Public Corporations

This is a corporate entity owned and controlled by the government, but which also has substantive independence in the conduct of its affairs. It is a body that can be used to improve the economy and development of any country. Public Corporations combine the features of government business and private business. The main reason for having Public Corporations is the need to implement government policy and foster the welfare of the people.

Legal Status of the Public Corporations

A Public Corporation is a creation of statute and it has distinct identity from its members and government officials, so it can sue and be sued in its own way. See the case of Lagos State Traffic Management Authority v Johnson Ezevoso where the court had to strike out the original suit against the appellant because they weren't a corporate body at the time the case was instituted. Thus, it was stated that a suit cannot be brought against a body which has no distinct identity.

However, if a public corporation has subsidiaries, only the public corporation can enjoy the benefit of a statutory corporate personality. And so such subsidiary cannot sue or be sued. This was the bone of contention in the case of FIRS v Integrated Data Services where the FIRS was only a subsidiary of the IRS.

Contractual capacity of a Public corporation

A public corporation can enter into a contract, it can receive payments or pay for IRS obligations and can sue or be sued based on the contract. However, a public corporation may not be permitted to enter into a contract beyond certain amounts without prior approval of its supervisory ministry.

Perpetual succession and seal

Every public corporation exists in perpetuity. In other words, unless a statute which creates a public corporation is repealed, public corporation will exist and subsist for a long time. The public corporation will use its seal when entering into a contract or other agreements.

The Right to claim Protection under Public Officers Protection Act

The POPA, in section 2(a), provides that in case of any civil wrong committed by a public officer, the action must be brought before the court within three months otherwise, it will be statute barred. Within the meaning of section 318 of the constitution, the public corporation is part of the public service. Therefore, its workers are also public officers. See the case of Awokunle v NEPA where the plaintiff instituted his action in 2004 when the Cause of Action had arisen in 2002. The suit was held statute barred.

Classification of Public Corporations

1. Government agencies: These are entities controlled by the government, and they perform the functions of implementing government policies. Examples of such agencies are the NDLEA, CBN, NAFDAC, etc.
2. Monopolies: These are business oriented entities with singular control of its sphere of operations e.g. Federal Palace Hotel, NITEL, NEPA, Nigerian Airways, etc. This showcases the fact that before the commercialization and privatization Act, there were lots of businesses which the government had a monopoly of.
3. Non-departmental bodies: These entities enjoy some level of autonomy in terms of control and financial needs. Examples are JAMB, NUC, NPA, etc.
4. Parastatals: They are owned wholly or partly by government. They provide social and economic needs for the people. They also exist to provide for the welfare of the people. Examples are the Kaduna Refinery, Port Harcourt refinery.

Control of Public Corporations

1. Legislative control

Legislative control provides effective means of checking the excesses of public corporations. The Legislative, through the various committees, exercise oversight functions on public corporations. The parliament may direct investigations to be conducted into the affairs of public corporations with a view to expose corruption, wastage and inefficiency in the running of such corporations. See sections 88 & 89 of the 1999 constitution. Note that the power to investigate must be used in line with section 88, otherwise it will be null and void. See the case of Tony Momoh v Senate where the court held that the investigation process by the National Assembly concerning who the informant was for a report given by the appellant, was going ultra vires as the process infringed on the appellant's fundamental right.

2. Executive Control

The Executive is responsible for the appointment of public corporation members and also, dissolution. This is also known as the power to "fire and hire". Financial activities are subject to approval by the Executive. As such, every public corporation is placed under supervision of a minister under a ministry.

3. Judicial control

In section 6(6)(b), the Judiciary has the power of judicial review of the actions of the public corporations. The power of judicial review cuts across various grounds such as breach of fair hearing as seen in Odutola v LASTMA, where the court held that the LASTMA has no power to impose fine on traffic offenders as that would constitute a violation of section 36 of the 1999 constitution. There is also the ground of unlawful delegation of authority (Delegatus non potest delegare), judicial review of actions undertaken in bad faith, non-compliance with statutory regulations, inter alia.

Privatization and Commercialization of Public corporations

This notion goes in line with the "Green Light Theory". There are certain reasons for the privatization and commercialization of public corporations. Privatization means the transfer of all or part of government equity or shares to the individuals and corporate bodies, while commercialization is the process of exposing government enterprises to market prices and profit making without taking ownership from the government.

Legal Status of Privatized/Commercialized Public Corporations

A public corporation will cease to have existence once fully privatized. It will no longer be governed by statutes. The applicable law will be Company and Allied Matters Act (1990), the memorandum and articles of association. The executive and legislative control of public corporations will no longer be applicable. The control of such organization would be in the hands of regulatory bodies established by law. Such a privatized public corporation will not enjoy statutory protection under the POPA. Also, the law that before an action can be instituted against the public corporation, one must give notice of intention to sue (Pre-action notice), would not be applicable.

Status of Employees

Workers in public corporations have their employments regulated by law (Statutory employment). In a privatized public corporation however, workers have their employments determined by those terms and conditions of service.

Change in Source of Funding

In a privatized public corporation, they no longer depend on the government for funds as the investors provide the capital to run the enterprise.