Unarguably, the Maritime Industry is a sector in the Nigerian economy with huge untapped potential. However, it is challenged by poor infrastructure, inadequate funding, imprecise policies and several pending laws. Mr. Mike Igbokwe SAN, a maritime law expert has over the years championed the cause of bringing the Nigerian maritime sector up to international standards, despite these challenges. In his discourse with May Agbamuche-Mbu and Tobi Soniyi, he addressed his appointment as Africa’s Regional Representative for the International Bar Association (IBA) Maritime and Transport Law Committee and explored his vision to ensure that the Cabotage Act which he worked on is reviewed.
The Maritime Industry is crucial to Nigeria’s economy, as an oil producing country which relies heavily on imported goods. In your opinion what steps can be taken by the government to unlock the potential in the sector to encourage economic growth?
The maritime industry is crucial to the import-dependent economy of oil producing Nigeria in that it provides the means for the transportation of passengers, exportation of crude oil, agricultural and finished products, importation of raw materials, equipment, petroleum products, finished goods etc. The maritime industry is also crucial to Nigeria’s economy because it facilitates trade and commerce, promotes tourism, creates employment opportunities, generates revenue and develops related economic activities and industries, maritime institutions and infrastructure, apart from national pride and defence and security. For emphasis, in these days of the drop in Nigeria’s revenue from crude oil, if well developed, the maritime industry is capable of generating trillions of US Dollars and Naira revenue for the Government through imports and export duties, registration fees on ship ownership and mortgages, taxes, levies paid to its maritime Agencies apart from other contributions to gross domestic product. In my opinion, the steps that can be taken by the Government to unlock the potential in the maritime sector to encourage economic growth should include creating the enabling environment for the indigenous shipping industry to develop and play its expected role in the economy. The government can do this in several ways but I would mention a few. The National Assembly should quickly pass all the Bills concerning the maritime industry which have been with it since the previous Administration. Some of these Bills are the National Transport Commission Bill, Ports and Harbours Bill, Cabotage Act (Amendment) Bill and the Sea Carriage Bill.
The Government and its Agencies should implement to the letter, the provisions of the legislations on the maritime industry, the maritime Agencies and the supervising Ministry in particular should be allowed a free hand devoid of political interference (but subject to regular monitoring of performance), to perform their statutory duties and implement maritime laws which include the Cabotage Act, Nigerian Maritime Administration and Safety Agency (NIMASA) Act, Merchant Shipping Act. For instance, some of the statutory functions of NIMASA under its enabling Act enacted by the National Assembly in 2007 are to develop shipping and regulate merchant shipping and seafarers, develop and implement policies and programmes which will facilitate the growth of local capacity in ownership, manning and construction of ships and other maritime infrastructure, to enforce and administer the provisions of the Cabotage Act, provide Maritime Security, establish and register, train and regulate maritime labour. The NIMASA Act also empowers the Hon. Minister of Transport on the recommendation of NIMASA, to grant ‘national carrier’ status to a shipping company with 60/40 Nigerian/foreign ownership, with headquarters in Nigeria, operating a vessel of not less than 5,000 gross tonnage on an international route (and not cabotage route), registered in Nigeria, with 100% Nigerian crew and 75% Nigerian shipboard officers. This will enable such a ‘national carrier’, shipping company to have exclusive rights to the carriage of export and import cargo belonging to the Federal, State and Local Governments and their Agencies and have the right to participate in the carriage of not less than 50% bulk dry cargo or liquid cargo and of cargo generated through technical assistance or international aid. NIMASA shall determine an efficient strategy for the participation of national carriers in the carriage of crude oil and petroleum products to and from Nigeria. The NIMASA Act also created a Maritime Fund to be funded with not less than 25% of its revenue, to promote the development of indigenous shipping and shipping infrastructure in Nigeria the beneficiaries of which shall be Nigerians and Nigerian companies and give not less than 5% of its revenue to the Maritime Academy of Nigeria. Under the Cabotage Act, the Cabotage Vessel Financing Fund into which a surcharge of 2% of contract sum performed by any vessel engaged in cabotage is paid, had been created since 2003 to promote the development of indigenous ship acquisition capacity by providing financial assistance to Nigerian operators in coastal trade and to be administered by NIMASA. I am of the view that the Legislature made all these provisions because it recognised that for any Nigerian shipowner to be interested in investing in the maritime industry and to thrive in it, there must amongst other things be availability of cargo, trained and competent seafarers and ship finance with low interest rates, and that there was a need for any ‘national carrier’ to participate in the carriage of crude and petroleum products to and from Nigeria under an efficient strategy determined by NIMASA which Nigerian shipping companies had for a long time been seeking to participate in. So, I am of the opinion that if the Government and its Agencies implement these and other provisions of our maritime laws relating to the growth of the Nigerian maritime industry, the potential in the sector can be unlocked to encourage economic growth.
Last year you were appointed as the International Bar Association’s Regional Representative for Africa. How does membership of the IBA enhance the practice of law in individual African Nations and what does your role entail?
Yes, last year I was appointed the Africa Regional Representative of the IBA’s Maritime and Transport Law Committee. As you know, the IBA established in 1947 is the global voice of the legal profession, comprising two groups (Legal Practice Division and Public and Professional Interest Division) covering all practice areas and professional interests giving its members access to immense up to date information resources and resource persons that are leading experts in their areas of legal practice. Therefore, the membership of the IBA enhances the practice of law in individual African Nations because amongst other things, it provides any African member of IBA unlimited access to information in different areas of legal practice especially those with international bearing, provides opportunities to its members from individual African nations to update their knowledge and understanding of developments of law in other foreign jurisdictions, self-development and exchanges in legal knowledge in especially international law and the municipal laws of other jurisdictions which can influence legislative advocacy for the modernisation and updating of municipal laws in African countries and opportunities for international or global networking which provides personal contacts and friends that can be used where necessary to enhance knowledge, international peace and friendship and work for clients in other jurisdictions where the contacts are based. The experience garnered from IBA membership can also be useful in the development of local Bars in Africa. IBA also supports and develops national Bar associations, supports the right of lawyers to practise their profession without interference, human rights for lawyers and the independence of the judiciary. You are aware that the current organisation of the Nigerian Bar Association into groups and Committees is modelled after the organisation of the IBA and this has made a lot of difference in our NBA in enhancing the practice of law in Nigeria.
The Maritime and Transport Law Committee is made up of top maritime law professionals who meet, create connections and discuss the most current legal issues and developments in maritime and transport law at the annual conferences of the IBA and its half-yearly seminars in different maritime cities. It cooperates with other organisations in the maritime law area such as Comite Maritime International, International Maritime Organisation Legal Council, and maritime law societies in different parts of the world for the unification of maritime and transport law. The gains of membership of this Committee include augmenting the knowledge of maritime and transport issues throughout the world; improving client’s advice and fellowship with maritime lawyers and acquaintance with other competent specialists. My role as its Africa Regional Representative entails working for and promoting the aims of the IBA and the Committee and these gains in Africa and encouraging African maritime and transport lawyers to join the Committee and IBA so as to benefit from these gains too and acting as the Committee’s ‘ambassador’ to African countries apart from representing Africa in the Committee to reflect its interests and situations. There is more information on IBA and its Committees at www.ibanet.org
Stakeholders in the Maritime sector have expressed concerns over its current legal framework. Do you believe these concerns are justified especially in light of the systematic abuses of Environmental laws and the Coastal and Inland Shipping (Cabotage) Act 2003? What is your assessment of the regulatory regime in the Maritime Sector?
I believe the concerns are justified to the extent that the maritime sector’s current legal framework is either out-of-date or insufficient or not fully implemented to enable it actualise it’s potential. Can you imagine that many years after the ports were concessioned, the intended legal framework for their regulation has not been enacted into an Act? I had stated earlier some of the maritime Bills that were not passed by the last National Assembly. You would recall that towards the tail end of the last National Assembly its Senate rushed the passing of about 300 Bills that one began to ask why it had to wait till the last minute to rush the passing of the Bills but they are yet to be enacted into Acts today. Also, some vital maritime treaties which Nigeria had signed or ratified several years ago including the 1988 Convention for the Suppression of Unlawful Acts against the Safety of Maritime Navigation and the Protocol of 2005 (which would have been used to counter piracy and armed robbery at sea that has been ravaging the maritime sector for long), are yet to be domesticated by the National Assembly. You know that I drafted the Piracy and Unlawful Acts and other related offences Bill with the technical assistance of the International Maritime Organisation for NIMASA and inputs of maritime stakeholders at public hearings in Lagos and Port Harcourt, but it is yet to be enacted into an Act.
It must be noted that the maritime sector is not a local sector and that it is heavily affected by international law and treaties. I wish that members of the All Progressives Congress in the National Assembly and the Peoples Democratic Party at its national and local levels would quickly overcome or put aside their internal wrangling and settle down to law-making business that would lead to the quick passing of these Bills in order to facilitate the development of the maritime sector and its role in the Nigeria’s economy and help President Buhari to move that sector and this country forward. Therefore, my assessment of the regulatory regime in the maritime sector is that it is insufficient and out of date in some areas and requires urgent updating and enactment of the pending Bills and full implementation of the current Acts without political interference.
You were part of the team that worked on the enactment of the Cabotage Act 2003. In practice certain sections of the Act such as the provisions concerning waivers has greatly subverted its primary objective of encouraging Nigerians to participate effectively in the maritime sector. What is your overall assessment of the Act?
Before concluding that the waiver provisions of the Cabotage Act have greatly subverted its primary objective of encouraging Nigerians to participate effectively in the maritime sector (which I do not agree with but I disagree with the implementation of the waiver provisions), it is necessary to understand why there are waiver provisions in the Act. At the time of choosing between the liberal and rigid cabotage principles, it was realised from the cabotage report I did for the then National Maritime Authority (now NIMASA) that caused me to visit Malaysia to study its liberal cabotage policy, that Nigeria could not beneficially implement the rigid cabotage policy whereby only ships wholly owned and wholly manned by Nigerians and built in Nigeria could take part in cabotage trade. It was also appreciated that if the rigid cabotage policy was enacted, Nigeria could be shooting itself in its legs especially in the oil and gas sector (the mainstay of its economy) where some of the ships operating there are not fully owned, fully manned by Nigerians or (cannot be) constructed in Nigeria. In fact, there were those who were of the view that the Cabotage Act should not be passed because Nigerians did not have the capacity to meet the requirements of a rigid cabotage regime. So, the liberal cabotage regime allowing waivers was opted for and enacted so as to allow foreign-owned vessels where there is no vessel wholly-owned by Nigerians that is suitable and available to provide the services or perform the activity, allow foreign seafarers where there is no qualified Nigerian officer or crew for a specified position and allow a foreign-built vessel where there is no Nigerian shipbuilding company with capacity to build the particular type and size of the vessel specified in the application for waivers. However, the Cabotage Act and the Ministerial Guidelines on the Implementation of the Act, allow the Minister to renew the grant waivers of any of the 3 of (the 4) conditions of 100% Nigerian ownership, manning and local construction of the vessels after one year subject to proof of improved level of compliance with the requirements of the Cabotage Act on manning, ownership and shipbuilding requirements. As stated in a chapter (Cabotage Bill: Reasons for Ministerial Waivers) in my book titled ‘Nigerian Cabotage Policy and Law: The Case and Advocacy’, the waivers were to ensure that there were no vacuums created by the application of the cabotage regime under the Cabotage Act on account of a lack of local capacity and technology to build, own and man cabotage vessels that will engage in activities or provide the services which will be available due to the restriction of foreign owned and foreign built vessels and foreign seafarers because such a vacuum would be counter-productive and have adverse effect on the development of the maritime sector and the economy. So, the waiver provisions being conditional and limited to one year though renewable, are not permanent but meant to be temporarily allowed as Nigerians build and or acquire the capacity and capability to fill the vacuum in the ownership, manning and construction of vessels. The Cabotage Act has a lot of provisions giving incentives to Nigerians to participate effectively in the maritime sector.
In my overall assessment of the Caboatge Act, I would like to borrow a part of what I wrote in the chapter of my book on cabotage titled ‘The New Cabotage Act-Its intended Effect on the Local Shipping Industry’. I had written that it instituted a “liberal protectionist maritime industry; for the protection or resuscitation of the local shipping industry from death or incapacitation due to the domination of carriages from point to point within Nigerian waters and unhealthy competition by the highly subsidised foreign vessels. In this regard, the Act sees the local shipping industry as a strategic industry which being in its ‘infant’ stage of development and not being in control of indigenous shipping operations, navigation and ship ownership, in the interest of Nigeria’s economy and national security, requires some guidance, conducive environment and protection from foreign competition so as to be nurtured into maturity and given room to develop through its acquisition and building of the necessary capacities to become sufficiently commercially viable and strong and viable. Thus, the local shipping industry will be able to control and become very strong in domestic shipping before venturing into regional or international shipping where it will then be able to withstand competition from the highly subsidized foreign ships in international shipping.” Even though the benefits of the Act are yet to be fully realised by the Nigerian maritime sector due to some factors including political interference, a lack of manpower and political will and determination to implement the provisions to the letter, the Act is still the right step in the right direction of development the indigenous ownership, crewing and building of ships and the local shipping industry as a whole. In two papers I delivered previously on the assessments of the Act after 3 and 5 years of its operation, I had maintained the same position.
The Cabotage Act was passed, among many other reasons, to ensure Nigerian participation in the Maritime industry. Today, over a decade on that objective is yet to be practically realised given the limited participation locally or internationally should there be a new policy approach to the Maritime industry?
No, I do not think that the objective of the Act is yet to be practically realised but I would say that its objectives are yet to be fully realised. I also do not think that the solution to realising the objectives of the Act is to have a new approach to the maritime industry. Rather, it is by discovering why such a well-thought out Act has not fully impacted the local maritime industry and change and remove those reasons. I had mentioned some of the reasons as including political interference, a lack of manpower and political will and determination to implement its provisions to the letter. At the recent Seminar of our Nigerian Maritime Law Association we were informed that the Cabotage Vessel Financing Fund was intact. I am of the view that the Fund should immediately be disbursed to eligible Nigerian shipowners that have met the requirements of the Act and the Regulations so that Nigerian tonnage and shipping would benefit and grow. If after its full implementation, the maritime sector does not fully benefit and acquire the missing or insufficient availability, capacity and qualification, I would be the first person to ask for its repeal for failing Nigerians.
In assessing the Maritime industry’s regulatory regime it is inevitable that the Nigerian Maritime Administration and Safety Agency (NIMASA)’s progress in that regard comes into view. There is an opinion, in light of the Agency’s recent history, that it has grown too big to manage transparently and efficiently. Do you share that opinion?
No. I do not share that opinion. The legislative intention behind creating NIMASA and giving it the roles it is playing were well thought out and in line with current best global practices so that maritime policy formulation and execution are streamlined for quicker, clearer, more focussed, cost-saving, effective maritime safety and administration and duplications and overlapping functions of maritime Agencies avoided. NIMASA today and as you can see from Section 1(2) of the NIMASA Act, 2007 is the result of the merger of the former National Maritime Authority and the former Joint Maritime Labour Industrial Council (JOMALIC), the abolition of the Office of the Government Inspector of Shipping and the transfer of his functions and powers to NIMASA in order to create a single maritime safety and administration agency as advocated by me in my paper titled: “The Proposed Merger of JOMALIC With NMA for a New Maritime Safety Administration: Advantages to the Nigerian Maritime Industry”. See it at www.mikeigbokwe.com. In that paper I had advocated for and shown the advantages of the merger as including consolidating our maritime laws, eliminating duplication and multiplicity of agencies and functions, eliminating or reducing administrative costs and waste, updating the empowerment of agencies to strengthen the enforcement of maritime safety and environmental pollution regulations and laws, enhancing unity for stronger and more efficient enforcement of maritime pollution and safety laws and making Nigeria fully IMO-compliant. I had also argued that similar Agencies existed in the USA, Singapore, UK and Denmark. So, NIMASA is not, and has not grown, too big to be managed efficiently and transparently. In line with my paper, the National Assembly has given statutory regulatory, safety and administrative functions and powers in respect of the maritime industry to NIMASA in its Act, Merchant Shipping Act and Cabotage Act etc that no other maritime Government Agency has.
We should not draw the hands of the clock backward by splitting its functions and powers amongst several Agencies because of the opinions of some that it has grown too big to be managed efficiently and transparently because of its recent history. A focussed, committed and determined leadership of NIMASA which I have seen in its current Director-General, and the elimination of political interference in the performance of NIMASA’s statutory functions and powers, are amongst the factors needed to cause NIMASA to perform its statutory functions and powers efficiently and effectively.
How should the Nigerian Maritime Administration and Safety Agency (NIMASA) ensure that the regulation of the Maritime industry is advanced in the same way as commercial innovations within the industry?
I think some of the ways NIMASA can ensure that the regulation of the maritime industry is as advanced as commercial innovations within the industry should be the avoidance of bureaucratic bottlenecks in the way it does business or performs its functions, the deployment and usage of technology, trained and motivated staff, the modernisation of its Ships Registry to make it attractive to registration. I learnt recently that one of the reasons why the Nigeria LNG Limited is yet to register its vessels in the Nigerian Ship Registry despite being owned 49% by NNPC, is that NIMASA has not updated the Ship Registry despite the support given to it by Nigeria NLG Limited. Whatever is delaying the updating of its Ship Registry to make it attractive to shipowners should be immediately removed because through ship registration, the much-needed revenue would also come into Government coffers. It should encourage regular training and updating of knowledge by its staff. It should also avoid ineptitude, corruption, bureaucracy, inefficiency, customer-unfriendly and unpatriotic practices and use experienced maritime experts to help it in bridging and supplementing gaps where it lacks relevant personnel to quickly accomplish its statutory functions.
An important feature of the Cabotage Act is the Cabotage Vessel Financing Fund which is supposed to have been in operation since 2008. However, indigenous ship owners have not been able to gain access to these funds and only few applications for funding have been approved. What can be done to improve accessibility to finance for indigenous ship owners?
I understand that indigenous ship owners have not been able to gain access to the Fund and only few applications for funding have been approved but not disbursed. In my view, what can be done to improve accessibility to finance for indigenous shipowners are the immediate efficient and proper implementation and disbursement of the Cabotage Vessel Financing Fund and the Maritime Fund which are creatures of statutes that are long overdue for implementation and disbursement in order to develop indigenous shipping and shipping infrastructure. The Central Bank of Nigeria should also create a Maritime Intervention Fund like it did for the aviation industry recently, in order to make room for long-term loans with single digit interest rates that indigenous shipowners would have access to so as to avoid the high interest laden ship finance from other financial institutions that often send Nigerian shipowners out of business. It is not out of place for the Government to subsidise the long-term loans or provide guarantees for the loans that shipowners should access in line with what obtains in other shipping nations to enable their nationals invest in shipping and compete internationally.
Maritime and Admiralty matters fall under the jurisdiction of the Federal High Court by virtue of Section 251 of the 1999 Constitution. It appears that the Federal High Court is overburdened due to the number of items under the Federal High Court’s exclusive jurisdiction. Do you think there is a good case for creating an exclusive maritime court?
There is no doubt that since the Federal High Court was conferred with unlimited jurisdiction under section 251 of the 1999 Constitution, the subject-matters over which it exercises civil and criminal jurisdictions have increased. In order to quicken the administration of justice and bring justice nearer to the people, the Federal High Court has been established in a majority if not all States of the Federation including the Federal Capital Territory but this has not fully solved the problem of congestion and delayed justice delivery. It is a universal principle that admiralty matters should be given accelerated hearing and determination because they usually involve heavy commercial interests and money but in practice, despite the front-loading procedure introduced by the Admiralty Jurisdiction Procedure Rules, 2011, accelerated determination of disputes is yet to be achieved by the Federal High Court in admiralty matters. This situation does not give Nigeria a good image internationally and does not encourage direct foreign investment.
I am of the view that all the stakeholders including the Judges, the Court (Registrar/clerk), lawyers, parties, witnesses and even the Government contribute to court congestion and each of them is responsible one way or the other for or contribute to the delayed determination of admiralty matters. Therefore, creating an exclusive maritime court would be addressing one or two of the causes of delayed determination of admiralty matters. I will advise that in addition to creating an exclusive maritime court or designating exclusive Maritime Judges to hear and determine only admiralty matters, more experienced lawyers should be appointed Judges of the Federal High Court, fixed timelines (as in arbitration matters and election petitions) of not more than 6 months from the date of commencement of admiralty matters, should be set for the hearing and determination of admiralty matters in such a way that adjournments would not be allowed any of the parties or caused by the Court once trial has commenced. In addition to this, admiralty matters should be added to the list of matters which enjoy fast-track hearing and determination under the Practice Directions of the Federal High Court and the Court of Appeal and the Supreme Court should also follow suit.
Also in this area of law, there is an argument for the admission of experienced legal practitioners as Judges in order to increase practice knowledge and depth of Maritime industry experience on the Bench. Do you think this would be a useful course of action?
Yes, but I will add that the legal practitioners appointed as Judges should be educated and experienced in maritime law. This is because maritime law is technical and wide and requires special education and experience to be properly appreciated and applied. Lawyers that are trained and experienced in maritime law will on being appointed Judges of the Federal High Court appreciate maritime matters better without learning it on the Bench and their training and experience would facilitate their understanding of proper and quicker resolution of the issues in those admiralty cases. When they are elevated to the Court of Appeal and Supreme Court, they will also go with their education and experience.
All Nigerian Ports were concessioned some 10 years ago allowing the private sector to participate in the running of the ports. However some maritime experts have observed that challenges, such as high port charges and undue delays in cargo clearance still persist. In your view what is the way forward in the administration of our ports?
Under the port concession regime, the port authority that has pecuniary interest in the concessioned ports was unable or reluctant to fully regulate the port concessionaires or their tariffs so as not to adversely affect its economic or pecuniary interests and income. This is one of the flaws of the port concession regime that the current regime of Port Economic Regulator has changed to the satisfaction of many Nigerian shippers. There have also been complaints by shippers that multinational shipping conferences or lines and terminal operators have been imposing unsubstantiated surcharges and terminal handling charges for services not provided to make up for dwindling freight and other income which has caused Nigerian shippers to divert their imports to neighbouring ports due to high costs of ports services in Nigerian ports. However, by the Nigerian Shippers’ Council (Port Economic Regulator) Order 2015, Nigerian Shippers’ Council was appointed the interim economic regulator for Nigerian ports and mandated to inter alia regulate Nigerian Ports’ Concession agreements, regulate tariffs, rates, charges and other related economic services at Nigerian ports and monitor all matters relating to the cost, standard and quality of services rendered by the regulated services providers including Nigerian Ports Authority and seaport terminal operators. This is one of the proper ways forward in the administration of the ports in that it separates ports ownership from ports management and from ports economic regulation and takes away the conflict of interest of the Nigerian Ports Authority. I believe that the high and unsubstantiated and unapproved port charges and undue delays in cargo clearance are now being addressed by the Nigerian Shippers’ Council which has set up inter alia the Port Service Support Portal and Standard Operating Policy to check them but because sea terminal operators have taken the Nigerian Shippers’ Council to court, thus the matter is now sub judice, I am unable to comment further on same.
The Buhari administration introduced a new Forex policy which allows the exchange rate to be determined by market forces. In your view what impact is this policy having on the maritime sector?
In economics, when market forces determine the price of any product, it’s price is determined by its supply and its demand, in such a way that when it’s demand outstrips it’s supply, it’s price goes up and vice versa. Due to the fact that Nigeria has been an import-dependent country, with a single foreign currency revenue generation product for a long time (which the Buhari regime is trying to change by diversifying) and importers (manufacturers and businessmen) depend on foreign currency to purchase and import their raw materials, equipment and finished goods, the moment the supply of foreign currency was lower (due to the fall in revenue from crude oil resulting from an oil glut causing oil prices to fall globally and reduced oil exports due to militancy) the demand for foreign currency, the exchange rate went up.
Some of the consequences are that there has not been enough foreign currency available for importers to buy their imports and the funds of importers could now only buy half of what such funds used to buy due to the increased exchange rate. The Central Bank of Nigeria also excluded 41 items from access to official foreign exchange directing their importers to source their foreign exchange from the black market and other non-official sources. Some of the immediate effects are that fewer raw materials, equipment and finished goods are now being imported than before and the cargo being handled by the ports have drastically reduced. The reduced imports has multiplier effects such as reduced revenue to the ports and Nigeria Customs Service, reduced income to freight forwarders and clearing agents, reduced cargo insurance premiums to insurance companies and of course reduced income and taxes from companies involved in clearing and forwarding. Also, reduced imports have led to low demand for trucks the owners of which are now struggling to be in business and reduced cargo being handled by bonded terminal operators thereby triggering unemployment. Reduced imported items means less supply of imported goods and increased demand, resulting in an imported inflation of the prices of the goods to the ultimate consumers.
Insecurity on Nigerian waterways has become a common state of affairs, Pirates and Militant groups negotiate the waterways at will and continue to pose a continuing risk to commercial shippers. The incidence of violence, robbery and kidnapping are on the rise but there seems to be no clear strategy to solve, not just these immediate problems, but their inherent causes of disillusioned youths and feelings of resentment in the Niger Delta region. How do we turn the situation around?
For the purpose of suggesting solutions, I would like to separate pirates and armed robbers or unlawful actors at sea who through maritime violence, robbery, ship hijacking, crew kidnapping in port areas, territorial waters, high seas (shoot, threaten, injure crew members, steal ships and crew cash, provisions and damage ships and navigational equipment), from (Niger Delta) militants who due to disillusionment and resentment destroy crude oil and gas pipelines and installations with explosives, disrupt exploration and exportation of crude oil and gas, even though they both involve and affect maritime security and safety. When the causes of a problem are known and removed, the problem is solved. It has been argued that these problems are due to Youth restiveness resulting from underdevelopment, unemployment of the Youths who could not farm or fish because of the degradation of their environment by oil pollution, agitation for self-determination and control of resources in the Niger Delta etc. The current militancy is not new because it was very rampant during the regimes of President Yar’Adua and when President Jonathan was Acting President but it resurfaced after President Buhari took over power. I think that applying the same strategy that Presidents Yar’Adua and Jonathan used to solve the Niger Delta militancy in the past would help in solving it now. The Government should also negotiate with the militant groups just like it is negotiating with Boko Haram with a view to amicably removing the causes of the militancy so that there can be peace and progress in the region. The military option should not be used because war never solves the problem but peace enables us solve disputes amicably. To reduce if not eliminate Youth restiveness in the Niger Delta, Government should provide infrastructure, jobs, education through schools, skills acquisition centres, electricity, pipe-borne water, health care hospitals. The sponsors of the Petroleum Industry Bill, the Government and the National Assembly should quickly enact the long-awaited and long-overdue Petroleum Industry Bill that would facilitate the development of infrastructure, creation of jobs, oil pollution prevention and control, and promote a sense of belonging and say in the oil and gas sector by the Niger Deltans etc, whilst not neglecting the interests of other stakeholders in the oil and gas industry. The Federal Government along with the Federal Ministry of Niger Delta Affairs and the Amnesty Programme Coordinator and the Governors of the States in the Niger Delta should work together to accomplish these targets. They have done certain things but they have to do more.
Piracy being an international crime should be dealt with through the domestication of the relevant treaties. I had told you earlier about the Bill on Piracy and Unlawful Acts at Sea for the domestication of the SUA Conventions and UNCLOS on piracy which I drafted at the instance of NIMASA with inputs from IMO and other stakeholders. That Bill should be enacted into an Act by the National Assembly to provide a legal framework for the enforcement of the provisions of those treaties and to deter piracy and unlawful acts. Until the Bill is enacted, pirates and unlawful actors at sea will not be deterred but will continue to ravage and create havoc to ships and shipping and when arrested cannot be successfully prosecuted, convicted or fined under the current inadequate and archaic laws. I had written two papers on these areas titled ‘Recent Developments in Nigerian Maritime Law & Practice: Piracy and Unlawful Act at Sea’ delivered at the Maritime Seminar for Judges in 2012 and ‘Maritime Security Issues in Nigeria’ presented at the International Maritime Conference of the IBA in Connecticut, USA IN 2010. (See www.mikeigbokwe.com) where I had canvassed solutions that I think are still relevant today.
Time is of the essence in commercial agreements and more so in the Maritime industry. When litigation is involved however, the effect of delays are often greatly damaging to commercial concerns and the cost of time lost is often greater than the damages to be recovered. Arbitration awards are binding and enforceable by Nigerian Courts, and in comparison they appear to offer faster resolution of disputes. What do you see as the effect of Alternate Dispute Resolution mediums such as Arbitration on Maritime Litigation?
There is still a debate as to whether arbitration is an alternative dispute resolution (ADR) method or a hybrid between ADR and litigation. You are totally right that time is of the essence in commercial agreements and the resolution of commercial disputes especially maritime disputes and also right about your impression about litigation. Due to the high costs, delayed determination, publicity and hostile nature of litigation in commercial dispute resolution, arbitration and ADR (by mediation, negotiation or conciliation) has been growing in importance and usage in the resolution of commercial disputes. Some of the advantages that arbitration has over litigation in the determination of commercial disputes are that it is less expensive and less time consuming, private and confidential in hearing, allows ‘party autonomy’ in choosing the substantive law, rules of procedure, it has finality and enforceability and recognition and allows for the use of experts as arbitrators which helps in resolving technical and complex issues in the dispute.
In my view, the main effect of arbitration on maritime litigation is that due to the advantages that arbitration has over litigation, parties to maritime contracts would want arbitration clauses to be inserted into their contracts for faster resolution of maritime disputes that may arise which would consequently reduce the number of maritime commercial disputes being resolved through litigation. This would no doubt reduce the maritime matters being filed in the Federal High Court for determination that would have given lawyers and Judges maritime disputes and maritime law experience. It is a warning to maritime Judges, maritime lawyers and their clients to support the quick hearing and determination of maritime litigation so that litigation would not totally lose out to arbitration in that area. However, in a paper titled ‘The Growing Importance of Arbitration in the Resolution of Commercial Disputes in Nigeria’ which I delivered at the 2016 Annual Conference of the Chartered Institute of Arbitrators in July, 2016, I had also warned that stakeholders in arbitration should be careful and continue to ensure that delayed determination and enforcement of Awards, high costs of arbitration, publicity due to challenges of Awards in courts, do not lead parties to ADR and reduce their use of, and the practice of, arbitration.
With the opportunity Arbitration provides to the Private Sector and especially Maritime stakeholders in the resolution of commercial disputes, do you think Nigeria can take advantage of Arbitration’s regional character to become a favourable forum for maritime arbitration in Africa?
Yes, I think so. I say so because there is a growing importance, awareness and use of arbitration in Nigeria through arbitration books, training and Seminars by Arbitration Institutions and Universities in Nigeria and due to the demerits of litigation in quickly resolving commercial disputes. Moreover, until a few days ago, Nigeria was the biggest (but now the 2nd biggest) economy in Africa and the most populous country in Africa. Nigerian courts encourage resort to arbitration where there is an arbitration clause in any contract in respect of which a dispute has arisen and now some State High Courts have rules allowing references of litigation to ADR for resolution. There are provisions in the Court of Appeal Rules allowing references of qualified appeals to mediation or ADR. I understand that the Supreme Court is in the process of amending its rules to allow mediation for the resolution of certain appeals. I believe that these uses of ADR has been helping and will continue to help in decongesting our trial and appellate courts.
The General Council of the Nigerian Bar in encouraging lawyers’ use of ADR, has made it a breach of the Rules of Professional Conduct in the Legal Profession for a lawyer to fail or neglect to inform his client of the option of ADR mechanisms before resorting to or continuing litigation on behalf of his client. There is also a growing number of arbitration institutions and professional associations including the Regional Centre for International Commercial Arbitration, Lagos Court of Arbitration with state of the art facilities comparable to those abroad and the Chartered Institute of Arbitrators, Maritime Arbitrators Association of Nigeria that are training users and practitioners of arbitration and arbitrators and promoting arbitration and ADR. There is an increase in commercial activities and availability of experienced arbitrators in Nigeria. I believe these are all good reasons for Nigeria to become a favourable forum for maritime arbitration in Africa.
The Nigerian National Shipping Line (NNSL) wound-up in 1995, but is reported to possibly make a return under the current Ministry of Transport. Going by the history of the NNSL do you think we are ready to manage a shipping line?
Well, I was at the meeting which the Hon. Minister of Transportation held on 4th August, 2016 in Eko Hotel, Lagos with members of the Nigerian Shipowners Association to discuss the ‘National Carrier’. I got the impression from the meeting that the Government wanted to galvanise interested shipowners to invest in a shipping company that would qualify as ‘national carrier’ for deep sea shipping and own 60% of the shares whilst a foreign technical partner would own 40% of the shares. The Hon. Minister assured that the national carrier would start from lifting the Ministry’s cargo but the Government would not hold shares in it, it’s plan being just to facilitate and create an enabling environment for, the ‘national carrier’.
However, after the discussions, it appeared to me that there were three different positions. First, there were those who felt that since the Government was not interested in holding any shares (even as little as 10%), it should not drive or influence the process and the board appointment but should provide the conducive atmosphere for the private sector to drive it. Then the 2nd group was made up of those who wanted to approach the idea with caution because they were not sure that there would not be an overbearing Government interference or that the lessons of the past from NNSL had been learnt and would be avoided. This group also felt that the cargo promised by the Minister would not be for the long term but for the short-term as long as the re-construction of railways and airports lasted. They were also of the view that the technical partner is only experienced in containerised shipping for which there is not enough outward-bound cargo, whereas there is silence on how the ‘national carrier ‘should carry Nigerian crude oil and gas which should be the main target for lucrative shipping. It is also this group’s position that due to the expensive dry docking charges by shipyards in Nigeria if the ‘national carrier’s’ shipyard is not built for repairs of its fleet, the technical partners would under the guise of sending the fleet abroad for repairs siphon its income in hard currency, to the detriment of the owners. The 3rd group comprised those fully in support of the Hon. Minister’s plan and who believe that from the high sense of determination and doggedness of the Minister who had set up different Committees to review and advise him on the ‘national carrier’, his plans should be fully supported. They also believe that no previous Minister of Transport since 2007 had thought it fit to pursue vigorously the establishment of the ‘national carrier’ like the current Hon. Minister.
To me, a strong and well-managed ‘national carrier’ would be something our nation would be proud of as it will fly our national flag overseas, provide space for sea training and experience to our cadets, compete with foreign ships and reduce freights on exports and imports, create employment opportunities, carry export and import cargo belonging to the Federal State and Local Governments and their Agencies and have the right to participate in the carriage of not less than 50% bulk dry cargo or liquid cargo and of cargo generated through technical assistance or international aid and crude and petroleum products, generate revenue (also in foreign currency) and during any emergency or crisis when foreign ships would refuse to come to Nigerian ports, would be available to carry our imports and exports and support the Armed Forces. I am also of the view that since the Nigerian shipowners or their various associations involved in wrangling had not come up with a better alternative to the Hon. Minister’s plans on the ‘national carrier’ (previous Ministers did not come this far), his plans for the establishment of the ‘national carrier’, about 9 years after its legal framework was established by the NIMASA Act, 2007; should be supported. Let us just start and build now a ‘national carrier’ rather than wait indefinitely for when it will take off. If we do not start now, what are the chances that we would ever start and when and who would start a ‘national carrier’ and get the statutory cargo reserved for national carriers? A journey of a 100 miles is made by taking the first step in the right direction. I also see through the establishment of a ‘national carrier’ as the Hon. Minister plans, an opportunity for indigenous shipowners who are currently divided, to be united under one umbrella in the ‘national carrier’ for a common goal and interest that would be used in developing shipping in Nigeria rather than dissipating efforts and resources in internal purposeless wrangling.
However, we must learn from and avoid the mistakes of the past and the bad experiences of NNSL’s failure but I do not think that failing once should stop one from trying again to pass a test until he gets it right. President Buhari would not have become our President in 2015 if after failing thrice in 2003, 2007, 2011 to win the presidential elections, he stopped trying to win. We should also put into consideration the concerns of those who are opposed to and those who want to ‘sit down look’ with respect to, the method of building, and, the ‘national carrier’ and address and allay those fears so as to take along as many shipowners as are interested. The ships in the fleet of the ‘national carrier’ should be diversified to take advantage of the types of cargo available in Nigeria namely, oil and LNG tankers, dry bulk and general cargo ships and incorruptible, diligent, focussed persons with cognitive experience in technical and commercial shipping should be hired to run such a national carrier with set targets.