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17 J.L. Pol'y & Globalization 20 (2013)
Different Approaches and Different Results: A Comparative Analysis of the Nigerian and Iranian Laws and Policies on Controlling the Foreign Corporations

handle is hein.journals/jawpglob17 and id is 23 raw text is: Journal of Law, Policy and Globalization www iste.org ISSN 2224-3240 (Paper) ISSN 2224-3259 (Online) t Vol.17, 2013 IISt Different Approaches and Different Results: A Comparative Analysis of the Nigerian and Iranian Laws and Policies on Controlling the Foreign Corporations Ahad Gholizadeh Manghutay Department of Law, University of Isfahan, Azadi Sq., Isfahan, Zip 81746, Iran E-mail of the corresponding author: gholizadeh4ase.ui.ac.ir Abstract Nigeria while applying her rights for controlling the foreign companies operations in her territory, despite feeling contempt, keeping pace with the international community has established and maintained durable grounds for cooperation with foreign internationally well-known investors whereas Iran failing to keep pace with the international community has lost the internationally reliable investors' cooperation. Unlike in Nigeria, this study shows that in Iran distrust to foreigners and local private sector has resulted in a gradual trend which quitting the private (including foreign) sector's whole activities has placed the economy under the governmental and prioritized semi-governmental sectors dominance. This situation does not seem to be sustainable. Keywords: Foreign companies - Iranian laws and policies - Multinational companies - Nigerian laws and policies Introduction Nigeria and Iran both to deal with MNCs adopting some national policies have promulgated some legal instruments. As similarities Nigeria and Iran both are members to the OPEC and have already experienced the British colonial or semi-colonial dominance respectively. Despite similarities their methods of controlling foreign corporations including MNCs in their territories differ extensively e.g. Nigeria is a member to the WTO including the agreement on Trade Related Investment Measures (TRIMs) but Iran is not. 1. Past and Present Legal Context The earliest MNCs entered the Nigeria during the British colonial period i.e. before 1959. (Amao, 2008, p. 90) In comparison, predecessors of MNCs i.e. concessioners entered Iran in late 19th century. Although Iran has never in recent centuries been a colony but such concessions brought about a semi-colonial status for her (Garret- Rempel, 2008, p. 46). The greatest of these concessions was gained by a British called WK D'Arcy for oil exploration and exploitation in 1901 i.e., just a few years before the constitutional Revolution (1906-1911) (Afray, 1996). Oil was explored in 1908 and of the Anglo-Iranian Oil Company (AIOC) was established with 16 percent Iranian (Garret-Rempel, 2008, p. 45) and 84 percent British share. With break of the WWI, the British government substituted 51 percent of the D'Arcy's share and in 1925 the terms of the concession were renegotiated for greater share from profits for Iran under the Reza Shah's (1925-1941) pressure. (Brumberg & Ahram, 2007, p. 11) Later in 1951 the oil nationalization upheaval led to substitution of National Iranian Oil Company (NIOC) to AIOC. Thereafter many other oil MNCs mainly from USA joined oil related operations in Irn. Besides the oil industry, MNCs were freely operative in almost all economic sectors until the 1979 Revolution changed the situation drastically. Some of the multinationals having before or after Revolution or at present operations in Iran are LG electronics (Dehghan & Shahin, 2011), Sirip, Agip Mineraria, Total Final Elf, Royal Dutch Shell, BP, Reliance Industries (O'Sullivan, 2010), and Gas-prom (Bhadrakumar, 2009). 1.1. Shaping up of a legal context for operation of MNCs preferably in the oil industries Oil prospecting started in Nigeria in 1906 and the first legislation concerned was the Oil Ordinance of 1914 under which oil exploration and exploitation was limited to British citizens and British companies. (Amao, 2008, p. 91) In comparison, Iran as well until the nationalization of oil lacked any legislation governing the oil industry but there after the Act for Establishment of National Iranian Oil Company, the first NIOC's Articles of Association Act of 1955, the Petroleum Act of 1974, and the Petroleum Act of 1987 came to existence. To regulate the entrance, operation and exit of foreign investors in all Iranian economic sectors including oil, the Law (Act) for Attraction and Protection of Foreign Investments (LAPFI), 1955 was enacted which later was substituted with the Foreign Investments Promotion and Protection Act (FIPPA), 2001. The Iranian Constitution's Principle 44 has left limited number of fields for participation of private sector including the foreigners who have in particular been restricted by Principles 81, 82 and 153 which respectively deny foreigners the concession to establish a company or institution in Iran; restrict the employment of foreign experts; and prohibit the foreigners dominance over natural resources, economy, army, and so on. (Shiravi & Ebrahimi, 2006)

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