property are regulated by the Nigerian Copyright Commission.

Furthermore, the absurd nature of the provision requiring broadcasters or right owners of prime sports events to invest 30% of the cost of acquiring such rights in a prime sports events of the same category at the local level, is a cause for alarm for the broadcasters as that mandate imposes unfair financial burden on the broadcasters and also prevents freedom of contract.

Conclusion

The amendments to NBC code focus on anti-competition, prohibits non-exclusivity of broadcasting rights, and empowers local web/online content producers. Despite the complexities in legalization and enforcement arising from the amended code, the music industry is ecstatic as their most notable concerns over the years have now been given due attention. Code 3, section 18, subsection 3, as amended, explicitly provides that broadcasters are mandated to pay all sums in form of royalties to Collective Management Organizations (CMOs), in this case, the Copyright Society of Nigeria (COSON), and obtain necessary permission for the use of artwork in the form of licenses from artistes or owners of recording artwork, before such can be transmitted on the airwaves. In all, the amendment is a laudable step taken by the Nigerian Broadcasting Commission to ensuring that the broadcasting industry is flooded by Nigerians to produce regulated contents for Nigerians.

References

https://www.mondaq.com/nigeria/broadcasting-film-tv-radio/954936/regulating- nigerian-content-on-broadcasting-platforms-an-examination-of-the-amendments-to- the-6th-edition-of-the-nigeria-broadcasting-code

https://www.lawyard.ng/2020/06/29/a-review-of-the-amendments-to-the-sixth- edition-of-the-broadcasting-code/

https://www.pulse.ng/entertainment/music/what-does-the-6th-amendment-to-nbcs- broadcasting-code-mean-for-nigerian-music/9yy8f48.amp

https://www.pulse.ng/entertainment/movies/what-the-nbc-broadcasting-code- amendment-could-mean-for-nollywood-explainer/ky4fj5l

https://nairametrics.com/2020/06/14/nbc-code-why-video-streaming-platforms-say- no/

https://allafrica.com/stories/202006180295.html https://opinion.premiumtimesng.com/2020/07/11/amending-the-nigeria- broadcasting-code-a-legal-analysis-by-justin-ige/

https://www.thecable.ng/iban-asks-nbc-to-suspend-implementation-of-amended- broadcasting-code/amp

[1] Section 9.0.2 of the amendments to the sixth edition of the Nigeria’s Broadcasting Commission (NBC) Code.

[2] Section 3.15 of the NBC Code.

[3][3][3] Section 3.15.1.f of the NBC Code.

[4] Section 2.12.7.2 of  the amendment to the sixth edition of the NBC Code

[5] Cap C28 LFN, 2011

[6] Copyright Act, cap C28 LFN, 2011.

[7] Section 4 subsection 5 of the Constitution of the Federal Republic of Nigeria,1999 (as amended)

[8] International Telecommunication Union

[9] Cap N11, LFN 2011

[10] Sections 1,3, and 17 of the FCCPA 2018

By: Odigbo Ugochukwu Sandra [Miss] Esq.

On the 17^th of August, 2020, Mr. David Hundeyin released an article titled “David Hundeyin’s State Theft, Cryonism and Civil Rights Violations: Inside the Hidden Horrors of the CAMA 2020 Bill”. The article was an analysis expressing the writer’s reservations about the Companies and Allied Matters Act, 2020 which was signed into law by President Muhammadu Buhari on the 7^th of August, 2020. Having read the very well written article, I recognize and applaud the writer’s need to call out the Nigerian government where he feels they have fallen short of their mandate.

However, there is a glaring shortsightedness in the analysis in the article. I believe this myopia stems from the fact that the writer is not a lawyer and may not have the wherewithal to interpret matters of the law as a lawyer can. Certain seemingly straightforward and simple words mean so much in the legal parlance. Also, the writer, in some cases, failed to present a holistic view of entire provisions and limited himself to the analysis of singular sections which, when read alone, do not present the full intent of the provision.

The article by Mr. Hundeyin raised a lot of social media attention which caused an uproar as there was a gaping absence of a devil’s advocate point of view. A few lawyers attempted to respond to the allegations in the article, but there are still a lot of unanswered questions. Thus, this article is aimed at explaining to the average Nigerian in the most layman terms the actual intendments of the sections highlighted in Mr Hundeyin’s article.

CAMA 2020: NGO Bill in Disguise?

The interpretation ascribed to the above marked clauses is as follows:

“The commission may remove and replace the trustees of a CSO if it determines that it is in “the public interest” to do so – in its sole opinion and based on criteria nobody else has access to.” 

This interpretation is wrong. Let’s take a wholesome look and attempt a more applicable interpretation. This section gives the CAC the power to suspend and appoint trustees where it appears to the commission amongst other grounds, that it is necessary for the purpose of securing public interest. This provision appears draconian at first glance, does it not?

But taking a closer look, it is immediately followed by directions to the Court as regards its powers to make the order upon which this suspension and appointment may be made. First, an order must be obtained from the Court. The Act is silent as to whether the Order is to be obtained by a motion on notice or a motion exparte. For non-lawyers, a motion on notice requires that the other party be notified and appear in Court where the Court will then hear both sides and decide whether or not to grant the motion; while a motion exparte is one where the Court grants the order without recourse or notification to the other party.

A motion exparte is typically granted in two instances:

• Where a law specifically provides that application be by motion exparte
• Where there is grave urgency and the rights of the applicant may be irrevocably affected if the motion is not granted.

See the Federal High Court Rules at Rule 26; Itama Vs Osaro-Lai (2000) 6 NWLR (pt 661) 551; Kotoye Vs CBN (1989) 419

Thus, where a law simply says ‘motion’, it refers to a motion on notice.

Applying this to the provision above, it means that the CAC may suspend and appoint trustees ony7l after approaching the Court for an Order by way of a motion on notice. This means that the trustee who is to be the subject matter of the order will appear before the same court with his own case. The Court will then decide based on the preponderance of evidence, whether to grant the Order or not. The CAC will not wake and suspend random trustees as the writer stated. Far from it. The CAMA provides a clear and common procedure which must be followed for any such order to be valid.

On this point, it is clear that the postulations made by the writer were not a fair analysis of the provisions of said section and should be disregarded.

Legislative Cronyism Hiding in Plain Sight?

It does look a little suspicious that the name of an APC stakeholder has been linked to BRIPAN. But put political affiliations aside for a minute and think about this: Insolvency practice as referred to in the section above is not the same as the practice of insolvency law. I’ll explain that. An insolvency practitioner (despite the use of the word “practitioner”) refers to only three classes of people as listed in Section 704 above; all of which are similar to the position of receiver/manager under winding up procedures.

Thus, the limitations placed on being an insolvency practitioner are placed on persons qualified to be appointed as “receiver/manager” in corporate insolvency procedures. Where a legal cause of action arises in the cause of an insolvency practitioner doing his job, any lawyer can approach a court. These restrictions do not apply to lawyers appearing in Court; rather, to lawyers, accountants or such other people being appointed insolvency practitioner. This is not an attempt to limit legal practice. Despite the use of the word “practitioner”, it does not refer to a lawyer in practice related to insolvency. So while referring to an insolvency practitioner under the Act, we are referring only to those listed in Section 704.

Furthermore, the practice of requiring certification before qualification to operate in such special/technical procedures is not new to the Nigerian law or even to CAMA. Under CAMA, persons qualified to be appointed company secretary include a legal practitioner, a chartered accountant, a chartered secretary, etc. These require certification from different bodies such as ICAN, ICSAN, etc.

My research showed that there aren’t many insolvency practitioners’ organizations in Nigeria. In fact, my research turned up only BRIPAN formerly known as IPAN (there are probably more but I didn’t see them). So it comes as no surprise that a person seeking to be an insolvency practitioner requires a certification from them. Also, please note that BRIPAN is a non-profit organization which means that the founders and guarantors do not make or split profit. All income is directed towards the purposes for which the company was incorporated.

Section 705 also provides for certification from other similar organizations recognized by the CAC. Where you want to be an insolvency practitioner and you already have a certification similar to that which would be issued by BRIPAN, all you have to do is to approach the CAC and get authorization to work in that field.

Again, in my opinion, the issue of political links was thrown in here to elicit a reaction, not to the insertion of any of the above discussed clauses, but to the political party and the conspiracy theory.

Criminalising the Informal Sector – 21,000,000 Nigerians are now Criminals?

The headline of this part of the writer’s articles is phrased in the most dramatic manner. But in truth, CAMA by specifying that all businesses be registered, is just doing its job. The CAC is to businesses as the Independent National Populations Commission which is responsible for conducting a census is to the Nigerian people. By specifying that all companies and businesses must be registered, they are just doing their job! This is not an attempt to trap anybody; indeed, it may not be the most pressing need Nigeria has. But it is a step in the right direction.

The provision that permits the commission to prescribe a fine from time to time, also goes further to specify the fine of N200.00 daily. It is not a new thing leave prescription of fines to be provided by regulations. Also note that the CAC regulations form part of CAMa.

The writer’s claim that the CAC can now rely upon this provision to garnish accounts at will is laughable. The section clearly states that the penalty shall be applicable “upon conviction”. The CAC must go to Court where both parties must state their case and be heard and the Court will then make a decision. It is not the CAC’s prerogative. Maybe this Act is not as draconian as you initially thought?

The CAC is Now Above the Law – Literally

Let me tell you about pre-action notices. Preaction notices come into play where a law provides that certain notice must be given to a certain person before a valid action can be instituted against them. Requirements for 30 days preaction notices similar to the one above are in nearly every law regulating a major governmental organization. CBN, AMCON, Customs, Immigration, Nafdac, etc. require 30 days notices. The idea behind this requirement is to create an avenue for settlement and to anticipate the bureaucracy. Where a preaction notice is served, more often than not, the agency served responds sometimes with an olive branch.

Also, we all know how extensive Nigerian bureaucracy can be. You write your letter, deliver it probably at the reception and it does the whole journey to the head who then sends it to the legal department. The legal department then knows to look out for your processes and to act upon it within the specified time.

Preaction notices are not unknown to the Nigerian legal system. They are a recognized prerequisite to the jurisdiction of the Court and without service of the adequate preaction notice, the Court will not hear your matter. They couldn’t even if they wanted to. Preaction notices are not a contravention of your right to fair hearing. They are simply a requirement for the full exercise of that right where the law requires it.

The requirement for preaction notice is not an attempt by the APC ruled government to take away any rights of the Nigerian citizen. It is a common sense provision because believing anything to the contrary would mean that all the other laws signed by different other parties which provide for preaction notices were all a conspiracy against us.

Bonus Clause: All Foreign Companies Must Register. Except Chinese Ones.

The reference to the Chinese in this section by the writer serves the same purpose as a lot of information and choice of words used in the article: Drama. Reading through the Sections quoted above, note the following things: first, there is no reference to any Chinese companies, generally or specifically. Second, the provisions of this Section (as amended) are fundamentally identical to the provisions of CAMA C20, 2004. The only major difference is the provision that the CAC now prescribes penalties by their regulations.

Reading through all the provisions of CAMA, 2020 relating to foreign companies specifically Sections 78 – 84, there is no provision exempting China from registration of their foreign businesses. This begs the question “what point was the writer trying to make?”

I do not presume to understand the workings of the writer’s mind, but here’s an assumption. If the writer was referring to Section 78(3)(b) which exempts foreign companies which are exempted under any treaty to which Nigeria is a party from registration of their businesses. I would like to point out here, that this provision is in the old CAMA which existed long before this regime. Thus, the insertion of this clause is not part of a grand plot to “sell Nigeria’s sovereignty” to China. Rather, it is simply a regular provision designed to display our good will to countries with which we have related treaties. Besides, Nigeria has bilateral investment agreements with 31 countries, 15 of which are currently in force. We also have double-tax treaties with 13 countries, and are signatories to 21 investment-related instruments and nine memorandum of understanding agreements (For more information, visit <www.ukpracticallaw.thomsonreuters.com>).

In the event that the writer was referring to the classifications of foreign companies not requiring registration stated under Section 80, the same principle as explained above also applies. The provision existed in the old CAMA and is designed to encourage foreign investment. The provision does not apply to only Chinese companies. It applies to companies from every foreign company falling under any of the categories contained in that section.

Conclusion

With the above, I have painted a clearer picture of the relevant Sections with an intent to correct the misinterpretations thereon. The Companies and Allied Matter Act, 2020 is a good legislation. It provides a better and more applicable companies regulations regime that suit the computer age. It provides innovations like the recognition of virtual annual general meetings, provides for insolvency practice as an alternative to winding up, new business structures called the Limited Liability Partnerships (LLPs) and Limited Partnerships (LPs) to better provide options for businesses not interested in registration as a company, and so much more.

Please, take some time and read our article available at https://pathsolicitors.com/the-companies-and-allied-matters-act-cama-2020-at-a-glance/ or click here to see the innovations introduced by the new CAMA, 2020.