Cabotage Waivers To Continue For At Least Five More Years, Says Peterside

Dakuku Peterside

 

In a curious twist of the demands of indigenous ship owners, Dakuku Peterside has promised to cease the granting of waivers on cabotage shipping, but only after five years from now.

It was not the measure indigenous shipping operators had been clamouring for. The false narrative was promoted by seeming inadequate understanding of proclamation of Dakuku Peterside, director general of the Nigerian Maritime Administration and Safety Agency (NIMASA) by a section of the media.

The truth of Peterside's speech when he met with a delegation of the Oil Producers Trade Sector (OPTS) in Lagos is that the wide-ranging waivers granted foreign-owned shipping companies to undermine the Cabotage Law is not about to be discontinued.

In a speech muddled up in eloquent double speak, the NIMASA boss said waivers routinely granted foreign companies is about to be stopped. But it will take over five years for it to take effect. Within the period, he urged industry players to “draw up a five-year strategic plan for the cessation of application for Cabotage waiver.”

Invariably, it is up to local shipping operators to draw up the road map for the utilization of Nigerian-owned vessels for marine contracts.

“It’s a classic case of double speak that has characterised the management style of Peterside. In one breath, he promised to stop the granting of waivers that has been turned into a money spinning racket and in another breath, he says it will take at least five years before strategic plan to effect this will be worked out by us, the indigenous operators. That is a brilliant piece of deception,” said the chief executive of Nigerian company engaged in oil and gas services.

 

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Speaking during a meeting with the OPTS in Lagos, Peterside had said his agency will no longer encourage the application of any form of waivers under the Cabotage Act, particularly from the oil firms’ operations that does not help the growth of the Nigerian maritime sector and economy at large.

According to press release signed Isichei Osamgbi, head of corporate communications of NIMASA, Peterside said “our laws forbid foreign vessels operating in our territorial waters save for compliance with the Cabotage Act. We also 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 categorization of vessels operating under the Cabotage Act in order to ensure the full implementation of the Act.”

Sections 9 – 11 of the Coastal and Inland Shipping Cabotage Act, 2003 states that to participate in the Cabotage trade a vessel must be registered under one of the following categories: wholly Nigerian-owned, joint venture vessel, bare boat charter vessel and foreign-owned. The essence of the law is to reserve all shipping operations and transportation of goods within Nigeria's territorial waters for ships owned, wholly manned and repaired in Nigeria. However, certain provisions of Sections 9 – 11 empower the minister of transportation to grant waivers to enable foreign-owned vessels to undertake Cabotage operations where it is determined that local companies lack the capacity to provide such services.

However, indigenous shipping companies have often complained of abuse of the conditions for granting of waivers with officials of NIMASA and the ministry frivolously activating the waiver clause. Mr. Martin Odekunle, operations director of a ship-owning indigenous company, complained that despite having a seaworthy vessel that meets all safety and operational specifications, his company has often lost out to foreign companies.

“We are strategically positioned to compete favourably in the provision of oil and gas services with our oil tanker that is manned by qualified Nigerian seamen. But our vessel is often left idle because those in authority conspire to give the lifting contracts to foreign companies,” he told Business and Maritime West Africa. “Its not because the foreign companies or their ships hold any strategic advantage over us. The basic reason is that some well placed Nigerians actively work to undermine the spirit of the Cabotage Law for their own selfish ends.”

Odekunle condemned the statement by Peterside that waivers will be stopped only after five years. “Some officials allege that indigenous companies have what they call old and rickety vessels on their fleet. That is not true. Although some Western countries now require the deployment of double hull tankers, it cannot be applied in Nigeria because we do not have turbulent waters in our coastline. So we do not need brand new tankers. Even then, the vessels used by foreign companies are not better than what we have. We all buy or charter from the same market,” Odekunle stated. 

A marine engineer with another local company wondered why NIMASA needs five years to stop granting waivers on Cabotage shipping. “I think Peterside is just playing smart politics. They know there is no longer any logical justification for sustaining the waiver regime, yet he acknowledges this but says it can only come into effect after five years. I know enough of what goes on to affirm that if NIMASA and the ministry of transportation have the political will to stop the waiver today, indigenous operators are capable of doing the job,” the marine engineer who preferred not to be named said.

In the meeting with the representatives of the OPTS, Peterside had urged the international oil companies (IOCs) to support NIMASA’s bid to ensure full implementation of the Act, stating that it would equally be of more benefit to the investors in the sector as it will be cost effective for them to engage Nigerians.

On the previous resolutions with the OPTS, Peterside said there was need for the trade section of the oil producers to fulfill their own part of the agreement. He said NIMASA will not compromise the growth of the maritime sector, especially when it comes to the issue of enforcing statutory regulations enshrined in the Agency’s empowering instruments.