Court stops Pres. Jonathan from signing amended Oil & Gas Bill

President Goodluck Jonathan.

President Goodluck Jonathan.

20 May 2015, Sweetcrude, Houston – A Lagos Federal High Court, on Tuesday, restrained President Goodluck Ebele Jonathan, from assenting to the bill for an Act to amend the Oil and Gas Export Free Zone Act.

The court presided over by Justice Saliu Saidu also restrained the National Assembly, the Clerk of the National Assembly from forwarding the Bill for an Act to Amend the Oil and Gas Export Free Zone Authority Act. Cap. 05 to President Jonathan for Assent.

The court also restrained the defendants their agents and privies from prohibiting the usage of the plaintiffs’ facilities at Snake Island Integrated Free Zone for Oil and Gas cargoes destined for use in the free zone.

The order was sequel to a motion ex-parte, in a suit number FHC/L/CS/719/15, filed before the court by Professor Olanrewaju Fagbohun, on behalf of Nigerdock Nigeria Plc, SIMCO Free Zone Company and Nigerdock Nigeria Plc-FZE, who are plaintiffs in the suit.

The court presided over by Justice Saliu Saidu also restrained the National Assembly, the Clerk of the National Assembly, the Attorney-General of the Federation, Minister of Industry, Trade and Investment, the Honourable Minister of Transport, and the Nigeria Ports Authority.

The Plaintiffs in an affidavit sworn to by Yusufu Abdullahi, a director of SIMCO Free Zone Company, the deponent averred that Nigerdock Nigeria Limited is a promoter of Snake Island Integrated Free Zone, SIIFZ, and that the SIMCO is a company saddled with the responsibility to develop, market, manage, operate, and administer SIIFZ.

The deponent averred that SIIFZ was approved as a privately owned and managed Free Zone by Presidential declaration in January 2005, was duly licensed by the Nigeria Export Processing Zones Authority, NEPZA, in April 2005. He added SIIFZ is operated by SIMCO Free Zone Company, under the direct supervision and monitoring of NEPZA. He added that other regulatory agencies such as Nigeria Ports Authority, NPA, Nigerian Customs Service, NCS, the Nigerian Immigration Service, NIS, the
Nigeria Police Force, NPF, and State Security Service, SSS, are present within SIIFZ to ensure due compliance with all laws and that appropriate security is maintained.

Abdullahi also averred that at privatization, one of the representations that the federal government as beneficial owner made to the core investor who purchased the federal government share in the Nigerdock Nigeria Plc was that the federal government shall take all necessary steps to co-operate fully with the purchaser to ensure that the purchaser obtains all benefits under Nigerian Law as a strategic Core investor in the company.

He averred that in November 2014, the plaintiffs became aware that a Bill for An Act to Amend the Oil and Gas Export Free Zone Authority Act, Cap. 05, Laws of the Federation of Nigeria, has been presented to the Senate of the national Assembly.

And that the plaintiffs were not invited to the Public hearing that the Senate of the national Assembly had in respect of the Bill. Notwithstanding, he stated that the plaintiffs submitted a petition to the Senate when they became aware that a public hearing had been conducted. He added that the petition was aimed at sensitizing the Senate on how the amendment will negatively undermine the plaintiffs and violate their constitutional rights.

The deponent averred that Section 5(3) of the Bill seeks to expand the powers of OGFZA such that it can without further assurance take over and perform the functions hitherto performed by NEPZA. While Section 10 of the Bill further seeks to confer the rights to handle oil and gas cargoes only at approved oil and gas concessioned ports, with freedom to investors to choose ports of discharge of their cargoes within designated terminal at Onne, Warri and Calabar ports.

He stated that the Bill did not define what constitute “oil and gas related cargoes”. And that this will give room to situations where cargoes intended for SIIFZ are wrongly classified as oil and gas relates cargoes.

The deponent further averred that, it is a known fact that a total of twenty-four ports were concessioned to private investors, with 14 and 10 in the western and eastern zones of Nigeria Ports Authority respectively. And that only one of the ports Concessionaires, Integrated Logistic Services Limited, INTELS, operates in Warri, Onne and Calabar ports. And that the amendment proposed in Section 10 will confer a right of monopoly only in INTELS, which he said will be to the detriment of other port Concessionaires and free Zones.

He stated that there are indications that the Senate has passed the Bill and is seeking to hurriedly present same to President Jonathan for assent. He added that the hurried passage of the proposed Bill is meant to foist a situation of fait accompli on the incoming administration of the Federal level, and that unless the defendants are restrained by the court, the defendants will confer an undue advantage on ports being proposed to be designated as oil and gas Free Zone, and divert traffic from the Free Zone and Port Development operated by the plaintiffs with devastating social and economic consequence.

Justice Saliu Saidu has adjourned till May 26, 2015, for hearing of originating summon of the suit.

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