Legal Framework for Consumer Rights in Nigeria with particular focus on the Telecommunications industry and Power sector

Introduction:

Due to little attention paid to protection of consumer rights in Nigeria, fraudulent and abusive practices by manufacturers and merchants of goods and services are widespread.

Nigeria like other countries around the world, boasts of well-crafted legal framework that guards against abusive business practices or infringement upon the rights of consumers by merchants of goods and services. Under the 1999 Constitution of the Federal Republic of Nigeria, (As amended) sections 35 and 42 provides for fundamental rights to liberty and discrimination from abusive practices in any form or manner of rendering of goods and services to consumers. These rights are also protected by The African Charter on Human and Peoples Rights ratified by Cap A9, Laws of the Federation of Nigeria, 1990.

This paper addresses the legal framework for consumer rights in Nigeria with particular focus on telecommunication and power sector in Nigeria.

Who is a consumer?

A consumer has been defined by the Consumer Protection Council Act, CAP C25 Laws of the Federation, 2004 as an individual who purchases, uses, maintains or disposes of products or services.

Does a consumer have a right? If yes, Can such rights be protected? How can such rights be protected?

A consumer, being the last link in the production chain, has vested legal rights from producers of the goods and services being offered in the market. These rights are as follows:

1. The right to safety and protection from hazardous goods and fraudulent services or business practices;
2. A consumer has absolute right to information, education of products and awareness to the processes, uses and guidelines to the products and services he is being rendered by manufacturers;
3. The right of choice is key to a consumer of product, to enable such consumer to make the right choice from a competitive and predatory market with beaming adverts and prices from a number of products in circulation;
4. A consumer has the right to be satisfied that the product is of standard quality and also will be of benefit to his basic needs;
5. A consumer has the fundamental right of being heard as contained in the constitution as well as redress and compensation whenever his rights are being infringed upon by a manufacturer or merchant;
6. Also, a consumer has a right to safe and secure environment from noxious industrial chemicals, pollutants and toxic wastes from manufacturing plants.

If yes, can such rights be protected?

As it has been established that a consumer has a fundamental right to be protected from unfair and abusive business practices of manufacturers and merchants, it follows that the 1999 Constitution of the Federal Republic of Nigeria, Consumer Protection Rights Act, Nigerian Communications Commission Act, Electric Power Sector Reform Act, and other enabling laws has guaranteed such rights. These are group of laws designed to ensure that the rights of consumers are protected and as well ensure that fair trade competition and the free flow of truthful information in the market place is achieved through the instrumentality and mechanisms of these laws.

In the case of Ransome-Kuti v. Attorney General of the Federation (1985) 2 NWLR (Pt.6) 211, the court held that: “A fundamental right is a right which stands above the ordinary laws of the land and which is antecedent to the political society. It is a precondition to a civilized existence…, the entrenchment of a right in the constitution does not create rights where none existed before; rather it is merely intended to protect existing rights from subsequent legislative interference and to enable their assertion against arbitrary, oppressive and illegal executive action”.

How can such rights be protected?

A consumer, whose rights have been infringed upon by manufacturers, is entitled under the Nigerian laws to seek redress in the appropriate court of law for possible compensation and punishment of errant manufacturers and merchants. In the case of Nwosu v. Nwosu (2012) 8 NWLR (Pt.1301) 5, the court held that: “A legal right is a right cognizable in law. It means a right recognized by law and capable of being enforced by the plaintiff. It is the right of a party recognized and protected by a rule of law, the violation of which would be a legal wrong done to the interest of the plaintiff, even though no action is taken.”

Types of Consumer Protection Cases?

Basically, there are two types of consumer protection rights cases as follows:

1. Individual law suit, and
2. Class action law suit.
3. Individual law suit:

The celebrated case of Donoghue v. Stevenson (1932) AC 562 also known as “the snail in the bottle case” established the first three basic legal principles of “negligence”, “duty of care” and “neighbor principle”, where an individual can institute a civil action against a manufacturer if the respondent’s negligence caused the plaintiff some injury or loss of property.  Legal action under consumer protection rights laws can be instituted at the federal as well as state high courts in all states across Nigeria. Where a victim files a complaint against any company for unfair business practice, such actions can also be enforced by government agencies and offices of attorneys general.

Class action law suit:

A class action law suit involves a group of affected individuals or consumers whose rights have been infringed upon by a manufacturer, company or merchant of products, goods and services. A familiar case in this type of action is the 1996 Kano trovafloxacin trial litigation involving Abdullahi v. Pfizer and Adamu v. Pfizer where five children given trovafloxacin died as well as six of those given ceftriaxone; on February 23, 2011 Pfizer announced an out of court settlement of the sum of $75 million to affected families.

In the above type of case, the balance of power tips in favour of the consumer. An individual whose rights have been violated can join together with others who have similar claims against the same defendant due to the economic scale that exists with a class action lawsuit.

The legal frameworks and enforceability of consumer rights action in Nigeria?

The Federal Government of Nigeria has promulgated several laws tailored towards protecting the rights of consumers. For the purpose of this paper, our focus will be on laws that govern the telecommunications and power sector as follows:

• Nigerian Communications Commission Act, CAP N97, LFN, 2004, and
• Electric Power Sector Reform Act, No. 6, 2005.

The Nigerian Communications Commission Act CAP N97, LFN 2004

This Nigerian Communications Commission Act 2004 established the Nigerian Communications Commission (NCC) as a body corporate with power to sue and be sued. The Act is very comprehensive in scope and covers subjects such as formulation of national policy on frequency management; requirements for issuance of class licences to telecoms operators. The powers conferred on NCC by virtue of section 2 of the Act are as follows:

• To create a regulatory environment for the supply of telecommunications services, facilities and to promote fair competition and efficient market conduct;
• To facilitate the entry into markets for telecommunications services and facilities, of persons wishing to supply such services and facilities;
• To ensure that licenses or authorized carriers and other providers of telecommunications services and infrastructure, meet their commercial obligations and such other obligations specified under this Act, in a manner which promotes cooperation and fairness;
• To protect licensees and the public from unfair conduct of other providers of telecommunications services, with regard to quality of service and to the payment of tariffs;
• To ensure that licensees achieve the highest possible level of accountability and responsiveness to customer and community needs;
• To ensure that standard telephone services are supplied as efficiently and economically as possible and at such performance standards which reasonably meet the social, industrial and commercial needs of the community;
• To promote the development of other sectors of the Nigerian economy through the commercial supply of modern telecommunications services within the framework of the Act;
• To establish technical standards and promote the development of Nigeria’s telecommunications capabilities, industries and skills;
• To ensure that the Nigerian public have growing access to telecommunications facilities; and
• To optimize the use of telecommunications facilities in Nigeria, with due consideration for the rights of the licensees and the public interest.

Electric Power Sector Reform Act, No. 6, 2005.

By virtue of section 31 of this Act, the Nigerian Electricity Regulatory Commission was established and empowered by section 32 to perform the following principal objectives:

1. To create, promote and preserve efficient industry and market structures and to ensure the optimal utilization of resources for the provision of electricity;
2. To maximize access to electricity services by promoting and facilitating consumer connections to distribution systems in both rural and urban areas;

To ensure that an adequate supply of electricity is available to consumers;

1. To ensure that the prices charged by licensees are fair to consumers and are sufficient to allow the licencees to finance their activities and to allow for reasonable earnings for efficient operation;
2. To ensure the safety, security, reliability and quality of service in the production and delivery of electricity to consumers;
3. To ensure that regulations is fair and balanced for licencees, consumers, investors and other stakeholders, and

To present quarterly reports to the President and National Assembly on its activities.

Further to the objectives of Nigerian Electricity Regulatory Commission, section 32 (2) of the Electric Power Sector Reform Act outlines the functions of NERC as follows:

1. Promote competition and private sector participation, when and where feasible;
2. Establish appropriate consumer rights and obligations regarding the provision and use of electricity services;

iii.      License and regulate persons engaged in the generation, transmission system operation, distribution and trading of electricity;

1. Approve amendments to market rules;
2. Monitor the operation of the electricity markets, and
3. Undertake such other activities which are necessary or convenient for better carrying out of or giving effect to the objectives of the commission.

Enforceability of consumer rights action in Nigeria?

For a consumer to succeed in an action under consumer protection rights law, the complainant must show that the defendant owes him a duty of care and that he has suffered damage in consequence of the defendant’s breach of duty of care towards him. See the case of Igheriniovo v. S.C.C nig Ltd (2013) 10 NWLR (Pt.1361) at 138, paras E-G, page 150 where the court stated:

“Negligence is the omission to do something which a reasonable man, guided by those ordinary considerations which ordinarily regulate human affairs, would do, or the doing of something which a reasonable and prudent man would not do. It is conduct which falls below the standard established by law for the protection of other against unreasonable risk of harm. A departure from the conduct expected of a reasonably prudent person under like circumstances. Negligence is a breach of duty of care which causes a loss. It is strictly a question of fact, which must be decided in the light of its own facts”

This duty of care under tort of negligence ranges from inadvertence that is hardly more than accidental to sinful disregard of the safety of others. What amounts to negligence is a question of fact not law, and each case must be decided in the light of its own facts and circumstances. See the case of Lufthansa German Airlines v. Ballanyne (2013) 1 NWLR (Pt.1336) 527-page 544 para-B where the court held:

“Negligence in law ranges from inadvertence that is hardly more than accidental to sinful disregard of the safety of others”

The term negligence connotes a failure to exercise the standard of care that a reasonable prudent person would have exercised in a given similar situation. It denotes any conduct or act that falls below the legal standard established to protect other persons against unreasonable risk of harm, except for conduct that is intentionally, wantonly or willfully disregardful of other person’s rights. See the case of Bouygues Nig Ltd v. O Marine Services Ltd (2013) 3 NWLR (Pt.1342) 429.

For a consumer’s right in negligence to be actionable, the complainant has the onus to establish that:

1. The defendant owed the complainant a duty of care;
2. The duty of care was breached by the defendant;
3. The breach of the duty of care in question caused damages to the complainant. See Orhue v. NEPA (1998) 7 NWLR (Pt.557) 187.

Until a complainant can prove by evidence the actual breach of legal duty of care against the defendant, the action must fail. In order to find a defendant liable for negligence, there must be either admission by him or sufficient evidence adduced to support a finding on his part. Such evidence may be direct or inferential depending on the circumstance of each particular case. See the case of Iwunze v. FRN (2013) 1 NWLR (Pt.1334) 119.

Challenges Telecommunication subscribers face in Nigeria?

Nigerian GSM subscribers are the most short-changed consumers in the world, even when the telecommunication operators generate most profits from these consumers. In the case of Adegboruwa v. Nigerian Communications Commission, the complainant sued the respondents for poor service delivery and arbitrary hike in tariff plan by telecommunication operators in Nigeria; the courts seem rather complacent to reach judgment in favour of teeming Nigerian consumers who have been subjected to disparaging exploitation by GSM operators since 2002 that the matter was instituted in court.

For years now, millions of Nigerian helpless subscribers have borne the brunt of poor service delivery with little or no effort made by the judiciary or government agencies to bring perpetrators to book.

Other noticeable challenges in the telecommunication sector as witnessed by subscribers are high cost of internet subscription, poor ICT infrastructure, lack of maintenance of base stations and weak fire optic cable services.

Every day, cases of abuse of consumer rights are brought to public glare in the telecommunication sector but they naturally fizzle out as a result of weak regulatory system.

Case study of electricity consumers in Nigeria?

Electric power generation began in 1896 and since then, so many reforms have been carried out by various regimes and administrations, but there seems to be no end to the epileptic power supply, unfair and fraudulent business practices witnessed in the power sector. See pages 20 and 21 of The Guardian Newspapers of Sunday, August 9, 2015.

The challenges faced by consumers in the power sector apart from poor power supply are: high electricity tariff, poor metering system, inadequately maintained transformers and cables, power fluctuation and high voltage.

With the present poor state of power supply which has affected businesses across all sectors of the economy, it is considered that an improved power supply in Nigeria will gladden the mind of consumers, investors and foreigners who would want to invest in Nigeria.

Suggestion and needed reforms for Consumer Protection Rights in Nigeria?

At this point, to protect consumers from these abusive, unfair and fraudulent business practices in the telecommunications and power sector, the following suggestions and reforms have been canvassed:

Suggestions:

1. There should be more awareness campaign by the Consumer protection council of consumer rights and existing laws which can help victims to obtain compensation from manufacturers;
2. Consumer protection council are encouraged to use various channels of information dissemination to publish banned and faked products in the market;

iii.      Telecommunication operators are encourage to boast their customer care service baseline to effectively deliver services in the internet connectivity, tariff plan and other value added services;

1. Government should encourage more private participation in the power sector, to boost competition and discourage the monopolistic practices of the existing companies,
2. A reduction in the fixed price as currently charged by the distribution companies, will encourage the patronage of consumers

Reforms:

1. Government reforms are needed in issuance of generation, distribution and transmission licenses in the power sector to encourage private participation and boost healthy competition;
2. The fundamental nature of consumer protection rights action should be the yardstick for the judiciary to be speedier in dispensation of justice;

 Conclusion:

The fundamental right to be heard has been guaranteed by the 1999 Constitution of the Federal Republic of Nigeria as amended. This means that every consumer’s right has been protected under the law and as such if any consumer have the believe that a company or merchant has violated or infringed upon any of his or her rights by abusive and fraudulent business practices, should not hesitate to seek legal advice from a lawyer and possible redress where needed.

References:

1. 1999 Constitution of the Federal Republic of Nigeria as amended;
2. The African Charter on Human and Peoples Rights ratified by CAP A9, Laws of the Federation of Nigeria, 1990;
3. Consumer Protection Council Act, CAP C25 Laws of the Federation, 2004;
4. Ransome-Kuti v. Attorney General of the Federation (1985) 2 NWLR (Pt.6) 211;
5. Nwosu v. Nwosu (2012) 8 NWLR (Pt.1301) 5;
6. Donoghue v. Stevenson (1932) AC 562;
7. Abdullahi v. Pfizer;
8. Adamu v.Pfizer;
9. Nigerian Communications Commission Act, CAP N97, LFN, 2004;
10. Electric Power Sector Reform Act, No. 6, 2005;
11. Igheriniovo v. S.C.C nig Ltd (2013) 10 NWLR (Pt.1361) at 138;
12. Lufthansa German Airlines v. Ballanyne (2013) 1 NWLR (Pt.1336) 527;
13. Bouygues Nig Ltd v. O Marine Services Ltd (2013) 3 NWLR (Pt.1342) 429;
14. Orhue v. NEPA (1998) 7 NWLR (Pt.557) 187;
15. Iwunze v. FRN (2013) 1 NWLR (Pt.1334) 119;
16. Adegboruwa v. Nigerian Communications Commission;
17. Pages 20 and 21 of the Guardian Newspapers of Sunday, August 9, 2015.