Foreign Direct Investment remains a veritable source for industrialisation, employment creation, and revenue generation for countries globally. This is because FDI positively impacts the Gross Domestic Product of global economies. In recent time, President Bola Tinubu made visits abroad with the major objective of attracting foreign investments in form of direct or portfolio investments.
This is evident in the president’s speech delivered at the United Nations General Assembly as well as the G-20 summit held in India. To boost Nigeria’s economy in terms of foreign exchange earnings and employment creation, the president made several commitments in the ease of doing business through tax incentives and assurances on repatriation of funds. While this addresses Nigeria’s present needs in line with economic realities, little or no attention is often paid to employment law compliance required by foreign companies upon incorporation in Nigeria.
Trade agreements are often regarded as drivers for economic growth and sustainability between states. Nigeria has bilateral investment treaties with over 31 countries with 15 of the agreements in force. However, the efficacy of the BIT and Multilateral Investment Treaties in entrenching labour standards remains doubtful. This is because BITs and MITs often provide assurances to investors on the terms of providing an environment conducive to business and promises against expropriation. A review of the bilateral treaty between Nigeria and Canada validates this. Most BITs place minimal emphasis on labour standards other than the minimum standard of treatment prescribed under customary international law.
For instance, Article 16 of the Nigeria-Canada Bilateral Agreement recognises the maintenance of labour standards as a corporate social responsibility. The voluntariness perspective on labour standards for foreign investors further worsens working conditions due to the existing weaknesses in the Nigerian legal framework for labour protection.
Therefore, while some terms contained in BITs and MITs are voluntary and discretionary in nature, they often require specific and further legislative intervention to give effect to the terms in the agreement. To buttress this, the African Continental Free Trade Area agreement has no modicum of legal cloak with respect to labour standards. Due to the mobility of labour in trade, huge dependence will be placed on local employment laws in giving effect to the social rationale behind the agreement.
Furthermore, export credit agencies also play pivotal roles in maintaining labour standards required for achieving decent working conditions. Customarily, export credit agencies provide export insurance services with respect to foreign receivables. ECAs often attach conditions or requirements in the provision of financial support, including adherence to specific labour standards. Significantly, the United States International Development Finance Corporation Environmental and Social Policy Procedures state that ‘‘the corporation is to support projects in countries that are taking deliberate steps towards preserving internationally recognised workers’ rights.
’’ In this context, internationally recognised workers’ rights include the right to freedom of association and collective bargaining, and ratification of international conventions on labour rights amongst others. Through the roles of ECAs in global trade, a more compelling responsibility can be imposed on exporters in terms of compliance with national and international labour standards.
The Nigerian Export-Import Bank also plays a role akin to that of the USIDFC. This implies that NEXIM through its services can also ensure decent working conditions for enterprises in Nigeria by stipulating compliance with labour provisions such as provision of safe working conditions, minimum wage, and prohibition of child labour as requirements for accessing NEXIM’s services.
Nigeria has over the years witnessed unfair labour practices perpetrated by several foreign companies doing businesses in Nigeria. These companies flagrantly flout labour laws as well as labour standards in the form of perpetual casualisation of labour, occupational, health and safety standards, modern slavery, minimum wage, and non-remittance of social security deductions such as pension and employee compensation fund.
This further exposes the lacuna in the Nigerian labour legislation in terms of implementation as well as relevance. I remember during my National Youth Service Corps at Oba Akran, Ikeja, of often witnessing an army of individuals trooping in and out of a factory daily during resumption and closing hours. Out of curiosity, I asked one of the roadside vendors who explained to me that they were casual workers in a foreign company.
During one of my interactions with the casual workers, I was informed about their precarious working conditions and remuneration of N25,000 which was below the national minimum wage. Beyond the zest of FDI, Nigeria must properly evaluate the labour standards practised by foreign companies because it behoves the Nigerian government through the relevant agencies and particularly the Ministry of Labour and Employment to ensure compliance, with stiff penalties for non-compliance.
Furthermore, the International Labour Organisation argues that social conflicts arise not necessarily from unemployment but in cases where citizens feel exploited with their fundamental human rights disregarded. Nigerians can no longer afford to undertake the role of second-class citizens under inhumane working conditions while working for investors who enjoy prominence. There are several news reports where foreign companies in Nigeria violate occupational health and safety standards in the form of precarious working conditions.
The case of Ola Suleiman v Hongzing Steel Company Limited (NICN/LA/73/2011) speaks to this fact. In this case, the claimant worked for the first defendant; a Chinese-owned Private Limited Company engaged in the business of steel manufacturing. The claimant, while working for the first defendant, sustained injuries when the casting he was working on exploded and burnt his body. The claimant, before being taken to the hospital by the first defendant for first medical attention, was beaten up by the agent of the first defendant on the ground that the claimant had wasted the company’s materials.
The claimant, without adequate medical attention for such degree of burns, was discharged from the hospital. Despite this, the defendant refused to pay up the medical bills for his further treatment. The claimant instituted an action in court. Upon investigation of the accident, it was discovered by the safety personnel contracted to investigate the accident that the absence of safety equipment caused the accident. The court held the defendant liable and awarded damages against the defendant. This and many more are the horrifying working conditions Nigerians are subjected to in a bid to eke out a living.
Policies drive the progress of any country across the globe and the Nigerian government through the relevant Ministries, Departments and Agencies must microscopically evaluate foreign direct investments into Nigeria in line with the tenets of decent work. This requires proactive steps beyond the submission of feasibility reports and plans at the point of incorporation.
This could involve a cross-sectoral requirement backed with adequate monitoring to ensure that even after incorporation, labour provisions such as occupational safety and health, minimum wage, and the right to freedom of association among others are respected and complied with. While it is generally believed that foreign companies maintain low-level of compliance in countries with weak labour standards and enforcement, Nigeria can change this narrative by ensuring that there is truly dignity in labour.
To achieve this, a holistic overhaul of the Nigerian labour and employment law gamut must be conducted to bring it in sync with international best practices and current realities because only through decent work can social justice be attained for human capital development.
Source: Punch
