Last week, Nigeria’s apex maritime regulator, the Nigerian Maritime Administration and Safety Agency (NIMASA) made it clear to international oil companies (IOCs) operating on and around Nigeria’s coast that it would no longer be business as usual for Nigerian shipowners lifting oil products.
It warned the oil companies operating in the upstream sector against disregarding the country’s cabotage and environmental laws, saying that the new management of the agency would no longer tolerate such practices in Nigeria’s marine environment anymore.
The director-general (DG) of the agency, Dr Dakuku Peterside, sounded the note of warning to IOCs during an engagement with their representatives in Lagos on ways of fostering a closer synergy towards Nigeria’s economic development, charging them to be mindful of all existing laws and regulations in their operations as applicable sanctions would be meted out to erring companies.
The DG highlighted areas of interest to the NIMASA to include the flouting of the Cabotage Law, negative impact to the environment from oil exploration activities, none payment of statutory levies due to the government and inadequate information sharing. He stressed that a situation where the IOCs engage foreign vessels to do jobs that Nigerian operators have adequate capacity and equipment to do will no longer be tolerated as this has been a major bane to the development of Nigeria’s shipping industry.
Nigeria’s Coastal and Inland Shipping Act, otherwise known as the Cabotage Act 2003, provides empowerment for indigenous shipping lines for cabotage (local) trade, offering them a competitive edge over their foreign competitors. However, the law, with high expectations to cause the development of the country’s indigenous shipping industry, remained largely unenforced 13 years after its enactment. Indigenous vessels remained largely rickety as the shipowners cannot get jobs in the brown waters to grow their fleets. Most of them are in huge debts and have closed shops.
Experts, investors and other critical stakeholders have posited severally that if well harness, Nigeria’s maritime sector could generate about five million jobs as the country has over 823 kilometres of coastal stretch. Peterside told the oil companies that, henceforth, they must give the NIMASA ample notice of vessel requirements so that the agency could engage indigenous operators who have the capacity to do the job instead of giving it to foreign operators.
“The spirit of the Cabotage Act is not to generate revenue in terms of waivers, but to build the requisite capacity for indigenous players which will in the long run generate wealth and create employment for Nigeria’s teeming population,” the NIMASA boss said.
The NIMASA is the lead agency for the implementation of the Cabotage Law, but this is the first time any DG of the NIMASA would be confronting the IOCs on the issue of cabotage trade and the need to obey the country’s laws on cabotage trade. Its DG noted that the era of some of the IOCs carrying out their businesses in violation of Nigeria’s laws, especially as regards cabotage and the environment was over.
“We will not fold our arms and watch while you do damage to our environment because environmental pollution is life threatening,” Peterside warned.
He, however, commended the IOCs for their compliance level with the payment of statutory levies so far and noted that the argument on the payment of cabotage levies on Floating Production Storage and Offloading (FPSOs) facilities and other offshore platforms was unnecessary.
“By our laws, the FPSOs and other offshore platforms are cabotage vessels that are subject to the NIMASA’s regulation and payment of statutory levies,” he said.
He called for a closer synergy with the oil companies for the benefit of the nation even as he promised that the agency will deepen its collaboration with the Nigerian Content Development and Monitoring Board (NCDMB) for the benefit of indigenous operators in Nigeria’s maritime environment.
“Whether you are into shipping or shipping-related business, the NIMASA has a role to play in ensuring that the business is done seamlessly without security risk and not to the detriment of the Nigerian state. Therefore, there is the need for you to cooperate with the NIMASA, especially in the area of information sharing,” he said.
He further said that the new NIMASA under his watch is committed to raising a high level of service delivery and that there is the need for all key players to cooperate with the agency by sharing relevant information that would assist it in carrying out its statutory responsibilities.