OGFZA BILL: RE-COMMUNIQUE BY LADOL, SIFZ AND OTHERS

OGFZA BILL:  RE-COMMUNIQUE BY LADOL, SIFZ AND OTHERS

 

The attention of the Oil and Gas Free Zones Authority (OGFZA), Nigeria, has been drawn to an advertorial of 7 March 2017 published in the Vanguard and other newspapers, and signed by the Snake Island Integrated Free Zone (SIFZ), Lagos Deep Offshore Logistics (LADOL) and two other companies. The said advertorial sought clearly to rally public opinion against the amendment of the OGFZA Act under consideration at the National Assembly, and tried to undermine the resolve of the National Assembly to go ahead with the amendment process.

 

We believe the advertorial deserves a response to set the record straight and make sure that Nigerians have all the facts in issue.

 

1) MONOPOLY: A key prayer of the advertorial in question was that the amendment to the OGFZA Bill before the National Assembly should not be passed because if the amendment were passed it would create a monopoly in the Oil and Gas Free Zones in favour of Intels. The complaint about monopoly by LADOL and others who are opposed to the bill is with regard to the initial provisions in the bill that designated Onne Port, Warri Port and Calabar Port as the only points where oil and gas cargoes could be loaded and discharged. These are ports that have been concessioned to Intels by the NPA. It is critically important to make it abundantly clear that this initial provision was opposed in its entirety by OGFZA in a memorandum to the Senate Committee on Trade and Investment during the public hearing on the bill. The provision was opposed by OGFZA for the simple reason that it would harm competition, impede the ease of doing business and generally run counter to the spirit of ongoing economic reforms of Government. The sponsor of the bill, Senator Abubakar Gobir; chairman of the Senate Committee on Trade and Investment, Senator Fatimat Raji Rasaki; and other stakeholders present at the public hearing equally agreed that the provision should be expunged from the bill because it would be inconsistent with the goals of the Federal Government economic policies. So the argument about monopoly by LADOL and others as far as the OGFZA Bill is concerned has been overtaken by new thinking which took hold during the public hearing. That provision cannot make it into the law because no one supported it at the public hearing and no one supports it now.

 

2) FLAWS IN THE EXTANT LAW: Publishers of the advertorial said they were opposed to the amendment because the principal Act that established OGFZA has flaws. However, the ongoing process at the National Assembly to amend the OGFZA Act is in major part informed by the goal of getting rid of the flaws in the principal Act. The amendment process therefore represents an opportunity to remove everything that the critics have pointed out as constituting flaws in the law. It equally offers an opening to those who are concerned about those flaws to send their suggestions for correction to the Senate Committee on Trade and Investment, which is considering the amendment bill. It would be a paradox that those who are opposed to the OGFZA Act on account of its flaws are equally opposed to the efforts by the National Assembly to remove those flaws via amendments to the law. All stakeholders who have expressed genuine fears and other forms of concern about the OGFZA law should take full advantage of the ongoing amendment process to address their fears and concern by making representations to the Senate Committee handling the amendment.

 

3) THAT OGFZA & NEPZA MAY BE MORE EFFECTIVE AND EFFICIENT: We should point out at this juncture that the NEPZA Act is also being reviewed at the National Assembly with a view to amending it to get rid of any imperfections and inadequacies that the law must have suffered from, as it is not perfect as it stands. No law is. The dream of OGFZA is to see the two enabling laws amended to meet the need of strengthening both OGFZA and NEPZA sufficiently enough to play their roles as effective and efficient agencies of government that can meet the imperative for specialisation and grow the free zones for both hydrocarbon and non-hydrocarbon businesses in the overall interest of the national economy.

 

4) ECONOMIC IMPLICATIONS OF THE AMENDMENT: The advertorial had argued that if the amendment bill were passed it would harm the economic interest of Nigeria in the Nigeria Ports Authority, NEPZA, Consumer Protection Council, Local Content Development, etc. That claim is not tenable given the changes suggested by OGFZA and other stakeholders at the public hearing. The NPA, the Association of Nigerian Exporters and other stakeholders who made representations to the public hearing also came to the same conclusion that the amendment would have a positive impact on the economy because it is meant to strengthen OGFZA to do a better job of regulating and managing the oil and gas free zones to attract more investments, create more jobs and generate more revenues for Government. Records show that the oil and gas free zones have created more than 200,000 direct and indirect jobs and attracted more than $20 billion in foreign direct investments from inception. A strengthened and better positioned OGFZA as a result of the proposed amendment would guarantee more economically viable oil and gas free zones.

 

Issued by:

The Media Unit

Oil and Gas Free Zones Authority

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