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Legal Alert – May 2014 – Smoking Regulations In Public Places
Legislation to control the hazards that smoking poses to human health has escalated in the last decade. In Lagos State, the Regulation of Smoking Law was assented to on 17th day of February 2014, with the full implementation of this Law commencing six (6) months afterwards.

At the Federal tier of governance, the Tobacco Smoking (Control) Act 1990, and the Tobacco Control Bill 2013, are legislations that are also worthy of review for a further appreciation of some of the legislations which regulate the smoking of tobacco products in public places.

Save for the few exempted areas, the Lagos State Regulation of Smoking Law, 2014 forbids smoking in all public places.
One of the exceptions to this rule is the one that states that the only places where an individual can smoke, as from 16th August 2014, are on a street, a road or a highway.

A second exception to the no smoking in public places rule is the requirement that an owner, an occupier or a person in charge of a Tertiary Institution, a Bar, a Night Club or a Hotel is allowed to designate not more than Ten per cent (10%) of such a person's premises as a smoking area. A designated smoking area must however have the necessary smoking signs, with good cross ventilation, and where necessary, proper ventilating equipment.

It is the duty of the owner or occupier or manager of a Tertiary Institution, a Bar, a Night Club or a Hotel to ensure that:-
(i) The internationally recognised "No-Smoking" Signs or Symbols are conspicuously displayed at each entrance and in other prominent locations of his, her or its premises.
(ii) "No-Smoking" Signs must be affixed with the Smoke Detectors in the premises.
(iii) Ensure that people that smoke on the street, near its premises, do so at least Ten (10) meters from the premises.
(iv) Ensure that Smoking outside the permitted No-Smoking area in its premises does not occur.

Any person who smokes in a public place that is not exempted under the Lagos State Regulation of Smoking Law commits an offence which on conviction carries a fine of not less than Ten Thousand Naira (N10,000) and not more than Fifteen Thousand Naira (N15,000); or to a term of imprisonment that is not less than One (1) month and not more than Three (3) months; or to such other non-custodial punishment as a Judge may deem fit; or to both the fine and the term of imprisonment.
Where a smoker is a repeat offender, the Lagos State Regulation of Smoking Law prescribes a fine of Fifty Thousand Naira (N50,000) or a term of imprisonment of Six (6) months; or both the fine and the term of imprisonment as the Judge deems fit.

It is an offence for the owner, occupier or a person in charge of a "No-Smoking Area" to fail to put up the "No-Smoking Signs" in such areas; or to fail to install smoke detectors; or to stop anyone from smoking in the non-exempted areas of his or her or its premises.
The penalties for the above offence, on conviction, includes a fine of One Hundred Thousand Naira (N100,000) or a term of imprisonment of Six (6) months; or to both the fine and the term of imprisonment. The Judge that hears the case is also allowed to award other non-custodial punishments.

Where the smoking control offence is committed by a corporate body, firm or association, the Directors, Managers, Partners, Company Secretary or such other similar or senior official of such an establishment could be held liable as if they personally committed the offence; and on conviction, they will suffer a fined Two Hundred and Fifty Thousand Naira (N250,000). The only permissible defence is for such an individual to establish that he took all reasonable steps to stop the smoker from smoking in his premises.

Where further or repeated violations occur, the premises so affected could be sealed up for the repeated smoking regulations violation.

To protect children from third party smoking, which is arguably as harmful as direct smoking itself, it is now an offence to smoke in the presence of a child under the age of Eighteen (18) years old; or to expose a child to any form of smoking.

The punishment for smoking in the presence of a child is a fine of Fifteen Thousand Naira (N15,000), or a term of imprisonment of One (1) month; or both the fine and the term of imprisonment. The trial Judge is equally given the discretion to order a non-custodial punishment for this infringement.

For repeat offenders, who expose children to smoking, the punishment, on conviction, is a fine of One Hundred Thousand Naira (N100,000), or a term of imprisonment of One (1) year; or to both the term of imprisonment and the fine herein stated.

The existing Federal Law that regulates tobacco smoking is the Tobacco Smoking (Control) Act, 1990. This Federal Law prohibits the smoking of tobacco in certain public places like Cinemas, Theatres, Stadia, Offices, Public Transportation, Lifts, Medical establishments, Schools and Nursery Institutions.

The advertisement of tobacco products through the medium of newspapers, magazines, radio, television, cinema, billboards and handbills must contain a prominent warning which says that tobacco smoking is dangerous to health.
In furtherance of the tobacco warning requirement, all tobacco packages must have inscribed on them the following package-rotational warnings, namely:-
a. "The Federal Ministry of Health warns that tobacco smoking is dangerous to health;" and
b. "Smokers are liable to die young."
It is also compulsory that all tobacco products must state the amount of the tar, and the nicotine content in each unit of each tobacco product.

The promotion or sponsorship of sporting events by tobacco and tobacco related firms is not allowed as a medium to advertise tobacco products at such events without the tobacco warning that "smoking is dangerous to health" prominently displayed.

Any person who smokes tobacco in prohibited public places is guilty of an offence and liable, on conviction, to a fine of not less than N200 and not more than N1000; or to imprisonment for a term of not less than one (1) month but not more than Two (2) years.

A person found guilty of smoking in prohibited public places could also suffer both a fine and a term of imprisonment as stated in the preceding above paragraph.

Any person who advertises, sells or offer for sale any tobacco product without the prescribed tobacco warning prominently inscribed on the tobacco product is liable, on conviction, to a fine of not less than Five Thousand Naira (N5,000).

Where the offending advertiser or seller of tobacco products without the statutory warning signs inscribed on the tobacco product is a corporate body, the penalty for contravention, on conviction, is a fine of not less than Five Thousand Naira (N5,000) or imprisonment for a term not exceeding Three (3) years; or to both the fine and the term of imprisonment to be borne by the key or controlling officials of the corporate body who were aware, connived or consented to the tobacco warning statutory contravention(s).

Numerous Tobacco Smoking Control Bills have remained un-passed into Law by the National Assembly. One of such Bills is the Tobacco Smoking (Control) Bill 2013, which seeks to provide regulations on the production, importation, exportation, advertisement, promotion, sponsorship, distribution, sale of tobacco products, and the designation of areas where tobacco products may or may not be smoked; and on other matters related to tobacco smoking.

Subject to the final deliberation and the assent to one of the versions or a harmonised version of the Tobacco Smoking (Control) Bill, it is anticipated that further legislation on the labelling of tobacco products, health warnings on tobacco products, outdoor public smoking of tobacco products, the retail selling of tobacco products to persons under the age of 18 years old, advertising and sponsorship of tobacco led events, licensing of the stakeholders in the tobacco industry, enforcement of these regulations, etc. will be captured in this awaited Federal Law.

This is a free educational material which does not create a Client/Attorney relationship. Readers are advised to always seek professional legal advice to their specific situations from qualified Legal Practitioners. Questions, comments, criticisms, suggestions, new ideas, contributions, etc. are always welcomed. You can also visit our website for more legal materials.

This material is protected by International Intellectual Property Laws and Regulations. This material can only be re-distributed for non-profit educational purposes only on the strict condition that our authorship is acknowledged, and the Disclaimer Notice is prominently displayed.

Legal Alert – May 2014 – Risk Management and Insurance Legislations

The most common medium for undertaking a commercial enterprise is through the registration of a limited liability company, which is also known as a corporation in some jurisdictions. 
As with any human undertaking, there are risks associated with a registered enterprise; and where these risks are not kept in perspective, managed and or prevented, such registered enterprise risk levels could become too high, with the result the enterprise may be wound up or liquidated.
Some of the most common compliance requirements that any successful enterprise should adhere to, and insurance covers that such enterprise must always retain, are highlighted herein for your guidance and benefit. Grave fines and other penalties are attached to the contravention of any of these provisions.
It is a mandatory requirement under the Companies and Allied Matters Act (“CAMA”) for every private company to ensure that at all times, it has a minimum of two (2) Directors and two (2) Shareholders; with its number of members/shareholders never exceeding fifty (50) members at any one time.
It is also a mandatory requirement that a private company shall not, unless authorised by law to do so, invite members of the public to subscribe to any of its shares or debentures. A private company is also forbidden from soliciting from the members of the public the deposit of money for fixed periods, whether or not such moneys bear or earn interest.
Where a private company infringes any of the above provisions, such private company, its Directors and Shareholders shall cease to be entitled to the privileges and exemptions that a private company and its members enjoy. Some of such privileges include the separation of the legal existence of the company from its members or Shareholders; the restriction of the liability of its members to only the unpaid portion of the shares allotted to them; etc.
Where however the above contravention or contraventions arose inadvertently or for some other sufficient reasonable cause or ground, a Court of law may on such just and expedient terms relieve the private company from the legal consequences of any such default.
Every company is required at registration, to state among other things its objects, which are the nature or kind or type of business or businesses which the company is authorised to undertake. 
Where a company undertakes businesses that are not authorised by its Memorandum of Association, consequences like law suits by its Shareholders or investigations by the Corporate Affairs Commission to redress such unlawful or oppressive action or actions could arise.
Every registered company is required to, within six (6) months of incorporation, for registered public companies, and eighteen (18) months for private companies, hold their first Shareholders Meeting; and subsequent Meetings must be held on an annual basis.
The penalties for not holding the mandatory annual Shareholders Meeting includes fines, which shall be borne by the company and every officer of such defaulting company who is proven to be aware of the default.
Unbeknownst to many, it is the mandatory legal responsibility of the Directors of every registered company to prepare the annual Financial Statements for their company. The Auditors engaged during this process only provide assistance to the Directors with regard to preparing the Statements and Reports. 
To be contained in every annual Financial Statement are the Directors’ Report, Auditors Report, Balance Sheet, Income Statement (which is also known as the Profit and Loss Account), among other information.
It is also a mandatory requirement for the Directors to ensure that the Financial Statements are annexed to the statutory Annual Returns which must be filed at the Corporate Affairs Commission.
The failure to prepare the annual Financial Statements, and file them as an annexure to a company’s Annual Returns, attracts fines which are inimical to the sustenance of the defaulting company.
There are numerous Corporate Governance provisions, in CAMA, intended by the legislature to minimise some of the Corporate Governance risks that any company may have to bear.
Some of such risks include:-
(i)The prohibition of any tax-free remuneration to the Directors of a company.
(ii)The prohibition of Directors deriving any secret benefits in respect of any transaction that the Director’s company is involved in or such a Director accepting a bribe, gift or commission in the performance of his or her duties.
(iii)The obligation for Directors to disclose any personal interest, and avoid conflict of interest situations while directing the affairs of the company.
The Financial Reporting Council of Nigeria Act, 2011 established the Financial Reporting Council of Nigeria (“F.R.C.N”).
With the objective of protecting investors and retaining public confidence, the F.R.C.N is charged by statute with the responsibilities of, among other things, developing and publishing accounting and financial reporting standards to be observed in the preparation of Financial Statements of public interest entities in Nigeria.
F.R.C.N is further charged to maintain a register of professionals engaged by public interest entities; and no such professional shall render any service to a public interest entity unless registered with F.R.C.N.
Despite the provisions of the F.R.C.N Act not applying to private limited liability companies, it is recommended that private limited liability companies desirous of fortifying their corporate governance practices should familiarise themselves with the F.R.C.N rules, and implement such rules that will grow and protect their businesses.
Nigeria is among many other countries that have adopted the International Financial Reporting Standards (“IFRS”) in place of the old Generally Accepted Accounting Practice (“GAAP”).
From the phased transition schedule, Nigerian publicly listed companies, and other companies with significant public interest are required to convert their Financial Reporting Standards from GAAP to IFRS before 1st January 2012. Small and Medium sized entities are required to effect the Financial Statement conversion by 1st January 2014.
The implication of the above is that all the Financial Statements prepared and submitted to the Federal Inland Revenue Service (“FIRS”) must be prepared in accordance with the IFRS template. This requirement creates the anomaly of the F.R.C.N Law not been applicable to private companies with no public interest whilst the same private companies must comply with the IFRS regulations as supervised by F.R.C.N. Unfortunately, until these Laws are amended or challenged up to the highest Appellate Courts of Law, private companies will remain in the damning compliance dilemma in this area of the Law.
The unabating financial crisis with “predatory debtors” that escalate these crisis especially in the banking industry led the Central Bank of Nigeria (“CBN”) to create a central Credit Risk Management System (“CRMS”), which is more commonly known as a Credit Bureau System.
By the provisions of Sections 33 and 57 of the Central Bank of Nigeria (Establishment) Act, 2007, legal force was provided to the CBN to demand from all licensed Financial Institutions monthly returns on all credits and debits information, with a minimum account opening balance of N1,000,000 (One Million Naira). These returns, according to the CBN website, are compiled and disseminated to all operators and regulators in the Financial Market requiring these information.
Nigerian Banks are now statutorily required to make enquiries from the CRMS regarding any intending borrower so as to determine their eligibility or otherwise for credit.
The CBN is also empowered to licence and regulate private credit bureaux establishments who must also subscribe to the CBN data collection regulations.
Infringement of any of the above provisions attracts penalties.
In addition to Corporate Governance minimum compliance requirements, some of which are enumerated above, there are various statutory insurance provisions intended to protect property and persons. Some of these provisions, summaries of which are provided hereunder, are very valuable risk management tools which though are mandatory, we recommend to you as business necessities.
The Insurance Act recognises the following categories of insurance businesses:-
A.Fire Insurance
B.General Accident Insurance
C.Motor Vehicle Insurance
D.Marine and Aviation Insurance
E.Oil and Gas Insurance
F.Engineering Insurance
G.Bonds Credit Guarantee and Suretyship Insurance.
H.Life Insurance 
I.Miscellaneous Insurance.
All buildings under construction and having more than two floors must be insured with a registered insurer in respect of any construction risk or negligence which may result in bodily injury, or loss of life, or damage to property.
Also, public buildings, whether privately or publicly owned, must be insured with a registered insurer in respect of any loss or damage to property or bodily injury or death suffered by the user of the premises or by third parties to the public building.
It is also a mandatory legal requirement that all goods to be imported into Nigeria must be insured with a Nigerian registered insurer.
All motor vehicles in Nigeria must also have a minimum cover of third-party insurance. This legal requirement applies to the owner of the motor vehicle, whether or not the owner is the driver of the motor vehicle. Further information in this area can be gathered from the Insurance Act and the Motor Vehicles (Third Party) Insurance Act.
One of the greatest risks to the existence of any business is for such a business not to be in constant tune with the minimum operating licences required in its industry. Some examples will now be considered.
A non-Nigerian company, whether resident in Nigeria or not, cannot carry on any business in Nigeria unless and until it is incorporated as a Nigerian company, in accordance with the provisions of CAMA. Where a default arises, any contract that such a company enters into will be declared null and void, with the benefits accruing therefrom lost.
A non-resident insurance company cannot carry on insurance business in Nigeria without first of all being incorporated under CAMA; and secondly being registered by the Nigerian National Insurance Commission.
A final example is with regard to the Oil and Gas sector of the Nigerian economy, which presently remains critical to the economic sustenance of the Nigerian Federation. Any business involved in any Oil and Gas enterprise must obtain an operating licence from the Department of Petroleum Resources (“DPR”).
To engender public confidence in the Nigerian Banking system, the Nigerian Deposit Insurance Corporation (“NDIC”) was created and statutorily charged to insure all deposit liabilities of licensed banks and other deposit-taking financial institutions operating in Nigeria. It is therefore mandatory for these licensed financial institutions to insure their deposits with NDIC.
There is however a limit to the amount that a depositor can receive from NDIC in the event that a financial institution’s operating licence is revoked or withdrawn. Presently, the maximum amount for depositors of licensed banks to receive in the event of a liquidation of the financial institution is N500,000; while for other financial institutions, the maximum amount receivable is N200,000.
The manpower capacity of any business is arguably such a business’ greatest asset. Mindful of this reality, there are numerous employee compliance provisions, which if not adhered to, bear financial risks to any defaulting enterprise.
Employment Agreements are generally required to be in writing, with both the employer and the employee given the legal right to terminate the employment Agreement with notice.
Employees are also statutorily entitled to sick and annual paid leave. See the provisions of the Labour Act for more information on these areas.
One of such mandatory employee compliance requirement is as stated in the Pension Reforms Act (as amended), which now requires every employer in Nigeria, whether in the public or in the private sector of the Nigerian economy, having five (5) or more employees, to contribute a minimum of seven and a half per cent (7.5%) of each of its employees’ monthly emolument to this mandatory contributory pension scheme. 
Every employee is also required to contribute another minimum of seven and a half per cent (7.5%) of the employees’ monthly emoluments to the contributory pension scheme. 
Penalties will accrue where any employer fails to implement the mandatory provisions of the Pension Reforms Act (as amended).
In addition to the above compulsory pension contribution, every employer in Nigeria with five or more employees must maintain a Group Life Insurance Policy in favour of its employees, for a minimum of three (3) times the annual total emolument of each employee.
A further risk compliance requirement on Nigerian employers is their compliance with the provisions of the Employees’ Compensation Act, 2010. This Law repealed the Workmen’s Compensation Act; and makes robust provisions for compensation to be paid to an employee, whether in the private or in the public sector, in the event of any death, injury, disease or disability which must arise out of or in the course of the employment.
The Nigerian Social Insurance Trust Fund (“NSITF”) Management Board is statutorily empowered to collect the monthly one per cent (1%) contributions of each employer’s payroll, which ensures that a solvent compensation fund is managed in the interest of the employees and their employers.
To continuously boost the entire economy, the Industrial Training Fund was created to promote and encourage the acquisition of skills by indigenous employees.
Every employer with five (5) or more employees, or with a lesser number of employees but having a turnover of N50,000,000 and above per annum, shall in respect of each calendar year contribute one per cent (1%) of its/his total annual payroll to the Industrial Training Fund (“ITF”).
Fortunately, employers that actively train their employees at subjects that are pre-approved by ITF are entitled to apply to ITF for a refund of fifty per cent (50%) of the training expenses incurred by the employer. Where a refund is made by ITF to an employer, ITF is obligated to inform the relevant tax authority of such a refunded training expenditure.
Any breach of the above provisions attracts fines of between N500,000 to N1,000,000 for both the corporate body involved, and its principal officers, i.e. Chief Executive Officer, Secretary, etc. Terms of imprisonment could also be imposed with the fine(s).
A key risk to doing business in Nigeria is the recurring multiplication of taxes which stifles the growth of enterprises and the larger economy. To curb this problem, the Federal, Lagos and Edo State Governments are examples of some governments that have passed legislation emphatically demarcating what taxes each tier of government can levy and collect.
It is therefore important that as a business owner, you familiarise yourself with, and adhere to these tax provisions.
Samples of some of these taxes, and which tier of government is authorised to collect them, are stated in the following paragraphs.
Taxes collected by the Federal Government.
1.Companies Income Tax and Education Tax.
2.Petroleum Profits Tax
3.Value Added Tax
4.Capital Gains Tax
5.Stamp Duties Tax, where the parties are corporate bodies and residents of the Federal Capital Territory, Abuja.
Taxes collected by State Governments.
1.Personal Income and Withholding Taxes on the income of individuals only.
2.Capital Gains Tax on the gains earned by individuals.
3.Pools, Betting and Lotteries, Gaming and Casino Taxes.
4.Road Taxes.
5.Business Premises Registration. In urban areas, the maximum amount is N10,000 for initial registration and N5,000 per annum for the renewal of this registration.
6.Development Levy payable by taxable individuals only in the maximum amount of N100 per annum.
7.Naming of Street Registration in State capitals.
8.Right of Occupancy Fees on State Land in urban areas.
9.Market Taxes and Levies where State finance is involved.
Taxes and Levies collected by Local Governments
1.Shops and Kiosks Rate.
2.Tenement Rates.
3.On and Off Liquor Licence Fees.
4.Slaughter Slab Fees.
5.Marriage, Birth and Death Registration Fees.
6.Name of Streets (outside the State Capital) Registration Fees.
7.Customary Right of Occupancy Fees for Land in Rural Areas.
8.Motor Park Levies.
9.Market Taxes and Levies, excluding any market where State finance is involved.
10.Radio and Television Licence Fees (other than radio and television transmitters).
11.Vehicle Radio Licence Fee imposed by the Local Government where the vehicle is registered.
12.Wrong Parking Charges.
13.Signboard and Advertisement Permit Fees.
14.Merriment and Road Closure Levy.
15.Religious Places Establishment Permit Fees.
Legal Alert – March 2014 – Nigeria Health Care Delivery Laws
Nigeria Health Care Delivery Laws
The availability of minimum, qualitative health care services to a vast majority of citizens must be regarded by any responsible government as one of the guaranteed fundamental human rights.
The provision of health care delivery services in Nigeria is the responsibility of the three tiers of government; namely the Federal, the States, and the Local Governments.
The Constitution of the Federal Republic of Nigeria, 1999 has provisions which require the Nigerian government to among other things formulate policies which ensures that qualitative health care, sick benefits and other similar health care services are provided to the citizens of Nigeria. Unfortunately, these constitutional provisions are only a guide as they are non-justiciable; i.e. they cannot be brought before a Court of Law for judicial determination of the government’s compliance with the said constitutional provisions.
Also, the inability of the three tiers of government to provide minimum, qualitative and affordable health care services in Nigeria, led to the enactment of the National Health Insurance Scheme Act, which Act seeks to provide health care benefits to persons, their spouses and not more than four (4) biological children under the age of 18 years old.
There is also the National Agency for Food and Drugs Administration and Control Act, which among other things established the managing Agency to regulate and control the importation, exportation, manufacture, advertisement, distribution, sale and use of food, drugs, cosmetics, medical devices, bottled water and chemicals.
Most recently, in 2014, the Nigerian Senate, with a lot of objections from some stakeholders in the health care sector, passed the National Health Bill. Pending its assent, it is reported that this Bill will, when passed into Law, guarantee minimum and basic health care services to children under the age of five (5) years old, pregnant women and elderly people with disabilities.
An exposition of some of the health care legislations in Nigeria will be undertaken in this presentation so as to provide you with more information on your health care rights and benefits. 
The National Health Insurance Scheme (“NHIS”), has the primary objective of ensuring access to good, qualitative and cost-effective health care services to every health care insured Nigerian citizen and a restricted number of his dependents. 
The NHIS also has as one of its objective the protection of such insured Nigerian families from exorbitant medical bills arising from their not having any health care insurance cover.
The NHIS, like any other insurance scheme, is required to assist the health care sector in Nigeria to have an equitable distribution of health care standards, facilities and costs among different income groups.
Contributions to the NHIS are voluntary, as any employer with a minimum of Ten (10) employees, may, together with every person in his employment, pay a health care insurance contribution to NHIS, at such rate and in such manner as may be determined from time to time by the Governing Council of the NHIS.
All NHIS contributions are required to be paid into the account of the health-insured’s chosen Health Maintenance Organisation (“HMO”).
Employers’ contribution to the NHIS, on behalf of their employees, must not however result in the reduction, directly or indirectly, of the employees’ remuneration or allowances, on whose behalf the NHIS contribution is, are or was made.
The NHIS is managed by the NHIS Governing Council; and the NHIS Governing Council has among its key functions the registration of all participants in the NHIS; namely Health Maintenance Organisations (“HMOs”), Health Care Providers (“HCPs”), employers, employees, etc.
Persons who are not obligated to join the NHIS are allowed to apply to be registered with the NHIS as voluntary contributors; and on registration, to make the specified contributions like other NHIS contributors to the NHIS.
In return for registering with the NHIS, and making contributions to the scheme, insured beneficiaries of the scheme are entitled to such quality of health care services that the contributor or subscriber has paid for.
Complaints and violations of any of the provisions of the NHIS Act are required to be referred for judicial decision to the nearest State or Federal Capital Territory, Abuja, Health Insurance Arbitration Board.
All complaints are required to be in writing and delivered within sixty (60) days from the date when the event giving rise to the complaint arose. An extension of time may however be granted if the Arbitration Board is satisfied that the complainant was justifiably unable to submit the complaint within sixty (60) days of the occurrence of the complained event.
Any registered person who fails to pay any NHIS contribution into the account of any NHIS organisation within the time specified; or who deducts NHIS contributions from an employee’s wages and withholds such NHIS deductions, commits an offence which on conviction, in the case of a first offender, attracts a fine of N100,000 or 500 per cent of the amount involved, together with accrued interest; this fine could be with or without imprisonment for a term not exceeding two (2) years or less than one (1) year; or to both the fine and the term of imprisonment.
For repeat offenders, the above monetary penalties and term of imprisonment are required to be doubled when the repeat offender is convicted.
Where any offender is a corporate body, its Directors and Managers who are or were aware of, connived or consented to the infraction of the provisions of the NHIS Act will be deemed to have committed the offence in their individual capacity, and will be liable to prosecution and punishment in the like manner stated above.
One of the benefits that an employer derives from incurring NHIS contributions on behalf of its employees is that the employer will have a healthier and more dependable workforce.
Another benefit to the employer and other independent contributors is that NHIS contributions are tax deductible expenses when computing the tax liability of the NHIS contributor for the relevant tax period.
Also, NHIS contributions are non-transferable to the creditors of a NHIS registered operator, where such operator goes into bankruptcy or insolvency. And where a merger or acquisition occurs, the acquiring entity shall take over the NHIS statutory responsibilities of the previous entities.
All health care providers – medical centres, institutions or professionals – are statutorily required to have a professional indemnity cover from an insurance company approved by the NHIS Governing Council.
As food and drug administration and control are very essential to qualitative health care, the National Agency for Food and Drugs Administration and Control Act established the National Agency for Food and Drugs Administration and Control (“NAFDAC”).
NAFDAC’s birth was also facilitated by the urgent need to stop the illicit trade in adulterated and counterfeit drugs and foods, from which many lives were frequently lost.
NAFDAC is the government Agency charged to among other things, regulate and control the manufacture, importation, exportation, advertisement, distribution, sale and use of food, drugs, cosmetic, medical devices, bottled water and chemicals in Nigeria.
NAFDAC is also statutorily charged to be the leader in appropriate technological advancement, enforcement and compliance with standard specification for all food, drugs, cosmetics, chemical and such other similar industries, manufactured, imported, exported, etc within the territory of Nigeria.
Any person who obstructs a NAFDAC official in the performance of his or her duties under the NAFDAC Act; or contravenes any of the provisions of any regulations made pursuant to the NAFDAC Act, will be liable on conviction to a fine or a term of imprisonment; or to both the fine and the term of imprisonment, for the offence so committed.
Where the NAFDAC Act offence is committed by a corporate body, every Director, Manager, Secretary or such similar officer in the corporate body who consented, connived or neglected to prevent the breach shall be deemed to be personally guilty of the offence and liable on conviction to a fine of N100,000.
The Federal High Court is seized with the exclusive jurisdiction to try offences committed under the NOTAP Act.
By the provisions of the Employees’ Compensation Act, 2010, all employees are entitled to compensation for any death, disease or disability arising from or in the cause of any employment. The conditions precedent to an employee enjoying this benefit is that the employer must mandatorily make a minimum monthly contribution of one per cent (1%) of the employer’s monthly payroll to the Employees’ Compensation Fund.
Also, by Section 9 (3) of the Pensions Reform Act, 2004, employees are entitled to enjoy life insurance cover of not less than three (3) times their annual total emolument.
The National Primary Health Care Development Agency Act created the National Primary Health Care Development Agency, which Agency has among its functions the development and regular review of all health care policies, vis-a-vis their relevance to the development of Primary Health Care in Nigeria.
This Agency, which is under the Federal Ministry of Health, is also charged to provide technical support to States and Local Governments in their planning, management and implementation of accelerated primary health care development in Nigeria.
This is a free educational material which does not create a Client/Attorney relationship. Readers are advised to seek professional legal advice to their specific situations from qualified Legal Practitioners. Questions, comments, criticisms, suggestions, new ideas, contributions, etc are always welcomed.
This material is protected by International Intellectual Property Laws and Regulations. Where redistributed, our authorship and disclaimer notice must be prominently acknowledged and displayed.
Legal Alert – February 2014 – Environmental Compliance Requirements for Non-Oil and Gas Companies

Introduction - Environmental Compliance Requirements

Managing and protecting the environment continues to be an enormous task that Governments around the world cannot be expected to bear alone.

Also, public perception that environmental protection and legislations only apply to materials which are toxic and hazardous to the environment has not endeared compliance, even at the least minimum compliance levels required for sustaining a good environment.
In Nigeria, there are Federal and State Legislations which seek to protect the environment; and some of these legislations directly and indirectly apply to many establishments that are not engaged in oil and gas activities. Some of such legislations include:-

1. The National Environmental Standards and Regulations Enforcement Agency (Establishment) Act 2007.
2. The Environmental Impact Assessment Act.
3. The Lagos State Environmental Protection Agency Law.
4. The Edo State Sanitation and Pollution Management Law
5. The Delta State Environmental Protection Agency Law.
6. The Abuja Environmental Protection Board Act.

The National Environmental Standards and Regulations Enforcement Agency (Establishment) Act 2007

The National Environmental Standards and Regulations Enforcement Agency (Establishment) Act, 2007 repealed the Federal Environmental Protection Agency Act.

The National Environmental Standards and Regulations Enforcement Agency (Establishment) Act, 2007 ("the NESREA Act") created the National Environmental Standards and Regulations Enforcement Agency ("NESREA") with the principal responsibility of protecting and developing the environment, its biodiversity, and conservation.

NESREA is further statutorily charged to ensure the sustainable development of Nigeria's natural resources, i.e. its standards, regulations, rules, laws, policies and guidelines on water quality, environmental health and sanitation, which includes pollution abatement, etc.

NESREA is also charged to enforce compliance with environmental regulations on the importation, exportation, production, distribution, storage, sale, use, handling and disposal of hazardous chemicals and waste generated in the none oil and gas industries.

NESREA is not however empowered to regulate most environmental activities in the oil and gas sector.
In furtherance of the objectives of the NESREA Act, various environmental regulations were recently published in the government's official journal known as the Gazette. Some of these regulations provide governance direction in some of these areas of human endeavour:-

1. Wetlands, River Banks, Lake Shores, Mountain, Hills, etc.
2. Sanitation and Waste Control.
3. Mineral Resources.
4. Ozone Layer Protection.
5. Food, Beverages and Tobacco.
6. Textile, Wearing Apparel, Leather and Footwear.
7. Noise Standards and Control.
8. Chemicals, Pharmaceuticals, Soap and Detergent.
9. Telecommunication and Broadcasting.
10. Soil Erosion and Food Control.
11. Protection of the Endangered Species.
12. Coastal and Marine Area Protection.
13. Construction, Decommissioning and Demolition Activities.
14. Control of Vehicular Emissions from Petrol and Diesel Engines.
15. Electrical/Electronic Activities.

As food and other nourishments remain very vital to the subsistence of mankind, the highlights of the NESREA National Environmental (Food, Beverages and Tobacco Sector) Regulations, 2009 ("the Food, Beverages and Tobacco Environmental Regulations") will be reviewed to provide a sampling of what is contained in the other 23 NESREA Environmental Regulations.

The Food, Beverages and Tobacco Environmental Regulations is intended to prevent and minimise pollution from every operation and ancillary activity in the Food, Beverages and Tobacco Industry.
Every company in the Food, Beverages and Tobacco sectors of the economy must therefore ensure compliance with the following:-

I. Every new industry and major developmental project must obtain an Environmental Impact Statement ("EIS") before it commences operations.
II. All existing companies must undertake and obtain every three years, an Environmental Audit Report ("EAR").
III. All companies must have and maintain an Environmental Management Plan ("EMP").
IV. All companies must have and maintain an Emergency Response Plan and Equipment to combat pollution hazards.
V. All companies must install anti-pollution equipment for the detoxification of effluent and emissions emanating from any of their pollution related activity.

These Regulations further require companies in the Food, Beverages and Tobacco sector to apply up-to-date, cost-effective and efficient cleaner technologies, which will minimise pollution to the highest degree practicable.

These Regulations further empower NESREA to strictly enforce the three "Rs" – Reuse, Recover and Recycle. Thus, all recyclable damaged and disused packaging materials like glass, plastics, metals, paper, wood, nylon, etc. must be recycled.

The Food, Beverages and Tobacco Environmental Regulations reiterates the Polluter-Pays Principle to every company whose activities pollutes the environment by ensuring that such a company must collect, treat, transport and dispose of the waste that it generates within specified standards and guidelines.
Polluter-Pays Principle further requires that a polluter of the environment will also be responsible for the costs of any damage, the assessment, control, clean-up, remediation, restoration or reclamation, compensation to any affected person or persons, etc. arising from such a polluter's infringing activities.

NESREA is statutorily required to recognise every company that demonstrates and adopts the best environmental practices. One of the ways that such recognition will be conferred is by NESREA awarding to such a company the NESREA compliance mark flag award, which the compliant company can use to brand itself and its products.
There are five kinds of NESREA compliance flag award; from the highest which is Green, to Blue, Yellow, Red and the lowest for non-compliance, which is red.

The Environmental Impact Assessment Act
The Environmental Impact Assessment Act ("EIA Act") was enacted to set out the general principles, procedures and methods that would enable the prior evaluation of any possible environmental impact, that any project or development, whether private or public sector led, would have on the environment.

Where a development or project is likely to have any impact on the environment, whether such a project or development is among the type of development for which a Mandatory Environmental Impact Assessment ("MEIA") must be undertaken, and an approved environmental impact assessment certification obtained, such assessment or analysis must be commenced at the very early stage of the project or development; and the Environmental Impact Assessment ("EIA") must be approved by NESREA as provided for in Section 35 of the NESREA Act.

The final decisions of NESREA are published after comments and opinions are received from members of the public and other stakeholders to the project or development.

Failure to comply with the provisions of the NESREA Act attracts fines and terms of imprisonment for both corporate bodies and individuals.
Lagos State Environmental Protection Agency Law

In Lagos State, the applicable Law is the Lagos State Environmental Protection Agency Law. This Law has among other things established the Lagos State Environmental Protection Agency ("LASEPA") as the Agency in Lagos State that manages all environmental matters inside Lagos State.

LASEPA is more commonly known for enforcing environmental sanitation regulations, which includes the disposal and control of all kinds of waste and other hazardous materials in Lagos State.

The LASEPA Law also expressly prohibits the discharge of untreated or un-purified waste of any kind into the environment.
To assist LASEPA in the discharge of its statutory functions, private sector enterprises are required to pay an annual Environmental Development Levy; and the amount of the Levy that a private sector enterprise will pay is subject to the nature of its business, with various amounts stated in Schedule 2 to the LASEPA Law.

Officials of LASEPA, who have reasonable grounds to believe that a environmental infringement has occurred are authorised by the LASEPA Law to without a warrant, enter, search, seize and or arrest any person or item that is constituting any environmental hazard or infraction.

Other penalties for infringing the LASEPA Law includes fines for both individuals and corporations, and both fine(s) and or terms of imprisonment for individuals.

Abuja Environmental Protection Board
In the Federal Capital Territory ("FCT") the principal legislation is the Abuja Environmental Protection Board Act, 1997. The subsidiary legislations include the Waste Management Rates/Charges Regulations, 2005, and the Solid Waste Control Environmental Monitoring Regulations 2005.

The FCT Environmental Protection Law and Regulations have in addition to making regulations for the protection of the environment, also provided for private businesses to pay an annual environmental levy or charge. Default with this legislation attracts fines, terms of imprisonment and the sealing of the business premises of the defaulting party.

Edo State Sanitation and Pollution Law
Like Lagos State, Edo State also has a similar Environmental Protection Law that goes by the name the Edo State Sanitation and Pollution Law, 2010. This Law empowers the Edo State Ministry of Environment and Public Utilities to charge and collect an annual Environmental Re-mediation and Pollution Management Levy. The average amount for this Levy is N100,000 (One Hundred Thousand Naira) per annum.
One of the penalties for non-compliance with the provisions of the Edo State Sanitation and Pollution Law is the sealing-up of the business premises from which the environmental infraction arises.

Delta State Environmental Protection Laws
Some of the applicable Environmental Laws in Delta State include the Delta State Waste Management Board Law and the Delta State Ecology Law. These legislations, like the ones of other States above mentioned, seek to protect the environment in Delta State while also providing for an annual environmental development levy or charge.

This is a free educational material which does not create a Client/Attorney relationship. Readers are advised to seek professional legal advice to their specific situations from qualified Legal Practitioners. Questions, comments, criticisms, suggestions, new ideas, contributions, etc. are always welcomed. You can also find more materials on our website

This material is protected by International Intellectual Property Laws and Regulations. You can only redistribute it on the strict condition that our authorship is acknowledged, with our Disclaimer Notice prominently displayed.
Legal Alert – January 2014 – Invisible Trades and Fees Remittances Regulations

In this Issue:-
1. Legal News - Lagos State No Smoking in public places, and FIRS Request for Transfer Pricing Policy Documentation
2. Legal Alert - Invisible Trades and Fees Remittances Regulations

Legal News

The Income Tax (Transfer Pricing) Regulations No. 1, 2012 ("TPR") took effect with tax returns that have their basis period beginning after August 2012. The Federal Inland Revenue Service of Nigeria ("FIRS") has accordingly requested all connected persons affected by the TPR to submit their company's Group Transfer Pricing Policy on the pricing of transactions between or among members within the group, or of persons connected with members within a group, in order to avoid a breach of the TPR, and the penalties that attach to such breach.
Lagos State No Smoking in Public Places Bill

The Lagos State House of Assembly has passed a Bill into Law prohibiting smoking in public places in Lagos State. There are fines and terms of imprisonment prescribed for any contravention of this Law.
Legal Alert - Invisible Trades - Fees Remittances Regulations

The repeal of the Exchange Control Act, in furtherance of the liberalisation of trade in Nigeria, is not however a free regime for the remittance of fees arising from invisible trades like royalty payments for the use of Trademarks, Patents, other Intellectual Property Rights, or technical advisory services.

One of the Compliance Regulation, on this subject of the remittance of income earned from invisible trades, is the Central Bank of Nigeria Monetary, Credit, Foreign Trade and Exchange Policy Guidelines for fiscal years 2012/2013 ("foreign trade and exchange guidelines") which provides trench-holds for the maximum range of fees that can be remitted under invisible trade transactions. Range of Fees for Invisible Trade Transactions
The recommended range of fees that can be remitted for the use of intellectual property rights - like trademarks, patents, know-how, etc must be between 0.50 to 5.00 per cent of the net sales or profit before tax ("PBT") of the licensee company. For Hotel services, the recommended range of remittable fees for incentive fees must not exceed 8.00 per cent of the Gross Operating Profit ("GOP") of the Hotel, while the basic fee shall not exceed 3.00 per cent of the Hotel's net sales. Fees paid for Technical Services must not be tied to the net sales of the Nigerian company. In its stead, such fees can only be settled on a per diem, man-hours, man-day or man-month basis.
Annual Technical Support Fees paid to a Information Technology Licensor can only range between 15.00 to 23.00 per cent as Licensee Fees for a period not exceeding three (3) years. Remittable Consultancy Fees are restricted to projects requiring very high technology content which content is not otherwise available locally. The allowable remittable consultancy fees, for these kinds of consultancy services, shall not exceed a maximum amount of 5.00 per cent of the project's costs.

Technology Transfer Agreements
Where there is a Technology Transfer Agreement ("TTA"), such Agreement must be submitted to the National Office for Technology Acquisition and Promotion ("NOTAP"), for registration, within sixty (60) days of its execution. The recommended range of remittable fees that is provided for in the NOTAP 2011 "Revised Guidelines for the Registration and Monitoring of Technology Transfer Agreements ("NOTAP Revised Guidelines") are similar to those in the CBN Foreign Trade and Exchange Guidelines. For example, and depending on the nature and extent of the management services, the management service fees are required to range from 1-5% of the PBT. For Hotels managed by an international chain, the range of fees is 1-2% of net sales for management/marketing/advertising fees.

This is a free educational material which does not create a Client/Attorney relationship. Readers are advised to seek professional legal advice to their specific situations from qualified Legal Practitioners. Questions, comments, criticisms, suggestions, new ideas, contributions, etc are always welcomed.

This material is protected by International Intellectual Property Laws and Regulations, on the strict condition that our authorship is acknowledged, this material may be shared with other persons with our Disclaimer Notice prominently displayed.