Free Zones, Port Concession stakeholders oppose OGEFZA operations
Apapa Port Terminal

Investors in the free zones in Nigeria have raised alarm over the adverse economic impact of the proposed Bill to amend the Oil and Gas Export Free Zone Act (OGEFZA Act), of 1996 (now Cap. 05, LFN, 2004), if signed into law.

The concerned stakeholders note with grave concern that the proposed Bill, if passed in its current form, will lead to economic sabotage, entrench monopoly, remove healthy competition in the industry, hamper the ease-of- doing business in Nigeria as well as cause loss of jobs.

In a joint statement, the stakeholders noted that the proposed Bill, which is currently being reviewed by the Senate Committee on Trade and Investment, if passed in its present form, would conflict with several existing laws and policies of the Federal Government and legitimise illegality that has been perpetuated over the years by the Oil and Gas Export Free Zone Authority (OGEFZA), and also undermine the integrity of the Senate in particular and the Nigerian State in general.

The stakeholders maintain that, if enacted as is, the Bill would effectively remove all competition in the oil and gas services sector, and endorse a monopoly in favour of Intels/Orlean Invest, the sole beneficiary of the proposed Bill, and every investment remotely connected with the oil and gas industry will be placed at the mercy of the monopoly.

According to them, “The proposed Bill seeks to use the legislature as a tool to entrench the monopoly of one entity in the Nigerian oil and gas services industry´ Its effects are twofold; to rubber stamp and endorse years of illegal and unconstitutional activity perpetrated by the management of OGEFZA, and to acquire the property of private investors through legislative process.

“Passage of the proposed Bill would further create the impression to investors; both local and foreign that Nigeria is a country that operates without the rule of law, where there are no checks and balances to regulatory overreach and executive impunity if the proposed bill is enacted.

“If passed in its present form, the Bill would create regulatory uncertainty and make nonsense of the Free Zone objectives in Nigeria, and if allowed to persist, it will result in disharmony, legal conflict and undermine investor confidence and economic recovery in Nigeria,” the group warned.

“The proposed Bill, if passed, would conflict directly with other legislation such as the Nigeria Ports Authority Act (NPA Act), the Nigeria Export Processing Zones Authority Act (NEPZA Act), and the Consumer Protection Council Act (CPC Act) and would completely change the scope and intent of the Principal OGEFZA Act,” the statement added.

The stakeholders therefore appeal to the Senate not to allow the passage of the proposed OGEFZA Bill because “its objectives are not in the national interest, but solely aimed at foisting a monopoly on the oil and gas services industry in favour of Intels/Orlean Invest.

“We respectfully appeal to the Senate to expeditiously ensure the harmonisation of both the OGEFZA and the NEPZA Acts with a view to establishing a single regulatory authority with a broad mandate to manage and oversee the Free Zone scheme in Nigeria in line with global best practice. We urge the distinguished Senators to undertake a holistic review of the draft Single Free Zone Authority Bill of 2006,” the stakeholders said.

While reinforcing the authority of NEPZA, the statement noted that in 1992 the Federal Government promulgated the Nigeria Export Processing Zones Authority Act No. 63 of 1992 (NEPZA Act) which created NEPZA with a mandate to designate, oversee, and regulate Free Zones and manage Federal Government owned Free Zones, and thereafter in 1996, the Federal Government enacted the Oil and Gas Export Free Zone Decree (the OGEFZA ACT) which designated the Onne/Ikpokiri area of Rivers State as an Export Free Zone and stablished the “Oil & Gas Export Free Zone Authority” (OGEFZA) as the body responsible for the management of the Export Free Zone so designated.

But rather than limit itself to its statutory mandate, for years OGEFZA has abused its mandate power by lending the semblance of legality to the expansionist agenda of Intels/Orlean Invest.

OGEFZA’s sole objective in unilaterally expanding its mandate is in furtherance of a desperate plot to entrench and legitimise the Intels/Orlean Invest monopoly that has distorted the oil and gas industry to the detriment of the economy of Nigeria.

Among its dishonest practices, OGEFZA unilaterally and/or illegally altered its name to read – OIL AND GAS FREE ZONES AUTHORITY.

The word “Export” was deliberately deleted and the word “Zone” was deliberately pluralised in direct contravention of an extant Act of the National Assembly without a formal amendment of same as required by law.

OGEFZA purported to exercise powers reserved for the President under the NEPZA Act by designating Warri, Calabar and Apapa as Free Zones in favour of Intels/Orlean Invest. As the law stands today, ONLY the President can designate an area as a Free Zone under the NEPZA Act.

OGEFZA has unilaterally sought to expand its mandate by consistently attempting to annex other Free Zones duly licensed and regulated by NEPZA. OGEFZA’s basis for this action is the clause of Section 5 (2) of the OGEFZA Act which stipulates that “The Authority shall have power to take over and perform such other functions being hitherto performed by the Nigeria Export Processing Zones Authority as they relate to the export of oil and gas from any of the Nigeria Export Processing Zones established by the Nigeria Export Processing Zones Decree 1992.”

The stakeholders however pointed out that the clause itself states clearly that the ONLY function that OGEFZA can take over from NEPZA is the export of oil and gas. Whereas none of the Free Zones that OGEFZA has sought to annex is involved in the export of oil and gas.

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