‘We can’t move from public to private monopoly without competition law’
Do you support the passage of the Competition Law? Yes. Going down memory lane, I came to BPE in 2002 and the first work I did was in the drafting of the competition law for the country. When you are privatizing, you are moving from public monopoly to private monopoly. And because you are moving […]
Do you support the passage of the Competition Law?
Yes. Going down memory lane, I came to BPE in 2002 and the first work I did was in the drafting of the competition law for the country. When you are privatizing, you are moving from public monopoly to private monopoly. And because you are moving to private monopoly, there is need to regulate it, thus the need for competition law. There is no dominant player in any market, sector or industry. This means there is no dominant player that will abuse the market. BPE has been privatizing since 1988, and our position is you cannot be moving from public monopoly to private monopoly without competition law in place. For me, the law is long overdue. When BPE was working, then in 2004, it found that there was a similar bill in the National Assembly. By 2006, there was a competition bill but it has suffered the fate of most bills in the National Assembly that is because it comes as an executive bill, it came to National Assembly when they were rounding up.
Luckily, with this 8th National Assembly, the Senate president is very passionate about this bill so it is moving in the National Assembly.
There is also the PIB which could not be passed, what is the importance of this bill?
When Nasir el-Rufai was the DG of BPE he set up various committees, one of them was the Oil and Gas Implementation Committee (OGIC). The main aim of that committee was to draft a policy for the oil and gas sector. That committee worked in 2005 to produce a draft PIB which by 2006/2007 got to NNPC. It was while there that Yar’adua took over and he set up another OGIC under Dr Rilwanu Lukman. Lukman chaired the first and second OGIC that produced another PIB of 2008. That PIB of 2008 went to the National Assembly and went through first reading, second reading and third reading, then the host community issue – how do you cater for the host community came up. Is the NNPC enough? Is the Ministry of Niger Delta enough? It was because of these various interests as to how to cater for the host community; whether you will now provide in that bill a percentage you pay to the host community in addition to what you do with NNPC. This is one of the reasons that hindered the bill from scaling through the third reading.
Alison Diezani, as minister of Petroleum, started her own draft. She produced it in 2012. For me, that PIB of 2012 is the worst version of all the bills I’ve seen because when you are reforming, you create a power for regulation, that is why in the power sector you have NERC, in the stock exchange sector you have SEC, in the communication sector you have NCC. The issue has always been in the oil and gas sector, what kind of regulator do we want? Generally, there is the concept of independent regulator – independent financially, administratively and functionally, in other words, it should not be subject to the direction of the minister, but the 2012 version of PIB was subject to the powers of the minister.
Another thing is who are those that make up this regulatory body? In that 2012 bill, you found that NUPENG and PEGASSAN are members. Those to be regulated became members of the organ that it is regulating. So, that bill didn’t go far at all.
There is a version now in the National Assembly. What NNPC has done is to break it down instead of having one bill covering the sector. So there is one in the National Assembly now that covers institutions and governance, in other words, which new institutions do we need to create? The House of Representatives is sponsoring a National stakeholders’ workshop to look at this bill holistically.
The president of the Nigerian Bar Association (NBA) is also interested in the PIB, he also set up a committee to advise him on the way forward on the PIB.
Professor, you headed the committee that was responsible for providing framework for holistic review and improvement of legislation and policies affecting business. What are your findings?
It is a committee of four, funded by DFID. We submitted our reports at the National Assembly sometime in March this year. Two things appealed to the Senate president, Dr. Bukola Saraki. First is our ranking, the World Bank ranking where Nigeria is 169 out of 189 countries. The Senate president was worried as to why we are ranked that low when you find smaller African countries ranking higher. So we looked at how the study was carried out and where Nigeria is not doing well. So we found out what the World Bank uses to determine the 10 indexes for this ranking. For instance, starting a business, getting electricity, paying parties, enforcing contracts, obtaining consultation permits, resolving conflicts; these are issues that they looked at and they found that we are deficient in them, that is why our ranking was that low.
The Senate president was also concerned about these reform bills. The BPE over the years has been carrying this package of reform bills (one of them is the Railway Commission Bill). The present Railway Act was passed in 1955, since then it’s just been amendment over amendment. In the era of reforms, states (like Lagos) have tried to start their own railway. But looking at the Railway Act which says you cannot establish any railway anywhere in the country without the supervision of the Nigeria Railway Commission and railway is on the exclusive list. So, you ask yourself why should railway be on the exclusive list? Then, you leave railway and come to ports and harbours.
I was in BPE when we did port concession in Lagos, Calabar, Warri. You find that in the ports sector, the NPA is the manager, the owner and the operator. So, we decided to unbundle ports activities. What we did was to lease out the terminals, draft a bill that will provide for a regulator for that sector. Now, that bill was drafted as far back as 2003, it was in the National Assembly and since the bill provided for Lagos and Warri ports, people were now asking why not one in the North. As we speak, we have done the reform of the ports but there is no regulator. The government now made the Nigerian Shippers Council as the regulator. Some of us when we were at the BPE have already raised issues that Shippers Council cannot be a regulator.
I was also involved in the reform of the power sector. I was in BPE when I drafted the transfer orders from NEPA to PHCN, from PHCN to Distribution Companies. It was strange for everyone at BPE then to hear that there was one organ (NEPA) that was responsible for the generation, transmission and distribution owf power, but thank God NEPA has been unbundle and we now have separate entities handling the generation, transmission and distribution.
What is your assessment of the ports concession?
I would have been happier if that law was passed at the time we did the concession, which I mean if we have a proper regulator in place. The bill is still in the National Assembly. But in terms of ports operation, there is a remarkable difference.
There was an argument back then that the ports concession was done without any legal framework.
As a matter of fact, there was no law dealing with PPP at that time. What we did was that we found that under the NPA Act, they have power to give a long lease. We used that provision in the Act to do the concession. That’s why if you see the documents, they were not called concession but leases. So, in terms of legal power of the NPA back then, it had powers to grant long lease.
Some have said the Nigerian Shippers Council should be scrapped, what is your take on this?
I am not saying they should be scrapped. They have their own functions. All I am saying is that I do not think they were set up to be a proper regulator in the sense of proper regulation.
As an arbitration specialist, do you think arbitration should be employed to settle election issues like we have in Abia State at the moment?
Sometime in 2008, INEC organised a workshop on the use of ADR in election dispute, if you notice carefully; you will observe that pre-election is not that controlled as post-election. Post-election issues are controlled and regulated by the constitution and the Electoral Act. So we cannot do ADR for post-election issues. I’ve always argued that INEC can direct political parties to provide for ADR in their constitutions pre-election since these issues can be handled by ADR. How does ADR work, especially for arbitration, the parties must agree to arbitrate, unlike litigation where I don’t need your consent to sue you, for ADR, we must agree to mediate and arbitrate. The do or die nature of election in this country is worrisome. Ideally, pre-election disputes can be handled by ADR, but from the players I’m seeing on our political field, I do not see them agreeing to arbitration.