Bonded Terminals: Has NAGAFF’s ‘Regulatory’ Mission Failed?
By Francis Ugwoke
Undoubtedly, the ports industry sometimes enjoys a mafia scenario. Some multinational shipping lines are in the habit of flouting laid down regulation, apparently because of those behind them. They impose charges even without receiving the approval of the Nigerian Shippers’ Council (NSC) now Nigerian Ports Economic Regulatory Agency, (NPERA), as the ports economic regulator. This was what happened over 12 years ago when the Council hit them by stopping the collection. The matter landed in the court and the shipping lines were asked to pay N1trn to the Council and shippers. The matter is currently being settled out of court with few of the shipping companies who actually ran to court paying N60bn for out of court settlement. Few months ago, the National Association of Government Approved Freight Forwarders (NAGAFF) which for years back set up anti-corruption committee to monitor operations in the ports, decided to give itself more roles. The new role is to monitor operational deficiencies in bonded terminals. In doing this, it has assigned to itself the role of the ports economic regulator belonging to the NSC ( now NPERA) without knowing or pretending not to know. While this appears worrisome, perhaps NAGAFF is taking advantage of the ills in the ports system. Corruption is breathing in the ports system against the shippers which the freight forwarders represent. It involves all. But most importantly, the issue is traceable to the doorsteps of shippers (importers and exporters). If proper declaration of goods is made, some Customs officials either in the seaports, airports, border stations or bonded terminals cannot be accused of being corrupt. The point is that the importers are also in the habit of trying to defraud the government through under-declaration, undervaluation and outright concealment which are discovered during physical examination at the ports. In some instances, some importers who have bad businesses try to circumvent the processes when they chose the terminals they want to clear their goods. This explains why a particular customs controller before his retirement decided not to stem containers to bonded terminals. It was to avoid malpractices in which importers through their agents would want to evade payment of correct duties. Besides, in some cases, it was found that beyond evasion of payment of correct duties, some terminals were allegedly being used to clear bad jobs.
Talking about NAGAFF plans to probably address some ills in the ports system, the association promised that by undertaking a visit to some bonded terminals, it will unearth some ills. However, the concern by observers is what gives the body the legal power to embark on such roles.
Besides, the fear is that the few members being deployed to carry out such roles could be easily influenced by those they are trying to check. Some industry stakeholders allege that this could simply be another emerging form of extortion. The Head of NAGAFF Trade Advocacy Committee, Dr. Increase Uche, in a statement issued some weeks ago said that the association is “worried about growing concerns and reports of operational inefficiencies, inadequate infrastructure, and poor service delivery across several Customs-bonded warehouses and terminals within the domestic cargo logistics chain by freight forwarders and shippers”.Uche explained that the objective of the exercise, is to assess the operational status, service capabilities, and overall viability of licensed Customs-bonded warehouses and terminals, with a view to promoting efficiency, compliance with industry standards, and improved trade facilitation in line with NAGAFF public policy advocacy dialogue.
“The outcome of the exercise is expected to provide critical data and technical insights that will support policy recommendations, operational improvements, enhanced cargo clearance processes, and the overall competitiveness of Nigeria’s logistics and trade facilitation sector”, The plan to embark on the port regulatory assignment started early this year when the association identified some of the terminal operators to visit. Incidentally, the outcome of the planned visit so far is unknown as at the time of filing this report. Could it have been aborted based on wise intervention and counselling? It is believed that NAGAFF may have been advised to drop its plans. This is even moreso with the recent assent of the NPERA bill which has strengthened economic regulation in the ports.
Undoubtedly, the ports industry sometimes enjoys a mafia scenario. Some multinational shipping lines are in the habit of flouting laid down regulation, apparently because of those behind them. They impose charges even without receiving the approval of the Nigerian Shippers’ Council (NSC) now Nigerian Ports Economic Regulatory Agency, (NPERA), as the ports economic regulator. This was what happened over 12 years ago when the Council hit them by stopping the collection. The matter landed in the court and the shipping lines were asked to pay N1trn to the Council and shippers. The matter is currently being settled out of court with few of the shipping companies who actually ran to court paying N60bn for out of court settlement. Few months ago, the National Association of Government Approved Freight Forwarders (NAGAFF) which for years back set up anti-corruption committee to monitor operations in the ports, decided to give itself more roles. The new role is to monitor operational deficiencies in bonded terminals. In doing this, it has assigned to itself the role of the ports economic regulator belonging to the NSC ( now NPERA) without knowing or pretending not to know. While this appears worrisome, perhaps NAGAFF is taking advantage of the ills in the ports system. Corruption is breathing in the ports system against the shippers which the freight forwarders represent. It involves all. But most importantly, the issue is traceable to the doorsteps of shippers (importers and exporters). If proper declaration of goods is made, some Customs officials either in the seaports, airports, border stations or bonded terminals cannot be accused of being corrupt. The point is that the importers are also in the habit of trying to defraud the government through under-declaration, undervaluation and outright concealment which are discovered during physical examination at the ports. In some instances, some importers who have bad businesses try to circumvent the processes when they chose the terminals they want to clear their goods. This explains why a particular customs controller before his retirement decided not to stem containers to bonded terminals. It was to avoid malpractices in which importers through their agents would want to evade payment of correct duties. Besides, in some cases, it was found that beyond evasion of payment of correct duties, some terminals were allegedly being used to clear bad jobs.
Talking about NAGAFF plans to probably address some ills in the ports system, the association promised that by undertaking a visit to some bonded terminals, it will unearth some ills. However, the concern by observers is what gives the body the legal power to embark on such roles.
Besides, the fear is that the few members being deployed to carry out such roles could be easily influenced by those they are trying to check. Some industry stakeholders allege that this could simply be another emerging form of extortion. The Head of NAGAFF Trade Advocacy Committee, Dr. Increase Uche, in a statement issued some weeks ago said that the association is “worried about growing concerns and reports of operational inefficiencies, inadequate infrastructure, and poor service delivery across several Customs-bonded warehouses and terminals within the domestic cargo logistics chain by freight forwarders and shippers”.Uche explained that the objective of the exercise, is to assess the operational status, service capabilities, and overall viability of licensed Customs-bonded warehouses and terminals, with a view to promoting efficiency, compliance with industry standards, and improved trade facilitation in line with NAGAFF public policy advocacy dialogue.
“The outcome of the exercise is expected to provide critical data and technical insights that will support policy recommendations, operational improvements, enhanced cargo clearance processes, and the overall competitiveness of Nigeria’s logistics and trade facilitation sector”, The plan to embark on the port regulatory assignment started early this year when the association identified some of the terminal operators to visit. Incidentally, the outcome of the planned visit so far is unknown as at the time of filing this report. Could it have been aborted based on wise intervention and counselling? It is believed that NAGAFF may have been advised to drop its plans. This is even moreso with the recent assent of the NPERA bill which has strengthened economic regulation in the ports.
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