The Companies and Allied Matters Act 2020, hereafter referred to as (CAMA), which repealed and replaced the old 1990 Act, was one of the most anticipated bills of the decade. A sweeping change in Nigeria’s corporate governance regime was expected, aimed at improving the ease of doing business, fostering accountability and revolutionizing business practice in Nigeria.
At least that was the expectation of the main players in the corporate sphere. However, CAMA has incorporated into its sections provisions that seriously threaten the existence of non-profit organizations and their right to freedom of association and religion.
Of these sections, the most important is Part F, specifically Section 839 which gives the Corporate Affairs Commission (CAC) the power to suspend the directors of an association for – (a) misconduct or mismanagement of the administration of the association; (b) ensure the proper use of the property of the association for the achievement of its purpose; (c) for the public interest or; d) when the affairs of the association are managed fraudulently.
In addition, the commission is further empowered to appoint interim administrators who will oversee the affairs of these associations and under the supervision of the commission. The above provision is one of many provisions in Part F of the CAMA which has been perceived by many, and rightly so, to have a “chilling effect” due to its tendency to violate the rights guaranteed by the Constitution.
It should be noted that before the law was assented to by President Muhammadu Buhari, the Socio-Economic Rights and Responsibility Project (SERAP) wrote an open letter to the President, asking him to “urgently revoke your Corporate Consent and Related Matters”. Act 2020 (CAMA 2020) and to send the legislation back to the National Assembly to address its fundamental flaws, including removing repressive provisions from the Act, including sections 839, 842, 843, 844 and 850 contained in Part F of the Act, and any other similar provisions.
The excerpt from the pre-action reads: “By seeking to suspend and remove trustees and appoint interim trustees for the associations, the government appears to want to put itself in a position to politicize the mandates of these associations and undermine ideas that the right to freedom of association and related rights are meant to be protected in a democratic society. I align myself with SERAP’s position.
Article 40 of the 1999 Constitution (as amended) of the Federal Republic of Nigeria, the African Charter on Human Rights, the Revised Treaty of the Economic Community of West African States, among other laws and conventions, to which Nigeria is a signatory, have guaranteed the rights of Nigerian citizens to associate freely and the freedom to practice the religion of their choice.
The involvement of the commission in the suspension, dismissal and appointment of interim administrators, as well as the supervision of the management of the affairs of these associations by the commission constitutes a threat to the freedom of association and religion of the members of these associations and religious bodies.
Indeed, the commission has the power to impose on the reluctant members of an association certain administrators who do not share the objective, the faith and the aspirations of their organization, which entails a risk of derailment in the pursuit of their motivations or, in the worst case. , liquidation of these organizations.
Certainly, it is not out of place for the commission to regulate the affairs of religious bodies and other non-governmental associations as is done in other places like the UK under the Charities Act 2011.
However, Section 839(1)(b) of the CAMA did not expand its boundaries to capture certain factors such as the identification of a particular trustee who is liable for said misconduct or mismanagement of the association and take action against him alone. Instead, it rather ambiguously states that the CAC can suspend “the trustees” of an association.
The UK Charities Act is clear about identifying the trustee responsible for misconduct or mismanagement and taking action against that person, while the CAMA targets a class of trustees, regardless of either the offender. This gap can be a ground of autocracy and arbitrariness which will probably lead to the violation of the rights of the members of these associations.
It should be noted that most non-governmental organizations have had a tremendous impact in various Nigerian sectors through donor-funded projects, and this strict provision may send the wrong signal to their benefactors.
Finally, Section 839 failed to conceptualize and expand the definition of certain terms. For example, since the Commission can suspend trustees on the basis of the public interest, CAMA should have given particular consideration to what may constitute mismanagement, misconduct or breach of public order.
The absence of this leaves the fate of these associations to the whims of the commission – a flagrant abuse of the rule of law and democratic rights and freedoms.
Tokma Esq. is a partner at NV Denden & Co (Barristers and Solicitors)