Bello: Strides and Challenges of Ports Economic Regulation
Nigeria is a country of complexity given the human elements and behaviourial patterns of individuals and organisations. Perhaps, Nigeria may not be alone as what obtains here could be the same in other global environment. However, what singles Nigeria out qualifying as a very difficult country is the high level of disorder, corruption in every aspect of life. It begins with the political leaders, business leaders and trickles down to the followers. Corruption breeds lawlessness in the system which is the case in every sector of the country’s economic life. Except for corruption, Nigeria would have been like every other advanced country. The problem has been one which could be likened to a ‘winner takes it all’ syndrome. Some who are fortunate to be in power or authority have had or are having a big party cornering whatever wealth they come across to private pockets. This could be in many forms and it has made it impossible for the country to develop. A comparison between Nigeria and other less privileged nations in terms of endowed natural resources such as oil leaves much to be desired. Privileged few in government have just been busy acquiring wealth, hiding large part of stolen wealth in foreign countries and leaving the country suffer economically. The worst hit are the less privileged masses which may have contributed in sparking the recent EndSARS protest nationwide.
Trade Malpractices
In the nation’s shipping industry, the Nigerian syndrome is at play. What is worrisome is that the international shipping community, notably shipping agents and other service providers, are taking advantage of this Nigerian disease to rip the country off. And this is the dilemma of the Nigerian Shippers Council (NSC) as the ports economic regulator which is expected to play the role of an umpire in ensuring fair-play for all stakeholders. As much as the NSC has done, the ports economic regulator is confronted with a system that is complex in managing. On one hand, shippers are fraudulent in varying operational trade practices in the ports. Some shippers and their freight forwarders have debased trade regulations with recklessness. Many shippers don’t just obey trade rules as this could be found in the billions of Naira worth of goods being seized by the operatives of the Nigeria Customs Service (NCS). There are cases of under-declaration, outright concealment and under-invoicing all as part of the measures adopted by shippers to maximise profit. The belief is that the Customsmen in the ports, border posts and on the road can be bribed. Of course, in many instances, they succeed but not many are lucky. Billions of goods are being seized on regular basis, most of which are lost. The ports economic regulator had been involved in sensitisation programme to check this through their associations without success.
The shipping environment is full of fraudulent practices through which government loses revenue. It is believed that if the loopholes are plugged effectively, the much talked about raking of N7trillion annually from the sector could be possible. But this is a tall dream. The shippers are involved in trade malpractices, including over/under invoicing. With appeals from NSC, some would listen, yet not all. As being pointed out, it is the sole statutory responsibility of the Customs Service to check such trade crime. But some unscrupulous officers see this as an opportunity to line their pockets. They simply collect bribe and keep blind eyes to the malpractices. This explains why many shippers have continued in such crime which to a large extent has impacted negatively on trade and revenue generation. It does not matter that the Customs Service meets its revenue target every year as more could have been generated. Among other measures, NSC is hoping on deploying Cargo Tracking Note (CTN) to check all forms of trade malpractices. Already, the Council has received approval to this effect. This again depends on the political will displayed by government in allowing this to be effective.
Arbitrary shipping charges
In the past few years, Nigerian shippers on the other hand have been at the mercy of shipping service providers on the issue of charges. Among the service providers are the multi-national shipping lines and their agents, including terminal operators. They impose charges at will and shippers have no choice than to pay. Even at such crisis period when shippers were handicapped in clearing their goods because of the coronavirus pandemic, new charges were still being imposed. About two years ago, the shipping lines had imposed such charges for goods coming to Nigeria and other African countries. This led to the meeting of the Union of African Shippers Council (UASC) first in Abuja during which an appeal was sent to the Global Shippers Forum (GSF) for intervention. The GSF at another meeting in London had brought the matter to the attention of liner conferences. Some of the charges were dropped later. It turned out during the meeting that some of the charges were the making of shipping agents based in each country’s ports. The NSC was in the forefront against the charges and they were eventually dropped . However, often times, one would not know when these charges would resurface which was the case early this year, precisely in August. Maersk Line, Mediterranean Shipping Company (MSC) and CMA CGM were the lead shipping agencies this time around. The NSC had cried out over this development before they were dropped. As the ports economic regulator, the NSC has made efforts at challenging the shipping lines and terminal operators to prevent them from introducing illegal charges. In 2014, the Council had moved to suspend some of the charges introduced by some shipping lines and terminal operators which resulted in a court case. The two under the aegis of Association of Shipping Lines Agency, ALSA and Seaport Terminal Operators Association of Nigeria (STOAN), had dragged the Council to the Federal High Court Lagos but lost on some grounds. They proceeded to the Appeal Court where they also lost before heading to the Supreme Court. Indications are that the case has been settled out of court or being settled out of court. What has been worrisome is that the shipping service providers while the case went on for years were busy and could be benefitting from the suspended charges. Incidentally, the court had ruled that the shipping service providers refund as much as about N1trillion being the estimated amount collected as at 2017 when the ruling was given. From 2017 till date, the figure could have risen. However, indications are that the service providers may get away with what they have been collecting since the ports economic regulator is considering how best the issue of refund could be settled. The service providers are said to have been lobbying since the idea of settling out of court was first brought to the fore. It was gathered that the NSC has been under intense lobby from all quarters, including the strong backers of the service providers. The service providers have political heavy weights close the corridor of power who lobby the Presidency and others to create a safe landing in respect of this issue. This has remained a big dilemma for the NSC. It appears to be the sad side of what happens in the larger society now happening in the maritime industry. In some cases, the NSC is compelled to soft pedal in what should be its level of hammer or axe on erring service providers. Yet, despite such challenges, the NSC has been able to check the shipping charges by the service providers, In doing this, the Council applies wisdom by appealing to the conscience of the providers. The Council is sometimes forced to use force in what has led to sealing of offices belonging to service providers. Commenting on this scenario, the immediate past President of Association of Nigerian Licensed Customs Agent (ANLCA), Prince Olayiwola Shittu described the job of the NSC as ports economic regulator as a difficult one requiring a lot wisdom. Shittu said the Council under Barr Hassan Bello has over the years displayed wisdom in dealing with the service providers who according to him have a lot of big men in power behind them. With full of praises for Bello, Shittu said, “ Those companies (service providers) have big men behind them even with power. I bet you if NSC leadership was not gifted by way of applying persuasion, they would not have succeeded”. Shittu however points to the fact that the shipping companies could only do this in Nigeria, adding that in other climes, they dare not introduce any new charges without negotiation.
According to him, “In fact Nigerian Shippers Council has more meetings in a month more than all the parastatals in a year, talking to the stakeholders, telling you their problem, talking to this one, calling shipping companies, terminal operators for them to see reasons why Nigeria should not suffer what other small countries are not suffering”.
He added, “They cannot do this thing abroad and most of these shipping companies, they are originally owned by foreigners who use Nigerian fronts to meet with certain exigencies, and those things and with those fronts, they say it is a Nigerian company. That is what you hear, because before you do business in Nigeria, you must be registered with Corporate Affairs Commission (CAC). With Nigerians on the list, they say, ooh, it is owned by Nigerian. The powerful ones among them are the ones pressing buttons”.
*Culled from SHIPPING WORLD
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