Consumer Rights Protection And The Nigerian State | Ahmed Adetola-Kazeem

Consumer Rights Protection And The Nigerian State | Ahmed Adetola-Kazeem


Being the text of a paper delivered by Ahmed
Adetola-Kazeem, MCIArb (UK) at a
lecture organized by the Nigeria
Association of Muslim Law Students (NAMLAS) Olabisi Onabanjo University chapter
in honour of Hon. Justice M. O Abimbola, Chief Judge of Oyo State.
INTRODUCTION
The recent Judgment of Hon. Justice Adedayo
Oyebanji in suit no. LD/13/2008- Adebo Holdings Ltd
&Anor v. Nigerian Bottling CompanyPlc&Anor
has brought to
the fore Nigeria’s lackadaisical attitude towards the protection of consumers
just as it is in other facet of its national life.


The black’s law dictionary 9th edition
defines a consumer as a person who buys goods or services for personal, family
or household use, with no intention of resale; a natural person who uses
product for personal rather than business purposes. A consumer has been defined
by the Consumer Protection Council Act, CAP C25 Laws of the Federation, 2004 as
an individual who purchases, uses, maintains or disposes of products or
services.

ADEBO HOLDINGS LTD &ANOR V.
NIGERIAN BOTTLING COMPANYPLC&ANOR REVISITED

The court held in Adebo Holdings
Ltd & Anor v. Nigerian Bottling Company Plc & Anor
 that
high levels of benzoic acid and sunset additives in the coca-cola products
could pose a health risk to consumers when mixed with ascorbic acid, commonly
known as vitamin C.

Justice Adedayo Oyebanji ordered the
Nigerian Bottling Company (NBC) to place written warnings on Fanta and Sprite
bottles against drinking them with vitamin C, and awarded costs of two million
naira ($6,350) against the National Agency For Food and Drug Administration and
Control (NAFDAC) for failing to ensure health standards.

The court said “It is manifest that
NAFDAC has been grossly irresponsible in its regulatory duties to the consumers
of Fanta and Sprite manufactured by Nigeria Bottling Company, NAFDAC has failed
the citizens of this great nation by its certification as satisfactory for
human consumption products which become poisonous in the presence of ascorbic
acid.”

A background to what transpired leading to
the filing of the action against NBC and NAFDAC was given by Dr. Fijabi Adebo
in an interview granted to Punch Newspaper on the 26th of March 2017[1]. He said,

“When the Coca Cola European Union alleged
that the products our trading company, EFAD Limited brought into the UK were
fake and unsafe for human consumption which made the UK Customs and Excise to
act by destroying the products, we had to query the NAFDAC which plays
supervisory roles in safeguarding public health as an agency of the Federal
Government. We had to ask what it was doing when products unfit for human
consumption were being manufactured in the country. That was why we joined them
in the suit. In fact, our initial prayer was to stop the production of Fanta
with sunset yellow because it really alarmed us and according to the UK
findings, it could cause injury to children and others. Justice Taiwo in 2009
ruled that NAFDAC should go to the premises of NBC and make it reduce the
content of sunset yellow in Fanta. They obeyed the order and reduced the
content considerably. Before then, you would notice that whenever children
drank Fanta, their tongue would be yellowish. If they knew that it was not
injurious to consumers’ health, why did they reduce the sunset yellow? After
that, we got another ruling against NAFDAC compelling it to henceforth do
things right after being negligent by allowing manufacturers do things their
way. It was after we concluded those ones that we faced Coca Cola. Our lawyers
wrote them and they were so arrogant. They were not interested in our loss as a
customer who bought products from them. Their response to our lawyers was a
little less insulting. We then thought that if we had been so badly treated in
England on issue that was a fault of a manufacturer in Nigeria, I would not
come to my country and be so treated. I therefore swore to pursue the case
until justice was served.”

“My main aim was to save Nigerians. I later
got rulings compelling the NBC to reduce the sunset yellow in Fanta and make
NAFDAC responsible in discharging its responsibilities. I also got an order for
the continuous monitoring of the content of Coca Cola products. The rulings
were satisfying to me. At the time we got the rulings, one would have
expected them to act in a normal, serious and corporate manner. But all we got
was that we did not tell them we were taking the products to the UK. What law
says I should tell them where I was taking the products to? By law, I have a
right to export to anywhere in the world? Through the Nigerian company law, I
have a limited liability company and also a licensed company in the UK. I
brought a shipping company to their premises to load the drinks including
customs to check the products. What else do they want me to do?”
Lawyers for the NBC argued that the
products were not intended for export on the grounds that the UK standards
limit benzoic acid in soft drinks to a maximum of 150 mg/kg. Both Fanta and
Sprite have benzoic levels of 200 mg/kg which is lower than the Nigerian
regulatory limit of 250 mg/kg, but Justice Adedayo Oyebanji rejected this
defense.

The Honourable Judge said, “Soft
drinks manufactured by Nigeria Bottling Company ought to be fit for human
consumption irrespective of color or creed.”

NAFDAC and NBC have appealed the decision
of the Lagos High Court, it remains to be seen which side of the divide the
appellate court will tilt.

In view of the High Court Judgment in
Adebo’s case and other worrisome cases, how has Nigeria faired in protecting
its consumers from the claws of manufacturers, business men and service providers
whose main aim is to make profit at the expense of unsuspecting Nigerians?

It will be wrong to suggest that there are
no adequate laws that govern consumer protection in Nigeria. The problem is not
the non-availability of laws but ignorance of the laws by consumers and the
unwillingness of those in authority to implement the laws.  Nigeria’s
situation was best described by a former MD of Nestle Plc, when he said
“Nigeria is over-legislated but under-governed.

CONSTITUTIONAL RIGHTS OF CONSUMERS
Chapter IV of the Constitution of the
Federal Republic of Nigeria, 1999(as amended) contains the fundamental rights
of all citizens and persons in Nigeria. These are the rights to life; dignity
of human person; personal liberty; fair hearing; private and family life;
freedom of thought, conscience and religion; freedom of expression and the
press; peaceful assembly and association; freedom of movement; freedom from
discrimination; and the right to acquire and own immovable property anywhere in
Nigeria.

These rights can be said to have some
affinities with consumer protection. Some actually have direct bearing on
consumer Protection. For instance the right to fair hearingaddresses
the principle of access to justice which
is a cardinal principle of consumer protection. [2]Section 36(1) of the Constitution provides:

“In the determination of his civil
rights and obligations, including any question or determination by or against
any government or authority, a person shall be entitled to a fair hearing
within a reasonable time by a court or other tribunal established by law and
constituted in such manner as to secure its independence and impartiality.”

In addition, on the strength of the
Constitution, Any citizen whose rights has been violated under any law
including consumer protection laws can approach the court or any other
appropriate body for redress, under section 46. The Fundamental rights are so
important that failure to observe them in any case vitiates the proceedings. They
cannot be derogated from except to the extent allowed by law. Describing
the primacy of a fundamental right, Eso,J.S.C, In Ransome Kuti v.
Attorney General of the Federation
 (1985) 2 NWLR (Pt.6) 211
 said:

“It is a right which stands above
the ordinary laws of the land and which in fact is antecedent to the political
society itself. It is a primary condition to a civilized existence and what has
been done by our Constitution, since independence … is to have these rights
enshrined in the Constitution so that the rights could be “immutable” to the
extent of “non immutability.”
CONSUMER PROTECTION COUNCIL
The Consumer Protection Council is the body
saddled with the responsibility of the protection of the rights of consumers in
Nigeria. Other agencies saddled with the duties of consumer protection in
various specific sectors are:
1.     National
Drug Law Enforcement Agency (NDLEA)
2.     Nigeria
Electricity Regulation Commission(NERC)
3.     Nigerian
Communications Commission (NCC)
4.     National
Agency for Food and Drug Administration and Control (NAFDAC)
5.     Central
Bank of Nigeria (CBN)
6.     Nigeria
Deposit Insurance Corporation (NDIC)etc.
Whilst the agencies listed above
individually deals with specific sectors, the Consumer Protection Council has a
wider coverage and has the power to deal with any consumer complaints against
any manufacturer or service provider.
FUNCTIONS OF CONSUMER PROTECTION
COUNCIL
Some of the functions of the Council as
provided in section 2 of the Consumer Protection Council Act are as follows:
a)    Providing speedy
redress to consumers complaints through negotiation, mediation and
conciliation; 
b)    Seeking ways and
means of removing from the markets hazardous products and causing offenders to
replace such products with safer and more appropriate alternatives;
c)     Publishing
from time to time list of products whose consumption and sale have been banned,
withdrawn, severally restricted or not approved by the Federal Government;
d)    Causing an offending
company, firm, trade association or individual to protect, compensate, provide
relief and safeguards to injured consumers or communities from adverse effects
of technologies that are inherently harmful, injurious, violent or highly
hazardous;
e)    Organising and
undertaking campaigns and other forms of activities that will lead to increased
public consumer awareness;
f)      Encouraging
trade, industry and professional associations to develop and enforce in their
various fields, quality standards designed to safeguard the interest of
consumers;
g)    Issuing
guidelines to manufacturers, importers, dealers and wholesalers in relation to
their obligation under the CPC enabling law;
h)    Encouraging the
formation of voluntary consumer groups or associations for consumers’ well
being;
i)      Ensuring
that consumers’ interest receive due consideration at appropriate fora and
providing redress to obnoxious practices or the unscrupulous exploitation of
consumers by companies, firms, trade associations or individuals;
j)      Registering
and monitoring products, services and sales promotions in the market place.
Section 3 of the CPC act gives additional
powers to the Council to do the following:
(a) Apply to court to prevent the
circulation of any product which constitutes an imminent public hazard;
(b) Compel a manufacturer to certify that
all safety standards are met in their   products;
(c) Cause as it deems necessary, quality
tests to be conducted on a consumer product;
(d) Demand production of label showing date
and place of manufacture of a commodity as well as certification of compliance;
(e)Compel a manufacturer, dealer and
service company where appropriate, to give public notice of any health hazards
inherent in their products;
(f) Ban the sale, distribution,
advertisement of products which do not comply with safety or health regulation.

RIGHTS OF CONSUMERS
 The Consumer Protection Council
Website[3] lists some rights
which consumers are entitled to and must insist on as follows:
·        
The Right to Satisfaction of Basic Needs Access to
basic goods and services necessary for survival, such as food, water, energy,
clothung, shelter, health-care, education and sanitation. Goods and services
must meet the standard of quality promised such that there is value for money
in the purchase.
·        
The Right to Safety Protection from hazardous
products, production processes and services.
·        
The Right to Information Provision of
information enabling informed consumer choice as well as protection from
misleading or inaccurate advertising and labeling.
·        
The Right to Choose Access to variety of quality
products and services at competitive prices.
·        
The Right to Redress Compensation for
misrepresentation, shoddy goods and unsatisfactory public and private services,
including the right to adequate legal representation
·        
The Right to Consumer Education Acquisition
of the skills required to be an informed consumer throughout life
·        
The Right to Consumer Representation Advocacy of
consumers’ interest and the ability to take part in the formulation of economic
and other policies affecting consumers i.e. the right to be heard
·        
The Right to a Healthy Environment Habitation is
a place that is safe for present and future generations and which will enhance
the quality of their lives.

RECENT STRIDES OF THE CONSUMER
PROTECTION COUNCIL
It is interesting to note that the Council
has made giant strides towards the protection of consumers’ rights in Nigeria.
In 2015, the Council issued Volkswagen Nigeria a 7 days ultimatum to provide
information on the status of its vehicles as regards the emissions of cheating
software which is reported to have affected 11 million cars worldwide. The
Council went on a nationwide sensitization campaign to checkmate smuggled
poultry products in the Country. Upon numerous complaints of subscribers to Digital
Satellite Television (“DSTV“), in July 2015 the Council
commenced investigative sittings into the operations of Multichoice Nigeria,
the franchise owners of DSTV. [4] The
Council later announced that it had “substantiated” allegations of abuses of
consumer rights brought before the council against MultiChoice Nigeria, the
owner of DSTV. In August 2015, the Council waded into a complaint of Bauchi
State Goverment of excess bank charges by First City Monument Bank, the Council
upon conclusion of investigation ordered the bank to refund N1.543 Billion
Naira unlawful deductions. The Council also investigated the activities of
VIP Express Tourism Limited, a Nigerian hospitality company upon receipt of complaints
that the operations of the company is against the rights of their subscribers,
the company was ordered to refund N25 Million Naira to aggrieved consumers.

It is also interesting to note that the
Council has commenced independent investigation into safety of additives in
Nigerian Bottling Company’s Fanta and Sprite. The Director of CPC in a
recent statement said, “Indeed the judgment only serves as the subject of
bringing this information to CPC’s attention, the Council would conduct its own
independent investigation. The reason for CPC’s interest is not far-fetched.
For years, Fanta, Sprite and Coca Cola have arguably and consistently been the
most widely consumed beverages in Nigeria. The spectrum of consumption is also
perhaps the widest, with consumption starting as early as age four and far into
adult years.”

“In addition, Vitamin C is one of the most
consumed medications for both children and adults, both as a matter of
prescription/ over the counter and, or as dietary supplement. Essentially, both
the NBC products and Vitamin C are routinely consumed in Nigeria with
absolutely no restrictions to access and availability” she added.
FAILINGS OF THE CONSUMER PROTECTION
COUNCIL
In spite of these achievements, there is
still a lot of work to be done. The Nigerian market is flooded with substandard
products and products which are not registered with the Council. Many Nigerian
consumers are not aware of their  rights or how to enforce them. It is
difficult for the Council to suspend the business activities of big
multi-nationals such as DSTV or MTN in proven cases of abuse of consumer’s
rights. It is also difficult for the Council to enforce consumer rights against
Federal Government agencies which are mandated to provide essential services to
the citizenry.

RECOMMENDATION AND CONCLUSION
It is important for the Council to devise
creative means of ensuring that its orders are obeyed, particularly by
multinationals and government agencies. The Council’s taskforce should
intensify its efforts by carrying out regular monitoring of factories, markets
and shops to ensure that products sold to Nigerian consumers are not
substandard and are duly registered with the Council. The Nigerian Customs
service and other security agencies must ensure the security of our borders and
ports through which many substandard products enter the country.

More sensitization campaign should be
carried out in schools, churches, mosques, print media, electronic media and
social media to create awareness on the rights of consumers and how to get
redress when such rights are infringed upon. The Council must be attentive to
complaints against the products of foreign or local companies, big and small
enterprises, private establishments and government agencies if it is to
adequately achieve its statutory mandate.
[2] Ebun
Adegboruwa, “Challenges of Consumer Rights Protection in Nigeria”. A
paper delivererd at the NBA Conference 2015.
[3] http://www.cpc.gov.ng/index.php/consumers (accessed
on 23rd May 2017)
[4] Nigeria:
An Appraisal Of The Role Of The Consumer Protection Council In Protecting
Consumers’ Rights In Nigeria
http://www.mondaq.com/Nigeria/x/459154/Consumer+Law/An+Appraisal+Of+The+Role+Of+The+Consumer+Protection+Council+In+Protecting+Consumers+Rights+In+Nigeria (accessed
on 23rd May 2017)

Ahmed Adetola-Kazeem
AHMED ADETOLA-KAZEEM,
MCIArb(UK) is a counsel at Gani Adetola-Kaseem (SAN) LP and ExecutiveDirector
of Prisoners’ Rights Advocacy Initiative (PRAI).
.
Ed’s Note – Article was first published here
Northern Groups October 1 Deadline to Igbos; A Constitutional Breach | Adedunmade Onibokun

Northern Groups October 1 Deadline to Igbos; A Constitutional Breach | Adedunmade Onibokun


According to news
reports
, on Tuesday, the 6th of June, 2017, 16, Northern groups including
the Arewa Citizens Action for Change, Arewa Youth Consultative Forum, Arewa
Youth Development Foundation, Arewa Students Forum and Northern Emancipation
Network on the Igbo Persistence for Secession, among others directed all Igbos
residing in their States to vacate the northern region before the 1st
of October, 2017.


This comes closely behind
the Indigenous People of Biafra (IPOB) and the Movement for the Sovereign State
of Biafra (MASSOB)’s May 30 shut down of commercial and social activities in
major towns in the East over Biafra agitations. The deadline which is worrisome
and could lead to a volcanic rise in ethnic tensions or probably another civil
war is condemnable in the highest words and not in the spirit of national unity
or have we as a country crossed the rubicon 
and now heading towards self- implosion?  

The Constitutional and
fundamental rights of every Nigerian with an Igbo descent is now on the line and
the a subsequent breach of same will likely result to violence, senseless loss
of lives and regional tensions as seen during the Nigerian civil war.   According
to Nigerian Constitution, Section 41 guarantees the right of every Nigerian to
freedom of movement. It provides in subsection 1 that-
“Every
Citizen of Nigeria is entitled to move freely throughout Nigeria and to reside
in any part thereof, and no citizen of Nigeria shall be expelled from Nigeria
or refused entry thereto or exit there from.”  
Section 43, further
provides for the right to acquire and own immovable property anywhere in Nigeria.
For ease of reference, it provides that;
“Subject
to the provisions of this Constitution, every citizen of Nigeria shall have the
right to acquire and own immovable property anywhere in Nigeria”.
The above provisions of
the Nigerian Constitution clearly shows that the deadline given to Igbos is a
clear breach of our constitutional provisions and thus should be met the full
force of the law and expertise of national security agencies to prevent the
grave mishap that looms in our front yard. The only legal exceptions provided
for the above constitutional provisions is also clearly outlined in Section 45
of the said Constitution which provides that only laws passed in a democratic
society and in the interest of defence, public safely, public order public morality
or public health; or for the purpose of protecting the rights and freedom of
other persons. Can the deadline be described as a law in line with the
provisions of Section 45, the answer is No.

Moreover, the said
deadline is seditious in itself and a breach of Section 51 of the Criminal Code
Act. Sedition has been defined by the Criminal Code in Section 50(2) to mean; any
act that excites the citizens or other inhabitants of Nigeria to attempt to
procure the alteration, otherwise than by lawful means, of any other matter in
Nigeria as by law established; or  to
raise discontent or disaffection amongst the citizens or other inhabitants of
Nigeria; or to promote feelings of ill-will and hostility between different
classes of the population of Nigeria. Could the deadline given by these
Northern groups be said to fall in line with the definition of a seditious act
under the criminal code, the answer is Yes. What the n is the penalty?

Section 51 of the Criminal
Code provides that;
“any
person who-
(a)
does or attempts to do, or makes any preparation to do, or conspires with any
person to do, any act with a seditious intention;
(b)
utters any seditious words;
(c)
prints, publishes, sells, offers for sale, distributes or reproduces any
seditious publication;  
(d)
imports any seditious publication, unless he has no reason to believe that it
is seditious;
 shall be guilty of an offence and liable on
conviction for a first offence to imprisonment for two years”.
The Penal Code also recognizes
the offence of sedition where it provides in Section 417 that “Whoever, seeks
to excite hatred or contempt against any class of persons in such a way as to
endanger the public peace, shall be punished with imprisonment for a term which
may extend to three years or with fine or with both”.

Clearly the deadline given
by the Northern groups to Igbo-Nigerians is a clear seditious, constitutional
and fundamental breach of Nigerian laws which clearly should attract prosecution.

Dunmade
Onibokun Esq.
Adedunmade
Onibokun & Co.

How to register a patent in Nigeria | Adedunmade Onibokun

How to register a patent in Nigeria | Adedunmade Onibokun


A Patent is an official
right to be the only person to make, use or sell a product or an invention. The
essence of a patent is to protect inventors by ensuring they get due
recognition and compensation for their efforts in inventing. A patent usually
covers new and ground breaking inventions which could be in any industry and
not necessarily in the sciences alone.


A patent confers upon the
patentee the right to preclude any other person from doing any of the following
acts-

 a)     where
the patent has been granted in respect of a product, the act of making,
importing, selling or using the product, or stocking it for the purpose of sale
or use; and
b)
     where the patent has been granted in
respect of a process, the act of applying the process or doing, in respect of a
product obtained directly by means of the process, any other acts mentioned
above.

That’s why various
governments have made it a point of duty to support and protect the rights of
inventors through patents. In Nigeria, a patent is registerable at the Ministry
of Trade and Investment located in Abuja.

The application for patent
registration begins with a search to ascertain whether such innovation or
invention had been created by another person in the past. This is then followed
by an application for registration. The Applicant must include other vital
information such as; the applicant’s full name and address; a specification,
including a claim or claims in duplicate; plans and drawings, if any, in
duplicate; where appropriate, a declaration signed by the true inventor
requesting that he be mentioned as such in the patent and giving his name and
address; a signed power of attorney or authorization of agent if the
application is made by an agent; an address for service in Nigeria if the
applicant’s address is outside Nigeria; and The prescribed fee.

It is important to note
that a patent shall stay valid for 20 years, after which other manufacturers
may have access to the creation or be legally able to create another version in
itself.  An inventor who has registered a
patent in another country can also re-register the patent in Nigeria. Such
inventor will be requested to append to his application a written declaration
showing the date and number of the earlier application, the country in which
the earlier application was made, and the name of the applicant who made the
earlier application. The applicant will be expected to furnish the Registrar,
not more than three months after the making of the application in the initial country
with a copy of the earlier application certified correct by the Industrial
Property Office (or its equivalent) in the country where the earlier
application was made.

A patent shall also lapse
if the prescribed annual fees are not duly paid in respect of it, provided that
a grace period of six (6) months shall be allowed for the payment of the fees;
and if the fees and the prescribed surcharge are paid within that period, the
patent shall continue as if the fees had been duly paid.

Many inventors have not
had the benefit of registering their inventions. This may result in a loss of
ownership by these inventors or a situation where the invention is registered
by someone else who is not the rightful creator of that invention.

If you have any enquires about
registering a patent or trademark in Nigeria. You may contact the undersigned
via
info@adedunmadeonibokun.com
or via
www.adedunmadeonibokun.com

Adedunmade Onibokun & Co.
Solicitors & Advocates

+2348055424566 

Photo Credit – www.insidecounsel.com 
Life of a Lagos Lawyer – Peacock  (Episode 10)

Life of a Lagos Lawyer – Peacock (Episode 10)

Have
you ever seen a peacock spread its feathers? Completely fanned out, it’s a lovely
spectacle, with the over 200 feathers forming a complete semi-circle around the
beautiful bird. That exactly is what this Oga, The – law, is doing in open
court. Not only has he filled our ears with big words, he has also been addressing
the court with all the pompousity he could muster. One would have been wondering why
counsel was making all that effort, had the person not noticed the group of law students
sitting in the gallery who were in court for their mandatory court attachment
programme.


Lawyers
sometimes take it upon themselves to show off to these law students when seen
in court. This act serves two purposes, one, it does not make the lawyer look
like a complete nonentity in front of the students because no one wants to be
described by law students as the lawyer that messed up in court. Secondly, the
eloquent speeches and showmanship of oratory skills gives the law students a
bit of encouragement and practice tips for their careers.  

The
only problem with this scenario was the lawyer was speaking completely off
point, citing the wrong authorities to support his argument and was acting in
complete ignorance of the rules of court. The Judge knew, other lawyers knew it but
counsel here, was completely lost in the sound of his own voice. The Judge
however, whose body language showed he was not happy that his court was being used
as a theater uncharacteristically kept silent and watched,  giving counsel enough rope to hang himself.

His
opposing counsel also did not help in any way, having also guessed the game the
Judge was playing, he sat quietly smiling, knowing the peacock was about to get
his feathers chopped off. After summing up his arguments, the Judge asked one
of the questions every lawyer dreads to hear from a Judge, especially when you
don’t know why he is asking.

“Counsel,
how many years are you at the bar?”

Suddenly,
counsel who was not sounding so confident replies “10 years, Milord”. Then the
washing came, like the pouring of heavy rainfall with a truck load of detergent
and bleach.

“You
mean, you are 10 years at the bar and you don’t know the simple principles of
law”.

“You
mean after all the bravado you showed in making your argument, you have only succeeded
in expressing your ignorance”.

“You
have only just showed these law students how not to make a mess of yourself in
court”, and on and on for another minute. Counsel had completely kept quiet at
this time, looking from his books to the Judge and making sure to avert his
gaze from the gallery occupied by the law students. Have you ever seen a
peacock after its feathers have been chopped off?
. No longer a pretty sight for sure.


He
was completely embarrassed and the piercing stares from the law students didn’t
make him feel any better. He must have been imagining how all of them were
going to recount all that happened to their friends later on. The Judge finally
denied his application and adjourned the matter for further hearing.
Immediately rising for a ten minute recess.

Everyone
was now free to move and naturally dialogues started all over the court room.
Junior lawyers were taking the time to confer with their seniors and clients
were their lawyers as well. The Peacock was however silent, not conferring with
anybody and brooding. What a colossal embarrassment that day had been in court
for him. So I sat with my feathers cut off and waited for the court to continue
sitting before I quietly took a bow and hurriedly left the court room. Never again
was that going to happen to me. 

Join us next time for another episode of
“Life of a Lagos Lawyer”. An exclusive Legalnaija series.

PLESE
NOTE: This is a work of fiction. Names, characters, places and incidents either
are products of the author’s imagination or are used fictitiously. Any
resemblance to actual events or locales or persons, living or dead, is entirely
coincidental.

Photo – Credit – 1. animals.mom 
                            2. thegroveguy.blogspot.com 
Competition Law: An Analysis Of The Federal Competition And Consumer Protection Bill 2015 | Yori Ehimony Junior

Competition Law: An Analysis Of The Federal Competition And Consumer Protection Bill 2015 | Yori Ehimony Junior

In Market
economies, there is inherent danger that market players may distort or even
eliminate competition in order to maximize profits, or in order to acquire and
abuse their market power. This has demanded legislative and policy intervention
and for many countries, such intervention has taken the form of competition law
and policy. In its simplest form, competition law and policy aims at playing
the role of an umpire in what may conveniently be regarded as a market jungle,
where financial might is right and profits can be made by unscrupulous
manufacturers, often at the consumers chagrin.

It therefore
follows that if left unchecked, financially buoyant corporations will muscle
out the financial less fortunate firms, create entry barriers, and reduce innovation,
quality, efficiency and output in the market. This has an overwhelming effect
in the production and distribution channels in the society. Consumers are
forced to pay so much for so little as they are manipulated by the greed of
entrepreneurs and lack of a functional competitive market.
To allay the
consternation of consumers and to protect the market, many countries around the
world have enacted competition laws and designed pro-competitive policies to
meet the many needs of the society at large, as the effect of an
anticompetitive regime has larger ramifications on the society. For instance,
industries will fail to compete in the market, consequently, they will not need
to employ labour as there is no need for expansion in a ‘one way’ market industry,
and they may even be tempted to lay off personnel; these increases
unemployment, inefficiency and by extension, crime rate.
It therefore
becomes imperative for the law to create a benchmark of acceptable trade
practice. This is done by the creation of rules to regulate their business
activities in such a manner that they conform to fair and equal standards of
trade. These rules are known as Competition Laws or Antitrust.
Competition law
is a set of rules, disciplines and judicial decisions maintained by governments
relating either to agreements between firms that restrict competition or to the
concentration or abuse of market power on the part of private firms.[2] These
laws prohibit the misuse of market powers by firms and businesses. For
instance, preventing undertakings which are dominant in their markets from
overcharging their customers or imposing unfair trading terms and conditions
upon them.[3]
Competition law
authorizes and regulates government intervention against anticompetitive
behavior, such as price fixing and price rigging, and the concentration of
economic power. When the law succeeds in safeguarding or increasing marketing
competition, such that both buyers and sellers are generally price-takers, it
brings widely economic benefits, boosting economic efficiency, growth and
innovation and thus, both consumer and aggregate welfare.[4]
In a similar
vein, Bob Lane defines competition as “the struggle by firms to achieve
superiority over other firms in the market place” and further defines competition
law as “the rules limiting the freedom by which they may do so”.[5]
The lack of
Competition legislation in Nigeria has been described as the reason why
producers of utilities do not feel obligated to answer the queries of the
consumers. There are sectorial regulations in some industries but this only
raise the question of how enforceable are these regulations and do they really
live up to their billing and hype? This has prompted the Government to send a
proposed bill to the national assembly to pass same and create some balance and
accountability in these sectors. Another role to be played by a competition
regulation is to eliminate entry barriers in certain businesses and encourage
new players in the market: such entry will naturally create competition and the
consumer will undoubtedly be the king of the market.
The Bill is an
Act which aims at repealing the Consumer Protection Act, CAP C25, LFN, 2004;
Establish the Federal Competition and Consumer Protection Tribunal for the
development and promotion of Fair, efficient and Competitive Markets in the
Nigerian economy, facilitate access by all citizens to safe products, secure
the protection of rights for all consumers in Nigeria and for other related
matters.[6]
The objectives of
the proposed Act are to promote and maintain competitive markets in the
Nigerian economy,[7] promote economic efficiency,[8] protect and
promote the interest and welfare of consumers by providing consumers with
competitive prices and product choices. The bill further seeks to prohibit
restrictive business practices which prevents, restricts or distorts
competition or constitutes an abuse of a dominant position of market power in
Nigeria; and contribute to the sustainable development of the Nigerian economy.
The Act is applicable to all undertakings and all commercial activities within,
or having effect within Nigeria.[9]
Establishment of the Federal
Competition and Consumer Protection Commission
;
The Act
establishes the Federal Competition and Consumer Protection Commission (“the commission”)
for the purpose of carrying out the functions, duties and responsibilities as
conferred upon it by virtue of the provisions of the Act.[10] The Bill
provides that the commission shall be independent in the performance of its
functions, duties, powers and responsibilities so conferred on it. In a bid to
ensure fairness and sincerity in purpose, the Bill directs that any member of
the commission who has a personal interest in any contract or arrangement or
matter to be considered by the commission or of a committee shall forthwith
disclose such interest to the commission or committee and shall not vote on any
question relating to the contract, arrangement or matter. This is in an
initiative to forestall a case where a member of a committee has a conflict of
interest and might be minded to manipulate the system to favor such interest.
This provision seeks to ensure objectivity among the members of the commission.
Also, the Act
provides for the establishment of a Competition and Consumer Protection Tribunal.[11] The
Tribunal is expected to adjudicate over every conduct prohibited under the Act.
The tribunal shall hear appeals from or review any decision from the exercise
of the powers of any sector specific regulatory authority in a regulated
industry in respect of competition and consumer protection matters; issue such
orders as may be required of it under the Act; and make any ruling or such
other orders as may be necessary or incidental to the performance of its
functions under the Act.[12]
RESTRICTIVE AGREEMENTS;
The 2015 Bill
provides that “Any agreement among undertakings, or the decision of an
association of undertakings that has the purpose of actual or likely effect of
preventing, restricting or distorting competition in any market shall be unlawful
and, subject toSection 61 of this Act, void and of no legal effect
whatsoever”.[13] This is a strong stand against any form of restrictive
trade practice among associations, cartels or any commercial unit.
For avoidance of
doubt, the bill lists out the particular acts to be prohibited by the proposed
Act. They include;
a; Directly or
indirectly fixing a purchase or selling price of goods or services, this is
subject to Section 108 of the Act.
b; dividing
markets by allocating customers, suppliers, territories or specific types of
goods and services.
c; limiting or
controlling the production or distribution of any goods or services, markets,
technical development or investments, subject to Section 109 of the Act.
d; engaging in
collusive tendering, subject to Section 110 of the Act.
e; making the
conclusion of an agreement subject to acceptance by the other parties of
supplementary obligations which by their very nature or according to commercial
usage, have no connection with the subject of such agreement.
The prohibited
acts which contravene certain Sections of the bill have been itemized for
avoidance of doubt by commercial undertakings which have formed the habit of
often using ignorance of the law and the absence of an active antitrust
legislation to breach competitive lines.
In a related
breath, Section 64 prohibits any term or agreement for the sale of any good or
services, if the purport of such term or agreement is to establish or provide
for the establishment of minimum prices to be charged on the resale of the
goods or services in Nigeria.  In other words, this Section proscribes
minimum resale price maintenance in the market. It has been identified as a
major trade restrain among experts in antitrust and a major setback in market
competition. Interestingly, the Bill creates a new form of restrictive trade
practice prohibition, where it prohibits the unlawful withholding of products
from a dealer by a supplier.[14] For the purpose of the Act, an
undertaking will be treated as withholding goods or services from a dealer if
the undertaking refuses to supply those goods or services to the order of the
dealer,[15] the undertaking refuses to supply the goods or services to the
dealer except at prices or on terms or conditions as to credit, discount or other
matters which are significantly less favorable than those at or on which the
undertaking normally supplies those goods or services to other dealers carrying
on business in similar circumstances;[16]
ABUSE OF DOMINANT POSITION[17]
The 2015 Bill
goes further to give an elaborate description on instances where a corporation
may be designated as a dominant firm in the market. It provides that, for the
purpose of the Act, a corporation will be considered to be in a dominant
position if it is able to act without taking account of the reaction of
its customers, consumers and competitors.[18] 
This definition
puts into consideration in defining a dominant firm, the effect the act of a
large firm might have, not only to its competitors, but also on the consumers and
the competitors. Much has been said on the subject in the last chapter, the
argument was made that there is nothing fundamentally wrong with a firm being a
dominant firm in the market. Its status might have been achieved by dedication
to purpose, hard work, investment and goodwill; hence a large corporation
should not be punished for excelling in the market environment. It has quickly
been added, that a large firm, in making decisions and carrying out its
business acts must be extremely considerate and cautious on the effect (usually
adverse) such acts or decisions might have on the consumers, customers or the
competitors in the same market and within the same geographical location.[19] As
a punitive and prohibitive step, the bill provides in Section 74 (3) that
any undertaking that abuses its dominant position in the market commits an
offence under the proposed Act and on conviction be liable to a fine of not
less than ten (10) per cent of its turnover in the preceding business
year or such higher percentage as the court may determine under the
circumstances of the particular case.
MONOPOLY[20]
Where it appears
to the commission that there are convincing grounds for believing that a
monopoly situation may exist in relation to the production or distribution of
goods and services of any description or in relation to the export of any goods
and services of any description in Nigeria, it shall cause an investigation to
be held into a particular type of agreement across various sectors to determine
the extent of the situation in relation to the market. The Bill identifies a
situation of monopoly to exist in relation to;
1.    
the supply of goods of any description’
2.    
the supply of services of any description,; or
3.    
the exports of goods of any description from
Nigeria, to the extent that it has an effect on competition in a market in
Nigeria.[21]
MERGERS[22]
For the purpose
of the proposed Act, a merger occurs when one or more undertakings directly or
indirectly acquire or establish direct or indirect control over the whole or
part of the business of another undertaking.[23] This control may be
achieved by way of the purchase or the lease of the shares, an interest or
assets of the other undertaking in question, the amalgamation or the
combination with the other undertaking in question, the amalgamation or
combination of the other undertaking in question.[24] It could also be by
way of a joint venture.[25] It is further explained that an undertaking
has control over the business of another undertaking if it beneficially owns
more than one half of the issued share capital or assets of the undertaking; is
entitled to cast a majority of votes that may be cast at the general meeting of
the undertaking or has the ability to control the voting of a majority of those
votes, either directly or indirectly; is able to appoint or to veto the appointment
of the directors of the undertaking. Subject to the notification of threshold
to be determined from time to time as set out in Part XII, a proposed merger
shall not be implemented unless it has first been notified to and approved by
the commission.
Section 95 of the proposed Act provides that when considering a merger or a proposed
merger, the commission shall determine whether or not the merger is likely to
substantially prevent or lessen competition. This shall be done by assessing
the strength of competition in the relevant market and the probability that the
undertakings in the market, after the merger, will behave competitively or
co-operatively, taking into account, any factor that may be relevant to
competition in that market, including, the ease of entry in the market, the
level and trends of collusion, the level of countervailing power in the market,
among other considerations.[26]   
CONCLUSION
On the whole, the
bill looks promising and all-encompassing, it touches on both competition regulations
as well as consumer protection, and the danger however remains in the
management of the commission if by chance the bill is passed into law. The
commission will need to be manned by professionals who are knowledgeable in
antitrust laws, economics, intellectual property and representatives of the
various sectors of production. It is essential that all necessary bodies are
carried along for a productive dispensation of competition policy in
Nigeria.   
That competition
law and policy has continued to enjoy a remarkable growth rate across the world
in recent times need no lengthy discussion. Its advantages have been seen to
cut across economic efficiency, consumer choice boost and protection, removal
of entry and exit barriers, protection of small and intermediate firms in the
market, improvement of the foreign direct investments (FDI) of countries, while
boosting the chances of local firms to compete internationally. This work has
therefore argued that, left unchecked, the untoward and unregulated trade
practices will continually relegate Nigerian markets to the background and have
extremely adverse effects towards the economic and trade development and growth
in the country.
RECOMMENDATIONS
The first step to
take is to harmonize all pending Bills before the National Assembly, remove
offensive sections contained in the Bills[27] and create independent
enforcement institutions. The Bills were products of legal transplants which
did not necessary take the peculiarities of Nigeria trade and market system into
consideration.
Competition
policy and law offers developing nations an added tool to manage their affairs.
The challenge then is to design a competition policy that fits local realities
and meets local needs. This is an aspect that often deludes the attention of
many enthusiastic proponents of competition law and policy.
Evidently a “one
size fits all” approach is practically inappropriate in developing competition
policy and law. It is essential to create a distinction between countries at
low levels of development and hence meager institutional capacity on one hand,
and semi-industrialized countries with greater institutional capacity on the
other hand.
Second, for
competition law and policy to make any meaningful success in Nigeria, allied
policies such as privatization, liberalization and commercialization have to be
placed on the front burner. Their functional existence shall ease up the market
system and usher in competition law and policy. Otherwise it would only make a
mockery of the process.
Third, any
eventual competition law and policy must be wary of falling into the temptation
of inundating itself with too many competition goals and objective. Much has
been said about the lack of infrastructural capacity and structural facilities
in the country, thus, blindly transplanting the U.S. Antitrust in its entirety
or the U.K. Competition Actwill be delirious and quite wasteful.
The E.U. Competition law is recommended to the extent that it advocates for
opening up of markets. For a country like Nigeria, operating Cartel is not so
significant and may not necessarily be an objective of the competition law, in
its stead, emphasis may be laid on the extermination of monopoly, opening up
the cement industry for example, focusing on merger activities, and abuse of
dominance in significant public services such as power, agriculture, shelter,
flood, water and other sectors.
Fourth,
Government’s fettering of competition process must be cautioned by law. Due to
vested interest in the markets, and owing to the outrageous level of greed and
corruption in developing countries, governments seem to protect the producers,
(from where their campaign funds emanate from) instead of the consumers. A
major reason why competition regimes have not seen the light of day in Nigeria
is because the government lacks genuine incentives to create a competitive
environment. Most political office holders, legislative members and other
public office holders have vested interests in the thriving monopolies ranging
from the power sector to the various production industries, water supply and
importation activities. The Federal government needs to provide overall
direction for the development competition in Nigeria. This may include
employing capable personnel in the implementation process.
Fifth, there is
need to intensify on competition law and policy advocacy in the polity about
the benefits inherent in the regime. The markets are perishing due to lack of
knowledge of this importation subject. Even worse is the fact that the
legislature, which is on the front seat to bring to life this budding Bill,
lacks any appreciable knowledge of competition law and policy. It was reported
that one of the reasons why the Federal Competition Bill was not sent for the
second reading was because the National Assembly were of the opinion that the
country already had a consumer protection agency. It is therefore recommended
that a crash course seminar be provided for the public to sensitize them on the
imperatives and benefits of this global trend.
The fact that
competition policy should contribute towards economic development is more or
less an agreed concept, it is largely the barriers to competition that exist
that are sources of apprehension. There is need therefore, for competition
culture to prevail in the whole economy to remove distortions. This should
start at the helm of administration before it can cascade to the consumer.
Political will
turns out to be one of the key factors that determine the success of
implementation of competition policy and laws. If competition law and policy is
to yield all the envisaged benefits, political will and consensus for reform is
a necessary condition.
[1] The
Federal Competition and Consumer Protection Bill
 2015 SB 544
(Executive Bill)
[2] Dimgba.
N. 2008. The Needs and Challenges to the Establishment of a Competition
Law Regime in Nigeria. Ibid. P.4.
[3] Green,
N., Hartley, T.C., Usher, J.A. 1991 Single European Market. Oxford
University Press, New York. P.207. the authors further defined competition laws
as that (which) prohibit undertakings from getting together to fix the prices
they will charge their customers.
[4] Buthe,
T.,2014 The politics of Market Competition: Trade and Antitrust in a
Global Economy. 
Ed. by Martin, L. Oxford handbook of the Politics of
International Trade. Gellorn, Kovacic and Calkins are other authors who have
been persuaded to view the roles and effects of Competition law from the same
perspective. See their book:Antitrust Law and Economy in a Nutshell. 2004. 5th
ed. St. Paul, MN: West Publishing.
[5] Lane, B.
2000. EC Competition Law. Longman, Harlowe et al, P. 6
[6] See the
preamble of the Bill.
[7] Section
1 (a)
[8] Section
1 (b)
[9] Section
1 (c) & (d)
[10] Section
3 (1)
[11] See Section
39 of the Bill
.
[12] Section
48
[13] Section
60, Part viii
[14] See Section
67
[15] Section
67 (1)[a]
[16] Section
67 (1)[b]
[17] Part
IX Section 71
[18] Ibid
[19] Section
73 (1) of the proposed Act list the considerations necessary in decided the
dominance of a firm.
[20] Part
X, Section 77
[21] Section
78
[22] Part
Xii, Section 93
[23] Section
93 (1) [a]
[24] Ibid,
[b]
[25] Ibid
(b)[iii]
[26] See
generally, Section 95.
[27] These
provisions include:
1.    
Empowering the Ministers of Justice and Trade
unregulated powers to interfere with the activities of the Commission’
2.    
‘Tying’ the funds of the enforcement institutions to
the governments account. This shows insecurity of purpose,
3.    
Fusing the goals of the Laws together, without any
direction as to the objectives of the Laws.

Yori Ehimony Junior  

Law Attorney & Antitrust Advisory

Photo Credit – law.ucl.ac.uk