Towards Eliminating Cabotage Waivers
Following a barrage of criticism over its seeming complicity in the shoddy implementation of the Coastal and Inland Shipping Act 2003 also known as the Cabotage Law, the Nigerian Maritime Administration and Safety Agency ( NIMASA), has said oil companies would no longer get waivers under the Cabotage regime.
The Director-General of NIMASA, Dakuku Peterside, announced at a meeting last week with the Oil Producers Trade Sector ( OPTS) in Lagos that continued grant of waivers to oil firms was inimical to the growth of the Nigerian maritime sector and the economy as a whole.
The NIMASA boss, at the meeting, which had managing directors and representatives of major oil firms including Total, Exxon Mobil, Shell, and Agip among others in attendance, directed oil industry operators to draw up a five- year strategic plan for the cessation of application for Cabotage waiver and also pursue the utilisation of Nigerian- owned vessels for marine contracts.
The Cabotage Act stipulates that vessels trading on Nigeria’s coastal waters must be wholly owned and manned by Nigerian citizens. Under the Act, foreign vessels or tugs cannot tow within Nigerian waters except when rendering assistance to persons, vessels or aircraft in danger or distress as coastal trade is reserved for indigenous shipowners. Foreign vessels are only allowed to participate in the business subject to a waiver by the federal government.
But the IOCs have continued to engage foreign vessels to do jobs that Nigerian operators have adequate capacity and equipment, to do in flagrant disregard of the Cabotage law,
In July, the agency announced its temporary suspension of manning waivers, citing abuse of the waiver regime by both indigenous and foreign shipping firms.
At the last week’s meeting with the OPTS, the NIMASA boss stated that the agency will not compromise the growth of the maritime sector, especially when it comes to the issue of enforcing statutory regulations enshrined in the Agency’s empowering instruments.
Peterside declared: “Our laws forbid foreign vessels operating in our territorial waters save for compliance with the Cabotage Act. We also want to increase the number of Nigerians who participate in the marine aspect of your business and we are working closely with the Nigerian Content Development and Monitoring Board (NCDMB) to have a joint categorisation of vessels operating under the Cabotage Act in order to ensure the full implementation of the Act.”
He warned that the agency would not hesitate to wield its powers where necessary, pointing out that its mandate is strictly regulatory.
In his words: “We don’t want to change our rules of engagement to a confrontational one because the mandate we have is that of the Nigerian people, to grow shipping for our economic benefits. In this wise, we urge you to cooperate and collaborate with us where necessary so that we can have an all-inclusive maritime sector,” he said.
However, industry observers say they are not expecting any positive outcomes from the agency, pointing out that the meeting last week was not the first time the NIMASA DG would be confronting the IOCs on the issue of cabotage trade and the need to obey the Nigeria’s laws on cabotage trade.
At two separate meetings with the IOCs in 2016 and last year, Peterside had warned that applicable sanctions would be meted out to errant companies and enjoined the IOCs to be mindful of all existing laws and regulations in the discharge of their duties and.
The NIMASA boss also advised the firms to give the agency ample notice of vessel requirements so that the agency could engage indigenous operators who have the capacity to do the job instead of giving it to foreign operators.
“The spirit of the Cabotage Act is not to generate revenue in terms of waivers, but to build the requisite capacity for indigenous players which will in the long run generate wealth and create employment for Nigeria’s teeming population,” he said.
The primary objective of the Cabotage Act is to reserve the commercial transportation of goods and services within Nigerian coastal and inland waters to vessels flying the Nigerian flag and owned by persons of Nigerian citizenship.
Painfully, NIMASA’s inability to fully implement the Cabotage law has resulted in the recent upsurge in piracy and other illegal activities in Nigerian waters, which has earned Nigeria and other countries in the Gulf of Guinea a negative image in the comity of maritime nations.
Maritime criminality in Nigerian waters has been on the increase in recent years, according to the ‘2018 Investment Climate Statements’, which provided information on the business climates of more than 170 countries including Nigeria.
The International Chamber of Commerce’s International Maritime Bureau ( IMB) disclosed that its piracy reporting center recorded 66 incidents in the first quarter of 2018, up from the 43 recorded in the corresponding period in 2017, and 37 incidents in the first quarter of 2016. Nigeria alone recorded 22 incidents between January and March 2018.
Last year, the IMB disclosed that attacks by sea bandits off the Coast of West Africa were on the increase in Nigeria, making the country ‘ a hotspot’ for piracy.
Not only that the spate of attacks is giving Nigeria and other countries in the Gulf of Guinea a bad image in the comity of maritime nations, experts said, it was responsible for the high freight costs because shipowners and crew members often demand for high insurance premiums before embarking on voyage to Nigeria and the Gulf of Guinea. It was gathered also that Nigeria was losing as much as N250billion monthly and about 400,000 barrels of oil per day to maritime thieving.
The domination of Nigeria’s coastal shipping business by foreigners in violation of the Coastal and Inland Shipping Act ( Cabotage) is perhaps, a major problem bedeviling the sector and full implementation of the Cabotage law is required to address the issue.
The spirit of the Cabotage Act is not to generate revenue in terms of waivers, but to build the requisite capacity for indigenous players which will in the long run generate wealth and create employment for Nigeria’s teeming population