Benefits of paying your tax

Benefits of paying your tax


Nigeria as a country and indeed all socially
responsible and law abiding individuals, groups, organizations and corporate
citizens will derive valuable benefits from imbibing a culture of tax
compliance. The benefits derivable include but are not limited to:

  • Providing
    sustainable finance and funding for governance, public and social services
    and economic development.

  • Promoting
    civic responsibility, patriotism by citizens and social responsibility by
    corporate citizens.

  • Stimulating
    priority social and economic activities and sectors while discouraging
    less preferred ones.

  • Bringing
    about the redistribution of wealth and bridging sharp disparities in
    living standards.

  • Giving
    taxpayers the moral and legal right to demand for (thereby engendering) a
    culture of accountability.

  • Serving
    as a gauge for measuring the level, growth and health of economic units
    and economic activities.

  • Individuals
    and corporate organizations are conferred with definite benefits, rights
    and privileges in the system based on their tax compliance status.

  • Tax
    compliance enables law abiding citizens to avoid the consequences,
    penalties and sanctions of non-compliance.

Ed’s
Note: This article was originally published on the FIRS website here.
  
Tax Legislations & Tax Policy

Tax Legislations & Tax Policy


Tax legislation is the act or process of enacting tax
laws and the body of laws that provide for the levying of taxes and tax
administration.

The following are the existing tax legislation in
Nigeria, as at 2016:

  • Associated
    Gas Re-Injection Act
  • Capital
    Gains Tax Act
  • Companies
    Income Tax Act
  • Deep
    Offshore and Inland Basin Production Sharing Contracts Act
  • Tertiary
    Education Trust Fund Act
  • Federal
    Inland Revenue Service (Establishment) Act
  • Income
    Tax (Authorised Communications) Act
  • Industrial
    Development (Income Tax Relief) Act
  • Industrial
    Inspectorate Act
  • National
    Information Technology Development Act
  • Nigerian
    Export Processing Zones Act
  • Nigeria
    LNG (Fiscal Incentive Guarantees and Assurances) Act
  • Oil and
    Gas Export Free Zones Act
  • Personal
    Income Tax Act
  • Petroleum
    Profits Tax Act
  • Value
    Added Tax Act
  • Stamp
    Duties Act
  • Taxes and
    Levies (Approved List for Collection) Act
  • Casino
    Act
Reviews, amendments and modifications to tax
legislations are continuous, evolving with global best practices and in keeping
with the local socio-economic realities. The review and amendment of tax
legislation is in keeping with the formal tax amendment process as provided for
in the Nigerian constitution.

As a result of the need to continuously review and
amend tax legislation, the following tax laws were amended in the respective
years indicated hereunder:

  • Companies
    Income Tax Act – 2007
  • Value
    Added Tax Act- 2007
  • Personal
    Income Tax Act – 2011
The Petroleum Industry Bill (PIB) is presently before
the National Assembly and when passed into law will replace the Petroleum
Profits Tax Act. In addition, there is an on-going process to overhaul all
existing tax laws and the Service has consequently initiated the Tax Law
Redrafting Project to achieve this.

The Public will be notified as soon as any further
change to any or all of the tax laws is concluded.


Ed’s Note: This article was culled from the website of the Federal Inland Revenue Service and was originally posted here 
How much can Nigerian Pension Funds really spend on infrastructure? by Detail Commercial Solicitors

How much can Nigerian Pension Funds really spend on infrastructure? by Detail Commercial Solicitors

Introduction

Pension funds are a fast-growing and useful asset pool
for funding infrastructure projects in Nigeria. The National Pension Commission
(PENCOM) recently announced that the asset pool made up of contributor’s funds,
and managed by Pension Fund Administrators (PFAs), is currently at N5.3
trillion (Vanguardngr.com, February 22, 2016). 


Nigeria’s infrastructure deficit has been restated by
many writers, policymakers, development enthusiasts and the government. It has
been suggested that the Federal Government of Nigeria (FGN) may use the Pension
Funds to fund this deficit. But the question is, how much of the N5.3
trillion may actually be invested in Nigeria’s infrastructure? This article
seeks to analyse the Draft PENCOM Regulation on Investment of Pension Fund
Assets, 2015 (Regulation) (The latest published Regulation is the 2012 version,
but the 2015 Draft version has been circulated and is expected to be passed
once the PENCOM Board has been reconstituted. It is hoped that this regulation
would be approved by the PENCOM Board in due course) with the aim of arriving
at estimates of how much is realistically available for investment in
infrastructure projects from the N5.3 trillion asset pool.

Investment of Pension Funds in Infrastructure – PFA
Investment Thresholds and Limits 

PENCOM issued the Regulation that established
Investment Thresholds and Limits for Pension Fund Administrators (PFAs). The
Regulation introduced a multi-tiered fund structure in order to match long-term
investments (such as investments in infrastructure) mainly to PFAs which house
long-term funds. Contributions by younger people who are not likely to cash out
their pensions in the near future constitute the pool of long-term funds. On
this basis, the structure distinguishes between Fund types based on the ages of
contributors and levels of permitted risk exposure as follows:


Fund 1 – This is for
contributors who choose more aggressive investments (possibly higher risk and
higher rewards). (The Regulation permits contributors to opt for Fund 1,
provided that RSA retirees or contributors aged 50 and above will not be allowed
to choose Fund 1).
Fund 2 – This fund
category is for contributors aged 49 and below.
Fund 3 – The fund type for
contributors aged 50 and above.
Fund 4 – This is for RSA
retirees.

In line with the principle
of long-term investments matching long-term funds, the multi-tiered structure
proposed by the Regulation has carefully matched majority of the possible
funding for infrastructure with Funds 1 and 2. 

A cursory analysis of the
implications of the multi-tiered fund structure shows the following:

a)      PFAs
are obligated to invest a minimum of 5% of Fund 1 and Fund 2 portfolios, respectively
in infrastructure.

b)     The
Regulation distinguishes between investment in Bonds and investment in
Funds.   

c)      Fund
1 is allowed to invest a maximum of 15% in corporate bonds and a maximum of 60%
in FGN and CBN securities including infrastructure bonds. As regards investment
in infrastructure funds, Fund 1 may invest a maximum of 10% in such funds.

d)     Fund
2 is allowed a maximum 20% in corporate bonds and 70% on FGN and Central Bank
of Nigeria (CBN) securities, including infrastructure bonds. Fund 2 has a
maximum investment of 5% in infrastructure funds. 

e)      Fund
3 and Fund 4 (unlike Fund 1 and Fund 2) do not have a minimum threshold for
investment in infrastructure. This means that Funds 3 and 4 have no obligation
to invest in infrastructure. Fund 3 and Fund 4 may, however, invest in
infrastructure by way of corporate bonds and FGN/CBN securities targeted at
infrastructure. The maximum limits for Fund 3 are 20% in corporate bonds and
80% in FGN & CBN securities; whilst the maximum limits for Fund 4 are 10%
in corporate bonds and 80% in FGN & CBN securities.

f)       The
allowable investment in bonds shows a pattern that seeks to allocate a greater
permissible spend in Bonds which are secured (by FGN and CBN), as opposed to corporate
bonds and Infrastructure Funds.


Infrastructure Wallet
Given the analysis above,
we now come to the core of this article: what is the amount of money (wallet)
that Nigerian PFAs have available for investing in Nigeria’s infrastructure?
There is no simple answer to this question. In the paragraphs below, we will
examine three basic scenarios and arrive at some “back-of-the-envelope
numbers”. These scenarios are based on the following basic assumptions:
a)      Total
funds in PFA portfolios amount to N5.3 trillion;

b)     Fund
1 is currently nil, as contributors have not opted for that option yet;

c)      Fund
2 currently accounts for 77% of the total funds in portfolios = N4.081
trillion; (
Number of
contributors per Fund, obtained from Pension Industry Membership by Demography
as at 31 December 2015)

d)     Fund
3 currently accounts for 17% of the total funds in portfolios = N901
billion; and

e)      Fund
4 currently accounts for 6% of the total funds in portfolios = N318
billion.


SCENARIO 1 – Minimum
Investment
The assumption here is
that PFAs get to invest the minimum of 5% from Fund 1 and Fund 2. If PFAs
simply follow this minimum injunction, the wallet available to PFAs for
infrastructure finance based on the Regulation would be 5% of N4.081
trillion available in Fund 2, which is approximately N204.5 billion.

SCENARIO 2: Maximum Investment in Bonds
The assumption here is
that PFAs get to invest the maximum allowable investment in
infrastructure bonds based on the maximum thresholds discussed above. This would
involve PFAs channeling the maximum of their investment limits on corporate,
FGN 
& CBN bonds and
all such investments as are geared towards infrastructure. This would give PFAs
an infrastructure wallet of N4.9 trillion for infrastructure investments. This
scenario is, however, highly unlikely, as most of the investments under this
category go to fund FGN recurrent expenditure.

SCENARIO 3: Maximum
Investment in Infrastructure Funds
As in Scenario 2 above, the
assumption here is that PFAs get to invest the maximum allowable investment but
in this case, the investment vehicle would be infrastructure funds. 
This would give PFA’s an infrastructure wallet of N204.5
billion for infrastructure investments based on 5% of N 4.081
trillion in Fund 2.

Conclusions
Based on the above analysis, it is clear from the
Regulation that the bulk of pension funds available for infrastructure may be
obtained via FGN and CBN securities and bonds. Therefore, government should
first and foremost focus on FGN secured infrastructure bonds and not on
infrastructure funds. To maximize this benefit, government may need to
recalibrate its utilization of funds accessed via this window – by reducing
utilization for recurrent expenditure and increasing utilization for
infrastructure investment. PFAs simply require a guaranteed return and are not
concerned with how FGN utilises the money.

Secondly, a structure for FGN guaranteed corporate
bonds (floated by project SPVs or FGN entities like the Federal Airports
Authority) on specific infrastructure projects may be explored. This manner of
project enhancement would go a long way to unlock pension funds for
infrastructure projects and reduce the project risk profile.

Thirdly, pricing of the bonds and the repayment can be
addressed in a cohesive manner if PENCOM, by regulation, discounts the return
on investment to the PFAs for instruments targeted at infrastructure. This may
be viewed as a Corporate Social Responsibility gesture.

Fourthly, as soon as the regulations are passed, FGN
and PENCOM should enforce the minimum investment of 5% to incentivize PFAs to
start investing in infrastructure albeit in bite sizes. PFA’s must learn the
ropes with investing in infrastructure projects.
Finally, it would go a long way if FGN proposes a
legislation that creates an infrastructure sinking fund (a given percentage of
future budgetary allocations) to support some of the bonds and project
enhancements. This will definitely improve the risk rating of each project
backed by FGN, and give the investors greater comfort.
Detail Commercial Solicitors is distinct as Nigeria’s
first commercial solicitor firm to specialize exclusively in non-courtroom
practice. Based in Lagos, Nigeria’s business capital, DETAIL is totally
committed to its clients’ business objectives and reputed for dealing with the
minutiae. Email: 
info@detailsolicitors.com

Ed’s Note: This article was originally published on www.detailsolicitors.com via  http://www.detailsolicitors.com/index.phpsection=news&cmd=details&newsid=66


Photo Credit – www.moneychoice.org 

11 Things to know about the Employee Compensation Act by @LawPadi

11 Things to know about the Employee Compensation Act by @LawPadi

NIGERIA’S EMPLOYEE
COMPENSATION ACT

The Employee Compensation
Act was an important piece of legislation passed in order to provide for
employees who were injured, disabled, or died during the course of their
employment. The Act replaced the Workmen’s Compensation Act.

Some of the key features
of the law which Nigerians need to be aware of are:

1.    
The Law was established in order to provide
an open and fair system of guaranteed and adequate compensation for
employees or their dependants for any death, injury, disease or disability
arising out of or in the course of employment. 


2.    
The Law is applicable to all employers and
employees in the public and private sectors throughout the Federal Republic of
Nigeria. 

3.    
The Nigeria Social Insurance Trust Fund
Management Board is empowered to implement the Act and the Fund established
under it. 

4.    
In order to access compensation, the
employee (or his/her dependants) must notify the employer of the
injury/disabling occupational disease/death within 14 days of the occurrence.
The information should include – name of the employee, time and place of the
occurrence, and nature and cause of the disease or injury if known. Failure to
provide the information required is a bar to a claim for compensation (subject
to decision of the NSITF in certain circumstances. 

5.    
The Employer must report this information
to the NSITF Management Board within 7 days of receiving notification from the
employee or his/her dependants. In the case of a death it must be reported
immediately. Failure to make a report is an offence under the Employee
Compensation Act. 

6.    
An application for compensation must be
made by the employee or his/her dependants within one year after the date of
death, injury or disability arising from an occupational accident or disease,
or else the claim will be refused (except if special circumstances for the
delay existed). 

7.    
Any employee who suffers any disabling
injury
 out of or in the course of employment is entitled to
compensation, whether or not it occurred in the workplace. 

8.    
An employee is entitled to payment of
compensation with respect to any accident sustained while on
the way between the place of work and –
  • The employee’s principal or secondary
    residence
  • The place where the employee usually
    takes meals, or
  • The place where he usually receives
    remuneration provided that the employer has prior notification of such
    place.
9.    
An employee is entitled to compensation for
mental stress arising from an acute reaction to a sudden and unexpected
traumatic event arising out of or in the course of the employee’s employment. 

10.                       
In the case of death of the employee,
compensation is paid to the employee’s widow(er) and/or child(ren) on a scale
ranging from 30%- 90% monthly of the employee’s remuneration depending on the
circumstances of the dependants. 

11.                       
Every employer is to make a minimum monthly
contribution of 1% of the total monthly payroll into the Employee Compensation
Fund. 

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Culled from www.lawpadi.com via http://lawpadi.com/11-things-every-nigerian-know-employee-compensation-act/
10 Legal tips for Start-ups by Adedunmade Onibokun

10 Legal tips for Start-ups by Adedunmade Onibokun

It is no news, startups
are springing up in Nigeria faster than we can say “Jack Robinson”. The entreprenual
power, wealth and opportunities in Nigeria are so enormous, the sky is big
enough for everyone to fly and that’s why international companies are breaking
legs just to get a foot in.
Having a startup goes well
beyond having an idea, implementing and executing your business plans and
strategies with adequate legal and commercial advice is another step in making
your business a success. I suggest you pay attention to the following legal
tips as it may be what makes or breaks your business.

Company
Registration
You have a great business
idea and you have picked the perfect brand name for your enterprise. It is
advisable that you register that business name or at least find out if it is
available for registration at the Corporate Affairs Commission before you roll
out your campaign. I have a friend who had picked a wonderful name for his
business and had gone out to print material and represent himself to local and
international clients with the name. He was really upset when informed after
conducting a search at CAC that the name he chose was not available for registration
because the name had been pre-registered. He had to spend so much money
changing his brand and re-introducing the new brand to clients. Therefore,
register your business and secure your brand name as soon as you can.
Share
Capital
Many startups when
allocating shares in their companies sometimes do not provide for investment
shares which can be sold to would be investors. Also, some make the mistake of
having an inadequate share capital for the type of business they are into. For
instance, registering a company with 1 million Naira share capital is fine if
your business catering, however, if you want to start a sport’s betting company
or a tech firm that intends to build phones and other gadgets, your share
capital should be about 30 million.
Post
incorporation matters
After registering your company,
there are a number of post-incorporation obligations which your company must
observe. For instance, filing your tax returns and notifying CAC of any change
in your status. This is why The Companies and Allied Matters Act mandates every
company registered in Nigeria to have a company secretary who is usually a
legal practitioner.
Compliance
Issues
Your industry may be
regulated by government agencies and policies. For instance, if your business
is the making of food and beverages or medicine, it is mandatory that you
obtain a NAFDAC registration number for each product. Also, your business model
may involve certain transfer of technology between countries, in such situation
you will be required to get a license from the
National Office for Technology
Acquisition and Promotion (NOTAP). It is important that you identify the
relevant government agencies involved in your sector and ensure strict
compliance with all policies. Doing otherwise may result in sanctions which may
affect your business badly.
The
consequences for not having your legal house in order can be expensive.
Contracts
Have an ironclad contract
that allows you legal recourse against a client who refused to pay. Also ensure
that your contracts clearly state the rights and obligations of each party to
the contract. This will prevent your company from liability that is unwelcome.
Also carefully peruse the clauses in any agreement before signing them and do
not hesitate to seek legal clarification from a lawyer on any clauses you may
not understand. It is generally advisable to allow a lawyer read all your
contracts as terms may have a different meaning to a lawyer than a lay person.
This will save you millions of naira in the long run and it protects you from
disputes in the future. You need to have something in writing to outline terms
and conditions. This protects both you and the person or company with whom you
are working
Documentation
Documentation is
essential. Taking the time to get your paperwork in order ahead of time pays
off big as your company grows, so make sure that you get all of your initial
legal work correctly pulled together and carefully maintained. This includes
offer letters, confidentiality agreements, option agreements and, most
importantly, your initial customer contracts. It is usually prudent to have an
off-site storage for copies of all your files. In case of loss, this will help
you retain all valuable piece of documentation.
Trademarks
Ensure your register your
patents and trademarks before going into business. Don’t get two years into
your business and then find that you have to change the name of a popular
product or even your entire company because someone has just realized that
you’re using a variant of their name and wants to sue you. This is similar to
ensuring your company name is registered.
Hire
a Trustworthy Lawyer
Retaining the services of
a good and trustworthy lawyer is as important as every other tip for startups.
Your lawyer could be the saving grace that prevents you from making a really
bad company decision. It is also important to educate yourself on legal issues
in your industry. Legal fees could end up being a large upfront investment when
you start your business but the advantages are immense.
Protect
your trade secrets
A trade secret is information,
including a formula, pattern, compilation, program, device, method,
technique or process, that derives its economic value from not being
generally known to the public and is protected by reasonable efforts  to
maintain its secrecy. 
Information such as
customer lists, process methods or other formulas that you’ve developed,
they can be protected as trade secrets as long as you use reasonable
efforts to keep them secret. This could include storing the information in
a password protected place, only disclosing the information on a need-to-know
basis and making sure the information isn’t posted in a public place.
Workplace policies
and procedures
Draft
your workplace policies and procedures to protect your business. In order to
protect yourself, ensure that your polices restrict employee abuse (accessing
restricted websites or sharing confidential information).
Adedunmade
Onibokun

Adedunmade is the Managing
Partner of Adedunmade Onibokun & Co., a corporate commercial law firm
located in Lagos, Nigeria. 
United Nations Convention against Corruption

United Nations Convention against Corruption

Photo credits – www.integritynigeria.com 

In its resolution 55/61 of
4 December 2000, the General Assembly recognized that an effective
international legal instrument against corruption, independent of the United
Nations Convention against Transnational Organized Crime (resolution 55/25,
annex I) was desirable and decided to establish an ad hoc committee for the
negotiation of such an instrument in Vienna at the headquarters of the United
Nations Office on Drugs and Crime. The
Convention approved by the Ad Hoc Committee was adopted by the General Assembly
by resolution 58/4 of 31 October 2003.

In accordance with article
68 (1) of resolution 58/4, the United Nations Convention against Corruption
entered into force on 14 December 2005.  There are 145 signatory countries
to the convention but 178 parties. Countries who are signatory to the Convention
include Afghanistan, Algeria, Austria, Brazil, Canada, Nigeria, China, France,
United Kingdom and United States of America to mention a few.

The Convention requires
countries to establish criminal and other offences to cover a wide range of
acts of corruption, if these are not already crimes under domestic law. Countries
agreed to cooperate with one another in every aspect of the fight against
corruption, including prevention, investigation, and the prosecution of
offenders. Countries are bound by the Convention to render specific forms of
mutual legal assistance in gathering and transferring evidence for use in
court, to extradite offenders. Countries are also required to undertake
measures which will support the tracing, freezing, seizure and confiscation of
the proceeds of corruption.

Countries agreed on
asset-recovery, which is stated explicitly as a fundamental principle of the
Convention. This is a particularly important issue for many developing
countries where high-level corruption has plundered the national wealth, and
where resources are badly needed for reconstruction and the rehabilitation of
societies under new governments. Several provisions specify how cooperation and
assistance will be rendered. In particular, in the case of embezzlement of
public funds, the confiscated property would be returned to the state
requesting it; in the case of proceeds of any other offence covered by the
Convention, the property would be returned providing the proof of ownership or
recognition of the damage caused to a requesting state; in all other cases,
priority consideration would be given to the return of confiscated property to
the requesting state, to the return of such property to the prior legitimate
owners or to compensation of the victims.

Effective asset-recovery
provisions will support the efforts of countries to redress the worst effects
of corruption while sending at the same time, a message to corrupt officials
that there will be no place to hide their illicit assets. Accordingly, article
51 provides for the return of assets to countries of origin as a fundamental
principle of this Convention. Article 43 obliges state parties to extend the
widest possible cooperation to each other in the investigation and prosecution
of offences defined in the Convention. With regard to asset recovery in
particular, the article provides inter alia that “In matters of
international cooperation, whenever dual criminality is considered a
requirement, it shall be deemed fulfilled irrespective of whether the laws of
the requested State Party place the offence within the same category of offence
or denominate the offence by the same terminology as the requesting State
Party, if the conduct underlying the offence for which assistance is sought is
a criminal offence under the laws of both States Parties”.

You can download the text of the convention here
Buhari’s keynote address at the Tackling Corruption Together Conference

Buhari’s keynote address at the Tackling Corruption Together Conference


Read his speech below:

Fellow Heads of State
& Government, The Secretary-General of the Commonwealth, the Rt. Honourable
Patricia Scotland, QC, Business Leaders, Representatives of Civil Society
Organizations, Your Excellencies, Ladies and gentlemen.

1. I am delighted to be
invited to this event to exchange views with you my fellow invited guests
representing Governments, the Private Sector and Civil Society Organizations. I
thank you Your Excellency, the Secretary-General of the Commonwealth, for asking
me to speak at this gathering.

2. Corruption is a
hydra-headed monster and a cankerworm that undermines the fabric of all
societies. It does not differentiate between developed and developing
countries. It constitutes a serious threat to good governance, rule of law,
peace and security, as well as development programmes aimed at tackling poverty
and economic backwardness. These considerations informed my decision to attend
this event as well as the Anti-Corruption Summit organized by Prime Minister
Rt. Hon. David Cameron that will be held tomorrow. I expect that today’s event
would feed into the discussions that will be held tomorrow at Lancaster House.

3. In 2003, when the world
came together to sign the United Nations Convention Against Corruption (UNCAC) that
entered into force in 2005, it was with a view to tackling the growing threat
that corruption had become to many nations. Little did we know that eleven
years since then, the problem would still continue unabated, but even become
more intractable and cancerous.

Excellencies,
4. Permit me to share with
you our national experience in combating corruption. I intend to do this by
placing the fight against corruption in Nigeria within the context of the three
priority programmes of our Administration. On assumption of office on 29th May
2015, we identified as our main focus three key priority programmes. They are,
combating insecurity, tackling corruption and job creation through
re-structuring the declining national economy.

5. Our starting point as
an Administration was to amply demonstrate zero tolerance for corrupt practices
as this vice is largely responsible for the social and economic problems our
country faces today. The endemic and systemic nature of corruption in our
country demanded our strong resolve to fight it. We are demonstrating our
commitment to this effort by bringing integrity to governance and showing
leadership by example.

Excellencies, Ladies and
Gentlemen,
6. Tackling the menace of
corruption is not an easy task, but it is possible even if many feathers have
to be ruffled. Our Government’s dogged commitment to tackling corruption is
also evident in the freedom and support granted to national anti-corruption
agencies to enable them to carry out their respective mandates without interference
or hindrance from any quarter including the government.

7. Today, our frontline
anti-corruption agencies, namely, the Economic and Financial Crimes Commission
(EFCC), the Independent Corrupt Practices and other related Offences Commission
(ICPC), the Code of Conduct Bureau (CCB) and the Code of Conduct Tribunal
(CCT), have become revitalised and more proactive in the pursuit of
perpetrators of corrupt practices, irrespective of their social status and
political persuasion. This is a radical departure from the past.

8. We have implemented the
Treasury Single Account (TSA) whereby all Federal government revenue goes into
one account. This measure would make it impossible for public officers to
divert public funds to private accounts as was the practice before. Through the
effective application of TSA and the Bank Verification Number (BVN), we have
been able to remove 23,000 ghost workers from our pay roll, thereby saving
billions that would have been stolen.

9. We are also reviewing
our anti-corruption laws and have developed a national anti-corruption strategy
document that will guide our policies in the next three years, and possibly
beyond.

10. I am not unaware of
the challenges of fighting corruption in a manner consistent with respect for
human rights and the rule of law. As a country that came out of prolonged
military rule only sixteen years ago, it will clearly take time to change the
mentality and psychology of law enforcement officers. I am committed to
applying the rule of law and to respecting human rights. I also require our
security agencies to do the same.

11. I admit that there are
a few cases where apparently stringent rules have been applied as a result of
threats to national security and the likelihood that certain persons may escape
from the country or seek to undermine the stability of Nigeria. It is for this
reason that we are seeking the support of many countries for the prosecution of
certain individuals residing in their jurisdictions. Of course we will provide
the necessary legal documents and whatever mutual assistance is required to
secure conviction of such individuals, as well as facilitate the repatriation
of our stolen assets.

12. Unfortunately, our
experience has been that repatriation of corrupt proceeds is very tedious, time
consuming, costly and entails more than just the signing of bilateral or
multilateral agreements. This should not be the case as there are provisions in
the appropriate United Nations Convention that require countries to return
assets to countries from where it is proven that they were illegitimately
acquired.

13. Further, we are
favourably disposed to forging strategic partnerships with governments, civil
society organizations, organized private sector and international organizations
to combat corruption. Our sad national experience had been that domestic
perpetrators of corrupt practices do often work hand-in-hand with international
criminal cartels.

14. This evil practice is
manifested in the plundering and stealing of public funds, which are then
transferred abroad into secret accounts. I therefore, call for the
establishment of an international anti-corruption infrastructure that will
monitor, trace and facilitate the return of such assets to their countries of
origin. It is important to stress that the repatriation of identified stolen
funds should be done without delay or preconditions.

15. In addition to the
looting of public funds, Nigeria is also confronted with illegal activities in
the oil sector, the mainstay of our export economy. That this industry has been
enmeshed in corruption with the participation of the staff of some of the oil
companies is well established. Their participation enabled oil theft to take
place on a massive scale.

16. Some of us in this
hall may be familiar with the Report released by Chatham House, here in London,
in 2013, titled “Nigeria’s Criminal Crude: International Options to Combat the
Export of Stolen Oil.” The important findings of the Chatham House document are
illuminating and troubling. Part of the Report concluded that:

a) Nigerian crude oil is being stolen on an industrial scale and exported, with
the proceeds laundered through world financial centres by transnational
organized criminals.

b) Oil theft is a species of organized crime that is almost totally off the international
community’s radar, as Nigeria’s trade and diplomatic partners have taken no
real action.

c) Nigeria could not stop the trade single-handedly, and there is limited value
in countries going it alone.

17. It is clear therefore,
that the menace of oil theft, put at over 150,000 barrels per day, is a
criminal enterprise involving internal and external perpetrators. Illicit oil
cargoes and their proceeds move across international borders. Opaque and murky
as these illegal transactions may be, they are certainly traceable and can be
acted upon, if all governments show the required political will. This will has
been the missing link in the international efforts hitherto. Now in London, we
can turn a new page by creating a multi-state and multi-stakeholder partnership
to address this menace.

18. We, therefore, call on
the international community to designate oil theft as an international crime
similar to the trade in “blood diamonds”, as it constitutes an imminent and
credible threat to the economy and stability of oil-producing countries like
Nigeria. The critical stakeholders here present can lead the charge in this
regard.

Excellencies, Ladies and
Gentlemen,
19. By the end of our
summit tomorrow, we should be able to agree on a rules-based architecture to
combat corruption in all its forms and manifestations. I agree fully with the
Commonwealth Secretary-General that anti-corruption is a shared agenda for
civil society, business and government, requiring commitment from companies,
creating a space for civil society and governments providing support for
whistle-blowers.

20. A main component of
this anti-corruption partnership is that governments must demonstrate
unquestionable political will and commitment to the fight. The private sector
must come clean and be transparent, and civil society, while keeping a watch on
all stakeholders, must act and report with a sense of responsibility and
objectivity.

21. For our part, Nigeria
is committed to signing the Open Government Partnership initiatives alongside
Prime Minister Cameron during the Summit tomorrow.

22. In conclusion, may I
commend the Commonwealth Secretary-General and her team for hosting this
important event. This is a very encouraging way to start your tenure. We wish
you the very best as you guide the affairs of the Commonwealth family in the
years to come.

23. I thank you.

culled from www.pmnewsnigeria.com 
The Obembe’s Clog in the Wheels of Arbitration Law in Nigeria by Kayode Omosehin

The Obembe’s Clog in the Wheels of Arbitration Law in Nigeria by Kayode Omosehin

Photo Credit – www.arcmediation.com 
Preliminary View

One of the few cases in
which a controversial pronouncement has ever been made by the Nigerian courts
arbitration-related disputes, the case of Obi Obembe v. Wemabod Estates
Ltd. (1977) All NLR 130
 takes the prize. It is relatively the oldest
decided case on the right of a defendant to insist that a dispute in respect of
an agreement containing arbitration clause must be referred to arbitration. In
the Obembe case, no earlier Nigerian case was cited or relied upon.
It appears to be the oldest judicial precedent on when a defendant can
rightfully request that parties to a judicial proceedings be referred to
arbitration in accordance with their agreement.


The Facts
The case was filed at the
High Court of Lagos State in 1971 and constituted in Suit No. LD/85/71.
The dispute arose from the wrongful termination of the plaintiff/appellant’s
(“appellant”) appointment as a consulting engineer. The appellant’s claim was
based partly on the scale of fees laid down in a booklet published by the
Association of Consulting Engineers in London (Exhibit 3). The respondent
defended the suit and did not file any motion for stay of proceedings even
though clause 17 in part 11 of Exhibit 3 contained reference to arbitration in
case of dispute. The suit went to trial and judgment was delivered upon
conclusion of trial.

The Decision by the Trial
Court
In the judgment of the
High Court delivered on 28th September 1973, the appellant’s case was dismissed
on the ground that the appellant did not prove his case as he did not lead any
evidence or put in any document to support his case. However, the judge went
further to observe that
“Had I been in a position
on the facts to find any of the plaintiff’s claims proved I would have been
unable to enter judgment in his favour in view of the Arbitration Clauses 17 in
part 11 of Ex. 3 at page 37 which the parties had agreed would govern their
contract.”

The Appeal to the Supreme
Court
Being dissatisfied with
the judgment of the High Court of Lagos State, an appeal was lodged to the
Supreme Court. The Supreme Court (consisting of Fatayi-Williams, Bello and
Obaseki J.S.C.) held that the lower court was in error to have dismissed the
appellant’s case and consequently held as follows: “For the above
reasons, the appeal succeeds but only in respect of that part of the judgment
of the trial judge dismissing the plaintiff/appellant’s claim for resident
supervision by his engineer.”

In the said judgment of
the Supreme Court, Fatayi-Williams CJN made a general statement that has now
generated confusion in the state of the Nigerian law of arbitration. Mr.
Kehinde Shofola (now SAN), Counsel to the Appellant had raised issue regarding
the learned trial judge’s observation about the failure of the appellant to
submit his claim first to arbitration before coming to court. The learned
counsel contended that arbitration clauses fall into two classes. In one class,
the provision for arbitration is a mere matter of procedure for ascertaining
the rights of the parties with nothing in it to exclude a right of action on
the contract itself, but leaving it to the party against whom an action is may
be brought to apply to the discretionary power of the court to stay proceedings
in the action in order that the parties may resort to the procedure which they
have agreed. In the other class, arbitration followed by an award is a
condition precedent to any other proceedings being taken, any further
proceedings then being, strictly speaking, not upon the original contract but
upon the award made under the arbitration clause.

In agreeing with Mr.
Sofola, the Supreme Court held that the facts of the case fit into the first
category stated in Mr. Sofola’s submission. The Supreme Court therefore held at
page 140 of the law report that the arbitration agreement did not oust the
jurisdiction of court and that either party to the agreement in dispute can,
before a submission to arbitration or an award is made, commence legal proceedings
in respect of any claim or cause of action included in the submission. The
Supreme Court thereafter held that it was erroneous of the learned trial judge
to observe as he did that even if the appellant had proved his case, he (the
trial judge) would have been unable to enter judgment in the appellant’s
favour. The conclusion of the Supreme Court, as can be gleaned from page 141 of
the law report, was based on the fact that;



 “No stay was asked for by
the defendants/respondents after they were served with the writ of summons. On
the contrary, they accepted service of the statement of claim, filed their own
statement of defence, testified in their defence, and took part in the
proceedings until judgment was delivered. In order to get a stay, a party to submission
must have taken NO step in the proceedings”.

Where the Supreme Court
Went Wrong in Obembe’s case
His lordship,
Fatayi-Williams CJN who delivered the judgment of the Supreme Court said at
page 141 of the law report that: “In order to get a stay, a party to
submission must have taken NO step in the proceedings. A party who makes any
application whatsoever to the court, even though it be merely for application
for extension of time, takes a step in the proceedings. Delivery of a statement
of defence is also a step in the proceedings.” 
(Emphasis mine) The
underlined statement has worked great hardship and injustice in the
administration of arbitration law in Nigeria.


There is nothing in the
facts of the Obembe’s case to justify the pronouncement made by
Fatayi-Williams CJN. An application for extension of time could be for many
purposes including to enter a conditional appearance, challenge jurisdiction,
etc. Under Nigerian law, entering of appearance is not and cannot be a bar to
the right of the defendant under Section 5 of the ACA to insist on referring a
dispute to arbitration. See Confidence Insurance Ltd. v. The Trustees
of Ondo State College of Education Staff Pension (1999) 2 NWLR (Pt. 591) 373 at
386-387 paragraphs C-G. 
 It is a bit of a stretch of the law to
pronounce, as Fatayi-Williams JSC did, that any application whatsoever (even
though it be merely for extension of time) constitutes “taking steps” in a
proceedings.
With due respect, the Obembe case
is not a valid authority for an issue on whether a party has taken steps in a
judicial proceedings. This is because the issue was not canvassed in the case
at the High Court from where the appeal culminated to the Supreme Court. The
portion of the judgment of the High Court touching on arbitration and taking
steps in the judicial proceedings was a mere observation made by the way in the
judgment of the trial judge. The said observation was made suo motu and obiter.


Interestingly, the High
Court judge had observed in his decision as follows: “Had I been in a
position on the facts to find any of the plaintiff’s claims proved I would have
been unable to enter judgment in his favour in view of the Arbitration Clauses
17 of Exh. 3 at page 37 which parties had agreed would govern their contract.”
 The
foregoing observation of the High Court judge, in my respectful view, is an obiter
dictum
 as it did not form the basis of the trial court’s dismissal of
the appellant’s case. Obiter dictum is of no legal consequence
in the Nigerian legal system though it may carry considerable weight if it
emanates from the Supreme Court.


In view of the foregoing,
the ground of appeal complaining against the said observation, the
determination of which culminated into the pronouncement of Fatayi-Williams
CJN, ought to have been struck out for being incompetent as the ground of
appeal complained against an obiter and not against the ratio
decidendi
. The law is trite that it is only against the ratio
decidendi
 in a judgment and not anobiter dictum that an
appeal (if any) can be lodged. The Supreme Court in A.I.C. LTD V. NNPC
(2005) 22 NSCQLR 903, at 925 (2005) 5 SC (PT. 11) 60
 definedratio
decidendi
 and obiter dicta as follows: “The
ratio decidendi of a case represents the reasoning or principle or ground upon
which a case is decided. Obiter simply means in passing, incidental, cursory.
Obiter dicta reflects, inter alia, the opinions of the Judge, which do not
embody the resolution of the Court.”


The ground and issue
formulated by the appellant in the Obembe case in respect of
the observation made by the trial judge ought to have been struck out by the
Supreme Court for being incompetent. Failure to strike out the erroneous ground
and the issues consequently led to the undoubtedly erroneous pronouncement by
Fatai-Williams CJN that “A party who makes any application whatsoever
to the court, even though it be merely for application for extension of time,
takes a step in the proceedings”
. Consequently, the pronouncement of
Fatayi-Williams CJN is not a statement of the law, rather it was a
pronouncement made from the Supreme Court’s needless determination of a ground
of appeal complaining against an obiter dictum. It was a profligate
use of judicial time for a needless cause.


In Chami V. UBA
Plc. (2010) 6 NWLR (PT. 1191) 474 at 493 Paragraphs E- F
, the Supreme Court
made the point so clear that grounds of appeal must attack only the ratios in
a judgment, when it was held thus: “It is settled law that issues
for determination must be distilled from Grounds of Appeal which Ground(s) must
attack the ratio decidendi of the judgment not anything said by the way, or
obiter dicta or be formulated in vacuo, as issue 5 in the instant case.”
 It
is therefore my humble view that the pronouncement of Fatai-Williams CJN was
made per incuriam which ought to be overruled or jettisoned by
a subsequent panel of Supreme Court. It is not enough to distinguish cases from
the Obembe’s case in order to avoid the shackles of judicial
precedent (as in Fawehinmi Construction Co. Ltd. v. O. A. U [1998] 6 NWLR
(Pt. 553) 171)
, the Obembe’s case needs to be overruled.


In line with the power of
the Supreme Court to depart from or overrule its previous where it is shown or
demonstrated that the earlier decision is either erroneous in law, or given per
incuriam
 or that it has become an instrument of injustice or where the
decision complained of hinders the proper development of the law (e.g. the law
of arbitration), it is therefore my humble submission that the decision in Obembe case
should be overruled by another panel of the Supreme Court not for the hardship
or injustice that it creates but also for being a major impediment to the
development of arbitration law in Nigeria. See Veepes Industries Ltd vs
Cocoa Industries Ltd (2008) ALL FWLR (Pt.425) 1667 at 1687; Bakare v. NRC
(2007) ALL FWLR (Pt.391) 1663
 It is useful to note
that the referenced decision was delivered by the Supreme Court at the time
when there was no what is today known as the Court of Appeal. All appeals from
the High Court then were entertained by the Supreme Court which consisted of
panel of justices still trying to appreciate the concept of arbitration. At the
time, all appeals from the Supreme Court went to the Privy Council consisting
of English Justices. Now, Nigerian legal system has evolved and our judicial
policy cannot in 2016 be such that stultifies alternative dispute resolution
mechanisms.




CONCLUSION
If the arbitration law
must be seen to be developing in Nigeria, Obembe’s case must be
overruled or corrected by an amendment of the Arbitration and Conciliation Act
to allow more discretion to local courts to ensure parties resolve their
dispute by agreed alternative resolution method. Also, local court should be
more inclined to granting stay of proceedings for the purpose of arbitration
than refusing it. It is said that in keeping with the informality of the
arbitration process, the law is generally keen to uphold the validity of
arbitration clauses even when they lack the normal formal language associated
with legal contracts. The fact that both parties have expressed intention to
arbitrate their dispute should weigh heavily in the mind of the deciding judge
in granting stay of proceedings. See the case of SINO-AFRIC AGRICULTURE
& IND COMPANY LIMITED & ORS v. MINISTRY OF FINANCE INCORPORATION ANOR
(2013) LPELR-22370
. The grounds for refusing a motion for stay ought to be
very compelling, and the onus should rest always on the party opposing
resolution of the dispute by arbitration. In the absence of any binding
authority, the right to seek a stay of proceedings should only be lost upon
service of a substantive defence on the merits as held in the case of Usi
Enterprises Limited v. Kogi State Government (2005) 1 NWLR Part 908 page 494 at
516
. A mere application for adjournment to enable the defendant file
defence should not constitute taking steps if the defendant
thereafter applies for stay of proceedings rather than file defence. This
approach will be consistent with our declared intention to encourage and
entrench arbitration as an alternative dispute resolution in Nigeria.


The fact that a defendant
makes an objection to the court’s jurisdiction on ground of an invalid
originating process or service objection (while reserving his right to request
stay of proceedings under Section 5 of the ACA) should not amount to taking
steps merely because the defendants brings an application for stay much later
after the initial jurisdictional objection. This much was made very clearly inFawehinmi
Construction Co. Ltd. v. O. A. U [1998] 6 NWLR (Pt. 553) 171 at page 184
 thus:




“When party has a right
whether by way of agreement or under statute he can exercise it at the earliest
time and can equally waive it if the statutory right is not absolute and
mandatory. The waiver must be clear and unambiguous like allowing all evidence to
be taken or even decision given before challenging the hearing. It will then be
shown that the party, deliberately refused to take advantage of the right when
it availed him. Such failure to take advantage of a right must be so clear that
there will be no other reasonable presumption than that the right is let go.
The preliminary skirmishes in this case at the trial Court could not by any
imagination be presumed to be a waiver. The defendant had not filed his
statement of defence and service of the statement of claim on it is certainly
not a waiver by it. Had it filed a statement of defence but with indication
that the preliminary objection will be raised that the suit was not properly
before the Court, it would not (sic) have been a waiver.”


Also, the mere inclusion
of a prayer to set aside a subsisting injunctive order in addition to a prayer
for stay of proceedings in the same motion paper should not be regarded as
having taken steps in the proceedings. See the case of Williams vs
Williams & 3 Ors. (2013) 3 CLRN 114
. The steps that a
defendant is alleged to have taken in a judicial proceeding to defeat his right
to arbitration must be so clear and positive as to constitute a waiver of his
right to insist on the resolution of the dispute by arbitration. The steps must
be inconsistent with an application for reference to arbitration.
Downsizing and its latent implications by Aloaye David Gibiri

Downsizing and its latent implications by Aloaye David Gibiri

Companies seeking to
effect organizational through the medium or process of downsizing may find that
the means to such an end may be flawed, causing more harm than doing any good.

Downsizing is the process
of reducing staff numbers and/or divisions of a company and has been a
widespread change practice since the 1970s. Fortune 500 companies have been
recorded to have cut back on their collective workforce by 1,040,466 in 2001
alone. Reasons for engaging in this change process range from restructuring,
cost cutting or savings, selling of a business unit, increasing productivity or
responding to external pressures such as recessions or economic down turns.


Share prices may rise with
such an announcement for publicly traded companies, but then often fall,
trading at or below market over a two year period. This action can have further
social and psychological effects on employees – especially on those who remain.
A number of these scenarios occur during downsizing exercises and others
afterwards, perhaps immediately after or over time, precipitating inefficiency
and low productivity. There are negative consequences of downsizing, some of
which are:
1.    
Political gaming and lobbying increases
during downsizing in order to retain positions, sometimes at the overall
expense of the organization.

2.    
Employees unscathed by the exercise may
doubt their future in the company which could impact on productivity
negatively.

3.    
Core competences could be lost or
underutilized because they were linked to people who were lost in the
downsizing.

4.    
Reduction in morale and guilt feelings as
retained employees attempt to validate/justify their own retention, wondering
if they may become victims of future downsizing.

5.    Non-selective and unplanned downsizing
could call into question the necessity and effectiveness of the overall
exercise which could strain employer-employee relations.

6. Disruption of informal networks and
subcultures that exist in all organizations previously drawn upon to implement
organizational work.

Downsizing in of itself
will not necessarily lead to gains in productivity where it is not associated
with other changes in business strategy and as such organizations embarking on
such a change exercise must ensure that the benefits outweigh the costs which
should be beyond only pure financial motives as managing retained employees
presents its own challenge and could undo the original intent of the act.

Ed’s Note: This article was initially posted by the author via this link https://www.linkedin.com/pulse/downsizing-its-latent-implications-aloaye-david-gibiri?trk=hb_ntf_MEGAPHONE_ARTICLE_POST (Last visited on 11/10/16)