A CASE FOR STATUTORY FRAMEWORK FOR A CASE FOR STATUTORY FRAMEWORK FOR NIGCOMSAT NIGCOMSAT

Presentation at Stakeholders Forum on NIGCOMSAT BILL 2012

Prepared by:

Olisa Agbakoba & Associates

(Project Consultants)

IntroductionIntroduction

SPACE Enterprise - Outer space is an exciting and highly important region which because of its unique nature holds the potential for both significant benefits and dangers .

Historically, Space fairing has been spearheaded by National governments because of the critical importance of space based assets to national interest. Countries like Russia, USA, China and Europe have led the efforts in this regard with research and launch of various space objects.

On 10th November 2003, the Federal Government of Nigeria kicked started its own process by approving the satellite project NigComSat-1 project as national priority and a critical ICT infrastructure.

Objective of NIGCOMSAT-1 ProjectObjective of NIGCOMSAT-1 Project

Alleviating Poverty Bridging the digital divide Affordable and Availability of ICT backbone Diversification of Revenue Generation for the Country Defense Agricultural Weather Forecast

Emergence of NIGCOMSATEmergence of NIGCOMSAT

NIGCOMSAT limited was incorporated in April 2006 under Companies and Allied Matters Act 1990 (CAMA 1990) to manage and operate the satellites for socio economic benefit of Nigerians. The mission of the company is to “…manage and exploit the commercial viability of the Nigerian Communication Satellite (NIGCOMSAT-1) for the socio-economic benefit of the nation.”

NIGCOMSAT LTD took over the assets, rights and priviledges of the project Management Office of NigComSat-1.

• The private company status means that NIGCOMSAT LTD is subject to the provisions which applies to ordinary companies;.

• This includes subscription of shares, and alteration thereof. It is also subject to Winding Up proceedings

• It was originally envisaged that The Company would be privatized hence the incorporation under CAMA 1990.

Need For NIGCOMSAT Transformation Need For NIGCOMSAT Transformation

• The decision to privatize the Company was dropped based on the critical role the Company could play in driving space based assets development

• The main reason is the issue of National security

Others are; providing an enabling environment for African ICT business industry to have a fair share of the world telecommunication market revenue currently projected at over $1.2 trillion dollars

To provide a platform for community and regional integration through the dissemination of social and cultural information, and the promotion of peace and stability in the African sub-region.

The potentials of NIGCOMSAT are thus constrained hence the RESOLVE to strengthen its status as aptly conveyed in the guidelines for operations of the company by its supervisory ministry .

NEED for Transformation of NIGCOMSAT NEED for Transformation of NIGCOMSAT

After Consultations and Review of the status of NIGCOMSAT, it was resolved that the STATUS OF THE COMPANY BE CHANGED to that of a STATUTORY CORPORATION.

The objective is to enable a ‘controlled development of the sector’, clarity of purpose in view of other government agencies like NCC, NASDRA etc and most importantly for sustainability purpose.

In view of the foregoing, a Legal Transformation that will make the Company a Statutory Corporation and an autonomous body set up under a Special Act of the Legislative arm of Government was embarked on.

The Act or Statute establishing NIGCOMSAT as a corporation will prescribe the Powers, Objectives and Functions.

FEATURES AND BENEFITS of NIGCOMSAT as a Statutory FEATURES AND BENEFITS of NIGCOMSAT as a Statutory CorporationCorporation

Statutory Foundation – Statutory Corporations are formed by the passing of a Special Act either at the Legislative Assembly or at Parliament. The NIGCOMSAT Act will define its powers, privileges and its relationship with MDAs. The powers can only be altered, through an Act.

Validation of its Objectives - NIGCOMSAT Act will validate the company ‘s objective and existence primarily to render service with low profit motive.

Profiling , Due Diligence and Industry Acceptance – Clear ownership structure devoid of misconceptions and ambiguity will be established. It will encourage easy due diligence and global industry acceptability

Operational Autonomy – NIGCOMSAT Corporation will enjoy internal autonomy and be free from interference in its daily workings. It will seek to combine the flexibility of a Private enterprise with public ownership and accountability.

Features & Advantages ContdFeatures & Advantages Contd

Continuity and Sustainability – The Corporation will be affected by political changes and it can therefore maintain continuity of policy and operations.

Priority Status – A Corporation Status will give NIGCOMSAT better standing and priority among other government establishments created by statutes that are in similar business.

Access to foreign (Sovereign Loans) – It will enjoy international acceptability and easy access to partnership arrangements with other sovereign nations and access to international development finance.

Features & Advantages ContdFeatures & Advantages Contd

Flexibility – The Corporation will enjoy full flexibility in its operations; freedom to take decisions relating to capital collection, investment, market, production, recruitment, planning etc

Funding & Capital Raising – It will enjoy statutory and thereby guaranteed funding. For instance the Act will provide for Sinking Fund for the Corporation as contained in the Subsidiary legislation attached to the Bill. The legislation spells out financing structure, borrowing powers, as well as use and re-use of revenue from operators.

Independence of Management Board – The Corporation will have an independent board that will be effective and ensure quick decisions. The Board can only be dissolved in line with the provisions of the Act.

Features and Benefits ContdFeatures and Benefits Contd

Suitability and Social Welfare Objective – The Corporation status is good for giant size and strategic enterprise – NIGCOMSAT is one.

Recruitment and Retention of Staff Members – NIGCOMSAT will be free to have its own recruitment policy. It can recruit promote and transfer any employee/officer as per its requirement s with distinct salary structure according to global industry standards.

Flexibility of Operations – NIGCOMSAT Corporation will enjoy flexibility and initiative in business affairs as it can engage in activities contributory to the aims and objectives of the Corporation and decisions can be taken without undue delay.

Confidentiality and Privacy of Classified Projects – It will benefit form security regulations for confidential venture and classified projects under the enabling laws

The Proposed Legal FrameworksThe Proposed Legal Frameworks

In the context of the broad development framework; The project consists of drafting of an establishment Bill and a supporting Code of Corporate Governance amongst others

The final draft of the Establishment Bill to be known as NIGCOMSAT CORPORATION BILL 2011 is ready. Next step is legislative engagement.

The Code of Corporate Governance is in final stage of drafting and could be introduced as a subsidiary legislation

Highlights of NIGCOMSAT BILL 2011 ContdHighlights of NIGCOMSAT BILL 2011 Contd

Part 1 contains the establishment provisions under 9 Sections covering ;

Establishment of the Nigeria Communication Satellite Corporation.

Alternate chairman. Managing Director and Secretary. Staff generally. General duties of the Corporation. Powers of the Corporation. Financial provisions. Borrowing powers. Disposal of surplus funds.

Highlight of the Core functionHighlight of the Core function

The Corporation shall be charged with the following duty amongst others;–

(a)designing, manufacturing in orbit launch (whether in low, medium or geostationary earth orbits) and operation of a communication satellite in respect of but not limited to telephony, television, radio, broadcasting, broadband, internet services, navigation, global positioning system or any other services of facilities of like nature, together with the transmitters, teleports, transponders, earth stations, terminals, antennas, frequency bands, (whether C-Band, KU-Band, KA-Band, L-Band and all satellite frequency bands) ;

The BoardThe Board

The affairs of the Corporation shall be conducted by a Board of Directors of the Corporation which shall consist of a chairman and the following other members;

the Permanent Secretary, Federal Ministry of Science and Technology;

the Managing Director of the Corporation

three persons to be appointed by the President, being persons who by reason of their ability, experience or specialized knowledge of the satellite communications industry or of business or professional attainments are capable of making useful contributions to the work of the Corporation.

The Chairman shall be appointed by the Federal Government through the Minister of Science & Technology and shall not be an officer of the Commission or any of its affiliates. 

Highlights ContdHighlights Contd

Part II provides under 2 sections for establishment of Satellite Inspectorate Division.

Major functions of the Inspectorate will be ;

(a) issuing permits and licenses for all activities connected with outer space exploration and exploitation, marketing, and distribution thereof; protection of Nigeria’s national interest in space;

(b) acting as the agency for the enforcement of the provisions of the said Acts and any relevant regulations

(c) carrying out such other functions as the Minister may direct from time to time, and notwithstanding the foregoing, any regulatory function conferred on the Minster

Highlights ContdHighlights Contd

PART III deals with Legal proceedings under 4 Sections

  -Limitation of suits against the Corporation, etc. Service of documents. Restriction on execution against the property of the

Corporation. Indemnity of members of the Board and employees of the

Corporation.

The Bill also contains an Subsidiary legislation to be known as NIGERIAN COMMUNICATIONS SATELLITE CORPORATION (PROJECTS) ACT to empower the Nigerian Communications Satellite Corporation to borrow money in any currency for the purposes of executing an approved project

Conclusion Conclusion

As a STATUTORY CORPORATION, NIGCOMSAT will become a corporate body created by the Special Act of Parliament other than CAMA 1990. Only an Act of National Assembly can be used to amend its provisions.

The Establishment Act will define the power, duties, privileges and pattern of management of the organization

It will be clothed with the power of the government but possessed with flexibility and initiative of private enterprises.

It will enjoy complete autonomy in management and play actively its role as a statutory body whose primary objective is of national interest and service the general public

Stakeholders Forum 2012

End End

Thank you