NIMASA’s Cabotage War of Attrition

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The move by Nigerian Maritime Administration and Safety Agency to end cabotage waivers, though commendable, will not succeed, if the ‘waiver clause’ in the Cabotage Act is not expunged, writes Eromosele Abiodun

On May 9, 2003, former President Olusegun Obasanjo signed the cabotage bill into law. To stakeholders in the maritime industry, that was one of the best decisions taken by the Obasanjo government. In their view, the development opened a window of limitless opportunities for not only those in the shipping business, but the entire nation and the economy as a whole. Cabotage came into being in Nigeria with the enactment of the Coastal and Inland Shipping Act 2003. The provisions of the Act made it clear that only indigenous ship owners have the mandate to carry out coastal trade and inland shipping.

The Act set out the limitations on foreign operations of cabotage shipping and the tight conditions under which exceptions can be allowed. These provisions are set out in sections 3 to 6 of the Act, which prohibit coastal carriage of cargoes and passengers, except by wholly Nigerian-owned, manned, built, and registered vessels.

It also restricts towage by tugs or vessels to those wholly owned by Nigerian citizens, just as it limits carriage of petroleum products and related oil and gas shipping services to vessels of Nigerian ownership. Furthermore, the Act prohibits domestic trading in the inland waters of Nigeria, except by vessels wholly owned by Nigerians.  

However, the purpose for which the act was enacted may have been defeated as most indigenous players in the industry are still been crowded out by foreigners. According to numbers released by the Nigerian National Petroleum Corporation (NNPC),Nigerian-owned vessels accounts for only 12 per cent of annual oil trade market. The major point of the matter is that rather than allow the letters and spirit of the cabotage act to work, a particular clause in the act flawed everything. This is the waiver clause. This clause has over the years been exploited by multinational companies with the excuse that Nigerian players do not have the facility, capacity and competence to play in critical areas. Many have questioned why the relevant agencies have not made effort over the years to get rid of this clause by proposing amendment to the national assembly for proper action. This is why some stakeholders are against the move, last week by the Nigerian Maritime Administration and Safety Agency (NIMASA), to harass foreign shipping companies over the matter. 

 Clampdown on Vessels 

The bid to put an end to non-compliance to the cabotage act did not start just last week. A few years ago, NIMASA announced that it had started seizing vessels for violating provisions of the Cabotage Law, which states that Nigerians should be employed onboard vessels. 

Director of Maritime Labour and Cabotage Services at NIMASA, Ibrahim Jubril, who disclosed this at the time said  the agency had also acquired fast intervention vessels for the purpose intercepting erring vessels. 

Jubril also said  in order to have an accurate data of available maritime labour in the sector, NIMASA has recently come up with an electronic register of all maritime labour in order to ensure jobs are provided for them in line with the Cabotage law. 

He said, “On the part of NIMASA as a regulator, we have put in measures to ensure full implementation of the Cabotage Act in Nigeria, particularly on the fourth pillar which has to do with building of ships, carriage of cargoes and the manning aspect of it. We have come up with an electronic register of all maritime labour that would enable us plan better for the industry, such that whenever there are identified jobs for seafarers, it would be carried out by Nigerians and Nigerians would be placed on the job. 

“In line with the Presidential executive order, we have come out in full force, in terms of our enforcement, to ensure that only Nigerians are engaged onboard. Before the release of the Presidential order, NIMASA came up with a marine notice which stated that we would have zero tolerance for any waiver at all.”

Operational Guidelines 

The Nigerian Maritime Administration and Safety Agency had at the time issued new set of operational guidelines to International Oil Companies (IOCs) as it concerns engagement of seafarers and dockworkers as provided for in the Cabotage Act. The guidelines, which were disclosed to the IOCs and other stakeholders at a sensitisation seminar on the implementation of the agency’s statutory mandate on offshore operations in respect of maritime labour and cabotage, the then Director, Maritime Labour Service of NIMASA, Juliana Gunwa, noted that same are to be fully complied with. 

Gunwa gave the guidelines which would attract penalties for defaulters as follows: All IOCs/ facility operators are to engage only maritime labour employers registered with NIMASA as agencies for outsourcing of seafarers/dockworkers. All IOCs/facility operators are to engage only maritime labour that is registered with NIMASA as seafarers/dockworkers; All IOCs/ facility operators are to ensure that only maritime labour employer that have conditions of service validated by NIMASA are engaged on their facilities. 

Others are that all IOCs/facility operators are to ensure that employers of maritime labour implement the agreed conditions of services for the maritime labour industry; “All IOCs/facility operators are to engage the cabotage services department of NIMASA for advice and periodic assessment on status of compliance with the Cabotage Act 2003 and manning of cabotage vessels.  All IOCs/facility operators are to ensure that only registered operators of ports, terminals, jetties, offshore platforms and vessels are qualified for service contracts on/in connection with their offshore facilities. “This will be implemented as a “fatal flaw” during the tendering process. 

She told the stakeholders that the agency will soon commence enforcement of the provisions of the Cabotage Act as it concerns engagement of seafarers and dockworkers in the oil and gas sector.

Instructively, an official of the agency had at the time admitted that NIMASA had some challenges in the enforcement of the Cabotage Act because they do not have a database on numbers of vessels providing marine services to offshore operations of the IOCs. 

The official also blamed the IOCs for not co-operating and not being open in the declaration of number of offshore marine vessels in their employment, as well as need to seek NIMASA‘s approval in all pre-tender for offshore and related contracting processes.

NLNG Vessel Detained

Rather than fix this administrative lapse, the NIMASA last week detained NLNG Limited’s vessel over alleged violation of the Cabotage Act, a move analysts say, may result to scarcity of Liquefied Petroleum Gas (LPG), better known as cooking gas.

It was gathered that the detention of ‘MT Navigator Capricorn,’ the only vessel that supplies cooking gas to Nigeria’s domestic market, created supply crisis, leading to a hike in the price of the product.

The vessel, which brought 13,000 metric tonnes of LPG to Lagos from NLNG’s Bonny Island plant in Rivers State, was detained for about 10 days by NIMASA at the NOJ Jetty at Apapa after it had discharged its product.

NLNG brought in the new vessel to replace ‘MT Gas Providence,’ which used to supply LPG to the domestic market.

THISDAY investigation revealed that the new vessel, which started operation in the country in 2018 brings in LPG every two weeks to Lagos for the licensed off-takers appointed by the NLNG to distribute LPG to the domestic market.

However, the refusal of the maritime regulator to allow the vessel to sail back to Bonny Island to continue its two-weekly voyage to Lagos, created supply crisis.

NIMASA Ban Waivers

Meanwhile, NIMASA had in a statement stated that it has commenced clampdown on vessels that do not comply with the provisions of the Cabotage Compliance Strategy introduced last year, to ease the implementation of the Cabotage Act of 2003 in Nigeria.

Director-General of NIMASA, Dr. Dakuku Peterside in the statement said the agency would no longer encourage the application of any form of waivers under the Cabotage Act, particularly from the oil firms operations because such do not help the growth of the Nigerian maritime sector and economy at large.

He said: “Our laws forbid foreign vessels operating in our territorial waters save for compliance with the Cabotage Act. There shall be no sacred cow when we commence clampdown on erring vessels.

“We 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.”

Already, he said a detention order for a Motor Tanker, MT NAVIGATOR CAPRICORN, which is a LPG carrier, has been approved for contravening sections of the Cabotage Act.

The vessel, he stated, was first boarded in October 2018 and all infractions of Cabotage non-compliance were noted and communicated accordingly to the charterer/owners representatives with a 90 days’ grace period to comply.

“The 90 days expired on January 31, 2019. It is noteworthy that the owners made undertaking to remedy the notable infractions when the vessel was issued a detention warning in October 2018.

“While NIMASA is currently engaging the owners and charterers of the vessel on the need to comply with the laws of the land, MT NAVIGATOR CAPRICORN has been moved to Lagos Anchorage to allow space for other LPG vessels to discharge at the NOJ Jetty,“ he said.

Peterside had recently led the agency officials to meet with the Oil Producers Trade Sector (OPTS) in Lagos where he urged industry players 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.

In August 2018, NIMASA had introduced a new Compliance Strategy for Cabotage Implementation in Nigeria to ensure full implementation of the Cabotage Act, 2003 to secure jobs for qualified Nigerians in the maritime sector.

The agency via a Marine Notice suspended considerations for applications of grant of waiver on manning for prescribed categories of officers in vessels engaged in Cabotage trade.