The Advertising Practitioners Council of Nigeria (APCON) recently came up with a new Advertising Standards of Practice codes which the Council touted as the required practice standard that can support the development of Advertising practice in Nigeria, but the practice standard has continued to stir controversies. Though supported by the Heads of Advertising Sectoral Groups (HASG) on the supply-side of the industry, one sectoral Group, the Advertisers Association of Nigeria (ADVAN), the only sectoral group on the demand side, have come out to contest some provisions in the new AISOP. In this interview, foremost business, and human rights lawyer, Jiti Ogunye pointed out that some of the knotty issues contained in the policy are diktat, not constitutionally backed, and should be revisited for industrial growth. Excerpts
Can we meet you briefly?
I’m Jiti Ogunye. I’m a lawyer, a general legal practitioner. However, I have vast interests, professional interests in human rights issues, democracy issues, corporate issues, business issues, and we have clients from all over the country that we service in respect of their business engagements and all that. Within that context, we keep an eye on the business environment and corporate governance issues, and issues that generally affect business and give advice to clients regarding compliance issues and legal matters generally.
How will you assess the Nigerian business environment with the various policies of the government and its agencies and the effects on some of the business sectors in the country?
The major challenge that businesses have with the government regarding regulations and policies, is policies and regulations inconsistency. Some people call it somersault but I rather call them inconsistency. Society is dynamic, the business itself can be dynamic and it is expected therefore that regulations and policies are not expected to be static. I mean, there should be no dogmatism regarding regulations. However, when regulations and policies appear not to be well thought through or even when they are well thought through and people are just embracing them, businesses are embracing them, there is a macro intervention gain, and then regulators want to respond to that, and then they churn out new regulatory regimes, businesses suffer as a result of this, because as lawyers say, the law must be certain. Law must be predictable so that when a lawyer gives advice, he gives advice based on the certainty of law and the possible certainty of the operation of that law, you can just say see this is what’s going to happen. It’s like a medical doctor giving a prognosis of how an illness will be.
In the same vein, businesses also want predictability because those rules and regulations govern their business operations. When the regulations appear not too certain, and all businesses complain a lot about this and they suffer the consequences of this.
Are there other challenges bedeviling businesses in the country aside from policy inconsistency?
Yes, there are other challenges, but I call it the major challenge, I won’t talk about production challenges. We all know that for those who produce things in Nigeria, the issue of how they source power, cost of production has gone up. Added to that now is the issue of insecurity in the country. Even the issue of businesses effectively distributing their products across the length and breadth of Nigeria is a concern, human beings are not secure. So how do we then imagine that goods and services can be secure? I mean, how would, for example, telecommunication companies have envisaged that at a point government, for reasons of maintaining security, in the North West, for example, that they will have to be called upon to shut down their operations. The one they had in the North East which, of course, telecommunication companies are getting familiar with is the actual vandalisation of their equipment and all that.
But here, it’s not the case of vandalisation, but a case of shutting down because it has to be done. How could they have imagined that that would occur two, three years ago? Yes, we have this problem of the macro reality impacting on businesses and we are not going to talk about that for now, but focusing on regulations and policies of the government and how they impact businesses. And I’m saying that the major concern of businesses, based on our experience is the issue of policy inconsistency, regulatory inconsistency, and even the issue of pandering is something that we have observed here.
In our response to what is happening globally, we do not want to be left out. We also want to do certain things even when our local reality is not dictating that we should just copy and paste and do that. So post-COVID era, there have been a lot of regulations, interventions here and there and all that. And so people responding to that without actually looking at our environment, looking at our peculiarities and then, coming to a reasonable understanding that while we have to be global, regarding best practices, we also have to be local in terms of how these practices are domesticated and then at the end of the day ensure that they serve the interests of businesses and interests of people who want services at the end of the day.
Looking at the policies and regulations of government and its agencies, recently APCON came out with AISOP policy, it says, to regulate the advertising sector and grow the small and medium enterprises (SMEs) in the country, as a follow up to the demand of the government to grow businesses post-Covid. What’s your view about it as it relates to laws on businesses?
Well, APCON, has a statutory duty to regulate the sector. That’s why it’s a council and nobody is going to doubt that. In regulating, however, certain factors have to be taken into consideration. How far must regulation go? No one in his right senses will call for the absence of regulations. Human affairs have to be regulated. Law regulates the conduct of human beings, right? So, there should be regulation and that’s why sometimes when there is under-deregulation, people also call for regulation. When there’s over-regulation, people also complain about over-regulation. The challenge is how to strike a balance that will ensure that what is being regulated is not killed, it’s not stifled, and the regulation does not even impede growth and creation of value.
We have had a look at the AISOP, we look at that document. Largely it has 11 broad sections and then a lot of appendices. Our assessment, I will say this with all sense of responsibility is that as a whole, and this is a general critique of that document, the document strives to put in place what I will call regimentation of the sector rather than regulation, I have said that regulation is not negative and that overregulation is bad, but I’m using a harsher word that what l see is regimentation. I have looked at those provisions and I’m a little bit amazed that a sector that is not only a public sector, which indeed largely is private sector-led in terms of those who are on the demand side and the supply side in the advertising industry is being dictated to on how to create a contract, on how to arrive at the contract, and not only that, on what the contracts must contain.
That is an affront to the principle of freedom of contract. Any basic text, law text, business law text that you read on the law of contract will tell you that contract, essentially is a phenomenon, is a concept, is an arraignment by which two parties or three parties or more parties willingly and voluntarily come together to agree on a relationship for value. And there are certain elements inherent, there must be an offer, there must be an acceptance of that offer, there must be a consideration. And then you talk about the resolution of the contract, etc. Now parties are expected to voluntarily engage. Of course, certain contracts are not permissible in law, and that’s why we have what we call void and illegal contracts. Two parties, for example, cannot agree to engage in an illicit business, with one party agreeing to supply cocaine, for example, to another party and then if one party defaulted, the party that was supposed to be receiving the cocaine would then go to court and say, I want to enforce the contract. No, they’ll be arrested. That’s purely an illegal contract.
Certain contracts are domestic and cannot be regarded as a contract. If you agree, for example, either orally or in writing that my daughter, if you read and pass your examination, I will buy you a car and you defaulted and the daughter then wants to enforce that contract against the father or parents, the court would say no, this is not the kind of contract to enforce. So, there are laws that govern that but save this, parties are expected to voluntarily come together and create their terms, including terms of payment. Now the AISOP rules that we’re talking about, for example, in section three, and there are many sections but that level broadly, section three governs payment terms, and it has specific subsections or subclauses prescribing days within which payment must be made. It must be made within 30 days and no later than 45 days. If there’s a default, there must be Interest and that interest must be at the Central bank rate.
I say, wait a minute! What kind of contract is that? Truly, I hope this will be revised because when it comes into operation it will stifle, whereas they intend to grow the industry, protect SMEs so that they are not exploited, and ensure that you continue to create business and generate income. That might be a good intention, but as it’s said, the way to hell is paved with good intentions. So how will these provisions, how will these rules operate in real-time, and what will be the lasting impact on the industry regarding the creation of value and value flow? Because when you do that, rather than focus on how to creatively expand the volume of value, I will speak in clear terms. When you say that that should be, an advertiser, for example, or those on the demand side, when they consider all the issues – if I have to pay someone, if I have to do this or that -, rather than advertise monthly or daily, as I should do, why can’t I be advertising on a weekly or quarterly? Because these new rules are now saying that I should do this and should pay this, rather than allow the parties to agree on their terms, terms that are favorable to them, and terms that they knew at the time of engagement that they could easily carry out, that they could easily, mutually execute.
That’s how contracts are done. And so for me, that provision, that section, for example, and I go to other sections, clauses is creating a regime, or I rather call it, regulatory diktat -this is how it must be. I’m seeing that those provisions offend the right to contract in freedom, and even if you look at this in the larger perspective, is tantamount to restriction of trade, restriction of business. Because I’m not even sure that studies and surveys were carried out before the formulation of these rules to determine or anticipate what will be the impact of such provisions if they were ruled out and were enforced.
Are there other provisions in the AISOP Policy that should be looked at as regards it being contradictory to laws of the land and will affect business operations of the players in the sector?
Yes. The other provisions, for example, after the payment terms, you have the method of payment. The method by which payments will be made, and discounts and commissions. These are things that should be at the contractual discretion of the parties. Not something that a council can dictate in the name of regulations. So that it will be clear, let’s use two other professions as examples. I know this is comparing apples and oranges, but I don’t think so as it’s about the provision of services.
Does the Nigerian Medical Association (NMA) or the Medical and Dental Council of Nigeria dictate to doctors the cost of providing medical services? How much they must take to treat malaria? To carry out surgery? And the period within which those who need medical services must pay? Or that there should be an intervention that Doctors shouldn’t carry out surgery or help patients to save their lives if they are not paid first, because if they are not paid first, their businesses will suffer. Or are you aware of such rules in the legal profession, by which the NBA, or the body of benchers, or the Legal Practitioners Disciplinary Committee or the Bar Council then tell lawyers that? Yes, in the legal profession, there is the schedule of fees for certain things, and that is why lawyers talk about five percent of this and so on.
But nobody is going around to say look, to recover your fees, you must be paid within 30 days as payment terms, you must be paid within 20 days, nobody says that. The rules of professional practice in the legal profession, rules of professional conduct we call it, has a provision, for example, allowing lawyers to conduct cases on a contingency fee payment arrangement. Meaning that you take an action, the person whose actions you are taking has a good case. The prospect of victory upon litigation is there but is indigent or he doesn’t have the funds to pay for the services at that moment that he desperately needed legal service, the rules allow you to offer that service.
That’s why it’s called contingency fee tenant on the premise that upon you winning, it’s like no cure, no pay, upon you winning, you will pay X amount and you are then permitted to charge more than you would have charged if he has the cash to pay you already. Contingency fee payment. But even the percentage that you must charge is not prescribed, the days within which, or the month within which you must recover the money, it’s not prescribed because that’s left to the parties. So what I’m saying is that any law of contract, any regulation of contract, any regulation of business, should not go beyond setting the ground rules that will govern how parties contract and should never attempt to then go into the nitty-gritty, the details of contracting as to be prescribing the terms of payment, the payment method, dispute resolution and so on.
These are my valid objections to the AISOP rules, and I wish that these rules be revisited so that such provisions are then taken out of because I see it stifling business and in the name of encouraging small and medium scale enterprises and businesses and all that, What we then have at the end of the day is that you have a skewed regime that is tilted in favor of those who are on the supply side, who can then say If you should want to come and advertise here, this is how we are going to recover our money and all that. This is the discount you are going to enjoy, this is the payment method you must follow. This is what it is and all the others. Because in truth payment can be in kind in business, because that’s value, it’s not just about money.
For example, if an advertiser engages somebody on the supply side and says, let’s have a contract. If you give us this rate, we will give you a contract for two years without fail, or we will give you a contract for three years without fail. The person on the supply side can look at that and say rather than have an episodic advertisement, or quarterly advertisement, renewable from quarter to quarter, they are committing themselves for three years. That’s value for me. So, this is something that I find reasonable and because of that, I have a three-year period to recover my money, I won’t have a situation whereby I say within 40 days you must pay me, within 30 days, you must pay me and sooner. That is why l say it’s at the discretion of the parties in the sector. So, my call is that yes, regulation is good. This is happening post-COVID, they want to encourage businesses and all that, but they must look for creative areas in which to encourage business without this diktat.
I want you to address the challenges that this AISOP policy seeks to solve. You mentioned earlier, the challenge of payment. APCON wants to use it to support SMEs, create jobs, ensure that SMEs have a flow of money to sustain the business. How else can these challenges be addressed as it’s an existing challenge and it’s so grave that APCON came up with the policy to address it as businesses there feel stifled? Why would an advertiser not be interested in a payment plan, say within 30, 40 days? Those on the supply side feel stifled already and at the mercy of the advertisers on the demand side. What better way do you think this can be solved?
I have considered that perspective. I’m not dismissive of that perspective. However, my insistence is that. If you have an issue, payment issue in the sector, that issue is not resolved by dictatorial legislation or rules intervention. It will create more problems than it’s intended to solve, and I will demonstrate it. First, let me say that if those who are on the supply side are complaining about payment terms or means of payment or delayed payment, in contracting, one supplier to the other, who are also in their respective associations.
They, as people that are affiliated in the association come by themselves and say, look, this is what we should do and, in their contracts, insist on negotiating with an advertiser on what is best for them. Look, it is possible that a supplier can in the contract with an advertiser, say that payment will be made within seven days. If the two of them agree, even earlier than the 30 days being suggested by the rules that’s fine. But their right to freely so agree must never be taken away from them. It is not a sentimental issue. It is important that in a free market economy that we are told Nigeria is, or aspiring to be, that parties to an agreement, those offering the service and those providing the service should be permitted to negotiate.
That’s what is called freedom of contract. Except that contract is an illegal contract ab initio, or void contract ab initio and agrees on favorable terms between the two of them. Factly speaking, there are sufficient safeguards under the law of contract to protect either party from unconscionable contracts. Certain contracts are called unconscionable contracts, contracts with oppressive terms. An example is that between Sunday Adegeye known as Sunny Ade and Bolarinwa of TYC records, decades ago. In certain cases where contracts are found oppressive, the court can even intervene on behalf of either of the parties. So, I am saying that regulations like this, as supportive of SMEs as they may be, and supportive of the sector as they are, may appear to be that those on the supply side now have a guaranteed payment term because the rules are binding, as there is interest and others, so it is whatever, but what of those who are on the other side who are now being constraint? Yes, you have to pay for it and all that. But now, rather than the two, then agreeing on how they should pay for it, rules are intervening
now to force the issues and say this is how it must be. Another interesting example is when people are employed, which is still more fundamental than what we were talking about because we are talking about the growth of a business. This is not only about the growth of the human body, but also the existence of a human being who works in the business, who works in an organization, including some of the businesses that we are talking about here. Payment of salary and emoluments, pension deductions. I am here to tell you that I have several cases with many organizations that do not make their pension deductions contrary to the Pension Act for their workers. Those workers, what are they expected to do? Possibly go to the National Industrial Court to enforce payment and enforce their rights.
In those examples, there are no rules to dictate that on the 31st day, you must pay a salary to this worker. If you don’t pay, that salary begins to attract interest. There are no such rules, perhaps on the recognition that even under labor and employment law, the contract between parties is a contract of service. It’s a contract of employment in the private sector, It’s not a contract with statutory flavor. It’s not á contract like a contract in the public sector where somebody is removed and then is reinstated. No. If somebody is wrongly removed in the private sector, the only thing that the person can get perhaps is damages. As it is said, you can’t foist a willing employee on an unwilling employer.
I’m saying that even in the private sector, talking about employment, we have no such guarantees or rules like the one they are suggesting here. And that has to do with the right to exist if l can use that word, where people that have worked must be paid their salary to sustain themselves and sustain their families. So, I am saying that, yes, that concern is there.
But my submission is that there are creative ways to look at how to ensure that there is fair play and that contracts awarded, contracts signed by parties, for example, and it’s very fascinating, in the rules, there is a procedure, even these new rules that I am critiquing and assessing, for conflict resolution thing. It said if money is not paid or there is a problem and all that, you can go to an APCON forum to do that before you escalate it and go to court or whatever without prejudice to the right of parties to go to court, as its said, which is perhaps one of the saving grace that I have, that parties still have the right to go to court. You can’t constrain their right because that’s an issue of access to justice. Section 6.6b Of the Constitution. The right to justice is a constitutional right, so you cannot constrain them. But I want to use that as an example.
It says that parties can go and enforce their contract. So if that procedure is being stipulated there that businesses seeking redress, parties seeking redress can get it. So why can’t that procedure be trusted to ensure that if payment is not being made as individually prescribed in individual contracts, parties can then go and use that mechanism of conflict resolution to ensure that they get paid, rather than dictating as an industry rule or standard practice, periods within which money perforce can be paid for a contract? So that’s the issue for me.
And so, my insistence remains that these are dictations. That’s why l call it diktat, that when you regulate business and regulating parties to a business transaction, you do not dictate such terms as to take away the liberty and rights of individuals to freely contract and agreed to terms that are mutually favorable to them and which they can, all things being considered, that they can easily and conveniently carry it out. If an advertiser would favor a time or even pay upfront before service is rendered, don’t insert as an industrial practice that it should wait for 30 days. If it will be six weeks to pay, all things being considered, Because, again, this is the larger point, every big business may have an advertisement budget, but that budget isn’t arbitrary.
That budget is made considering all other things that the business does to survive and to be run profitably, and that’s the concern that I have. The concern is that when you then constrain and say this is what should happen, that is not justifiable. In our profession, there has been a lot of discussions; there’s a group now called Young Lawyers Forum and they are complaining bitterly that principals are shylocks, that they take all the money, they use them to do the work because they still have the energy and all that, and yet they pay them so poorly. So questions are being raised. Do you fix a minimum wage in the legal profession to be paid? How are you going to fix it? So how do we determine the volume of briefs that come to a law firm and the value of such briefs? In terms of the money, is it every law firm that takes election petition where they pay themselves humongous money that they take from the State Treasury, for example? So how are you going to dictate that? And then from place to place. Lagos, Ibadan.
Owo, and all that. In the practice, wherein some jurisdictions or certain states, there are aspects of legal practice that are so available in abundance that does not exist elsewhere. You go to a place in Ondo, for example, they will not be talking about shipping in that jurisdiction. A ship is to be arrested, they pay in dollars, etc. So, there is a certain aspect of the practice that is not available and if you dare regulate across the board, say If you are year one to five in Ikare-Akoko, this must be your salary, if you are year one to five in Lagos, this is also it. That’s why the matter remains contentious. That complaint has been there ever since. There are no easy ways to resolve such issues. However, the worst way to attempt to resolve them will be to then offer a diktat that constrains the rights and liberties of parties to engage in businesses freely because don’t forget, what we are talking about is not a state-organized business. It’s a private sector-led business.
The rules that I have seen that I say that I’m alarmed about also have appendices talking about the content of the contract, the format. They have already suggested how a contract should look like. It’s prescriptive and also impinges on my work as a lawyer, so if you are ready to prescribe a contract, you look like it. So, in a matter that requires flexibility of terms and professional input, professional advice on how the contract should look like to suit the interest of both parties should be given. But you are now saying that this is the general format, this is what everybody must gravitate towards. There’s a problem with that and as I said, it’s too prescriptive.
Overall, I will say that regulation is something that should be done. But in doing all these rules, I’m not too sure. I don’t know how wide the consultation is or how wide the discussion within the industry is. But even if the discussion was very wide in the face of valid reservations being expressed, objections, criticism, there is no need for those who made the rules to then say no, to dig in and say that these are immutable rules, cannot be changed and all that. I think that the conversation should continue so that these rules can be enriched by such commentaries, such reservations, such assessments. And then they can have more robust rules that will not have these strictures and prescriptions and diktat.
Despite APCON having the statutorily right to come up with rules for the sector, how come that this policy is being challenged, making it seem that it is not all stakeholders in the sector that were carried along during its formulation unlike what obtains in other sectors where public consultation will be held? Are those complaining justified?
That concern, the complaint is valid and I will tell you why. I use one example. Rules, professional rules, professional guidelines, regulations, and all that are best formulated or made after exhaustive discussions, consultation and deliberations. Within the profession that is being regulated and even outside it, for imputes, because rules, regulations, even law. are best obeyed by willing acceptance and compliance and that willing acceptance or compliance is more assured before those rules are made, as parties will already build ownership around those rules. They see these rules as their own, not something that is being imposed on them. For law-making, we are familiar with the process of bringing a Bill. After the first reading, a committee will be set up, then there will be a public hearing to hear the views of everybody and all that.
That elaborate process. But even after that, when the law is eventually made, what happens many times is the law being challenged in the court of law. The law made by the National Assembly, for example, by 109 Senators and 365 House of Representative members, look at that number and then consult the public, and after then they will all be taken to a court of law, where a judge sits in law for that Judge to look at and decide whether the law in some parts does not offend the provision of the constitution, and if it does, the court using what’s called judicial review will then use its judicial power to declare it illegal and unconstitutional, some of those actions.
It’s happened before, it happened to the Electoral Act of 2011 when it was made. It happens every time. That is what’s called the Blue Pencil rule. It’s not the whole law that is rejected, but those sections that are against the provision of the constitution are canceled out and that’s for a law. So, the kind of conversation we are having. I’m not out of place and that’s where I, want APCON to come forward and say, look, what are people saying? Maybe we should have had this feedback at the outset? But discretion is the better part of valour now that these are coming out. Let’s look at this again and see what can be done so that it will not happen as if anybody has been defeated.
No, that’s not the issue, because what may happen and I will elaborate on your question further, is that there may be avoidance of contracts by advertisers. That if this regime holds, pay this; within this time frame, there may be avoidance of contract and there may be contracts outside, in circumvention of this because the regime says all contracts must be in writing which is another thing by me. All contracts will be written, but the little law l know also recognizes oral contracts, oral arguments, oral transactions. In the name of regulation, this just is too prescriptive and that ought not to be so. For the advertisers, who might say that there is the right to freedom of expression, which is a constitutional right that you can voice out how you feel about anything that concerns you. I know that for regulations and things like this, you cannot exhaust discussions, but at a point, you have your rules, but discussions on this ought to have been exhausted. What I understood was that at the initial point they have stakeholders consulted and all that, but when these rules were brought out, no further input was invited.
What should have happened after that initial consultation, input, representation, and position paper after the consultations, when these rules were crafted, when the standards were crafted, they ought to have been referred to as draft AISOP and then circulated again and say, now we have taken all this representation, we have taken all these perspectives and positions, we have come out with this AISOP. Now circulate to all the stakeholders and then say let’s discuss the draft rules and let’s talk about what each and each section contains and those inputs would then be brought back before you then come out with the final copy. That’s what ought to have happened.
Even the constitution allows people to challenge any law that is against them. So, my view is that the AISOP rules, which are not even a law now, you know, are not beyond contestation or challenge. But the objective of that can’t be antagonism, can’t be attrition, can’t be controversy. The objective must be to make all the parties realize that this business will thrive, not by dictation but by encouragement and by, you know, creative measures that will encourage all the players in the sector to contribute their quota to the economy of the country.
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