20 April 2016, Lagos – Stakeholders, including civil society groups and the legal community, have berated the Oil and Gas Free Zone Authority (OGFZA) for the establishment of “illegal three Oil and Gas Free Zones”.
They argue that citing Oil and Gas Free Trade Zones in the Warri Port Complex, the Eko Support Service (Lagos) and the Brass Oil and Gas City, (Brass Island) is illegal because the only recognised Oil and Gas Free Zone is the one in Onne (Rivers State) as stipulated in the Oil and Gas Free zone Act of 1994.
They described the arrangement leading to the establishment of the three Oil and Gas Free Zones, as “a brazen disregard for the law of the land.”
A law lecturer at the University of Lagos (UNILAG), Dr. Amokaye Oludayo, told The Nation that the oil and gas free trade zone is a nomenclature created under the Export Promotion Council. What the Export Promotion Council Free Trade Zone implies is that goods coming into that country will be operated without getting into the country, he said.
He said unless a port is categorised, concessioned or declared as oil and gas terminal, it will be illegal for any operator to operate therein as oil and gas terminal, stressing: “In fact, there is nothing like oil and gas terminal.”
Oludayo spoke of companies operating illegally, adding that .the only company that is championing the oil and gas terminal is Intel, that claims, in his words, “that they have the exclusivity to operate oil and gas cargo.
And that issue is being debated by many of the terminal operators,” he said, pointing out that the” nomenclature is unknown.”
He said if the issue was to be resolved, the government must take a holistic view of all the issues involved, including “ relating to claims by one terminal operator that excludes others.
“They have to look into the agreement and the document that created the relationship. It is not by Executive fiat because it is contractual,” warning that if the situation does not change, “the operators will drag government to court and it will hamper maritime operation in the country.”
The Lecturer dismissed Lagos as an oil and gas zone. “Lagos is not part of it, there is no oil and gas pipeline in Lagos. It is not oil and gas zone. Calabar is one of them,” if a company is operating oil and gas in a territory that is not designated as oil and gas, that is illegal.”
Other stakeholders, who declined to be named, alleged that even though these multi billion naira free trade zones were financed 100 per cent by the Federal Government, they remained essentially private projects. They described the situation as unacceptable.
Maritime operators said the approvals allegedly obtained by the Oil and Gas Free Zone Authority for the establishment of the Oil and Gas Zones at Eko Support, in Warri Port Complex and in Brass are illegal, contending that with those approvals, the Onne Oil and Gas Free Zone Authority has vested itself with powers it does not statutorily possess.
They said the Oil and Gas Export Free Zone Act, in Section 1 (1) titled, Designation and Establishment of the Oil and Gas Export Free Zone etc, it was stated categorically that “The President hereby designates the Onne/Ikpokiri area of Rivers State as an Export Free Zone (in this Act referred to as “the Export Free Zone”).
As Oludayo put It: “Going by that Act and until it (the Act) is reviewed, “ the only legally recognized Oil and Gas Export Free Zone is the one in Onne/Ikpokiri. Any other one so designated does not have any legal status and therefore illegal.”
It was, however, learnt that after decree No. 8 of March 29 1996, the Oil and Gas Export Free Zone Authority, established by that Act, has, over the years approved and/or licenced the operations of Eko Support Services on 17th April 2014, Warri Ports Complex as Oil and Gas Free Zone in May 2011, and Brass, which was approved by the Federal Government “to be under the supervision of the Authority, however the date of approval was not indicated.
On its website, www.ogfza.gov.ng,under Our History,the Onne Oil and Gas Free Zone Authority wrote: “The Authority is (also) responsible for registering, licencing and regulating Oil and Gas Free Zone in Nigeria”.
It was learnt that the Authority does not possess the power it is laying claims to on its website. The Act clearly states, under Functions of the Authority, section 5 (1)(b) of the Oil and Gas Export Free Zone Act, it was stated clearly that the Authority has powers to “grant all requisite permits and licences to conduct approved enterprises within the Export Free Zone [which is in Onne].”
In the three sub sections of section 5 where the Functions of the Authority are clearly stated, none gave it the power to licence oil and gas free zones in Nigeria, as it claimed on its website.
Oludayo countered that “from the wordings of that section 5, there is no expression to infer, or any statement to imply that the Authority has the power to register or licence oil and gas free zones outside of Onne,” stressing, “if it (Authority) did that in the past, it is an exercise in illegality.”
He said the power given to the Authority under section 5 (1)(b) is that of granting permits and licences to enterprises that may want to carry out commercial activities at the Onne/Ikpokiri Free Zone. “It was specific and unambiguous,” he stated.