CAMA Act 2020: Appraising the legal, commercial & political implications on NGOs and religious bodies (1)

Since its passage, the Companies and Allied Matters Act 2020 (CAMA) has continued to generate reactions, mostly from the religious bodies and Non-Governmental Organisations (NGOs). Chief among the concerns is that Part F of CAMA gives the Corporate Affairs Commission (CAC), and by extension, the Federal Government, the power to significantly interfere with the administration of incorporated religious bodies and NGOs (the Bodies).

This power includes the authority to suspend and replace the Bodies’ leadership (Section 839); to spy on and effect transfer of funds from the (dormant) accounts of the Bodies (Section 844); to obtain the financial records and other information from the Bodies and impose penalty in the event of noncompliance (Sections 843-846 and 848), (Sections 839, 843- 846 and 848, together the Provisions).

Following this controversy, this article examines the validity of the Provisions within the ambit of the 1999 Constitution of the Federal Republic of Nigeria as amended (the Constitution) and certain treaties which Nigeria is signatory; also the commercial and political implications of the Provisions. This article finds that the Provisions are valid, albeit debatable, and the Provisions present Nigeria with enormous commercial and political benefits. It concludes with recommendations on how the concerns can be addressed and the opportunities harnessed.

The provisions and the constitution

There are concerns that the Provisions threaten rights to freedom of religion, association, privacy and fair-hearing. Most worrisome is the provision on the power of the CAC to replace the trustees and officers of the Bodies, which may arguably lead to the intrusion of the Bodies by persons with contrary beliefs and orientation.

The burning question is whether the Provisions are indeed a threat or violate the identified human rights protected by the Constitution. Sections 36, 37, 38 and 40 of the Constitution guarantee the rights to privacy and to freedom of religion and association respectively. These rights are however not absolute. They are circumscribed, in the main, by Section 45, which subjects the rights to the dictate of “any law that is reasonably justifiable in a democratic society- in the interest of defence, public safety, public order, public morality or public heath, or for the purpose of protecting the rights and freedom of other persons.”

Put differently, the rights can be restricted or interfered with by a law if the law is reasonably justifiable in a democracy and is for the promotion of the listed metrics. A law will only meet this threshold if it is reasonable and or it is not capable of stifling or rendering illusory, the enjoyment of the rights. See IGP v ANPP & Ors (2007) LPELR-8932(CA); Media Rights Agenda & Ors v Nigeria (2000) AHRLR 200 (ACHPR 1998). The law will be deemed “reasonable” if it is fair, proper, moderate, suitable under the circumstances- See Etajata & Ors v. Ologbo & Anor (2007) LPELR-1171(SC).

Notably, the onus to prove that the Provisions do not meet the threshold is on the Bodies. See Osawe & Ors. v. Registrar of Trade Unions (1985) LPELR-2792(SC). The ability of the Bodies to discharge this burden is doubtful. The exercise of the power to suspend and replace in Section 839, is not at the whims of CAC, but it is only exercisable after the CAC has: (a) made reasonable findings of mismanagement, fraud etc; (b) furnished a competent court with “all reasonable evidence” regarding the findings; and (c) obtained the court’s order to suspend.

A competent court would, in view of Section 251 of the Constitution, be the Federal High Court, and not a magistrate court which is historically easier to abuse. Arguably, this is fair, proper, etc. relative to the negative impact such mismanagement or fraud may have on the Nation’s financial system, and by extension, on defence, public safety, order and morality; and on the rights of the Bodies’ unsuspecting members.

Meanwhile, the fairness of the section can be questioned on the grounds that the wordings (especially of Subsections 2 and 3) suggest that CAC can secure the order ex parte, that is, behind the back of the concerned entity and without an opportunity to be heard before the order is made. Argument can be made that such an ex parte mode violates right to fair hearing. Except where the Bodies are able to demonstrate an exceptional injustice such an ex parte order will cause, the chances that the court will hold that the provision violates right to fair hearing are slim, considering the recent decision of the Supreme Court in FRN v Jonathan (2019) LPELR-46944(SC) where the Court held that Section 17 of the Advanced Fee Fraud and Other Related Offences Act, 2006, which empowers law enforcement agents to obtain an interim (ex parte) forfeiture order does not violate the defendant’s right to fair hearing or right to own property, and the provision is therefore constitutional.

By Sections 842-844, CAC can have access to the “dormant” accounts of the Bodies and direct the transfer of the fund therein to another entity. A dormant account is one in which, for five years, there is no tangible transaction, other than payment of money into the account or deduction of bank charges (Section 844 (2)). An obligation of secrecy or restriction on disclosure under common law or statute is explicitly said to be no bar (Section 844 (1)).

Thus, to the extent that the transfer of the fund is required to be done only after the affected party has been given an opportunity to defend itself (Section 842 (2)) and the provisions are legitimately meant to prevent the adverse effect of illicit funds in dormant accounts, it remains to be seen how these provisions can be faulted. Our jurisprudence is replete with decisions where the courts have upheld the validity of similar provisions. See UBA v. CAC & Ors (2016) LPELR-40569(CA); Chrome I.B. Ltd & Ors v. EFCC & Ors (2018) LPELR-44818(CA). A similar reasoning applies to Sections 846 and 848 which border on the power of CAC to request for audited financial records and other information from the Bodies.

Ibikunle is an Associate at Olaniwun Ajayi LP in Lagos