Ports Economic Regulation: When Corruption Fights Back
NSC CEO
The lamentations of the federal government Task Team set up to address corruption and other irregularities in the seaports over threat to the lives of members speak volumes of the sleaze in the sector and the implication to the national economy, writes Francis Ugwoke….
The nation’s ports industry remains an important sector which contributes trillions of Naira revenue to the national economy annually. It employs thousands of Nigerians formally and informally. The maritime industry is adjudged as next to oil in terms of revenue generation to the economy. Its annual revenue as at last year could be equaled to about N4trillion with the Nigeria Customs Service (NCS) leading the way with N2.3trillion. Maritime experts believe that if the potentials of the sector are harnessed, the industry could generate as much as N7trillion to the national economy annually. However, the biggest issue in the sector is corruption which has remained unabated despite all efforts in the past decades to address it. Often times, many have accused the political class and others of corruption which has impacted negatively on national economy. But the truth is that corruption appears to be everywhere permeating deep into strategic sectors of the economy. This is the case in the ports industry. The scenario for one who is resident in the ports is that the sleaze has remained as a tradition and therefore a herculean task for any regulator.
Scenario of Corruption
Issues of corruption in the maritime industry are enormous and complex. It involves all, both consumers and providers of shipping services. Specifically, it involves importers, exporters, freight forwarders, with collaboration from providers of shipping services, some unscrupulous officers of the government and shipping companies and their agents. An importer orders for goods but decides to falsify the value downwards for the purpose of paying lower duty. He does this with the advice of some customs agents who are beneficiaries of the trade crime . On arriving the ports, officials of the Customs Service discover the infraction and therefore this becomes an opportunity to position themselves for rounds of settlement for the goods to be released. They negotiate what they would receive and what the importer would pay to government as duty. This arrangement is indeed favourable to the importers and the policemen of the system, who are supposed to check such fraudulent practices. It could also be in form of under-declaration and concealment which are all aimed at paying lower duties. As much as the importers benefit from this, the main beneficiaries of the fraud remain some unscrupulous customs officers who for their inaction are encouraging the importers to be fraudulent. The bad story for some importers is that after the goods are cleared at the ports, the unlucky ones have their goods intercepted by other customs officers under checks and balances in the Service. The Comptroller-General’s Task Force responsible for overseeing what happens at the ports or the Federal Operations Unit (FOU) whose responsibility it is to ensure that the right thing has been done at the ports can intercept such goods. When goods are intercepted by these units, the result is another round of surcharge and settlement all over again for the goods to be left off the hook. This explains the many seizures worth several billions of Naira made by these units on daily and monthly basis. In what would appear as a measure to check under-payment, the Customs Service had late last year introduced a duty benchmark for containers. Under this, some containers of trade goods are to attract certain amount of duties irrespective of the value quoted by the importers. Importers had protested against this policy but the Service insisted that this was the only way to deal with the problem of under-declaration, concealment and other forms of under-valuation of goods by importers.
At a recent event, a senior customs officer, Deputy Comptroller Garko Ali , who was reacting to a question on what happens to some customs officers who failed to do their jobs well at the ports only for such goods to be intercepted on the road by operatives of the FOU said such officers have always been punished.
Ali who spoke at a training programme for journalists in Lagos said resident customs officers who fail to do a thorough job during cargo examination and evaluation for duties at the ports or border stations do so at great risks.
He said releasing goods which are either contraband or those badly under-valued in which the government loses revenue was a big risk for any officer when such issues are discovered
He explained that as good as many resident customs officers may be , one cannot rule out the possibility of bad eggs among them, adding that it was such people that were creating problems for the good ones.
But he said that no officer caught in such act of poor handling of goods at the ports is left unpunished by the headquarters of the Service.
Ali said that such issues were among the reasons why some officers were either dismissed from Service or de-ranked by the Customs Service management.
Shipping companies are also not left out as far as fraudulent practices are concerned in the ports. They are accused of under-declaration of the gross registered tonnage (GRT) of the vessels bringing goods into the country. With such under-declaration, they cheat the government on actual dues they ought to have paid to its agencies.
For other security agencies at the ports, including some Police officers, the corruption involving importers and some customs officers are opportunities to also extort the shippers. This was the case until the Police was warned to desist from stopping containers on the road where they demand to carry out the duties of the Customs. Perhaps, what could be a bad image to the nation is the extortion of crew members of ships bringing goods to the ports, berthing and awaiting for goods to be discharged before leaving. Some security agents would board these vessels to carry out their statutory duties and in the process turn into extortionists. At one incident about two years ago, the Nigerian Port Process Manual (NPPM) team had recovered thousands of dollars that had been extorted from crew members. The NPPM is headed by the NSC as the ports economic regulator. The team which is made up of agencies authorised to stay in the ports had threatened to expose the suspects if the trend continued. The NPPM followed the policy of achieving the ease of doing business at the ports which was introduced by the Vice President, Prof Yemi Osinbajo to enthrone efficiency in the ports. The NPPM which is made up of personnel drawn from agencies of government at the ports and other stakeholders was later to set up a Task Team under the leadership of the NSC. The main function of the Task team is to identify corrupt practices at the ports and address it. Although the team is not without good results, yet it has not been easy fighting corruption at the ports.
Lamentations by NSC
As the ports economic regulator desirous of enthroning an efficient port system as obtains in other global ports, including neighbouring ports of West African sub-regional ports, the NSC is not happy about the malpractices at the nation’s ports. The Executive Secretary of the NSC, Barr Emmanuel Jime, is sad about the trend in the ports. It would be recalled that his predecessor, Barr Hassan Bello, had also felt the same way before he left office. Jime recently said the life of members of the Task Team were in danger over their efforts to address fraudulent practices at the ports. He recently expressed concerns over attacks on the Port Standing Task Team (PSTT) waging war against corruption at the nation’s ports.
The Task Team led by the Council is a federal government committee set up to check corruption at the nation’s ports.
Jime disclosed that officers of the Task Team who have challenged corrupt practices at the ports have been under attack. The Task Team has been championing joint vessel boarding by mandated government agencies, a development that may have angered many of the affected operatives for obvious reasons. Joint boarding gives no room for easy extortion as would individual boarding of vessels by different units of agents. But this helps in saving the time of the vessels, making it possible for them not to be delayed in Nigerian ports which their cargoes have been discharged. Besides, Jime disclosed that with the joint boarding, the PSST team saved the Nigerian economy an average vessel demurrage of $20, 000 per day between year 2020 and 2021, which ultimately translates to the sum of $6.5m (N3.3billion). In the fight against corruption at the ports, the NSC CEO said what was surprising is that most of those (security personnel) at the ports environment for different roles were not alone on the issue of corruption as they make returns to superior officers who enhanced their posting to the ports. However, he insists that this will not stop the Task Team in their determination to check the sleaze that make the nation’s ports unfriendly.
Jime recounts the ordeal of the Task Team, “We are engaged in a fight that no agency of government has ever been engaged in. We are fighting in a territory where the challenge is more than what anyone can ever imagine. The National Coordinator, Port Standing Task Team (PSTT) of our agency, Moses Fadipe, is seated here but I can tell you that there are lots of butterflies in his stomach because this guy’s life is in danger.
“The lives of Moses Fadipe and his team are in danger because they are fighting against a corrupt system that has been here for a very long time.
“Kindly help us shine light on happenings along the port corridor. We have to rid the port of the endemic corruption that has gone up to a level anybody can ever imagine.
“When I tried intervening, I found out to my chagrin that the more I get involved, the more I try not to get compromised. I was surprised that at the level of my intervention, I was almost getting into a compromised level. It’s like I was reporting someone to his benefactor. What I have decided is that we must fight this corruption at the ports. What we found out is that most of these other ranks (security officials) don’t just wake up in the morning to go and mount checkpoints. They have superior officers that they make returns to. That is why all the previous interventions done by previous administrations failed.
“This is the magnitude of the problem concerning corruption at the ports. We will fight it the best way we can. We will ensure people are held accountable for their actions and the work of the PSST will continue.”
Incidentally, Jime was economical in making public perhaps for the sake of diplomacy the identifies of those threatening the lives of members of the Task Team. When asked to give this vital information, he said, “I wish I can mention their names, but it’s entirety corruption fighting back.
“This is the magnitude of the problem concerning corruption at the ports. We will fight it the best way we can. We will ensure people are held accountable for their actions and the work of the PSST will continue.”
The nation’s ports industry remains an important sector which contributes trillions of Naira revenue to the national economy annually. It employs thousands of Nigerians formally and informally. The maritime industry is adjudged as next to oil in terms of revenue generation to the economy. Its annual revenue as at last year could be equaled to about N4trillion with the Nigeria Customs Service (NCS) leading the way with N2.3trillion. Maritime experts believe that if the potentials of the sector are harnessed, the industry could generate as much as N7trillion to the national economy annually. However, the biggest issue in the sector is corruption which has remained unabated despite all efforts in the past decades to address it. Often times, many have accused the political class and others of corruption which has impacted negatively on national economy. But the truth is that corruption appears to be everywhere permeating deep into strategic sectors of the economy. This is the case in the ports industry. The scenario for one who is resident in the ports is that the sleaze has remained as a tradition and therefore a herculean task for any regulator.
Scenario of Corruption
Issues of corruption in the maritime industry are enormous and complex. It involves all, both consumers and providers of shipping services. Specifically, it involves importers, exporters, freight forwarders, with collaboration from providers of shipping services, some unscrupulous officers of the government and shipping companies and their agents. An importer orders for goods but decides to falsify the value downwards for the purpose of paying lower duty. He does this with the advice of some customs agents who are beneficiaries of the trade crime . On arriving the ports, officials of the Customs Service discover the infraction and therefore this becomes an opportunity to position themselves for rounds of settlement for the goods to be released. They negotiate what they would receive and what the importer would pay to government as duty. This arrangement is indeed favourable to the importers and the policemen of the system, who are supposed to check such fraudulent practices. It could also be in form of under-declaration and concealment which are all aimed at paying lower duties. As much as the importers benefit from this, the main beneficiaries of the fraud remain some unscrupulous customs officers who for their inaction are encouraging the importers to be fraudulent. The bad story for some importers is that after the goods are cleared at the ports, the unlucky ones have their goods intercepted by other customs officers under checks and balances in the Service. The Comptroller-General’s Task Force responsible for overseeing what happens at the ports or the Federal Operations Unit (FOU) whose responsibility it is to ensure that the right thing has been done at the ports can intercept such goods. When goods are intercepted by these units, the result is another round of surcharge and settlement all over again for the goods to be left off the hook. This explains the many seizures worth several billions of Naira made by these units on daily and monthly basis. In what would appear as a measure to check under-payment, the Customs Service had late last year introduced a duty benchmark for containers. Under this, some containers of trade goods are to attract certain amount of duties irrespective of the value quoted by the importers. Importers had protested against this policy but the Service insisted that this was the only way to deal with the problem of under-declaration, concealment and other forms of under-valuation of goods by importers.
At a recent event, a senior customs officer, Deputy Comptroller Garko Ali , who was reacting to a question on what happens to some customs officers who failed to do their jobs well at the ports only for such goods to be intercepted on the road by operatives of the FOU said such officers have always been punished.
Ali who spoke at a training programme for journalists in Lagos said resident customs officers who fail to do a thorough job during cargo examination and evaluation for duties at the ports or border stations do so at great risks.
He said releasing goods which are either contraband or those badly under-valued in which the government loses revenue was a big risk for any officer when such issues are discovered
He explained that as good as many resident customs officers may be , one cannot rule out the possibility of bad eggs among them, adding that it was such people that were creating problems for the good ones.
But he said that no officer caught in such act of poor handling of goods at the ports is left unpunished by the headquarters of the Service.
Ali said that such issues were among the reasons why some officers were either dismissed from Service or de-ranked by the Customs Service management.
Shipping companies are also not left out as far as fraudulent practices are concerned in the ports. They are accused of under-declaration of the gross registered tonnage (GRT) of the vessels bringing goods into the country. With such under-declaration, they cheat the government on actual dues they ought to have paid to its agencies.
For other security agencies at the ports, including some Police officers, the corruption involving importers and some customs officers are opportunities to also extort the shippers. This was the case until the Police was warned to desist from stopping containers on the road where they demand to carry out the duties of the Customs. Perhaps, what could be a bad image to the nation is the extortion of crew members of ships bringing goods to the ports, berthing and awaiting for goods to be discharged before leaving. Some security agents would board these vessels to carry out their statutory duties and in the process turn into extortionists. At one incident about two years ago, the Nigerian Port Process Manual (NPPM) team had recovered thousands of dollars that had been extorted from crew members. The NPPM is headed by the NSC as the ports economic regulator. The team which is made up of agencies authorised to stay in the ports had threatened to expose the suspects if the trend continued. The NPPM followed the policy of achieving the ease of doing business at the ports which was introduced by the Vice President, Prof Yemi Osinbajo to enthrone efficiency in the ports. The NPPM which is made up of personnel drawn from agencies of government at the ports and other stakeholders was later to set up a Task Team under the leadership of the NSC. The main function of the Task team is to identify corrupt practices at the ports and address it. Although the team is not without good results, yet it has not been easy fighting corruption at the ports.
Lamentations by NSC
As the ports economic regulator desirous of enthroning an efficient port system as obtains in other global ports, including neighbouring ports of West African sub-regional ports, the NSC is not happy about the malpractices at the nation’s ports. The Executive Secretary of the NSC, Barr Emmanuel Jime, is sad about the trend in the ports. It would be recalled that his predecessor, Barr Hassan Bello, had also felt the same way before he left office. Jime recently said the life of members of the Task Team were in danger over their efforts to address fraudulent practices at the ports. He recently expressed concerns over attacks on the Port Standing Task Team (PSTT) waging war against corruption at the nation’s ports.
The Task Team led by the Council is a federal government committee set up to check corruption at the nation’s ports.
Jime disclosed that officers of the Task Team who have challenged corrupt practices at the ports have been under attack. The Task Team has been championing joint vessel boarding by mandated government agencies, a development that may have angered many of the affected operatives for obvious reasons. Joint boarding gives no room for easy extortion as would individual boarding of vessels by different units of agents. But this helps in saving the time of the vessels, making it possible for them not to be delayed in Nigerian ports which their cargoes have been discharged. Besides, Jime disclosed that with the joint boarding, the PSST team saved the Nigerian economy an average vessel demurrage of $20, 000 per day between year 2020 and 2021, which ultimately translates to the sum of $6.5m (N3.3billion). In the fight against corruption at the ports, the NSC CEO said what was surprising is that most of those (security personnel) at the ports environment for different roles were not alone on the issue of corruption as they make returns to superior officers who enhanced their posting to the ports. However, he insists that this will not stop the Task Team in their determination to check the sleaze that make the nation’s ports unfriendly.
Jime recounts the ordeal of the Task Team, “We are engaged in a fight that no agency of government has ever been engaged in. We are fighting in a territory where the challenge is more than what anyone can ever imagine. The National Coordinator, Port Standing Task Team (PSTT) of our agency, Moses Fadipe, is seated here but I can tell you that there are lots of butterflies in his stomach because this guy’s life is in danger.
“The lives of Moses Fadipe and his team are in danger because they are fighting against a corrupt system that has been here for a very long time.
“Kindly help us shine light on happenings along the port corridor. We have to rid the port of the endemic corruption that has gone up to a level anybody can ever imagine.
“When I tried intervening, I found out to my chagrin that the more I get involved, the more I try not to get compromised. I was surprised that at the level of my intervention, I was almost getting into a compromised level. It’s like I was reporting someone to his benefactor. What I have decided is that we must fight this corruption at the ports. What we found out is that most of these other ranks (security officials) don’t just wake up in the morning to go and mount checkpoints. They have superior officers that they make returns to. That is why all the previous interventions done by previous administrations failed.
“This is the magnitude of the problem concerning corruption at the ports. We will fight it the best way we can. We will ensure people are held accountable for their actions and the work of the PSST will continue.”
Incidentally, Jime was economical in making public perhaps for the sake of diplomacy the identifies of those threatening the lives of members of the Task Team. When asked to give this vital information, he said, “I wish I can mention their names, but it’s entirety corruption fighting back.
“This is the magnitude of the problem concerning corruption at the ports. We will fight it the best way we can. We will ensure people are held accountable for their actions and the work of the PSST will continue.”
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