Nigerian shipping firms shun cabotage regime
By David Ogah and Yetunde Majekodunmi
FOUR months into the implementation of the National Inland and Coastal Shipping (Cabotage) Act, indigenous shipping companies are yet to register to indicate their willingness to participate in the new regime.
No fewer than 74 applications for waiver from foreign shipping companies have been received by the National Maritime Authority (NMA).
Investigations by The Guardian revealed that Nigerian firms are shying away from the regime because of their unwillingness to pay registration fees as stipulated by the law.
Section 22, subsection 1 of the 2003 Cabotage Act makes it mandatory for all ships intended for use under the cabotage regime to be registered by a special Registrar of Ships, in a special register for vessels and ship-owning companies that intend to engage in the cabotage trade.
"Notwithstanding the provisions of any other laws and subject to Section 47, every vessel intended for use under this Act shall be duly registered by the Registrar of Ships in the special register for vessels and ship-owning companies engaged in cabotage and shall meet all the requirements for eligibility as set forth under this Act and the Merchant Shipping Act and its amendments, to the extent that the said Merchant Shipping Act is not inconsistent with the provisions of this Act."
But the guidelines on cabotage implementation released recently state that before any shipping company could be registered, it has to first apply for waiver as permitted by the same law.
The waiver clause was inserted in the Act to avoid creating a vacuum in the industry, as it was envisaged that Nigerians may not have acquire sufficient expertise in shipping to take total control of the inland and coastal shipping business by April when the law came into force.
The Minister of Transport was therefore given power to grant waivers upon application to Nigerians in areas where they lack capacity to operate and to foreigners in areas where Nigerian shipping operators seemed to lack capacity to operate.
Since there is no local ship-building industry, and all operational vehicles were built abroad, Nigerians ship owners would need to apply to government to waive the ship building requirements of the Act, while foreigners were expected to apply for waiver only in areas where Nigerians appeared weak operationally in order not to cause disruptions in the shipping business in the coastal areas of the country.
The guidelines imposed fees for every waiver granted by the minister.
For instance, ships not built in Nigeria but which intend to participate in the regime would attract a waiver fee of $1,000 while vessels owned by foreigners who may wish to register them for the cabotage regime would need to pay a waiver fee of $50,000.
According to the guidelines, all joint venture-owned vessels and bare boat chartered vessels would attract waiver fees of $5,000 and N100,000 respectively to participate in cabotage regime.
Most indigenous shipping operators who spoke with The Guardian over the weekend said that they had registered their vessels at the office of the Registrar of Ships at the National Maritime Authority, adding that it would amount to double registration if they were asked to register again with the Cabotage Registrar.
"Most of us with large tankers have registered with the ship registry and have submitted all necessary evidence to it. So, for us to be asked to bring the same requirements again for registration under cabotage trade is a double process," Captain Ihenacho of Genesis Worldwide Shipping Company said.
"The point we are making here is that all necessary modifications must be done to enable us partake in the cabotage trade without difficulty.
"We are ready to register, contrary to speculations that we have refused to register, but all the loopholes in what is required must be reviewed," Capt. Ihenacho said.
But an authoritative source at the NMA said the law, which requires all shipping companies and their vessels to be registered in a special cabotage register will be followed to the letter.
According to the source, the Cabotage Act renders the previous register invalid as it empowers a government's specialised agency to open a special register for cabotage vessels.
The previous register, he said, was opened under the Merchant Shipping Act, adding that the foreign shipping firms that had shown up for registration were also registered by NMA under the old act.
The Guardians source said that indigenous shipping firms would only pay $1,000 for waiver on the requirement for ship ownership contrary to speculations that they were being asked to pay $50,000 which was being paid only by foreigners with vessels to operate under the new regime.`
