President Muhammadu Buhari, on August 7, 2020, assented to the Companies and Allied Matters Amendment Act (CAMA) 2020, an executive action that effectively repealed the Companies and Allied Matters Act, 1990 and targets facilitation of the ease of doing business.
Among other positives, CAMA 2020 would ensure transparency of the ownership and control of all companies involved in property purchase and public contracting in Nigeria. The new law also gives legal backing to the implementation of Nigeria’s commitment to establish a public register of beneficial owners of corporate entities in its Open Government Partnership (OGP) 2019 – 2021 National Action Plan.
For both the Presidency and 9th National Assembly, the deed represents both an executive and legislative landmark. The CAMA 2020 has been described by many as a very innovative piece of business legislation coming on stream in decades – and a badly-needed respite for the private sector and small scale businesses.
It is worth noting that the Nigerian business milieu has for the past 30 years operated under the authority of the Companies and Allied Matters Act (CAMA) 1990. That Act effectively managed the business environment, providing guidelines and the structures that kept the business framework running for decades.
But, flowing from both the dynamic realities of doing business and the passage of time, the CAMA 1990 became out-dated, leading to agitations for the Act to be repealed or re-enacted.
President Muhammadu Buhari, last year, finally heeded the agitations with a letter to the Senate, seeking an amendment to the CAMA 1990. When the Senate passed a bill to repeal and re-enact the CAMA early this year and since it was signed into law early this month by the president, it clearly provides significant benefits to companies by reducing red tape and making it easier to comply with regulatory obligations.
But no sooner did the president sign the CAMA Bill into law than considerable controversy trailed aspects of the CAMA 2020. The CONCLAVE believes that as the CAMA 2020 stands, like many human enactments, it is not perfect, mirrors some ‘grey areas’ but will evolve by usage, like every other law.
What are the ‘grey areas’ of CAMA 2020 that have spawned some controversy and provoked public debate? The provision of Section 839 (1) and (2) and its relation to Trustees of Non-Governmental Organizations (NGOs) has been fingered as not being in the best interest of NGOs. Many, especially churches, see it as a gag by the federal government on NGOs and a dodgy way of introducing the unpopular NGO Bill into CAMA.
This perception is hardly helped by public perception in some quarters that the Buhari-led administration observes many democratic norms in the breach, especially, as it relates to fundamental human rights.
Section 839 (1) of the CAMA 2020 empowers the Commission to suspend trustees of an association and appoint interim managers to manage the affairs of the association where it reasonably believes that –
(a) There is or has been misconduct or mismanagement in the administration of the association;
(b) It is necessary or desirable for the purpose of;
i. Protecting the property of the association
ii. Securing a proper application for the property of the association towards achieving the objects of the association, the purpose of the association of that property or of the property coming to the association,
iii. Public interest; or
(c) The affairs of the association are being run fraudulently.
By the foregoing provision, the Commission can lawfully suspend the trustees of an association on the grounds stated above.
It is this particular Section that fired up the Christian Association of Nigeria (CAN) to reject CAMA 2020 out of hand, saying appointing a supervising minister to suspend church trustees and appoint new one is satanic. The umbrella religious body said the new act would snuff life out of the church and rank the church as a secular institution under secular control.
According to CAN, while it was not against the government fighting corruption wherever it might be found, yet it completely rejected the idea of bringing the church, which is technically grouped among the NGOs, under control of the government.
In the association’s words: “The Church cannot be controlled by the government because of its spiritual responsibilities and obligations. How can the government sack the trustee of a church which it contributed no dime to establish?
“How can a secular and political minister be the final authority on the affairs and management of another institution which is not political? How can a non-Christian head of government ministry be the one to determine the running of the church? It is an invitation to trouble that the government does not have power to manage.”
According to the body, the president must stop the implementation of what it believes is an obnoxious and ungodly law until the religious institutions were exempted from it and return the law to the National Assembly for immediate amendment.
The CONCLAVE believes that the law was not completely new, as registered NGOs were regulated in the past in line with the practice in all democratic societies.
But the only addition which we find objectionable is the power conferred on the commission to take over and manage NGOs on allegations of misconduct. It represents a violation of the fundamental right to freedom of association guaranteed by Section 40 of the Constitution.
Notwithstanding that Subsection 2 of the Act provides that the trustees shall be suspended by an order of Court upon the petition of the Commission or Members consisting of one-fifth of the association, and the petitioners shall present all reasonable evidence or such evidence as requested by the Court in respect of the petition, it still raises genuine, legitimate concerns on its intent.
As things stand, to unduly overheat the polity over some aspects of CAMA 2020 is not desirable. We counsel that relevant subsidiary llegislation cum amendments be kick-started to address these concerns as the intensity as well as the logic behind the objections are fairly well grounded.