On March 6, 2010, as the Managing Editor of NGO Network, a general interest magazine for the non-profit sector, I had sent a Special Memo to Mr. Adetokunbo Kayode, the then Minister of Justice and Chairman, National Council on Privatization (NCP) Review Committee for the Sale of Nigeria Telecommunication Limited (NITEL) and Mobile Telecommunication (MTel). The Memo was in response to a publication in the ThisDay Newspaper of March 13 heralding the inauguration of the Kayode Committee to among other things, review the bidding process for the disposal of NITEL/MTEL and to confirm if the disposal are in accordance with the provision of the law.
The four-page Memo detailing the statutory requirements for the acquisition and disposal of public assets was copied to President Goodluck Jonathan, then as Acting President, Mahmud Yayale, the then Secretary to the Government of the Federation, Mr. Humphrey Abah, the then Minister of State for Commerce and Industry, Mike Oghiadomhe, then Principal Private Secretary to the Acting President (Goodluck Jonathan). Mohammed Hayatu-Deen, Chairman of the Technical Committee of NCP and five (5) copies submitted to Ms. Bolanle Onagoruwa, then Acting Director General of the Bureau of Public Enterprises (BPE). As luck would have it, the NCP was sitting during the submission which I personally delivered at the Secretariat.
Paragraph two of the Memo titled ‘Information on the Legal Implications of Disposing NITEL/MTEL Without the Inauguration of the National Council on Public Procurement and Without a ‘No Objection Certificate’ Duly Signed by the Appropriate Officer at the Bureau of Public Procurement’ was a strong warning which read in part “For the benefit of your Committee, the Public Procurement Act (PPA) 2007 covers the acquisition and disposal of public assets, and as such, all transactions under the Bureau of Public Enterprises (BPE) dealing with the disposal of public assets are covered under the Act, subject to the provisions of the Privatization and Commercialization Act (PCA) of 1999”
Though NITEL/MTEL was ‘sold’ severally and illegally, what we have now is an exhausted situation as the sales of NITEL/MTEL is still a subject of debate. Two years after the above Memo, Nigerians are still confused as to the real meaning and understanding of the provision of the laws governing acquisition and disposal of public assets.
Following recent developments resulting in battle between Presidency, BPP and BPE as well as Manitoba Hydro International, the Canadian firm on the takeover of the Transmission Company of Nigeria (TCN), it has become necessary to once again revisit the issue and educate Nigerians on the imperatives of our laws and how those in position of powers have ignorantly abused it to the detriment of Nigerians.
Though the latest in the twist indicates that BPP has finally sent a letter to BPE ratifying the Manitoba contract to run the TCN for three years, there are still grey areas that require clarification on the involvement of each party. Also, there are several questions that are begging for answers. First is the independence of the two Agencies – BPP and BPE as regulatory and supervisory bodies. Second is the separation of powers between the parties involved in the Manitoba saga. And finally is the need to evaluate and analyze the role of each party in the entire contract process.
On BPP’s accusation that the Manitoba contract award did not follow due process, BPE had responded thus “The exclusive right of NCP to preside over the privatization and sale of public assets was also recognized by the Public Procurement Act (2007) when it stated in Part X – Disposal of Public Property (Section 55) that ‘this section shall apply subject to the Public Enterprises (Privatization and Commercialization) Act 1999’ That this implies that one, the powers that the BPP exercises do not extend to the BPE as the Act establishing the BPE’s processes had made it superior to that of BPP, and two, the privatization agency held further: “Our understanding of the above provision is that the powers of NCP to approve privatization transactions have not been taken away by the BPP’s Act but rather constitutes an exception to the jurisdiction where BPP can exercise such power.”
To discuss the above and provide an understanding of the link between the two Acts, it will be helpful to address some provisions of the constitution as it relate to the Acts which are undisputable. Thus this should include the Federal Executive Council (FEC), the National Council on Privatization (NCP), BPE, BPP and the yet-to-be inaugurated National Council on Public Procurement (NCPP). The President and his ministers form the Federal Executive Council, with the President as the Chairman. This body initiates the policies and programmes of the Federal Government and ensures that they are properly implemented.
The functions of the National Council on Privatization as contained in the law include but not limited to approving policies on privatization and commercialization, approving guidelines and criteria for valuation of public enterprises for privatization and choice of strategic investors, approving public enterprises to be privatized or commercialized, approving the prices of shares or assets of the public enterprises to be offered for sale, and approving the appointment of privatization advisors and consultants. The BPE serves as the secretariat of the NCP and is charged with the overall responsibility of implementing the NCP’s policies on privatization and commercialization.
The specific functions under review include “vetting candidates for appointments as Consultants, advisers, investment bankers, issuing houses stockbrokers, Solicitors, trustees, accountants and other professionals required for the purpose of either privatization or commercialization”
It is evident from the above that there is a clear distinction of role between FEC and the NPC. Thus clearly the President or through FEC has the constitutional powers to ensure that the privatization policies are properly implemented and that they comply with Fundamental Principles and Directives in Chapter 2 of the Constitution. On the other hand, the NCP can only approve policies on privatization and commercialization, approve guidelines and criteria for valuation of public enterprises for privatization and choice of strategic investors, approve public enterprises to privatized or commercialized, approve the prices of shares or assets of the public enterprises to be offered for sale, approve the appointment of privatization advisors and consultants. But the President or FEC can cancel any of those decisions under Chapter 2 of the Constitution and cannot be challenged in court, in line with Section 6 of the 1999 Constitution as amended.
The powers of the President in Chapter 2 of the Constitution are sufficient to discharge this function of supervising NCP. In the case of AG Ondo State Vs AGF and 35 others (2002) CLR 6(d) SC, it held that ‘The purpose of directive principles in Chapter 11 of our Constitution is that, through Directive Principles certain directions are given to the future legislature and future executive to show in what manner they are to exercise the legislative and executive power they will have. It is not the intention to introduce in this Part these principles as mere pious declarations. It is the intention of the Assembly that in future both the legislature and the executive should not merely pay lip-service to these principles but that they should be made the basis of all legislative and executive action that they may be taking hereafter in the matter of the governance of the country. It stated further that what is called ‘Directive Principles’ is merely another name for the Instrument of Instructions. The only difference is that they are instructions to the Legislature and the Executive. Whoever captures power will not be free to do what he likes with it. In the exercise of it, he will have to respect these instruments of instructions which are called Directive Principles.
The BPE is the Secretariat of NCP and therefore should only report to NCP by sending contracts to them for approval and to perform other functions while the NCP itself is answerable to the President/FEC who can call for and review contracts approved by NCP to guarantee Nigerians about the protection of Directive Principles of Chapter Two as taken during the Oath of Office of the President and Legislators. It is also part of the reasons why the Legislators have powers to challenge the activities of BPE.
Reading from the above, BPP is not empowered by law to request BPE to send contracts directly to FEC for approval but to FEC through NCP. But the bone of contentions is whether BPE is exempted from ‘No Objection Certificate’ issued by BPP while submitting documents to NCP for approval with respect to the ‘appointments of Consultants, advisers, investment bankers, issuing houses stockbrokers, Solicitors, trustees, accountants and other professionals required for the purpose of either privatization or commercialization?
To answer the above question, let us examine Section 15 sub-section 1 of the Public Procurement Act (PPA) 2007 under ‘Scope of Application’ which states inter alia “The provisions of this Act shall apply to all procurement of goods, works, and services carried out by: (a) The Federal Government and all Procuring Entities (including BPE) (b) All entities outside the foregoing description which derive at least 35% of the funds appropriated or proposed to be appropriated for any type of procurement described in this Act from the Federal share of the consolidated Revenue Fund; Sub-Section 2 states further that “The provisions of this Act shall not apply to the procurement of special goods, works and services involving national security unless the President’s express approval has been first sought and obtained”
Reading further, Section 16 sub-section 1 to 4 maintained that (1) Subject to any exemption allowed by this Act, all public procurement shall be conducted (a) Subject to the prior review thresholds as may from time to time be set by the Bureau (meaning BPP) and pursuant to Section 7 (1) (a)-(b), (b) Based only on procurement plans supported by prior budgetary appropriations and no procurement proceedings shall be formalized until the procuring entity has ensured that funds are available to meet the obligations and, subject to the threshold in the regulations made by the Bureau, has obtained a “Certificate of No Objection to Contract Award’ from the Bureau, (c) By open competitive bidding; (d) In a manner which is transparent, timely, equitable for ensuring accountability and conformity with this Act and regulations deriving therefrom; (4) Subject to the prior review thresholds as may be set by the Bureau, any procurement purported to be awarded without a “Certificate of No Objection’ to Contract Award” duly issued by the Bureau shall be null and void.
Having established the relevant provisions dealing with the powers of the each party, let us now address the main subject of the dispute, which is asset disposal under the law. Section 55 of the PPA under ‘Disposal of Public Property’ states unambiguously in sub-section 1 that, “This Section shall apply subject to the Public Enterprises (Commercialization and Commercialization) Act 1999. To appreciate the meaning and interpretation of this section, we will now draw inference from a Supreme Court judgment Ref (1991) 6 NWLR (pt.198) 382 SC that “Wherever the expression ‘subject to’ is used at the commencement of a statute it is an expression of limitation andimplies that what the section or sub-section is “subject to” shall govern control and prevail over what follows in that section or subsection of the enactment”
The above interpretation captures the position of BPE above, but in other words, it does not imply that “the powers that the BPP exercises do not extend to the BPE as the Act establishing the BPE’s processes had made it superior to that of BPP.” Or that the powers of NCP to approve privatization transactions have not been taken away by the BPP’s Act but rather constitutes an exception to the jurisdiction where BPP can exercise such power.” The implication here is that this expression of limitation mean that only Section 55 of PPA is subject to the Public Enterprises (Commercialization and Commercialization) Act 1999 but not the entire Sections of PPA that is subject to the Public Enterprises (Commercialization and Commercialization) Act 1999.
For the purpose of acquisition of goods, works and services, which does not involve Disposal of Assets, the BPE Act 1999 will not prevail over PPA 2007. Subsequently, Section 56 of PPA that follows Section 55 will prevail over the Public Enterprises (Commercialization and Commercialization) Act 1999 likewise Sections 5,6,16 etc of PPA, where it does not involve asset disposal. Section 56 of PPA applies to all entities where it states that “For the purposes of this Act every procuring entity shall also be regarded as disposing entity, (3) The open competitive bidding shall be the primary source of receiving offers for the purchase of any public property offered for sale, (4) The Bureau shall, with the approval of the Council, determine the applicable policies and practices in relation to the disposal of all public property; issue guidelines detailing operational principles and organizational modalities to be adopted by all procuring entities engaged in the disposal of public property.
Having established the fact that every procuring entity is a disposal entity, the meaning therefore is that every Ministries, Departments and Agencies (MDAs) of government (including BPE) are procuring entities. Thus every MDAs are subject to the provision of the PPA 2007. With this background, we can now look at the relationship between BPE, BPP, NCP and NCPP as well as their functions with respect to public procurement conformity assessment in Nigeria. While the NCP and BPE are first parties, that is, organization that conducts the procurement and provides the goods, works and services to the public or conducts the processes for obtaining the goods, works and services, the BPP and NCPP are third parties because they are bodies that are recognized by first and second parties or by the law, or the system as being independent of the organization in the first and second parties as stated above, and also independent of the contractors or service providers with respect to Public Procurement activities.
Third parties are involved in procurement process activity, including product testing, inspection and certification. They do not approve or ratify contract of any value under the law but can only provide guidelines for review or audit. From the above roles on procurement conformity, it is a clear fact that BPP is not an implementing agency of Government but a regulatory agency empowered by law to conduct Risk Management Audit and issue ‘Certificate of No Objection’ before contracts are awarded either by NCP or FEC or even any Tenders Board in Nigeria unless exempted by NCPP by virtue of Section 6 of PPA.
Section 16(4) of PPA and read together with Sections 2 and 6 of PPA that subject to thresholds issued by the Bureau as approved by the National Council on Public Procurement any procurement purported to be awarded without a “Certificate of No Objection’ to Contract Award” duly issued by the Bureau shall be null and void. And this means that before sending processed documents to NCP for approval, the NCP is required to obtain ‘NO Objection Certificate’ with respect to the appointments of Consultants, advisers, investment bankers, issuing houses stockbrokers, Solicitors, trustees, accountants and other professionals required for the purpose of either privatization or commercialization. And if for any reason whatsoever this did not happen, the contract remains null and avoid after execution until a ‘Certificate of No Objection to Contract Award (not for award) is issued by BPP as was the case in the Manitoba contract.
In the same vein, the Nigeria Extractive Industry Transparency Initiative (NEITI) Act 2004 empowered the body to engage consultants to conduct audit of the extractive downstream sector. But this power does not exclude the powers of BPP to superintend over the process of the appointment of auditors to carry out this assignment. Only recently in June 2012, NEITI advertised for the acquisition of consultants to conduct audit in the oil sector and underwent the process of obtaining a ‘No Objection Certificate’ from BPP before the contract was approved by the FEC. Though there were cries over the quality of auditors awarded the contracts, BPP and NEITI are in agreement that due process was followed in the conduct of the recruitment.
While the attempt here is to put the laws establishing these bodies in proper perspectives, it is also an effort to dispel certain articles in the newspapers and discussion on television which have tilted in political dimension and lacking in professional submissions. Those who read the laws with one eye closed or have a different mindset will definitely be blind to these provisions. And this applies to all those laws quoted by others. It is therefore clear from the above statements and the judgments of the Supreme Court that no law is independent.
It is an elementary principle of law that the jurisdiction of a Court, administrative body, Tribunal or a Quasi-judicial body to perform an assignment is very fundamental to the adjudication of any matter before it and this extends to issuance of ‘No Objection Certificates’ by BPP. The issue of jurisdiction to perform an assignment – even in family matters – is so radical that it forms the foundation of any adjudication by BPP on procurement disputes and the issuance of ‘No Objection Certificate’ If BPP or any other quasi-judicial body, administrative body or Tribunal lacks jurisdiction, it lacks the necessary competence to entertain the issue before it, vide Oloba v. Akereja (1988) 3 NWLR (Pt. 84) 508.
The present situation where BPP’s jurisdiction to perform their statutory assignments is continuously challenged due to the non-inauguration of the National Council on Public Procurement (NCPP) and the constitution of the officers of BPP as required by law, is a major setback for the country. Thus BPE is correct when they said that BPP can only exercise such powers over them only and if the BPP Council is in existence.
In conclusion, the FEC should not be encouraged by any individual to engage in undue interference in the mandate of NCP and BPE. The report that Presidency directed that the Mantitoba contract be cancelled without an initial consideration of the implications in the first instance is unfortunate.
Mohammed Bougei Attah,National Coordinator, Procurement Observation and Advocacy Initiative
