RORO Port, Apapa, Lagos
With lamentations by members of the Senate Committee on Customs and Excise on the discovery of some overtime cargoes that have stayed up to 10 years in the ports, stakeholders have called for measures to address the issue and a review of the law applied by the Nigeria Customs Service on such goods, writes Francis Ugwoke
For members of the Senate Committee on Customs, it is unbelievable that some goods could stay in the ports for years without their owners clearing them. But for those conversant with the port environment, it is not a big story. It is the traditional for a number of reasons. Some of the reasons could either be traced to the importers or the Nigeria Customs Service (NCS) and other agencies of government.
About a month ago, the Chairman of the Senate Committee on Customs, Senator Hope Uzodinma and his members stumbled into a number of overtime containers in Ikorodu Lighter Terminal in Lagos. The senators were shocked by this discovery. They were on tour of the facility for an oversight function when they found goods that had stayed up to 10 years not cleared. The affected items were described as transformers, cars and electronics.
Angry over the discovery Uzodinma had raised alarm: “To see these numbers of containers with very valuable items in our various sea ports and airports not claimed for a period of over 10 years, is to say the least, very disappointing. This shows to some extent a sign of irresponsibility on the side of the authority. We are going to discuss with the hierarchy of the service.
“We will ensure that the Act that established the Nigeria Customs Service, which has also prescribed a procedure for disposal of overtime goods and seized cargoes, is respected and complied with. The only way to dispose these items or overtime cargoes is copiously captured in the Act and it is not going to be subjected to any further negotiation.
“Whatever that is defined in the Act is what should be done. Our responsibility as lawmakers who made the law is to ensure that it is followed forthwith. We are talking of economic recession in the country but you can see how many hundreds of billions of items of value that are lying at the Ikorodu Terminal for the past 10 years.” Few weeks after the discovery by the Senate Committee, the Minister of Power, Works and Housing, Mr. Babatunde Fashola, and the Transmission Company of Nigeria (TCN) took delivery of 218 stranded containers of electricity equipment in Apapa, Lagos. They were abandoned at the port for over eight years.
On receiving the consignment at the Duncan Terminal in Apapa, Fashola said the equipment would boost power supply in the country.
When Goods Become Overtime
Until the ports were concessioned exactly 10 years ago, the issue of overtime cargo was common. Under the law, the Nigeria Customs Service reserves the right to auction any cargo, which spends over 90 days in the ports without being cleared. Such goods are described as overtime cargoes and the Customs has the right to auction them after necessary gazetting. Before the concession, such cargoes could be found in any port and they stayed as long as possible until the owners were ready to clear them. The amount paid on demurrage was not much then, and the owners could afford to play with time. Some importers could even bribe their way by making some falsification as to when the goods arrived the ports to reduce the amount paid on demurrage.
But this trend has since changed with the terminal operators taking over the ports. Any importer, who delays in clearing his goods will pay heavily on demurrage. In some cases, some terminals have been accused of causing delays in order to create more room for the cargoes to stay in the ports and attract demurrage. But for the containers that the senators discovered, many of them are owned by government agencies, which could be granted waiver on payment of demurrage on the intervention of those in government.
A customs source said the failure to clear them after about 8 years may be as a result of bureaucratic bottlenecks always in government departments. Other items like electronics belong to different individuals who were not able to clear them until the goods entered overtime. The importers may have lost interest in clearing them apparently because of the cost involved. Sometimes, an importer may decide to forget some goods if the clearance will lead to more losses for him. This is when some trade goods enter overtime and accumulate so much demurrage that clearing them will be a nightmare.
It would be recalled that following the congestion in the ports some years ago, the administration of President Goodluck Jonathan had ordered some overtime containers to Ikorodu Light Terminal from the Apapa, Tin Can Island and surrounding ports. Some of these containers may have been among those that shocked the senators. There is no doubt that the importers, particularly those who own the cars and electronics may no longer be interested in the goods apparently because they may have no market value.
This is what one could find in government warehouses, seizures that have lost their value as a result of time. Although, it is the duty of Customs to auction goods, the experience has always been that only items that are valuable were the ones sold off as quickly as possible to some highly placed Nigerians, including those in government, ministers, power brokers, monarchs, among others.
This does not appear to have been the same trend since the tenure of Col. Hameed Ali (rtd) as customs boss. And the reasons are obvious. A highly placed source said Ali cannot carry out auction sales outright because he would need the approval of the Minister of Finance, Mrs Kemi Adeosun. Incidentally, sources said the two of them are not in the best of terms as far as working relationship is concerned. And fraudsters have taken advantage to advertise auction sales by the Customs apparently to defraud innocent Nigerians. The Service had arrested some suspects involved in this racket.
Why Cargoes are Abandoned
A good number of importers abandon their containers at the ports for different reasons. Sometimes, an importer may run out of funds to clear his goods. This often leads to accumulation of demurrage to such an extent that he is not able to pay. Some importers are so fraudulent that they would want to cheat government on any consignment they bring into the country. In the process, some of them lose the goods as they are not able to settle the issue within the time allowed for them to clear the goods. Paying the amount on the Debit Note and the demurrage on the goods could be a herculean task. Some of the importers would resort to bribing their way to buy the same goods on auction from the Customs. Now, it does not appear that such arrangement exists under the change mantra of the leadership of the Customs. Some importers even bring in prohibited goods which are seized and they rot away in the ports.
Customs sources said there is hardly any port in the country where there is no overtime cargo. In Lagos, Ikorodu Lighter Terminal has over the years remained the home of such goods to save the terminals from congestion.
Worried about the increasing number of abandoned goods at the Ikorodu Lighter Terminal and other government warehouses, stakeholders believe that it was time for the Customs to do an audit of such items. A freight forwarder, Mr Laurence Ojoko, said the Customs should take stock of all such items in all the government warehouses throughout the country and auction them as provided by law. Ojoko said this will help decongest the areas where the goods are being kept. On the transformers at Ikorodu Light Terminal, he called on the Customs to reach out and find out which of the current companies that are in charge of power distribution in the country owns the equipment. According to him, the items should be handed over to them after they have paid the necessary penalties instead of auctioning them.
Another freight forwarder, Mr Emma Opara, advised importers to shun any fraudulent practice that is responsible for seizure of goods at the ports. Opara added that importers should always be on top of any situation when their goods arrive the ports to ensure that they are cleared in good time before entering demurrage and overtime status.
Some stakeholders are also of the view that the new Customs bill now before the National Assembly should increase the three months period after which the Custom can auction an importer’s goods if he does not clear them, to at least six months with payment of necessary penalty. This, according to them, will check many cases of overtime cargoes.