With Supreme Court’s Ruling on Waterways, Lagos Loses Big Money Spinner

Last week’s judgment of the Supreme Court upholding the powers of the federal government to exercise control over the inland waterways must have sent a signal to the Lagos State Government that excessive drive for revenue through tax and levies have limitations, writes Alex Enumah 

Excessive and multiple taxation by the Lagos State Government and some of its touts last week made the state lose its share of control of the inland waterways to the federal government when the Supreme Court held that it was the sole responsibility of the central government to impose levies, and issue licences to operators in the industry.

Before then, for 15 years, the state government had exercised control over the waterways through levying and licensing of operators in the sector, the way it has been doing in other areas. Under the Lagos State Waterways Authority (LASWA) law which came into force in 2008, the state government had raked in billions of naira from operators in the sector.

But delivering judgment in a suit concerning the dispute, the Supreme Court  said it was unlawful for state governments to seek to control the country’s inland waterways.

In the lead judgment written by Justice Okoro, who also led the seven-member panel, the apex court held that existing laws confer exclusive control of activities in the inland waterways on the federal government through its agencies, the National Inland Waterways Authority (NIWA) and the Nigerian Maritime Administration and Safety Agency, (NIMASA) and no other tier of government.

Faced with a multiplicity of charges by both federal and the Lagos government agencies, the incorporated trustees of the Association of Tourist Boat Operators and Water Transportation of Nigeria (ATBOWTN) and the incorporated trustees of the Dredgers Association of Nigeria (DAN) filed a suit at the Federal High Court, Lagos to seek an end to such in 2012.

The plaintiffs prayed the court to determine which tier of government was empowered by law to license and levy business operators on the nation’s inland waterways.

Ruling on the case, the judge, Justice John Tsoho, said the federal government agencies – NIWA and NIMASA – are the proper and lawful agencies with authority in matters relating to the commercial activities of ATBOWTN and DAN, who are involved in water tourism, water transportation and sand dredging within the national inland waterways.

 Justice Tsoho restrained the LASWA and the state Commissioner for Waterfront Infrastructural Development from further seeking to control the commercial activities of the plaintiffs – ATBOWTN and DAN.

However, Justice Tsoho’s decision was nullified by the Court of Appeal in its July 18, 2017, judgement on the appeal filed by the state governor and three others.

The Court of Appeal held that the inland waterways within Lagos State were not captured by the National Inland Waterways Act, are within the legislative competence of the state’s legislature, and that Lagos could collect taxes/levies on businesses on waterways which start and terminate in the state.

Based on the Court of Appeal judgement, Justice Saliu Saidu of the Federal High Court in Lagos, sequel to a suit with reference number FHC/L/CS/1098/07 filed by Ewenla Fishermen Cooperative Society Limited, Afenifere Fish Sellers Better-Life Igbokusu, Eti-Osa Fishermen Cooperative Society Limited, Kolawole Giwa Balogun, and Folani Oladipupo Sikiru, suing for themselves and on behalf of all fishermen/women and fish sellers in Eti-Osa Local Government Area of the state, in 2017, affirmed the power of the state government to legislate and control the inland waterways within the territory of the state.

The plaintiffs had filed the suit asking that NIWA be declared as the body statutorily empowered to manage, control and regulate land interest within 100 meters of all declared Federal Waterways in Nigeria, and that the license on the right of way granted to them by NIWA is valid and subsisting.

They also contended by the plaintiffs that any license granted by the state government over the declared federal waterways in particular, Peninsular of Lagos Lagoon was ultra vires, illegal and of no effect whatsoever.

In his judgment, Justice Saidu held that NIWA lacked the constitutional power to regulate inland waterways within the state, and thereby declared all licences granted to the plaintiffs as null and void. He dismissed the claims of the plaintiffs and held that same conflicted with the provision of the constitution.

The court held that to determine the extent of the power of NIWA to regulate inland waterways, recourse must be made to the Constitution of the Federal Republic of Nigeria (CFRN), 1999.

The court considered Items 29 and 36 of the Exclusive Legislative List of CFRN and held that “Inland Waterways was not one of the items over which the National Assembly was given power to legislate and the National Assembly did not designate the Peninsular of Lagos Lagoon as an International Waterway.

Specifically, the court agreed with the submissions canvassed in favour of the 2nd and 3rd defendants (Governor of Lagos State and Lagos State government) that: “The state government has the authority to legislate over Inland Waterways within its territory; the state government possesses the power to grant permits and collect fees as this is a residual matter and that NIWA has no constitutional power to regulate Inland Waterways within Lagos State.” In arriving at the decision, Justice Saidu relied on the recent Court of Appeal decision in the case of LASWA & Ors vs. NIWA & Ors, adding that the plaintiffs failed to establish the identity of the land claimed.

“NIWA has no power to grant the said licence to the plaintiffs in the first place. As such, the plaintiffs have no interest whatsoever in the land,” Justice Saidu ruled.

This made NIWA and three others challenge the Court of Appeal’s decision at the Supreme Court, which on January 5 judgment reversed the decision of the lower court and affirmed the March 28, 2014 judgment by Justice Tsoho of the Federal High Court.

The appellants – NIWA, NMSSA, the Minister of Mines and Steel Development, and the Minister of Transport – listed the Lagos State Waterways, the state’s Commissioner for Waterfront Infrastructure Development, the Attorney-General, the Governor of Lagos State, the incorporated trustees of the Association of Tourist Boat Operators and Water Transportation of Nigeria, among others, as respondents.

They contended that the activities of LASWA created by the state government, through the enactment of LASWA Law No. 14 of 2008 (LASWA 2008) by the state’s House of Assembly, to regulate, develop and manage all aspects of the waterways in Lagos State were unconstitutional.

Deciding the appeal, the Supreme Court agreed with the appellant’s lawyer, Lateef Fagbemi, who is now the Attorney General of the Federation (AGF), that NIWA is the only statutory agency vested with the responsibility of levying, imposing, and charging rates of utilisation along the declared waters of the NIWA.

The lead decision of the Supreme Court, which was prepared by Justice Okoro but read in open court on his behalf by Emmanuel Agim, clarified that the Federal Waterways agency is the rightful and legal agency of government with the “powers to exclusively manage, direct and control all activities on the navigable waters and its right of way throughout the country for inland navigation, pursuant to Sections 8 and 9 of NIWA Act.”

Justice Okoro upheld Fagbemi’s argument that the activities of the Lagos State government and its agencies constituted a flagrant usurpation and an illegal encroachment on the statutory functions of NIWA. He noted that the waterways of Lagos State, among others in Nigeria, fall under the Exclusive Legislative List set out in Part 1 of the Second Schedule to the Nigerian constitution. 

The apex court added that it is only the federal government, through the National Assembly, that can validly legislate on Maritime Shipping and Navigation, saying the power to legislate on any subject in the Exclusive Legislative List does not reside with the state government.

It agreed that the existing laws do not favour the state government’s contention on resource control, but that political stakeholders, including the legislature, could work on ways to amend the law to address the concerns raised by Lagos and others on the issue.

While state governments have always been in contention with the federal government over resource control, especially petroleum resources and mining of other mineral resources, the constitution confers exclusive control of these resources on the central government, the extant judgment by the Supreme Court on the control of waterways has added to the list.