THE Nigeria Export Processing Zones Authority (NEPZA) has handed Dangote Refinery and Petrochemicals a relief from industrial actions by reaffirming that no strike or lockout is permitted within the country’s Free Trade Zones for a period of 10 years after commencement of operations.
This follows a recent industrial action that impacted Dangote’s key oil and gas facilities by the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), which accused management of the $20billion refinery of sacking 800 Nigerian workers for joining the union.
The management denied the allegation, insisting the exercise was part of an internal reorganisation and affected only a few workers it accused of engaging in acts of sabotage.
The Managing Director of NEPZA, Olufemi Ogunyemi, in a statement on Thursday, October 9, cautioned against “external union infiltrations” that disrupted the smooth operations of enterprises operating under NEPZA’s jurisdiction, saying such interference contravenes established laws governing Free Trade Zones.
Ogunyemi recalled that the trade tensions at the refinery were “worrisome and avoidable,” as the Free Trade Zone law clearly prohibits industrial action within such economic enclaves.
He stated that while workers in Free Zones retain the right to form or join unions and engage in collective bargaining, the law requires all disputes to be handled through the Authority’s administrative mechanism, rather than through strikes or lockouts.
He noted that the trade union should have directed its concerns through NEPZA, as required by law, as the Authority operated a one-stop-shop administrative model to fast-track processes, adding: “The recent escalation of the trade dispute between the zone and PENGASSAN, particularly given the refinery’s Free Trade Zone status, is worrisome. Section 18(5) of the Nigeria Export Processing Zones Act provides that ‘there shall be no strikes or lock-outs for a period of 10 years following the commencement of operations within a Zone, and the Authority shall resolve any trade dispute arising within a Zone.’’
The above provision, he said, imposes a 10-year prohibition on strikes and lockouts within Free Zones, while still allowing workers to join or form trade unions and engage in collective bargaining, adding: “We are pleased that the conflict has been de-escalated. Dangote Refinery is a declared FTZ that continues to benefit from tax incentives and customs duty waivers to support the economy, and NEPZA regulates it.
“The Free Trade Zone scheme in Nigeria is slightly over 30 years old, and we ought to be familiar with the scheme and the global rules that guide the operation of this world economic model, which aims to accelerate economic development and industrialisation.
“The NEPZA Act requires us, along with all instruments of the corporate government system within the industry, government agencies, and relevant sectoral and specialised bodies, to honour the Authority’s ‘one stop shop’ status in overseeing the scheme.
“The union should have directed its concerns through NEPZA, as the Authority operates a One-Stop-Shop model designed to fast-track resolutions and ensure industrial harmony.”
According to Punch, the 650,000 barrels-per-day Dangote Refinery, located in the Lekki Free Trade Zone, Lagos, enjoys special regulatory incentives, including tax holidays and customs duty waivers.
According to NEPZA, these privileges are granted under a framework that aims to attract investment and shield operations from disruptions that could undermine national economic objectives.
Ogunyemi pointed out that Section 24(1) restricts excessive interaction between external laws and the operation of the scheme, as laws applicable within the customs territory can only be operational within Free Zones to the extent that they are not inconsistent with the NEPZA Act.
He stated further: “Consequently, in cases of conflict between the Trade Unions Act or Trade Disputes Act and Section 18(5), the provisions of Section 18(5) take precedence as the more specific regulation governing Free Zones.
“In cases of conflict between the Trade Unions Act or the Trade Disputes Act and Section 18(5) of the NEPZA Act, the provisions of the latter take precedence as the more specific regulation governing Free Zones
“…Labour issues often pave the way to industrialisation, but they must be handled within the bounds of law to protect critical national assets.”
Ogunyemi stressed that stakeholders must respect this governance structure to sustain investor confidence and economic growth, noting: “The Free Trade Zone scheme is over 30 years old. We ought to be familiar with its global rules, which aim to accelerate economic development and industrialisation.
“The Dangote Refinery is a declared Free Zone, and as such, all industrial matters within it must follow NEPZA’s regulatory framework.
“Stability within the zones is vital to Nigeria’s economic transformation agenda.”
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