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. Here are excerpts from the interview.
Tell us more about yourself?
I’m Jiti Ogunye. I’m a lawyer, engaged in general legal practice. I have vast professional interests in human rights, democracy, corporate and business issues, and we have clients from all over the country that we service in respect of their business engagements and all that. For this reason, inevitably, we keep an eye on the business environment and corporate governance issues, and issues that generally affect business and give advice to clients regarding corporate governance and regulatory compliance issues and on 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 main challenge that businesses have with the government regarding regulations and policies, is policies and regulations inconsistency. Some people call it somersault but I will rather call it inconsistency. Society is dynamic. Business itself is dynamic and it is expected therefore that regulations and policies cannot 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 and businesses have just started embracing them, and suddenly there is a macro development which regulators want to respond to by churning 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. It’s like a medical doctor giving a prognosis of an illness.
In the same vein, businesses also want predictability because those rules and regulations govern business operations. When regulations appear not too uncertain or temporary, it is not good for business; 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, which are major. We all know about production challenges. We all know that for those who produce things in Nigeria, the issue of ever skyrocketing cost of production, including sourcing power. Added to that now is the issue of insecurity in the country. I mean the issue of businesses safely and 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 could, for example, telecommunication companies have envisaged that at a point government, for reasons of maintaining security, in the North West, would call on them to shut down their operations.
The one they had in the North East which, of course, telecommunication companies were getting familiar with was the actual vandalization of infrastructure and equipment and all that. But in the North-West part of the Country, right now, it’s not the case of vandalization, but a case of shutting down because of security exigency and anti-banditry and anti-terrorists’ internal security operations. How could they have imagined that that would occur two, three years ago? So, we have the problem of our socio-economic reality impacting on businesses.
We do not want to dwell on that for now, but focus regulations and policies of the government and highlight how they impact businesses. And I’m saying that the major concern of businesses, based on our experience, is the issue of policy inconsistency and regulatory inconsistency. We have even observed a new trend. We have observed some pandering in policy adoption. In our response to what is happening globally, we do not want to be left out. We also want to do certain things, as they are being done elsewhere in the world, even when our local reality is not dictating that we should just copy and paste. So post-COVID era, for example, there has been a lot of regulations, interventions here and there and all that.
In these policy adoptions and responses, we observe that there has not been a sufficient study of our policy environment, nor a critical look at our peculiarities, to enable us come 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 quality and efficient services.
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. 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 deliberately using a harsher word that what l see in that AISOP Document is regimentation.
I have looked at those provisions and I’m amazed that a sector that is not entirely 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 the terms that an advertising contracts must contain.
That is an affront to the principle of freedom of contract. Any basic text on law of contract, business law or commercial transactions that you read will tell you that contract, essentially is a concept, an arraignment by which two parties or more willingly and voluntarily come together to agree on a business relationship to create value. And there are certain inherent elements.
There must be an offer, there must be an acceptance of that offer, there must be a consideration. A contract is not dictated but negotiated, 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 agreed, for example, either orally or in writing with your daughter that should he pass an academic examination, you would buy her 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 contracts, 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 3. Section 3 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’s interest rate.
I say, wait a minute! What kind of contract is that? Truly, I hope AISOP Rules will be revised because when it comes into operation, I fear the Rules will stifle advertising businesses, whereas the intention may be to grow the industry, protect SMEs so that they are not exploited, and ensure that they 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-life, 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, you are engaged in regimentation. Not standardization.
When you have AISOP Rules with the dictations, an advertiser, for example, or those on the demand side, may consider all they are being compelled do and the timelines within which they must do them, and decide to revise their advertising schedules or calendar. They may say that “instead of advertising daily or weekly, as I should do, why can’t I be advertising on a monthly or quarterly basis?
Because these new rules are now dictating the terms of payment to me” AISOP Rules are dictating terms of contract, rather than allowing 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, that clause is creating a regime, or I rather call it, regulatory diktat. The AISOP provisions offend the right to contract in freedom, and even if you look at this in the larger context, 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 and when rolled out and 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 and should dictate in the name of regulations. So that the point being made will be clear, let’s use two other professions as examples. I know this may be considered 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 dictate to lawyers the payment terms of the services they provide? Yes, in the legal profession, there are provisions in the Rules of Professional Conduct for Legal Practitioners, governing remuneration and fees, 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 have a provision, for example, allowing lawyers to conduct cases on a contingency fee payment arrangement. Meaning that you take a legal action, the person whose action you are taking has a good case. The prospect of victory upon litigation is there but he is indigent or he doesn’t have the funds to pay for the services at that moment that he desperately needs legal service, the Rules allow you to offer that service. That’s why it’s called contingency fee payment on the premise that upon the lawyer resolving the legal action or winning, he recovers his fees. It’s like no cure, no pay. If a lawyer has a contingency fee payment arrangement with a client, he is permitted to charge more than he would have charged were the client to have funds to pay at the time of hiring the lawyer’s service.
But the percentage that the lawyer must charge is not prescribed. The days within which, or the month within which the lawyer must recover the fee is 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 go into the nitty-gritty, to go into 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 could be revisited so that such provisions are then taken out of the AISOP because I see stifling of advertising businesses, all in the name of encouraging small and medium scale enterprises and businesses.
What may be occasioned 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 want to advertise here, this is how we are going to recover our money, this is the discount you are going to enjoy, this is the payment method you must follow, et cetera. 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 prefer this putative three -year contract to a three-month contract with the compulsory terms that within 40 days you must pay me, within 30 days, you must pay me”. That is why l said terms of payment must remain the contractual discretion of the parties in the sector. My hunch is that since this is happening in the COVID era, the Council wants to encourage businesses and all that, but they must look for creative areas in which to encourage advertising businesses 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 delayed payment, that issue can be tacked in contracting, by parties on the supply side, who are also in their respective associations. They, as people that are affiliated in their associations can self-regulate 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 must 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 the terms of contract they want to jointly or commonly bind themselves to execute. That’s what is called freedom of contract. Except that contract is an illegal contract ab initio, or void ab initio, they must be left by regulations to agree on favorable terms between the two of them. Candidly 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 was the promoter-musician (artiste) contract between Sunday Adegeye (Sunny Ade) and Bolarinwa Abioro 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 these, as supportive of SMEs and the entire sector as they may appear to be, they give the impression that those on the supply side now have a guaranteed payment term.
The Rules are expected to be binding. And interest shall be charged if there is payment default. So, it is whatever the supply side wants that is expected tom prevail. But what of those who are on the other side who are now being constrained? The ideal and legal thing is for the two parties to a contract to agree to a payment term therein. But rules are intervening now to force the issues and say this is how payment must be made.
Let me use another example to demonstrate why the AISOP Rules must be revised to remove the payment term prescriptions therein. In the employment sector, payment of salaries is fundamental. More fundamental than what we were talking about because we are talking about the growth of advertising businesses. This is not only about the growth of the human being, but also the very existence of a human being who works in a business or an organization, including some of the businesses that we are talking about here. Let us look at payment of salaries and emoluments, pension deductions. I have cases with many organizations, including media organizations, that do not make their pension employers’ deductions and remittances, contrary to the provisions of the Pensions Act, for their workers.
Those workers, what are they expected to do? Possibly go to the National Industrial Court to enforce their rights. In this example, there are no rules to dictate that on at the end of the month, you must pay salary to the worker, and that if you fail to pay, that salary begins to attract interest. There are no such rules, perhaps in the recognition that even under labor and employment law, the contract between parties is a contract of personal service. It’s not a contract with statutory flavor. It’s not á contract like a contract in the public sector where somebody is unlawfully removed and he can then be 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 ones one being introduced by the AISOP Rules. And under a contract of employment, we are dealing with the right to exist. if l may use that term, where people that have worked must be paid their salaries to sustain themselves and sustain their families.
My submission is that there are creative ways to ensure that there is fair play and that contracts awarded, contracts signed by parties, equitably can be enforced. In in the AISOP Rules, and I find this fascinating, there is a procedure for conflict resolution. It states that if contract money is not paid or there is a dispute, you can go to APCON domestic forum to seek a resolution before you escalate it and go to court, and that seeking internal resolution is without prejudice to the right of parties to go to court.
This provision is, perhaps, one of the saving graces in the AISOP Rules: that parties have the right to go to court. You can’t constrain or block the exercise of that right because that raises the issue of access to justice. Section 6.(6) b Of the Constitution of Nigeria. The right to justice is a constitutional right, so you cannot abrogate that right by industry rules.
But I want to use that as an example. AISOP Rules say that parties can enforce their contract through internal conflict resolution mechanism and the court of law. So, if that procedure is stipulated that businesses seeking redress, parties seeking redress can use the mechanism and the court, the question is, why can’t that procedure be trusted to ensure that if payment is not being made as mutually agreed to and 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 must be paid under a contract?
And so, my insistence remains that these new industry rules are dictations. That’s why l call them a diktat. My legal proposition is 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 agree to terms that are mutually favorable to them and which they can, all things being considered, easily and conveniently carry out. If an advertiser and an advertising platform owner would favor a term or even agree to an upfront payment before service is rendered, don’t insert a norm or rule, as an industry practice, that they should wait for 40 days and 30 days.
If they agree to payment after six weeks of service, so be it. Because, again, this is the larger point, every big business may have an advertisement budget, but that budget isn’t an arbitrary one. 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 constrain an advertising party by giving it payment timelines and deadlines, you may be contracting and constricting advertising business.
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 petitions where humongous fees are paid? So how are you going to dictate that? And then from place to place. Lagos, Ibadan, Ikare-Akoko, Abuja . In the law practice, in some jurisdictions or certain states, there are aspects of legal practice that are so available in abundance that do not exist elsewhere, for example admiralty and shipping matters. So, you dare not regulate emolument across the board, and in accordance solely with professional ages.
This is 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 give a diktat that constrains the rights and liberties of parties to engage in businesses freely because don’t forget, advertising is not a state-organized business. It’s a private sector-led business.
The AISOP Rules that I have read have appendices prescribing the entire terms and clauses of an advertising contract, the format. The Rules are prescriptive. They impinge on my work as a lawyer. If a lawyer is crafting a contract, sure he relies on precedents and forms, but 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, the lawyer is not bound by precedents. Once the essential elements of a binding contract agreement are there, one is good to go. But AISOP Rules 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 fashioning these rules, I don’t know how wide the consultation was or how wide the discussion within the industry was. 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 quickly make amends. I do not expect them to dig in and say that these are immutable rules, which cannot be changed. 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, 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?
The concern being raised is justified, 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 those being regulated would have, before the advent of the rules, built 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 introducing a Bill. After the first reading, and the second reading a committee will be set up, then there will be a public hearing to hear the views of everybody and all that. And then the third reading, and passage before assent, or exercise of veto power, and repassage of the bill as the case may be. What an elaborate process! But after that, when the law is eventually made, what happens many times is that the law is 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 the public hearing component, and after all that the bill, now law is challenged in a court of law, where a judge sits alone, and adjudicate the matter and decide whether the law in some parts does offend the provision of the constitution, or are in conflict with it, and if it does, the court using what’s called judicial review will use its judicial power to declare certain provisions of the law illegal and unconstitutional.
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 is not out of place. This is why 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 reservations are being made let’s look at this again and see what can be done so that it will not appear as if anybody has been defeated. My fear 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 AISOP Rules, in circumvention of the Rules. Section 39 of the Constitution guarantees the right to freedom of expression. You can voice out how you feel about anything that concerns you. I know that for regulations and things like this, there will be continuous discussions and reviews. But at the point you roll out the rules, pre- rule formulation discussions ought to have been exhausted.
What I understood was that at the initial point, stakeholders were 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 presentations, after the consultations, when these rules were crafted, when the standards were crafted, APCON ought to have referred to these rules as “Draft AISOP”, and then circulate the Draft to all stakeholders, and say, “now we have taken all these representations, we have taken all these perspectives and positions, we have come out with this Draft AISOP.
Let’s discuss the draft rules and let’s talk about what each section contains”.
These new feedbacks and inputs will be factored into the final review and revision leading to the release of the Final Copy of the AISOP Rules. 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 stalemate.
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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