The Trade Union Congress has urged the Federal Government to bring to book and punish all those found culpable in the violation of the laws of the country that saw levies that the Nigeria Liquefied and Natural Gas Limited should have paid to the Nigerian Maritime and Administration Safety Agency remaining unpaid.
The TUC said this is the only way the Federal Government can absolve itself of any complicity in the failure of the NLNG to remit the mandatory fee to NIMASA.
Owing to the failure of NLNG to remit the mandatory fee, NIMASA grounded the activities of the company for about 48 hours last week.
It took the intervention of the Federal Government to free the seized vessels of NLNG.
The TUC, in a statement signed by its President, Comrade Peter Esele, and the Secretary General, Barrister Musa Lawal, said the Federal Government cannot wash its hands clean of complicity in the NLNG saga unless it brings to judgment all those who encouraged the breaking of the country’s law in regard to the NIMASA/NLNG face-off.
The statement reads in full: “The Trade Union Congress of Nigeria observes with keen interest the on going saga leading to the refusal of NIMASA to allow the continued operation of LNG vessels over the later’s wrongful refusal to pay the statutory levies of 3% gross freight on international inbound and outbound cargoes carried by their vessels (whether owned by their wholly-owned subsidiary, Bonny Gas Transport Limited or chartered by them), and the 2% of contract sum on their vessels (whether owned by their wholly-owned subsidiary, Bonny Gas Transport Limited or chartered by them), engaged in cabotage trade to Nigerian Maritime and Administration Safety Agency’s (NIMASA).
“The Congress therefore advises the Federal Government to exonerate itself by bringing to book all those directly or indirectly involved in the dirty deals as no company or individual is above the law of the land. In other climes this act of criminality is enough to shut down any organization no matter what.
“The congress frowns at this act of ingratitude by NLNG, taking into cognizance the fact that at the inception of the LNG project in 1988/1989, the Federal Government did not only recognized the company’s pioneer status within the provisions of the Industrial Development (Income Tax Relief) Act 1971, but also magnanimously granted it a package of investment incentives including a ten-year tax holiday under the Nigeria LNG (Fiscal Incentives Guarantees and Assurances) Act Cap. N87 Laws of the Federation of Nigeria 2004 (“NLNG Act”) on certain conditions.
“In 1997, the office of the Commander-in-Chief of the Nigerian Armed Forces (Gen. Sani Abacha) had by a letter dated 20th August 1997 conveyed through the Federal Ministry of Transport directed that NLNG should comply with the extant law at the time, being the National Shipping Policy Act of 1987 which mandated it to pay the then 2% statutory levy on international inbound and outbound cargo as well as submit to routine inspection by the relevant government agencies including the then National Maritime Authority.
“The directive notwithstanding, NLNG has over the years been importing project cargo into, and exporting LNG from Nigeria, using vessels belonging to its wholly-owned subsidiary, Bonny Gas Transport Limited and other chartered third party vessels without paying statutory levies to the Nigerian government as enshrined in section 15 (a) of NIMASA Act of 2007. This is criminal and the congress is of the opinion that LNG should pay for all the years it has circumvented the levies immediately.
“Section 15(a) of the NIMASA Act 2007 provides that the Agency’s operations shall collect:-
“a. “…… 3% of gross freight on all international inbound and outbound cargo from ships or shipping companies operating in Nigeria”
“Section 43 (a) of the Coastal and Inland Shipping (Cabotage) Act, 2003 provides as follows:-
“That there shall be paid into the Fund (Cabotage Fund),
a. “ a surcharge of 2 percent of the contract sum performed by any vessel engaged in the coastal trade”.
“Consequent upon these and for the fact that the tax holiday granted NLNG Limited has elapsed, what then is the basis of LNG’s continued refusal to pay statutory levies? Nigerians will also want to know the purpose of citing the provisions of NLNG Act despite the proviso quoted at 3 above.
“Our concerns:
1. The Congress and of course Nigerians desire to know whether a registered company in Nigeria, local or foreign can refuse to pay tax to relevant authorities as enshrined in the law “through a veil threat” of scarcity of gas if not allowed to operate without paying statutory levies?
“2. The Congress and of course Nigerians desire to know whether tax exemption by way of pioneer status for a fixed period that has elapsed could be a basis for refusal to pay tax?
“3. The Congress and of course Nigerians desire to know whether NLNG is right in claiming that it is not bound to honour its accrued and continuing liabilities to NIMASA under section 15(a) of the NIMASA Act 2007?
“4. We also want to know whether NLNG is right in claiming that it is not bound to honour its accrued and continuing liabilities to NIMASA under section 43(a) of the Coastal and Inland Shipping (Cabotage) Act 2003?
“NLNG’s ARGUMENT
“NLNG argues that it is not liable to pay any levy by virtue of the Nigeria LNG (Fiscal Incentives, Guarantees and Assurances) Act Cap. N87 Laws of the Federation. This argument to the Congress is not only weak but laughable.
“PUBLIC INTEREST
“1. The incentives granted to NLNG under the NLNG Act were not meant to be and cannot be in perpetuity. Indeed, section 2 of the NLNG Act also embodies a rider which limits the tax holiday of the company to 10 years or when the cumulative average sales price of the liquefied natural gas reaches $3USD in million metric British Thermal Units (MMBTU) as calculated in the first schedule to the Act, whichever is earlier. From our market intelligence, as at January 2004 which was the fifth anniversary of the production of the company, the New York Mercantile Exchange (NYMEX) indicated that the price of gas stood at $9USD per million metric British Thermal Units (MMBTU). This meant that as at the said January 2004, the milestone for the expiration of the exemption period had been surpassed by 200% in the cumulative average sales price.
“2. The National Shipping Policy Act which NLNG’s wholly-owned subsidiary, Bonny Gas Transport Limited and other chartered third party vessels are specifically exempted from by virtue of section 6(10) of the NLNG Act had been repealed by section 63(1)(a) of the NIMASA Act of 2007. Furthermore, the NIMASA Act of 2007 specifically provides vide section 15(a) that NIMASA shall be funded by money accruing to NIMASA from “ 3% of gross freight from all international inbound and outbound cargo from ships or shipping companies operating in Nigeria to be collected and paid over to the Agency to meet its operational costs.”
“The NIMASA Act is clear on who is liable to pay the 3% levy as being “ships or shipping companies”. The law makes no exemptions. It is also important to note that the NIMASA Act is a later Act to the NLNG Act. Based on the cannon of interpretation of statutes known as ‘Lex posterior derogat priori’, that is to say, where two legislations are inconsistent, the latter in time prevails, it is our respectful view that since the provisions of the NLNG Act that the NLNG is relying on in support of its position are repugnant to and inconsistent with the provisions of the subsequent NIMASA Act that NIMASA is relying on, the said provisions of the subsequent NIMASA Act prevail over the said provisions of the NLNG Act. The question of accumulated rights does not apply in this case because the Legislature that made the NIMASA Act was fully aware of the NLNG Act when the said later NIMASA Act was enacted, and if it wanted to, could have made specific derogations in favour of the NLNG Act therein.
“3. NLNG has started paying tax to the Federal Inland Revenue Service while refusing to pay the 3% of gross freight on international inbound and outbound cargo and the 2% carbotage surcharge.
“4. The position adopted by NLNG under the NLNG Act to the effect that neither the company nor its shareholders shall in any way be subject to new laws or regulations is unconstitutional to the extent that it fetters the power of the National Assembly to make laws for the order and good governance of the nation and is repugnant to natural justice, equity, good conscience and public policy. This is particularly so when the said NLNG Act was made under a military regime.
“The Congress will like to use this opportunity to charge the Federal Government to call NLNG to order by ensuring that every dime is paid to NIMASA. We also want government to take advantage of the meeting slated for tomorrow, Friday 2013 in Abuja by Federal Government to address the saga and bring accomplices to book. We do not want to envisage any iota compromise against the interest of the country.
“No individual or corporate organization is above the law. The institutions of the state must be allowed to carry out its function without interference and in accordance with the act establishing it. It is our hope that the Abuja meeting respect that.”
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