By Francis Ugwoke
The task of ports economic regulation is indeed an enormous one. It is even moreso considering the peculiarity of the ports system, the Nigerian factor that has permeated into the operations of the sector like every other. The maritime industry is governed by international regulations but this is often altered by all, either as shipping service providers or consumers in one way or the other. This has remained the bane of the sector for decades. The implication is that as much as the ports economic regulator tries to address a lot of anomalies in the system, it is often confronted by certain challenges that have remained obstacles to trade facilitation.
Having spent few months in office, the Executive Secretary, Nigerian Shippers Council (NSC), Mr. Emmanuel Jime, recently hinted of plans to introduce a new agenda for improving on ports efficiency.
Jime told newsmen in his office that the agenda will be in conformity with the mandate of the Council as the Ports Economic Regulator. He explains that the agenda will address clarity in the regulatory framework and processes that must be embarked upon in the maritime domain. “My understanding is that once there is clarity and once there are rules and everybody is playing by them, then we can all achieve our goals whatever those goals may be particularly when they are rules that can positively impact on the businesses being done in the maritime sector”, he said.
Jime added, “Ours is a regulator that is unbiased and not showing any particular interest to any stakeholder but an interest that recognises the fact that the environment in which businesses are being done is one that everybody recognises as being clear. If there is clarity almost everything else will fall in place. So, this is what we plan to do”.
With this declaration, Jime, has no doubt kept industry stakeholders guessing on what the full details of his agenda would contain. At the weekend, Jime and his management team went for a retreat in what no doubt would address expectations of stakeholders in the industry.
But without pre-empting the specifics of what the NSC CEO has in mind, observers are of the view that Jime’s agenda should cover salient areas where providers and consumers of shipping services need effective regulation. When this is done, perhaps what remains is monitoring to ensure enforcement.
Cargo Tracking Note
The ports industry is filled with a lot of irregularities in all that are clear cases of corruption. The shipper cheats through under-declaration, under-invoicing, outright concealment, among others. He settles his way by greasing the palms of either the customs personnel as the flag-bearer in the system or operatives of SON, NAFDAC and other agencies, including the Police who are no doubt aware of the ills in the system. The multinational shipping agents are not left out. There is also the under-declaration of the gross registered tonnage (GRT) of vessels in which the federal government loses so much while few line their pockets from settlement. The more the tonnage, the more the shipping companies pay to the government. Checking these would mean saving a lot of revenue for the government and good for the national economy.
Therefore to check this trend, the ports economic regulator should insist on the deployment of CTN which will have no hiding place for any fraud in either cargo declaration and GRT of vessels. It would be recalled that the former Executive Secretary of NSC, Mr Hassan Bello, had said that the re-introduction of the CTN will reveal all cargo information that have been discretional all these decades with consequences of huge losses of revenue to the government. Therefore, the much talked about clarity could be achieved with CTN deployment. Observers are of the view that the NSC needs to seek the political will for the effective deployment of CTN as part of the new agenda to enhance trade facilitation which reduces corruption. The current scenario in the ports involving all security agencies, shipping companies, shippers and customs agents, is one of corruption personified and could be an obstacle to the objectives of the Nigerian Port Process Manual (NPPM) being spearheaded by ports economic regulator.
Streamlining Activities of Security Agencies
As part of the agenda, observers are of the strong view that the NSC should aim at getting the security agencies at the ports to streamline their operations. Having succeeded in ensuring that security agencies inspecting vessels are organised to do so at the same time to save the time of the vessels, the NSC should carry out audit on roles of security agents and their units which are involved in cargo clearance at the ports.
So far, only four agencies are allowed to be at the ports. But this is not being followed as some of them who are not designated to be at the ports find their way into the seaports. The NSC should insist that the Nigeria Customs Service (NCS) has to audit its units involved in different operations at the ports who are playing conflicting roles for obvious reasons. There are different customs units who are responsible for alerts on goods being cleared all with the aim of ‘palm greasing’.
The other issue is a situation in which a shipper after clearing goods at the ports is again stopped few meters away from the ports for another round of checks.
Clarity on Shipping Charges
To ensure that shippers are not cheated through arbitrary charges, there is the need for shipping companies to clearly specify their charges which must be made public for scrutiny, including when penalties are charged and the amount for each/which offence. There is also the need for the shipping companies to equally publish all surcharges that could be applied in Nigeria giving specific reasons for everyone to be aware. Needless to say that the shipping companies need to obey the process of negotiating charges before they are introduced. It would be recalled that this has been a subject of litigation before the Supreme Court for which out of court settlement is being touted but which has remained unclear. Incidentally, some of the shipping companies after losing at both High and Appeal Courts continued with these charges while the case is in court indefinitely. Perhaps, it may not be out of place for Nigerians to know whether there has been any success on the out of court settlement and the terms arrived at. It would be recalled that the Court had ruled that the affected shipping companies refund what they had collected over the years. The status of the case has remained unclear.
Beaming searchlight on the terminal operations remains very crucial to be able to check cases of arbitrary charges, including demurrages that many shippers have been complaining about. The days of demurrage need to be clear as a guide for shippers. The other issue is on movement of cargo from one terminal to another without the consent of the shipper in which he is forced to pay charges. The NSC should be clear on this to save importers the nightmare of having their containers moved to other terminals without consent and compelling them to pay double charges for an arrangement made for the convenience of the shipping company. In addition there should be continued equipment audit to ensure that every terminal has enough and quality cargo handling equipment for cargo discharge from vessels and position containers for examination.
Truckers and Charges
Part of the new agenda should include a clear rate of moving containers to different parts of the country. The NSC should be able to regulate the truckers and stop them from high transport cost that has led to high cost of goods in the market.
Freight Forwarders Tariff
In the same light, it does not appear that
freight forwarders have clear tariff for their customers. The NSC should introduce this as it appears in other countries and applicable in other sectors of the economy. This will check the industry of over-billing by some practitioners.
Reviewing NSC’s media roles in the industry over the years as excellent, stakeholders are however of the view that the time to make greater impact has come. For this, the former President of National Association of Government Approved Freight Forwarders (NAGAFF), Dr. Eugene Nweke said that Jime’s approach to stress clarity in the activities of the Industry was crucial and timely too.
Nweke notes that having achieved a milestone with the establishment of trade facilitation supports tools, including the Standard Operating Procedures( SOP), such standard as registered on the platform has remained as posited by critical stakeholders. Clarity in this respect, he explained, should entail a further “re-visitation with a mindset of taking a cue from the reversed Kyoto convention 2004” . This is about “simplification and harmonization of application, processes and procedures amongst the critical stakeholders so as to attain the industry prism of port value adding supply chain”, he said.
Noting that the NSC is currently x-raying all charges across board as obtains in every port of the world, he urges the Council under Jime to pursue regulation and clarity in all aspects of charges in the ports for the interest of the consumers of shipping services.
He advised, “Clarity is required in the aspect of official gazette of regulatory notices and publication of same, especially as it relates to components of services applicable to all charges in the port.
“ Clarity is also required in the aspect of official gazette of regulatory notices and publication of same, especially as it relates to the applicable best standards with regards to port operational parameters, templates or indicators and as well as publishing sanctions, whereby keeping the port users promptly informed.
“ Clarity is equally necessary as to the articulation and publication of new operational rules and practices, especially in the aspects of shipping activities and bonded warehouse or outer terminals operations.
In the area of checking high cost of transportation as obtains currently, Nweke urges the Council to ensure that trucking charges should be defined and determined by an appropriate cost per mileage.
He said, “Cost per mileage takes into consideration the percentages to represent cost of fuel, tear and wear effects, maintenance, etc”.
On standard tariff for freight forwarders, he advised the NSC to liaise with the CRFFN management for the full implementation of the published Standard Trading Conditions (STC). The Council, he said, should insist on the conclusive works of the Freight Forwarders Professional Scale of Charges (PSOC).He however noted that freight forwarders derive their professional earnings from commission , explaining that this explains why they are referred to in some climes as commission agents.
“Freight forwarders’ commission is usually a flat rate of 1.5% of CIF Value or FOB.
This addresses the incident of professional charges without service component that is prevalent in our profession”, Nweke said.
He also added that the ports economic regulator may reach out to the CRFFN management to articulate headings for charges with its corresponding service components, gazette and publish same.
Nweke believes that this will usher in reasonable sanity that can be integrated into the freight forwarding profession as service driven and not a money milking profession as the activities of some practitioners portray.
By Francis Ugwoke