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‘Regulations have force of law under Interpretation Act 1964’

By Joseph Onyekwere
21 May 2019   |   4:25 am
It is true that policies lack the force of law. However, regulations are subsidiary legislations and have the same force of law as their principal...

Etomi

Mr. George Etomi is a distinguished transaction lawyer regularly consulted by multinational companies and top government agencies. He was closely involved in acting for the first mobile telephone service in the country and advises major foreign airlines operating in Nigeria.

He has extensive experience in commercial transactions, spanning arbitration and other ADR methods, aviation, building and construction, banking and finance, energy and natural resources. He has represented clients on a variety of corporate and commercial matters including public and private offerings, privatisation and major project finance transactions.

Etomi, who holds Master’s degree of law from London School of Economics also has a special interest in the energy and natural resources field and is a member of Centre for Petroleum Law Research [CPLR]. He has worked over the years with numerous multinational oil companies. In the power sector, he supported investors during the acquisition and concession of successor companies in the Nigerian privatisation process. He provided high-level legal advisory services to the government and core investors throughout the several stages of the privatisation process.

He is a director on the board of one of the top performing utilities in Nigeria where he serves as the chairman, legal, Corporate Governance and Regulatory Affairs Committee.

Etomi is the first past chairman of the Nigerian Bar Association, Section on Business Law and recently, the Nigerian Institute of Advanced Legal Studies named a centre after him: “The George Etomi Centre for Strategic Investment and Corporate Governance”. He has also been given a professorial chair at the institute. In 2016, Etomi was appointed a member of the Body of Benchers, the highest regulatory body of the legal profession in Nigeria. He is a regular facilitator at global business conferences.

There is no argument about the fact that the Petroleum Industry Bill (PIB) is one of the longest legislations at the Nigerian National Assembly. PIB became imperative given that the laws guiding the nation’s oil and gas industry have become opaque and outdated. But that bill just could not be passed due to political considerations for years. Consequently, the lawmakers decided to break the bill into parts. Despite this, the federal government has to introduce policies and regulations to oversee activities in the sector. But some stakeholders are insisting that policies and regulations cannot substitute for laws. A distinguished transactional lawyer, Mr. George Etomi, in this interview with Assistant Editor, Law and Foreign Affairs, JOSEPH ONYEKWERE, thinks differently. He believes that the regulations as subsidiary legislations enjoy the same force of law as principal legislations.

Some experts in the oil and gas sector strongly believe that since policies and regulations lack force of law, emphases on those are misplaced. What do you think of that?
It is true that policies lack the force of law. However, regulations are subsidiary legislations and have the same force of law as their principal legislations according to the Interpretation Act, 1964. Therefore, we are of the view that policies form the basic framework for legislation and as such, a forecast analysis on the impact of the policies is not misplaced. This is imperative to inform and guide players in the oil and gas industry on the long-term vision of the government vis-à-vis their present business plans. Similarly, since regulations give effect to principal legislations on specific areas of operation within the industry, discussions around critical regulations is pertinent because of its direct impact on industry stakeholders.

How can we inspire confidence and attract foreign direct investment in the oil and gas sector with only policies?
Policies are intended to demonstrate the broad overview of the government’s long-term aspirations for the oil and gas sector. It is agreed that policies alone do not translate to increased foreign direct investment in the sector. Therefore, the creation of an enabling business environment, which is mirrored by the enactment and implementation of legislations are required to drive investor buy-in and attract investments to the sector.

Agreed that the main way out of the problem is to have a law in place, to what extent are stakeholders prepared to push to get parts of the Petroleum Industry Bill (PIB) passed into law by the 9th National Assembly?
It should be noted that stakeholders in the sector have been actively involved in the lobbying process for the PIB since its inception. The aim of the 3rd Lawyers in Oil and Gas Conference was to sensitize and garner strategic efforts of lawyers to lobby for the passage of the PIGB by the 9th National Assembly. It is expected that this would form the framework for aggregating a pool of lawyers within the sector to push not only for the passage of the law but its implementation which would drive the long awaited reforms in the sector. It is also suggested that other coalitions be formed for the purpose of addressing any bottlenecks, which may arise in the process of ensuring the quick passage of the bill into law.

In the area of power, why is constant electricity supply elusive to Nigeria, despite the privatization of the sector?
There are several factors responsible for the absence of constant electricity supply in Nigeria. These include constraints in gas supply occasioned by instances of pipeline vandalism or malfunctions, weak state of infrastructure across the sector, low remittance of revenue across the value chain resulting in rising debt profiles of sector players, non-cost reflective tariffs, insufficiency of the government bail-out funds and general customer apathy. A primary solution to this is the introduction of cost-reflective tariffs to the sector which is a first step towards ensuring the resolution of the varying conflicts, the harmonization of all stakeholders’ interests and the formulation of a definite plan of action for implementation in clearing the debt overhang in the sector.

Is it not ironical that we have about 45 percent of gas deposit in Africa and still unable to supply gas to the turbans to generate power and also flare the gas?
Indeed it is ironical that despite our vast natural gas deposits, Nigeria still suffers from challenges, which could be solved with the efficient use of natural gas. The National Gas Policy and the Gas Master Plan are strategic documents which if implemented, would harness the huge potentials for the natural gas market within Nigeria, West Africa and internationally. Effective gas utilization in Nigeria depends on the switch of emphasis from crude oil alone to natural gas as a separate commodity and a first step in this direction would be the enactment of a separate piece of legislation for natural gas. More so, the Nigerian Flare Gas Commercialization Programme (NGFCP) is intended to harness the flare gas for domestic utilization.

To what extent would the national gas flare commercialization regulations address the problem in that sector by providing more and cleaner energy?
The Flare Gas regulations aim to create a new set of players in the industry whose operations would expand the natural gas market through the efficient use of flared gas. This would result in increased availability and supply of gas to end-users as well as the deployment of innovative technologies for the production of clean energy. Natural gas is generally acknowledged to be the cleanest fossil fuel, producing considerably low CO2 emissions in comparison to crude oil and coal. Therefore, the increase in commercial activities occasioned by the NGFCP would definitely provide solutions relating to improved access to clean energy.

According to you, sanctity of contracts is not being obeyed, yet arbitral awards in most cases contentiously end up in courts. Is it possible to deploy ADR effectively without efficient court system in the country?
Absolutely not! The court system remains the ultimate arbiter in enforcing the sanctity of contracts. Therefore a robust court system that champions sanctity of contracts remains indispensable.

Will it be right to say that non-passage of the Arbitration and Conciliation Act by the National Assembly to be in tune with UNCITRAL model law 2006 is a clog in making Nigeria an arbitration hub in Africa?
The current Arbitration and Conciliation Act incorporates some of the principles enshrined in UNCITRAL model law with slight modification. However this does not negate or act as a clog in making Nigeria an arbitration hub in Africa. What is needed for Nigeria to become an arbitration hub in Africa, is for her to develop and inspire confidence in her court system to enforce arbitral awards/judgments.

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