Plea Bargaining Under Nigerian Law

Plea Bargaining Under Nigerian LawIntroduction

The usual outcome of ‘guilty’ or ‘not guilty’ and or ‘sentencing’ in a criminal trial which was largely determined by the legal principles of ‘proof beyond reasonable doubt’ and ‘presumption of innocence’ has been resolved by the now common aspect of a negotiated agreement by parties to the criminal proceedings. In real times, parties’ concession underlies the basis for a successful plea bargain to bridge the gap in circumstances where the prosecution is unable to procure compelling and conclusive evidence against the accused or co-accused necessary for the Court’s finding of ‘guilty’ and gives an opportunity to an accused persons to elect not to proceed with the trial.

A Plea bargain in ordinary parlance is a negotiated term of settlement in criminal trials between the prosecution and the accused, wherein the accused pleads guilty to a lesser offence or reduced charge in exchange for a reduction in sentence or dismissal of the charges,[1] which is finally accepted by the Court. Simpliciter, plea bargaining means a ‘conviction without trial.’ There are different types of plea bargain. Most specifically, are the Charge bargain in which a prosecutor agrees to drop some of the counts or reduce the charge to a less serious offence in exchange for a plea of either guilty or no contest from the Defendant. The second type of bargain is a plea bargain in which a prosecutor agrees to recommend a lighter sentence in exchange for a plea of either guilty or no contest from the Defendant.[2] There is also a type of plea bargain called the count bargain, in which a Defendant who is faced with multiple charges will be allowed to plead guilty to fewer counts of the charge. This is however not a common form of plea bargain as it only applies to Defendants who are faced with multiple charges.[3]

Plea Bargain – Historical Background

The origin of Plea Bargain could be traced to the American legal system in the eighteenth century. It began by convention but after it was accepted by the Courts, it became entrenched in the Federal and state criminal procedure rules.

The concept of ‘plea bargain’ achieved its global recognition in 1970 in the landmark case of Brady v. United States,[4] by the Supreme Court of the United States of America where Brady who pleaded guilty to a kidnaping charge in violation of 18 U.S.C. § 1201(a) and whose sentence was 50 years imprisonment, was later reduced to 30.

This was adopted due to the adversarial nature of the United States’ judicial system which places the judges as an umpire, in which they are completely dependent upon the parties to develop the factual record and cannot independently discover information to assess the strength of the case against the Defendant.  There are several cases where the US Courts have given full effect to plea bargain and as at today, 95% of criminal cases in the United States of America have been resolved by plea bargains.[5]

Plea bargain as a concept was not known in Nigerian Criminal Justice jurisprudence until 2004. It became known and applied with the establishment of the Economic and Financial Crimes Commission (EFCC) Act following increased level of corruption, as the concept was provided for under Section 14(2) of the EFCC Act. This concept of Plea Bargain was also boldly institutionalised by Lagos State House of Assembly in the Administration of Criminal Justice Law 2011, Laws of Lagos State.[6]

Plea Bargaining under the EFCC Act

Section 14(2) EFCC Act empowers the commission (subject to the prosecutorial powers of the Attorney-General under Section 174 of the Constitution to institute, continue or discontinue criminal proceedings against any persons in any court of law), to compound any offence punishable under the EFCC Act by accepting such sum of money as it thinks fit not exceeding the maximum amount to which that person would have been liable if he had been convicted of that offence. This discretionary power given to the EFCC coupled with the authority to compound offences exemplify the proposed concept of plea bargaining under the Nigerian law.  This provision has been given full interpretation and application by the Courts in several high-profile cases.[7]

However, the Economic and Financial Crimes Commission (EFCC), has been criticised for this provision and it has been termed as “smuggling” the plea bargain concept, which has been described as dubious into our legal system to prosecute public officers involved in money laundering and looting of the public treasury.[8] It has also been described as corruption to bring plea bargain into the law of Nigeria.[9]

At a cursory look at the provision, one may argue rightly that there is no express or implied mention of plea bargain under Section 14(2) of the EFCC Act and as such, what the section envisages is “compounding of offences’ which is an act in which a person agrees not to report the occurrence of a crime or not to prosecute an accused in exchange for money or other consideration. This is not the same as plea bargain. The Section does not show the nature and type of the Plea Bargain neither does it show the stage of the proceedings the bargain may be initiated. There is also no laid down procedure or safeguards for Plea Bargain and such agreement as envisaged under the EFCC Act does not necessarily culminate in a judgment neither does it lead to conviction nor sentencing. It is to be noted that compounding of a felony is an offence in itself.[10] It may also be argued that the purport of the EFCC Act may be the concept of withdrawal of Compliant under Section 355 of the ACJA which provides that where a complainant at any time before a final order is made in a case, satisfies the court that there are sufficient grounds for permitting him to withdraw his complaint, the court may permit him to withdraw the complaint and shall thereupon acquit the Defendant. It may also be argued to mean reconciliation as provided under Section 23 of the High Court Law of Lagos State, 2019 which provides that in criminal cases, the High Court may encourage and facilitate the settlement in an amicable way of proceedings for Common Assault or for any other offence not amounting to a felony and not aggravated in degree, on terms of payment of compensation or other terms approved by court. Continue reading “Plea Bargaining Under Nigerian Law”

A Review of the Business Facilitation Act, 2023 in Relation to CAMA, 2020

President Muhammadu Buhari, on 13 February 2023, signed the Business Facilitation (Miscellaneous Provisions) Bill 2022, otherwise known as the Omnibus Bill into law. The Business Facilitation Act 2023 amends relevant legislation to promote the ease of doing business in Nigeria and institutionalize all the reforms to ease implementation.

One of the major amendments is as regards the provisions of the Companies and Allied Matters Act (“CAMA”) 2020. This short paper highlights some of the key amendments made to CAMA 2020 under Part 1, paragraphs 1-21 of the Business Facilitation Act (“BFA”).

They include:

  • Alteration of Share CapitalSection 127(1) of CAMA is now amended by paragraph 3 to provide that a company can also increase its issued share capital by a resolution of the Board of Directors. However, it is subject to conditions that may be imposed by the Articles or the company in general meetings. Previously, this could only be done by the company in general meetings.
  • Pre-emptive Rights– Section 142(1) of CAMA is now amended by paragraph 4 to provide that the right of an existing shareholder to be allotted newly issued shares now applies to a private company alone. Previously, it applied to all types of companies. A pre-emptive right or a right of first refusal is a right of existing shareholders in a corporation to purchase newly issued shares before it is offered to others. The right is meant to protect current shareholders from dilution in value or control. To mandate a public company to have the right of first refusal contradicts the essential principles of publicly traded company which is the issuance of shares to the public. Additionally, the time limit for the existing shareholders to accept the offer is 21 days. Previously, the applicable period was a reasonable time under Section 142(2)(c) of CAMA, 2020.
  • Authority to Allot Shares – Paragraph 5 of the BFA has amended Section 149 by substituting subsection (3) for subsection (1) and deleting the previous subsection (3). The implication of the amendment is that the members in general meeting of a private or public company reserve the power to allot shares. However, such power is exercisable by the board of directors where express authority has been vested on them by the company in general meeting or by the company’s articles. Previously, the power of the company to delegate allotment of shares to the directors was only applicable to a private company.
  • Return of Allotment– Section 154(1) of CAMA is now amended by Part 1, paragraph 6 of BFA to provide that the time limit for a company limited by shares to make a return of allotment to CAC is now 15 days. Previously, the timeframe was one month.
  • Share Certification– Section 171(7) by the amendment in paragraph 7 now provides for share certificates in physical or electronic form.

Continue reading “A Review of the Business Facilitation Act, 2023 in Relation to CAMA, 2020”

Overview of Data Protection in Nigeria

INTRODUCTION

With the European Union’s General Data Protection Regulation (GDPR) coming into force in 2018, the prioritization of data protection by States has increased significantly. Protection of personal data has assumed an international human rights status. Paragraph 12 of the Universal Declaration of Human Rights (1948) and the International Convention on Civil and Political Rights (1966) provides that “No one shall be subjected to arbitrary interference with his privacy, family, home or correspondence, nor to attacks upon his honour and reputation.” In Nigeria, the path to developing a data protection law has been protracted, with multiple yet unsuccessful attempts to adopt a law. The National Data Protection Regulation adopted by the National Information Technology Development Agency (NITDA) in 2019 as a subsidiary regulation has proved inadequate and only further emphasized the need for a comprehensive personal data protection framework.

This overview centers on the data protection regime in Nigeria, and the role of Nigerian lawyers in the Data Protection Sector.

DATA PROTECTION LAW – LEGAL FRAMEWORKS

Simply put, Data Protection is the process of securing digital information while keeping data usable for business purposes without trading customer or end-user privacy. The intent of data protection laws is to place human beings at the center of technological advancement. In the recent world, everyone has their personal details online and if mishandled, can be exploited to harm users unscrupulously for financial gain. It has therefore, become imperative to regulate how vast amount of personally identifiable data can be managed.

Although Nigeria does not have a specific statute regulating Data Privacy and protection, the National Information Technology Development Agency (NITDA) commendably came up with the Nigeria Data Protection Regulations (NDPR) in 2019 which specifically addresses Data Privacy and Protection in Nigeria.

Nigeria Data Protection Regulations (NDPR)

On 25 January 2019, the NITDA issued the NDPR pursuant to its powers under Sections 6 (a) and (c) and 32 of the NITDA Act, 2007. The Regulations have introduced a new data protection framework with pioneer compliance requirements for organizations that deal with the data of individuals. The objectives of the Regulations include safeguarding the rights of natural persons to data privacy, preventing manipulation of personal data, and fostering the safe conduct of transactions involving exchange of personal data and the integrity of commerce and industry in the data and digital economy. Based on the NDPR, data processing includes the collection, recording, storage, retrieval, use, disclosure, transmission, erasure, and destruction of personal data. The NDPR also specifically confers certain rights on persons that provide their personal data that is, Data Subjects. These include the right to information about their personal data, right to access their personal data, right of rectification of their information, right to withdraw consent, right to object, and right to data portability. The NDPR requires Data Controllers to develop adequate security systems to protect data within their custody. In line with this requirement, Data Controllers are required to maintain and publish a data protection policy that is in conformity with the NDPR and continually train and build the capacity of staff members on data protection and privacy procedures. The NDPR also mandates Data Controllers to appoint Data Protection Officers for the purpose of ensuring compliance with the Regulations; they are to obtain lawful consent of Data Subjects before processing their personal data. Data Controllers are required to display a simple and conspicuous privacy policy on any medium through which they collect or process personal data. Such privacy policy is to contain a description of the kind of personal data to be collected, and the purpose for the collection of the data amongst other information (a sample has been attached to the NPDR 2019); In the event that a Data Controller engages the services of a third party to process personal data of Data Subjects, the NDPR requires that such engagement must be governed by a written contract between the third party and the Data Controller.

The Regulations reserves the requirement for submitting data audit reports to certain categories of Data Controllers. Accordingly, only Data Controllers that process personal data of more than 1000 Data Subjects within a period of six months are mandated to file a soft copy of the summary of their audit to the NITDA. Similarly, Data Controllers that process personal data of more than 2000 Data Subjects within a period of 12 months are mandated to file a summary of their audit to NITDA, not later than 15 March in the following year. NITDA also requires that a verification statement by a licensed Data Protection Compliance Organization (DPCO) should accompany all filings made. A DPCO is any entity licensed by NITDA to train, audit and render consulting services and other services and products for the purpose of compliance with the Data Protection Laws applicable in Nigeria; Based on the NDPR, a data controller is required to only transfer data to a foreign country or international organization subject to the supervision of NITDA and the Attorney General of the Federation (AGF). NITDA would co-ordinate relations with the AGF with respect to international transfer of personal data. However, data controllers are obligated to notify NITDA of any such transfers.

NITDA is the agency responsible for administering the NDPR. The NDPR empowers NITDA to register and license DPCOs to monitor, audit, conduct training and render data protection compliance consulting services on its behalf. However, the DPCOs will be subject to Regulations and Directives of NITDA issued from time to time.

However, paragraph 2.1 of the regulation provides for Statutory and legal exceptions to the application of data privacy and protection as applicable to the NDPR. Therefore, the NDPR does not apply to the use of personal data in furtherance of national security, public health, safety and order by agencies of the Federal, State or Local government or those they expressly appoint to carry out such duties on their behalf; the investigation of criminal and tax offences; iii. the collection and processing of anonymized data; and personal or household activities with no connection to a professional or commercial activity. In furtherance of the NPDR, 2019, a guideline for the Guideline for the Implementation of the Nigeria Data Protection Regulation (NDPR), 2019, within Public Institutions in Nigeria was issued in 2020.

Asides the NDPR, there are other laws which touch on Data Privacy and Protection in Nigeria, which are briefly highlighted below:

  1. Constitution of the Federal Republic of Nigeria: Section 37 of Nigeria’s 1999 constitution forms the foundation of data privacy rights and protection in Nigeria. It guarantees and protects the right of Nigerians to privacy and deems Privacy in this respect a fundamental right which is enforceable in a court of law when breached. Prior to the NDPR, most cases of data privacy breaches were enforced under this section.
  2. The NCC Consumer Code of Practice Regulation 2007: Part VI of the Nigerian Communications Commission (NCC) regulation, generally deals with the protection of consumers’ data in the telecoms sector. Reg. 35 requires all licensees to take reasonable steps to protect the information of their customers against improper or accidental disclosures. It prescribes that licensees shall not transfer this information to a third party except as permitted by the consumer or commission or by other applicable laws or regulation.
  3. The NCC Registration of Telephone Subscribers Regulation 2011: Regulation 9 and 10 of the NCC Registration of Telephone Subscribers Regulation 2011, deals with the data privacy and protection of subscribers. It provides for confidentiality of personal information of subscribers stored in the central database or a licensee’s database. It also provides that this information shall not be released to a third party nor transferred outside Nigeria without the prior written consent of the subscriber and commission, respectively.
  4. The Freedom of Information Act 2011: Section 14 of the Freedom of Information Act protects personal data. It restricts the disclosure of information which contains personal information by public institutions except where the involved data subject consents to its disclosure or where the information is publicly available. The Act also provides that a public institution may deny the application for disclosure of information that is deemed privileged by law (e.g. Attorney-client privilege, doctor-client privilege)
  5. The Cybercrimes (Prohibition, Prevention, etc.) Act 2015: The Cybercrimes (Prohibition, Prevention, etc.) Act, Nigeria’s foremost law on cybercrimes criminalizes data privacy breaches. Generally, this Act prohibits, prevents and punishes cybercrimes in Nigeria.
  6. The National Identity Management Commission (NIMC) Act 2007: Section 26 of this Act requires the approval of the Commission before a corporate body or anybody can have access to data stored in their database. The Act also empowers the NIMC to collect, collate and process data of Nigerian citizens and residents.
  7. The National Health Act (NHA)2014: The NHA which regulates health users and healthcare personnel restricts the disclosure of the personal information of users of health services in their records. It also ensures that healthcare providers take the necessary steps to safeguard such data.

Other acts are The Federal Competition and Consumer Protection Act 2019 and The Consumer Protection Framework 2016:

data security illustrated by a photo of a locked physical padlock resting on a laptop keyboard.

TAKING THE PRIVACY SPACE – THE ROLE OF LAWYERS

It is worthy of note that the issues surrounding legal protection have indeed created an opportunity to further specialize. There are opportunities in different specific sectors of the economy that intersects with privacy and which professionals will be able to provide tailored services, like healthcare, start-up, financial institution, insurance, big data companies, tech companies that engage in cloud computing, cyber insurance and cyber security amongst others.

 Such areas of specialization include:

  1. Privacy Policy advisor and analyst/Compliance officer – Good policies remain the driver of a regulatory framework. Involvement in Policy drafting for companies and contribution to policy recommendations when a draft regulation is issued for public consultation. Lawyers can effectively function as data protection officers, chief privacy officers or any other designation, assisting clients with compliance and transparency. Overseeing a company’s data protection strategy and its implementation to ensure compliance with extant data protection regulation.
  2. Privacy Attorney/Consulting – Data Protection laws provide a right to lodge complaint which allows data subjects to initiate lawsuit before a supervisory authority or Courts in instances of infringement of their rights. Sanctions are imposed on organizations which are also challenged before National Courts. There is an opportunity for collaboration between privacy lawyers and litigation lawyers to navigate the slippery-slope. Outside the remit of litigation, transactions lawyers can provide advisory services on privacy and data protection and the appropriate implementation and compliance with privacy laws as a risk-based strategy.
  3. Legislative Tracking – Lawyers can provide latest legal opinions and update organizations with latest decisions and laws that can impact their business. This entails providing real-time update and guidance to existing and new client companies, on the development in privacy laws globally and how it could possibly impact their businesses in order to guide them to wider compliance.

 Recommendations for Growth

Lawyers can read up articles, books and laws governing data protection, sign up for courses, attend conferences and events centered on data protection laws in order to gain knowledge and possible clientele, write articles on data protection to create a large impression to the public on the firm’s expertise on data protection and contribution to policies and conversations.


Contact:

Mercy Agbo

Associate – Intellectual Property, Communications and Technology Sector.

mercy.agbo@paulusoro.com

Impact of Technology on Maritime Activities and its Implications

Impact of Technology on Maritime Activities and its Implications by Esther Samuel Umoekam

INTRODUCTION

With the impact of the Covid-19 Pandemic on major activities around the world, particularly in Trade, there is no doubt that in the 21st century, the advancement of technology has indeed been a major disruptor of activities in most industries of the economy and the Maritime Sector is not excluded. Recently, the Maritime industry has witnessed the deployment of Maritime Autonomous Surface Ships (“MASS”), the exponential growth of the usage of the E-Bill of Lading and the effective use of technology in the advancement of Maritime Security as evidenced by the Deep Blue Project and the likes. With the global trend towards digitization, embracing the technological innovations for the improvement of trade efficiency is a no brainer.

This need to change the old ways of doing things is not one without implications. These recent technological innovations shall be considered in the succeeding paragraphs of this article.

A. AUTONOMOUS SHIPPING

Autonomous Shipping is the use of self-piloting vessels to perform shipping operations. They are in most cases fully operated with the use of technology or unmanned vessels and their usage is largely associated with safety and security challenges; this however, does not eliminate the human element as this is an important factor for consideration. The benefits of Autonomous Shipping include cost savings as there are little or no crew onboard and reduction in loss of lives at sea or harm to humans. These benefits have prompted the governments of some countries to look into the concept of ship automation with nations such as Finland, Japan, USA and Singapore, conducting research and trials. Even in Norway, there is an established body called the Norwegian Forum for Autonomous Ships (NFAs) made up of persons and organizations interested in the subject of Autonomous Ships and one of their many objectives is to contribute to the development of and use of autonomous ships in Europe.

As beneficial as the concept of Autonomous Shipping may be, so many questions arise from this innovation viz: How is liability allocated in a situation where two autonomous ships collide? Where the ship breaks down at sea, what method is deployed to ensure it is fixed? How will Autonomous Shipping affect the future of workforce? These questions are yet to have answers owing to the lack of regulations governing the use of Autonomous Ships.

To ensure that there is a balance of the benefits derived from this new and advancing concept against safety and security concerns, the impact on the environment and on international trade, the potential costs to the maritime/shipping industry, and finally their impact on personnel (both on board and ashore); the International Maritime Organization (“IMO”) has initiated a work plan for the development of instruments for Maritime Autonomous Surface Ships (“MASS”). The IMO envisages/predicts that the MASS Code will come into force on 01 January 2028.
Although it is predicted that autonomous ships will be used for short voyages, as the global maritime industry momentum focuses on digitization and technological innovations, there is a dire need to develop legal frameworks for proper regulation and also to ensure there is adequate training for the maritime workforce, particularly sea farers as there is obviously a need to upskill in order to meet up with the attendant disruptive nature of Autonomous Shipping.

B. E-BILL OF LADING

A Bill of Lading is a document acknowledging the receipt of goods by a carrier or by the shipper’s agent and the contract for the transportation of those goods . It serves as a receipt of shipment, evidence of carriage contract, negotiable instrument and document of title.

Leveraging on technology, there has been a recent evolution and increased usage of Electronic Bills of Lading (“E-Bill of Lading”) and a general digitization of trade documents. Some of the advantages of the E-Bill of Lading over the Traditional Paper Bill of Lading are tabulated below:

A table that compares the E-Bill of Lading with the Paper Bill of Lading.
Esther Samuel Umoekam

It is trite that only parties to a Bill of Lading are bound by the terms of the Bills and ipso facto can sue and be sued in respect of same . This, by parity of reasoning or extension means that for a person to sue in respect of a Bill of Lading, it must be a recognizable Bill of Lading. Owing to the fact that the functionality and legal implications of most trade documents depend on their ability to be possessed for purposes of lien, one question that begs for answer is, can an Electronic Bill of Lading, being an intangible property be capable of possession? Although there are decisions of Superior Court which answer this question in the negative, the Writer aligns with the decision of the District Judge whose decision formed the basis of the Appeal in Your Response Limited v. Datateam Business Media Limited where a very important issue was raised and it was “whether it is possible to exercise a common law possessory lien over an electronic database”. The District Court while acknowledging the need to keep abreast with technological development and advancement, rejected the argument that it is not possible to exercise a lien over intangible property. The Court held thus:

“It seems to me in the present case that a lien can apply to the electronic data which was in the possession of the Claimant. It would not be appropriate for the law to ignore the development in the real world of record keeping moving from hard copy records into electronic media. The decision which I have to reach today is of limited purview and no doubt this topic may arise again in other cases in other contexts. But for the purpose of the particular decision which I have to reach in this case. I do not accept the submissions by Counsel for the Defendant that a lien cannot exist over the electronic data which was in the Claimant’s possession in just the same way as it could exist over the hard copy records in the Claimant’s possession.”
Sadly, the decision of the District Court was not supported by the Court of Appeal but it is the Writer’s firm position that with the innovations in technology, the problem of control and possession has been resolved. The UNCITRAL Model Law on Electronic Transferable Records (“MLETR”) adopted by the General Assembly on 07 December 2017, clearly recognizes the use of electronic trade documents for improved efficiency in commercial activities. As at date, only 7 States have adopted the MLETR as part of their domestic Legislations and these States include; Bahrain, Belize, Kiribati, Papua New Guinea, Paraguay, Singapore and Abu Dhabi Global Market located in the United Arab Emirates .

Based on the UNCITRAL MLETR, in a bid to reform the law in the United Kingdom to allow for trade documents in electronic form, the Law Commission submitted a Report to Parliament on Electronic Trade Documents, and in its Report, it recommended certain criteria which must be met for a document to qualify as an electronic trade document. These criteria are as follows:

• The document must be capable of Possession;
• Fully divestible upon transfer;
• Capable of exclusive control;
• Requirement as to the integrity to establish authenticity;
• The document must contain the same information as would be required to be contained in the paper equivalent;
• The electronic trade document system must be reliable; and
• Identification of persons who exercise control of a document in electronic form.

With modern trends and evolving technology and as can be seen from the increasing number of Countries adopting the use of Electronic Trade Documents, it is safe to argue that the E-Bill of Lading can be treated in the same way as the traditional paper Bill of Lading.

In Nigeria, the closest legislation that recognizes the use of Electronic Documents is the Evidence Act, 2011. By virtue of Section 84(1) of the Evidence Act, electronic documents can be admissible in evidence upon satisfaction of the conditions contained in subsection (2) of the same section. Although it may seem as if the distinction between a mere computer-generated document and a legally binding E-Bill of Lading may be advanced to argue that the Evidence Act is being stretched beyond its limits, one can safely conclude, based on the provisions of the Evidence Act, that an E-Bill of Lading can be admitted in evidence under Nigerian Law.

Technology Platforms for E-Bills of Lading

In recent times, software platforms have been developed to meet the rising demands for electronic bills of lading and one of such platforms is Wave BL. The Wave BL Platform (an E-Bill of Lading and Trade Document Software) which has been used by major shipping companies to create and execute electronic bills of lading, leverages on blockchain technology for its effectiveness. Wave BL has a decentralized solution that makes it possible to verify title and possession, allows for transfer of e-bills of lading from one person to another with zero exposure to third parties. The Wave BL platform also has byelaws which are required to be accepted by users who sign up to use the platform. These byelaws are created to mirror the English Carriage of Goods by Sea Act of 1992 which in effect retains the required terms as stipulated under the relevant law.

The only challenge that may arise from these varying software platforms, is the problem of uniformity.

Finally, when it comes to trade or commercial transactions, particularly shipping, financial institutions play a major role in terms of issuance of letters of credit or using the e-bill of lading as a negotiable instrument. There is therefore a need to onboard the banks and acquaint them with the new development in this regard.

C. MARITIME SECURITY

Maritime Security is concerned with the prevention of intentional damage through sabotage, subversion, or terrorism and prompt mitigation of incidences within the maritime domain . It involves the continuous surveillance and reconnaissance of a nation’s maritime domain with a view to prompt interdictions when infringements occur to the nation’s regulations. For this purpose, surveillance technologies have been deployed to facilitate timely and accurate decisions to neutralize threats. The Deep Blue Project was established by Nigerian Maritime Administration and Safety Agency (NIMASA) inter alia, for the prevention of illegal activities in the Nigerian Exclusive Economic Zone and enhancement of the safety of lives at sea. Also, the NAF ATR 42 Patrol Aircrafts, Falcon Eye Project, Maritime Operational Intelligence System (MOIS) are some of the other technological systems deployed for the purpose of maritime security.

This has helped in promoting and securing the international maritime domain as well as protect maritime resources from all criminal acts.

Conclusion

Safety, ease of doing business, cost savings, speed and support for a greener economy are some of the many benefits that the effectual use of technology in the Maritime industry can promote. It is recommended that countries of the world key into this development and either adopt and domesticate the relevant international laws and or enact legislations to cover any lapse that may arise therefrom so as to enable the smooth running of the Maritime Sector in their jurisdictions.

With the world gravitating towards the use of technology, it is left for individuals and institutions to embrace modern technology and rethink their business processes in a bid to adapt and compete with global the market.

The Maritime Industry is taking laudable steps in ensuring that it has a competitive advantage by embracing the use of technology and it is imperative that the Maritime Workforce upskill to meet up with the challenges that this disruption may pose.


For further information, please contact:

Esther Samuel Umoekam
Energy, Constitutional and Transport Law Section
Paul Usoro & Co.
+234 (0) 8028242292
esther.samuel@paulusoro.com

Nigerian Ships for Nigerian Waters: The Protectionist Policy of the Cabotage Act vis-à-vis the Liberalism of the African Continental Free Trade Agreement (AfCFTA)

NIGERIAN SHIPS FOR NIGERIAN WATERS: THE PROTECTIONIST POLICY OF THE CABOTAGE ACT VIS-A-VIS THE LIBERALISM OF THE AFRICAN CONTINENTAL FREE TRADE AGREEMENT (“AfCFTA”) – Gideon Edem[1]

INTRODUCTION

The potential of our Maritime sector is becoming a recurring revelation and needs no projection into the future but rather an immediate investment for immediate returns. Across the world, crude oil is increasingly being relegated and pressure is increasingly moving to cleaner alternatives, and renewables. The maritime sector offers a wide range of new business opportunities from clean energy to new modes of transportation, logistics and agriculture across almost all other sectors.

However, despite the potentials of this sector for the national economy and sovereignty, our maritime assets were not optimally harnessed as the sector was dominated by foreign companies, with significantly limited participation by domestic companies.

This has been attributed to the lack of financial and technical capacities of domestic companies, inadequate infrastructure, and ineffective implementation of local content policies, among other factors, which perpetuated the state of underdevelopment of local operators.

The Chairman, Lagos Deep Offshore Logistic (LADOL), Mr Ladi Jadesimi, at the 2019 Nigerian Shippers’ Council (NSC) Annual Stakeholders Appreciation Night, had noted that “The maritime industry holds the key to the sustainable economic development of Nigeria and whatever we do must be underpinned with strong local content – in today’s world that starts with Nigerians owning, engineering and building the ships we use.”[2]

It must have been for this reason that the Coastal and Inland Shipping (Cabotage) Act, 2003 was enacted to address the limited participation of domestic companies and enhance their participation in the maritime sector. The main objective of the Act is to give first priority to Nigerian shipping companies in domestic coastal trade and develop indigenous tonnage.

The Cabotage Act clearly gave priority to indigenous ships and strictly reserves the Nigerian waters for Nigerian ships.

While protectionism has been the Nigerian maritime dream, concerns broke out across Africa on the Pan African liberalism drive and this led to the ambitious trade pact to form the world’s largest free trade area by creating a single market for goods and services of almost 1.3bn people across Africa in order to deepen the economic integration of Africa; The African Continental Free Trade Area (AfCFTA) Agreement. This agreement and the impact therefrom could have a combined gross domestic product of around $3.4 trillion, but achieving its full potential depends on significant policy reforms and trade facilitation measures across African signatory nations.[3]

On the basis of Nigeria being a signatory to this trade pact, this article attempts to highlight the startling divergence (if any) between the Cabotage Act and the African Continental Free Trade Agreement with respect to the Nigerian waters and maritime assets.

TRADE PROTECTIONISM OF THE CABOTAGE ACT

It is no gainsaying that the Cabotage Act was enacted for trade protectionism. Trade protectionism is a policy that protects domestic industries from unfair foreign competition using tools such as tariffs, subsidies, quotas, and currency manipulation.

According to Mrs. Mfon Usoro in a paper presented at the International Maritime seminar for Judges in 2018,[4] the Cabotage Act was enacted in 2003 to inter alia promote the development of indigenous tonnage, and restrict the use of foreign vessels in cabotage. It defines cabotage to include the carriage of goods by vessel or any other mode of transport from one place in Nigeria or above Nigerian waters to any other place in Nigeria or above Nigerian waters.

Indeed, for a vessel to engage in cabotage on the inland waterways, it must be wholly owned and manned by Nigerian citizens; and must be built and registered in Nigeria.[5] To further maintain its strict protectionist disposition and to aid enforcement, the Act criminalises non-compliance with its provisions.

The only exceptions for participation of foreign vessel in the act[6] are instances where the vessel is engaged in a salvage operation,[7] engaged with the approval of the minister or any related government agency in activities of marine pollution emergency or any threatened risk,[8] engaged in any ocean research activity commissioned by the department of fisheries,[9] and operated or sponsored by a foreign government that has sought and received the consent of the Minister of Foreign affairs to conduct Marine Scientific Research[10]. A salvage operation in this section must be determined by the minister to be beyond the capacity of Nigerian owned and operated salvage vessels and companies.

While the Cabotage Act leaves some allowances for waivers[11] and licenses to foreign vessel,[12] the circumstances of these allowances are only activated if there are no domestic options.

The foundational issue of ship registration is also protected as a vessel shall not be registered or used in the domestic trade unless the minister is satisfied that[13]

(a) the vessel is wholly and beneficially owned by Nigerian citizens or by a company wholly and beneficially owned by Nigerian citizens and a vessel or company is wholly and beneficially owned by Nigerian citizens where all the shares in the vessel and the company are held by Nigerian citizens free from any trust or obligation in favour of any person not a citizen of Nigeria;

(b) the vessel is on bareboat charter to Nigerian citizens and is under the full control and management of Nigerian citizens or a company wholly and beneficially owned by Nigerians;

(c) the vessel is owned by a company registered in Nigeria and the percentage of shares in the company owned by Nigerian citizens is not less than 60 per centum;

(d) any foreign vessel is licensed in compliance the Cabotage Act;

(e) the vessel is exclusively manned by officers and crew of Nigerian citizenship except with the minister’s waiver and

(f) the vessel possesses all certificates and documents in compliance with international and regional maritime conventions to which Nigeria is a party including all safety and pollution requirements imposed by a Nigerian law and any international convention in force.

From the foregoing, it is a requirement for registration for a vessel intending to participate in the domestic trade to be built by a company owned by Nigerian citizens or with the controlling interest vested in Nigerian citizens.[14]

The law determines instances where the controlling interest shall not be deemed to be vested in Nigerian Citizens, thus-

(i) if the title to a majority of the shares thereof or 60 per centum are not held by such citizens free from any trust or fiduciary obligation in favour of any person not a citizen of Nigeria; or Coastal and Inland Shipping

(ii) if the majority of the voting power in such company is not held by citizens of Nigeria; or

(iii) if through any contract or understanding it is so arranged that more than 40 per centum of the voting power may be exercised, directly or indirectly on behalf of any person who is not a citizen of Nigeria; or

(iv) if by any other means whatsoever control of any interest in the company in excess of 40 per centum is conferred upon or permitted to be exercised by any person who is not a citizen of Nigeria.

While Protectionism has its merits particularly with shielding a country’s new industries from foreign competition and temporarily creating jobs, it might also have a converse impact as companies have the tendency of decline without competition.  The potential to outsource jobs and negatively impact economic growth are other demerits of protectionism.

A peek into other jurisdictions particularly, the Merchant Marine Act of 1920 otherwise called the “Jones Act” was signed into law on June 5, 1920, following a bill by Senator Jones, serving then as the chairman of the Senate Commerce Committee, to encourage greater commercial use of U.S. ships. Among the provisions in Jones’s legislation were requirements that ships eligible to transport goods from one U.S. port to another must be U.S.-flagged, U.S.-built, U.S.- owned, and crewed by U.S. citizens. Today, those provisions require that such ships be at least 75 percent U.S.-owned, at least 75 percent U.S.- crewed, and assembled entirely in the United States with all “major components of the hull and superstructure” fabricated domestically.[15] Many critics of the Jones Act describe it as a burden and a foe to America’s economy as “Higher shipping rates are the most obvious cost of the Jones Act, but they are merely the first in a cascade of adverse consequences unleashed by the law’s restrictions.”[16]

The discontent with America’s Jones Act begs the question if our Cabotage Act is a friend or foe and this should set the tone for the invitation of liberalism to our maritime trade.

THE LIBERALISM OF THE AFRICAN CONTINENTAL FREE TRADE AGREEMENT (“AFCFTA”)

In January 2012, fifty-four African countries agreed to establish the African Continental Free Trade Area (AfCFTA) during the 18th  Ordinary Session of the Assembly of Heads of State and Government of the African Union (AU) in Addis Ababa, Ethiopia. The aim of this agreement was to create a single market for goods and services with ambitious long-term goals of deepening integration among AU member States, promoting the African Economic Community as envisaged in the 1991 Abuja Treaty of the Organisation of African Unity, and realising Africa’s Agenda 2063 to build a prosperous and united Africa.[17]

The AfCFTA envisages a borderless African Continental market as a step forward in reducing the cost of shipping in Africa in order to expand the intra-African trade from the traditional regional economic communities – where trade between African countries is currently domiciled – to the continental level to help diversify African economies and promote continental trade integration.[18] As a natural impact to this liberalisation, there could be an increase in containerised trade and port traffic volume as well as the need for cross-border maritime transportation between Nigeria and other African countries. One wonders what this will mean for Nigeria’s closed up maritime sector as the agreement and cabotage act seems at face value to be very distinct in objectives and totally opposed to each other.

THE MEETING POINT

While the AfCFTA might seek to liberalise trade among state parties, there have been an increasing conversation to support the position that any vessel that expects free and unlimited passage to trade in the African Continental Free Trade area needs to be flagged in an African State that is a party to the Agreement and in addition, hold 50 percent of its crew from a state party, or hold its equity shareholding in respect of the vessel in 50/50% equity from/with nationals of a state party

When placed side by side with the provisions of the Cabotage Act, it cannot be said that there is a contradiction as the requirements appear quite similar to those of the Cabotage Act in Nigeria which beyond protecting coastal shipping for indigenous operators has by way of waivers still left Cabotage trade open to foreign participation.

It is also suggested that the AfCFTA permits flagging, and foreign vessels take advantage to participate in Nigeria’s maritime trade using the mechanism of flags of convenience in a bid to attract the incentives bestowed on vessels plying the African waters by AfCFTA’s protocol on trade on goods.

CONCLUSION:

It is the opinion of the author that the protectionist policy of the Cabotage Act and the Liberalisation thrust of the African Continental Free Trade Area Agreement might seem divergent in principle but do not confront each other when tested in the practice of Nigeria’s maritime sector.  While there may also be discontentment with the Jones Act of America, the author of this piece opines that Nigeria’s cabotage Act is more of a friend than a foe to Nigeria’s economy as it will prevent capital flight in the booming maritime sector.

As a recommendation, it is imperative for the Cabotage Vessel Financing Fund (CVFF) as created by section 44 of the Cabotage Act to be implemented religiously as that would increase the capacity of indigenous shipping companies and merchants to stay in the game to ensure that Nigerian waters are for Nigerian ships, and with the heightened capacity from this funding and the complementary support of ACFTA, Nigeria’s ships may lead in Africa’s waterways.


[1]Associate, Paul Usoro & Co., LL. B (University of Uyo) B.L(Bagauda, Kano)

[2] Sulaimon Salau, “Nigeria’s Huge Maritime Potential Remain Untapped” available at Nigeria’s huge maritime potential remain untapped | The Guardian Nigeria News – Nigeria and World News — Business — The Guardian Nigeria News – Nigeria and World News – accessed on 25 December 2019.

[3] David Thomas, “What you need to know about the African Continental Free Trade Area” available atWhat you need to know about the African Continental Free Trade Area – African Business accessed in February 2022

[4] Mfon Usoro “Liability Regime for Inland Carriage of Goods (Road, Rail and Inland Waterways)” paper presentation at Sheraton Hotel Abuja, July 2018

[5] Section 3-6 of the Cabotage Act

[6] Section 8 of the Cabotage Act

[7] Section 8(a) of the Cabotage Act

[8] Section 8(b) of the Cabotage Act

[9] Section 8(c) of the Cabotage Act

[11] Section 9-11 of the Cabotage Act

[12] Section 15-21 of the Cabotage Act

[13] Section 23(1) of the Cabotage Act

[14] Section 23(2) of the Cabotage Act

[15] C. Grabow, I. Manak & D. Ikenson, “The Jones Act – A Burden America Can No Longer Bear” available at The Jones Act: A Burden America Can No Longer Bear (cato.org) accessed on 16 August 2022

[16] ibid

[17] UNCTAD Research Paper No. 15, “African Continental Free Trade Area: Challenges and Opportunities of Tariff Reductions” available at African Continental Free Trade Area: Challenges and Opportunities of Tariff Reductions | UNCTAD accessed on 16 August 2022.

[18] The Maritime Executive, “What Will the African Continental Free Trade Area Mean for Shipping?” available on What Will the African Continental Free Trade Area Mean for Shipping? (maritime-executive.com) accessed on 16 August 2022.

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A story of a dogged female entrepreneur, Self Made – a miniseries premiered on Netflix exposed the realities and challenges of a sole proprietor who was limited by every factor except her hair loss. The series chronicled the life of Madam C.J. Walker who built a haircare business that churned out products for black-women’s hair. Continue reading “SELF MADE? Intellectual Property Issues Arising in Madam C.J. Walker’s Chronicle”

AfCFTA: The Need for Cautious Optimism in Assessing its Economic Impact

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The Treaty (“Agreement” or “AfCFTA Treaty”) establishing the African Continental Free Trade Area (“AfCFTA”), was birthed on 21 March 2018 at the end of the Extra Ordinary Summit of the Assembly of Heads of States and Governments of the African Union which held in Kigali, Rwanda.   Continue reading “AfCFTA: The Need for Cautious Optimism in Assessing its Economic Impact”

Impact of the Finance Bill 2019 on Nigeria Business Environment

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As part of the process to improve the Nigerian tax environment and promote fiscal equity and uniformity in line with global best practices, the Finance Bill 2019 (“the Bill”) was presented to the National Assembly by President Muhammadu Buhari GCFR on 08 October 2019 and was passed by the House of Representative on 28 November 2019.

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