'Implementation of new presidential directives will break monopoly’

Professor Fidelis Oditah (SAN), is the President of Nigerian Branch of the International Law Association. In this interview with selected journalists, including WALE OLAPADE, speaks on the presidential directive, its enforcement, monopoly of oil and gas logistic services among other issues.
MONOPOLY is an issue that the Seaport Terminals Operators of Association of Nigerian, STOAN has openly objected to for some time, with the new presidential directive, would you say, they are pacified?
I do not know that there is a presidential directive that says monopoly should go. I think the presidential directive said many things. First of all, that general practice is to categorise ports and terminals to bulk cargo and multi-purpose. There is no such thing as categorization according to cargo. If I say this is the cocoa port or oil and gas port; that is what President Jonathan tried to do. I think he was misled by trying to designate particular ports for oil and gas. By doing that you are trying to designate ports and terminals according to the cargoes that arrival there, which can only distort competition.
Apart from that, if you take a step back, in 2006, the Federal Government entered into 25 concessions on the basis that some were going to be bulk terminals, others were going to be cargo terminals and there will be multi-purpose terminals. There was no provision for oil and gas or cocoa or Arabic gum or cashew nut; there was simply no categorization based on the type of cargo arriving. What that meant was that it enabled concessionaires to invest monies in developing infrastructure along their coastal belt. And also allowed them make projections as to what types of returns you get. It wasn’t based on a particular type of cargo. They signed agreements which were binding, telling them they could receive cargoes. If you are a multi-purpose terminal, for example, you could receive every cargo. For someone to turn round after signing in 2006; and then in 2015, someone turns round and says to you, all oil and gas cargo must go to Onne or Calabar or Warri, it creates many problems. First, it distorts competition. I suppose that is why people talk about monopoly.
The attempt to monopolise oil and gas cargo is wrong. It goes against all the principles underpinning procurement law. The whole essence of public procurement is that you procure your services on a competitive basis, transparent basis and promote competition on a level playing field. That is the only way that users of the facilities or services will get value for money. If you are a monopoly, you can charge whatever you like. That is the first problem.
The second problem is that while distorting competition in that way, it means that some of those who had invested and borrowed money to invest (because people don’t have all these monies sitting idle waiting to be deployed), will not be able to repay their loan and then they become insolvent just because of one person’s desire to monopolise the entire business, especially in an oil and gas dependent economy like this. If the economy were very diversified, perhaps people will not be too hung-on.
Thirdly, the attempt (to monopolise) also impacts on job creation. These terminal operators and concessionaires all have employees and they generate direct and indirect employment. When you kill them off by concentrating all the business in one person who you call a monopoly-oil and gas terminal, it simply means that the local economy suffers because people who were employed will be laid off. Whereas by allowing free competition people are able to plan. That is part of the problem in Nigeria and many developing countries-the inability to plan because governments keep changing their policy. This is something that is capital intensive. You need to take a five-year view and you borrow money and invest on the basis of five to ten years. Then one government comes two years along the line and says we don’t want it, XYZ company should now be the only one doing it, how do you repay your loan?
Then when you are talking to government officials, it is like you are talking to a wall. They say, ‘I am directed to’. That is the language of the civil service. Nobody takes responsibility. They are always directed to and they cause a lot of difficulty.
What interest would that serve?
I think for them, they probably think that by opposing the withdrawal of our case, they can then go back to the government and say that LADOL has not complied with one of the terms with which the government reversed the policy. That must be it.
But your willingness to discontinue the case is apparent?
We have filed. It is not a question of it being apparent. We have filed a notice of discontinuance, which is the normal process when you want to get out of a case, you file a piece of paper, giving notice that you want to discontinue your claim completely or you might file and say you want to withdraw against a particular individual. In this case, we are not withdrawing against an individual, we want to discontinue the whole case. When we were in court recently, they said the judge shouldn’t grant the order because they were going to file something. You can see the monopoly fighting back, just like corruption fights back. It is very shameful. We would have thought that the policy which the government communicated recently would encourage investment and improve port infrastructure, create competition in the sector. And competition is always good for the consumers. It improves product quality, service quality and reduces cost.
What do you think made government to take the step of issuing this new policy directive to reverse the monopoly?
I think the government reaction is a response to a number of pressures. It is not just Ladol. There is also the STOAN. There is Snake Island. There is Julius Berger-a number of stakeholders who were ostracized by the Jonathan administration. When we got the injunction, one of the calls I got was from Shell. They were very happy because that you are subjecting everyone to use just one company in the procurement of particular logistic services seems to be wrong. There were lots of pressures. And lots of petitions were written by everyone. There were several meetings by stakeholders held by the Minister of Transport in February last year in Lagos. In March, last year in Abuja, we sent someone from my chambers to attend both meetings. Following that the Minister of Transport advised the government, but also NPA sent its own letter to the government explaining its own position. Then the government took its own internal steps in the light of agitations, in the light of advice that it had received from the Minister for Transport, Minister for Industry, the Attorney General and the NPA. You have to remember that the long standing government policy under President Obasanjo and under President Yar’Adua was that importers should be free to choose where to go to. It was some corrupt people that tried to change that. That had been in existence all along right up to 2014 when the President in January of that year reversed it and then in February under further pressure reversed himself, which then created uncertainty.  It wasn’t clear whether he was reinstating the pre-Jonathan position or whether he was maintaining the Jonathan position. It was a confusing situation. And it was very unfortunate. Why as a President should you try to reverse what your predecessor did in January, 2014 and then a few weeks later, early February, 2014, you say my last memo should not be implemented until further notice. Then on the 20th of April, 2015, having lost the election and knowing that you were on your way, you go back and say that my memo that I said you shouldn’t implement, I now want to implement it. I think it was just most unfortunate. What you must not do in the twilight of your administration if you find yourself in the position that Jonathan found himself was to leave the status quo as it was. It was clear that if he as the president had lived with that policy for five years, there cannot be any imperative that was strong enough to dictate a change so late.
You must be happy with the Acting President for issuing some new directives that are supposed to make the business environment more friendly?
Of course, I love those three policy guidelines, especially the one about the default approval that says if the period for saying no has passed, then it is deemed to be yes. It is fantastic. I hope they can follow it up. The biggest problem we have in this country is the civil or public service. Given the size of the public service that is very incompetent, very corrupt, very inefficient, how do you deliver public services? You don’t even know where incompetence ends and corruption begins. As a Nigerian, we have to be reasonably positive to believe that these changes and policy initiatives will provide something good, at least in the short term. I want to believe that in the short term, there will be some initial response which will help the ease of doing business in Nigeria. Provided that will is sustained. My fear is that Nigeria as a nation has shown very little capacity or willingness to enforce anything; so where would they suddenly have capacity or willingness to enforce this new initiative? We have laws and policies, but who is going to enforce? It is the same civil servants, who will find some kind of justification for not enforcing it. You want to retire someone who is very well connected and suddenly you get a call from the presidency telling you to hands off. That is the end.