|
Free Zones all over the world have been
instrumental in boosting industrial and
economic growth. According to the Onne
Oil and Gas Free Zone some of the
advantages for Nigeria in establishing
the Free Zone are ‘’greater levels of
foreign direct investment; technology
transfer; manpower development;
provision of employment opportunities
and greater economic self-reliance’’. We
recall that The Onne oil and Gas Free
Zone was officially opened over 12 years
ago in March 1997.We however, with
all humility and the greatest respect,
have serious doubts as to whether
Nigeria as indeed benefited from the
Onne Oil and Gas free Zone beyond the
benefits accruable to an Industrial Area.
We are persuaded by what is on ground to
think that the case of the Onne Oil and
Gas free Zone deserves urgent attention
by the Federal Government of Nigeria if
the country must benefit from her huge
investments in the Onne Oil and Gas Free
Zone in addition to the very generous
incentives to the companies operating in
the area.
We also, with the
greatest respect and humility, struggle
to understand the rational behind the
free zone status of many of the
Multinational Oil and Gas companies
which basically have their offices in
the Onne Oil and Gas Free Zone Area but
effectively carry out their oil and gas
operations outside the free zone area
just like any other oil and gas company
not located in the Free Zone.
We seem to believe that these companies
are only interested in the Free Zone
Incentives which interalia include:
i.
100% foreign company ownership
ii.
100% repatriation of capital and
profits
iii.
100% exemption from Value Added
Tax and With holding Tax
iv.
No corporate tax
v.
No personal income tax for
expatriates
vi.
No expatriate quota
vii.
100% import and export tax
exemptions
viii.
Duty on raw material only for
manufacturing
ix.
75% duty rebate on processing
special product
Our worry is compounded by the current
way the Free Zone status is accorded
these companies, which we believe, does
not provide a level playing field for
the oil and gas companies operating
elsewhere in Nigeria. This is because
there is no difference in operations and
production between these companies
excepting for that of location. In
addition, there is basically no
additional benefit to Nigeria for the
free zone status of these companies
beyond that accruable to an industrial
area. All that is happening now is
that Companies that are hitherto located
outside the Onne oil and gas free Zone
area are now moving to the Free Zone
Area just to REAP the benefits as listed
above without any commensurate benefit
to the country. A cursory look at
the Approved list of the Companies in
the Oil and Gas Free Zone Area as at
April 2009 indicate that these
organizations also exist outside the
free zone area. Nigeria obviously
loses hundreds of billions of Naira in
taxes and customs duties from this
inappropriate use of the Onne Oil and
Gas Free Zone Area, not to talk about
the disturbing violations of the
human/workers rights going on unabated
in the area.
It is common knowledge that the Oil and
Gas Free Zone Authority Act of 1996 seek
to abridge the right of workers to join
a trade union and bargain collectively.
Unfortunately prior to the take-off
democracy in 1999 (i.e. during the
military era) decrees reigned supreme
over all other laws, including the
constitution. Fortunately, with the
advent of democracy in 1999, and the
reinstatement of the constitution, the
supremacy of the constitution over all
other laws is no longer an issue for
debate. Expectedly, the courts have also
ruled, for instance, in A.G. Oyo State
vs. NLC (2004 NLLR Pt 3) that as from
May 29th 1999, the constitution is
supreme and all other legislations in
the land take their hierarchy from the
provisions of the constitution. We in
PENGASSAN have always drawn the
attention of the Free Zone authority and
these oil and gas companies to the
provisions of sections 1 and 40 of the
1999 Constitution of the Federal
Republic of Nigeria as well as the
position of the Law Courts on the
Supremacy of the Constitution, for
instance as stated in A.G.Oyo State vs.
N.L.C. Regrettably, some companies
operating in the Onne Oil and Gas Free
Zone are still hiding under the act to
deny their workers their rights
including the right to decent work,
health and safety at work etc. We
note that this right to associate and
join a trade union like PENGASSAN is a
constitutional right that, in my opinion
and with all due respect, cannot be
taken away or even abridged by
implication through an inferior
legislation.
We challenge the Oil and Gas Free Zone
Authority to demonstrate to Nigerians
the continued relevance of the Oil and
Gas Free Zone Authority vis-à-vis the
obvious losses of income to the Country.
We are
persuaded further by the fact that the
Onne Oil and Gas Free Zone, managed by
DMS International Ltd, is the only Free
Zone in the world dedicated solely to
the oil and gas industry. We
further observe that since the Onne Oil
and Gas Free Zone was officially opened
in March 1997 to date no oil fabrication
facility exist in the Free Zone and that
virtually all the oil and gas
facilities, oil tools and equipments
used in this Country and by the
companies in the free zone are imported.
Moreover oil exploration and production
do not take place in the Oil and Gas
Free Zone Area. They all take place
outside of the Onne oil and gas free
zone.
We call on the
Federal Government to investigate the
operation and activities in the Onne Oil
and Gas Free Zone we well as review the
Free Zone laws with a view to ensuring
that the current loopholes and
inconsistencies in the administration of
the Oil and Gas free zone are blocked in
the interest of the country. We also
urge all well meaning Nigerians to
persuade the Federal Government to
investigate the operation and activities
in the Onne Oil and Gas Free Zone we
well as review the enabling legislation
in the interest of our dear country.
Comrade Hyginus
Chika Onuegbu
PENGASSAN Zonal Industrial Relations
Officer
Port Harcourt Zone |
