Cabotage: Agbakoba Moves Against Illegal Operations of Foreign Vessels on Nigerian Waters, Plans Arrest, Prosecution
OLISA AGBAKOBA
By Francis Ugwoke
Worried about the illegal operations of foreign vessels on Nigerian waters probably without waivers as provided for under the Cabotage shipping law, Olisa Agbakoba Legal has said that it has concluded plans to arrest and prosecute such vessels.
The vessels, according to the firm have been operating illegally on Nigerian waters to the detriment of Nigerian owned vessels.
The decision of the law firm was contained in a notice inviting industry stakeholders to the launching of its advocacy campaign in respect of the illegal operations of the vessels.
The notice which was signed by the former Director General of Nigerian Chamber of Shipping, Mrs Ify Akerele, hinted that the action of the firm was targeted at adding great value to the revival and compliance to the Cabotage Act.
The firm said its plan is to ensure that the Cabotage Act becomes a massive success in Nigeria for the interest of the indigenous shipping development.
The meeting scheduled for Thursday next week would be both physical and virtual.
Nigerian indigenous shipping companies have been full of lamentations for decades over the presence of foreign vessels in Nigerian waters with the apex regulatory agency, Nigerian Maritime Administration and Safety Agency (NIMASA) and the Transportation Ministry appearing overwhelmed by the situation.
Indigenous operators have been full of lamentations to no avail.
In an interview some years ago, a former Minister of Interior and Chairman of Genesis Worldwide Shipping, Capt Emmanuel Iheanacho said cabotage has not helped Nigerians in a significant way apparently because of the presences of foreign vessels on Nigerian waters.
Ihenacho said, “ It (cabotage) really has not helped us in a significant way. If anything, it has turned the tables and whereas before 2003, there were Nigerian companies who operated a limited tonnage, good tonnage….. but once you put that law in place the people who were turned out to be our competitors, foreign shipowners found loopholes in the specification of the cabotage law and they operated it in such a way that it now excluded our people. How did it exclude out people ? They introduced things like shipping vetting service where a foreign shipowner bringing a ship , and if I have to compete with him (for instance in the case of tanker trade) to lift some of our products will now be in a position to vet our own ships and say, I want this ship and I don’t want this ship. And then we had a situation where those foreigners became very bold and even introduced coastal vessels themselves. They will get a cabotage waiver and when it came to vetting , they will prefer to work with those vessels. And so, we lost out because nobody was using us. The cabotage was conceived to create an avenue for Nigerians to come into the business to learn by lifting products on the coast wise basis and when they had sufficient experience they would then buy vessels and venture into international shipping trade. But it did not quite work out that way. It is very difficult to see successful indigenous operators because of all these things I have told you”.
Part of the interview on cabotage is reproduced here:
There was also the other side that some of the indigenous shipping companies did not have the right vessels to take part in the trade, how would you react to that?
It depends on what you mean by right vessels. To my mind, any vessel is right. The important thing about a vessel is that you operate it in the correct way. Vessels are absolutely conceived to last nearly for ever because they go for dry-dock every two years. When they go to dry-dock, they will take the thickness measurement, and if there are areas where the plate has diminished, they have to cut it out and insert another plate. The same thing goes for the engines and machinery. They have to open them up and look at them, and if you follow the class regulations, then you have to change all these parts and continue to operate in that manner. You will have the phenomenon that you encounter when you go to America, when you see vessels that are about 40- 50 years. You will say it is a very old ship, but it is viable and it has passed class because the persons who own them can operate them according to class rules. They make sure the ship goes to dry dock to check the plates, the engines and machinery.
There was the belief that cabotage was conceived by lawyers and that if indigenous operators were involved, they would have been able to get it right, how would you react to that?
I doubt if you can make such a generalized statement. There were some lawyers involved most certainly, but I was there working with them, Mr Olisa Agbaokoba (SAN) Mr Mike Igbokwe (SAN) were there, and Mrs Mfom Usoro was there. There were lots and lots of lawyers who were obviously interested in contributing an input into the cabotage shipping. I was very active those days. I was giving papers everywhere talking about it. So, I don’t think you can blame it purely on lawyers or purely on the fact that mariners had a limited input, no. Neither the lawyers , nor the mariners are policy makers. Those people were turned into a committee to do the job. People who should have made success out of that cabotage are the policy makers.
Could it be that a well needed document for policy makers to implement was not presented?
Well, do you know that it is impossible to have a perfect document. When you present a document, you will start implementing it and you will start going back and changing things. That is the way these laws are really up to evolve. Let me give you an example, we wanted to model the cabotae law on the Jone’s Act which is the American Cabotage Law but the Jone’s Act was very strict in terms of the requirement for a ship to be considered a Jone’s vessel. The vessel has to be based in America, it has to carry an American crew, so many things. When we were in Committee session and we were talking about this issue, people who copied the Jone’s Act 100percent, said these are the things we are going to accept and we are going to do that…..We don’t do that, we don’t build ships and they said no, no, no it does not matter, when the time comes, we are going to find a way. And I said no, you cannot start from the point where or the one that you cannot even say it is our law and everybody will go and get a waiver, including the indigene, they put it there. And so what we did was to create an extra-ordinary draw for people to bastardise the cabotage Act in terms of the waivers that are being applied for and how they got those waivers and that is what we hear these days. Everybody is talking of waivers. All foreign vessels that are now dominating Nigerian cabotage, they are all on waivers.
If we are to review that Cabotage Policy, what will you point out as part of the changes to be made?
Well, there are several things, a long time ago, it wasn’t really in regards to the cabotage, I think it has to do with, there are Treaties in Nigeria that only Nigerians could participate in. There are sectors of the economy which are fully reserved for Nigerians and I will likely say to them cabotage is for Nigerian registered vessels and if you really police the ownership particulars of those vessels to make sure you don’t have a situation where a foreigner will then beg one or two Nigerians to have a stake and then they put their names and he will still continue to make that money.. Then, we will have an opportunity for Nigerians to own ships but let me also add here, because it brings us to the historical Ship Acquisition and Ship Building Fun (SASBF) that is what it was then which people now refer to as the Cabotage Vessel Financing Fund (CVFF). Shipping is very different from a lot of things that we do in the economy. It is highly capital intensive and for you to be able to buy a reasonable vessel for instance, if I want to buy a mid-range vessel for bringing in products that can carry 40,000 tons dead-weight, but because of the draft restrictions that we have here, it will take up to 15,000 tons ..if you want to buy a reasonable one that is made in say 2003 or so, you need to shell out $10million . So, if you want to buy a new one, you are probably talking about $30million and this is a big trauma for our people to find money to buy ships. NIMASA could have done it if they had stayed with it.. because … I am sorry to unbutton myself here, we were an example of an experiment that they set up because I borrowed money from them (SASBF).. $2.5million. I did not realize that $2.5million was not a lot of money. It was a lot of money if you go and change it and put it in your account. $2.5 was absolutely a dead body money if you want to buy a ship but of course we were not in a position to say, don’t give me $2.5million, it is too small. So, I took it and I bought several vessels that I traded and I did not just trade them in cabotage because when I started , I bought a type SD-14 ship. It was not a tanker vessel, it is a general cargo vessel and I traded all the way to India and I traded it across the oceans of Brazil and I traded from Brazil back to Spain and I traded it back down here and as I was trading them, I started learning how to sell that ship and buy another one. I will trade it for sometimes and sell it as scrap according to the amount of metal that was left in it and I add my own money and I buy another one. The important thing was that I was acquiring very beautiful skills on how to be a ship owner. I now knew how to run a ship. I was acquiring skills on how to buy, sell the ship and buy a new one. I just kept on but unfortunately the authorities at that time did not keep their eyes with us and I kept on saying to them, please look at us and if you think we have done well, there will be a time you can say to us, alright scrap this ship and let us move you unto the next quality of vessels but it never happened because it became a big issue. People took money, they say it is their own share of the national cake….. you must have heard about it but it wasn’t because I paid up all mine. Some other people paid. One or two people didn’t quite pay but it wasn’t their fault. Some of the vessels sank. So, I think they should have really looked at it as an experimental time and given the limited amount they loaned to us, if they were sure that we spent that money to buy ships, they should never have created an emphasis on recovering that money rather than looking at the skills we have acquired and making sure we don’t lose those skills and move us to the next level”.
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