In 2014, the Nigerian Shippers’ Council (NSC) was appointed the economic regulator of the ports. There were some agitations against the government. The report takes a look at the performance of the council in its eighth year.
One of the lapses in the concession agreement that handed over the ports to private investors in 2006 was Federal Government’s failure to appoint an economic regulator. This lacuna, according to operators and stakeholders in the industry, left port users, especially importers, holding the short end of the stick.
However, the need to close the gap was not lost on the government. This was why in February 2014, it appointed the Nigerian Shippers’ Council (NSC) the economic regulator in the industry.
Eight years after, the NSC is in the centre of public scrutiny. How has it fared in its role at the ports? Has the council delivered benefits to stakeholders in the industry? What have been its major challenges? And how has it positioned itself to continue playing its role of not only barking but also biting those violating the rules of engagement at the ports? These are some of the questions agitating stakeholders’ minds today.
Speaking on the sidelines of the sensitisation held for stakeholders on the regulatory mandate of the Council, its Executive Secretary, Mr. Emmanuel Jime, said the council carried out its mandate effectively, having been backed by the ministerial nod.
“This sensitisation programme under the supervision of the Federal Ministry of Transportation and anchored by our Permanent Secretary where there is a clear declaration of the legal backing of the mandate of the Nigerian Shippers’ Council as the port Economic Regulator, the stakeholders will go with a certain clarity that, finally, there is a proper definition of the mandate of Shippers’ Council,” he said.
Jime added that such era of ineffectiveness is no more as the agency is ready to firm up its role as the official economic regulator of the industry with adequate venom to assert its authority to enforce compliance.
He said no service provider has the power to hike charges without the approval of the council.
“We will redouble our efforts to re-em-phasise on the areas where we have already been providing services.
“It is clear that no agency, no stakeholder can wake up on their whims and go into the marketplace and decide for themselves what charges to impose on our maritime services.”
What terminal operators must do
Jime added: “You have to negotiate with the Shippers’ Council whether there should be an increase or a decrease and this is going to impact the economy because we are talking of competitiveness and to be competitive, the cost of business must be related to the quality of services that are delivered.”
The council chief added that, henceforth, an increase in charges in the industry should be related to quality service by operators.
He said the council is emboldened by the reaffirmation of the agency as the economic regulator by the Minister of Transportation, Mu’azu Sambo, who was represented by the Permanent Secretary, Dr. Magdalene Ajani, at the programme.
According to him, the pronouncement would bring about confidence in port service users because they know that every charge would be attached toquality.
He also said the ministerial endorsement of the council would end the inter-agency rivalry that has hobbled the performance of the council.
He said the agencies should work together to attain common goals.
“On the role of the regulatory of the Shippers’ Council, we have not been able to do that as clearly as we should because of some questions that have come from industry stakeholders as to whether the legal backing for Shippers’ Council is as clear as it should,” he said.
What NSC should do?
“First, it will have clarity in the regulatory framework and that is good for business. No business person wants to invest in an environment where there is uncertainty.
“The stakeholders are clear that there is a body for the economic regulation.
“In the past, there were a lot of inter-agency rivalries, but we are beginning to come together to work on the same page” he said.
What others said
Also, an official of the council said: “Effective regulation requires much more than just competent economic and financial analysis, but must also manage often complex interaction with the regulated firms, consumers, politicians, courts, the media, and a range of other interests.”
The road to a sub-regional hub
“The council needs to work with the Central Bank of Nigeria (CBN), Customs and other relevant stakeholders so that every payment made in the maritime domain is reflected on the platform. In doing this, it must design a template and standard tariff system that will ensure 30 to 40 per cent reduction in cost to achieve harmony in tariff and this involves all service providers, a source said.
There is the need for a system that will harmonise every transaction suc that transfer of containers to off-dock terminal does not attract extra charge in terms of payment of royalty to the terminal operator. Stakeholders said transfer of containers to off-dock facilities should not attract extra charge, as it amounts to double charges to the shippers.
Streamlining freight forwarding
The NSC must streamline freight forwarding to strengthen its position.
Operators, stakeholders react
Former President, Association of Nigerian Licensed Customs Agents (ANLCA), Prince Olayiwola Shittu, said his group agreed that the seaports have lost their comparative advantage in terms of costs, especially in cargo clearance and that the council should make the seaports attractive.
Jime, the ANLCA chief said, should ensure that the country recouped its losses and also restored stakeholders’ confidence in the seaports. He, however, said the problem of the ports came about before the Federal Government appointed the NSC as an economic regulator.
Shittu said this was responsible for the legal tussle the council is fighting and the inability of Nigerians to reap the benefits of the port reforms.
Shittu, however, said the involvement of stakeholders is an important source of legitimacy and acceptability for regulators and their decision-making procedures. As a start-off, the NSC, he said, met with stakeholders, including clearing agents, shipping agents, importers and private terminal operators to understand the challenges facing them individually and how to resolve the problems and unite the stakeholders.
The Nation recalled that at the beginning, the council received the support of the Nigeria Ports Authority (NPA), whose former managing director, Mallam Habib Abdullahi, affirmed that ”it would amount to failure on the part of NPA if the NSC fails”. At the meeting, Abdullahi had said he was ready to support the council in its role as the economic regulator.
The council also had similar consultations with the NCS and the CBN. At these meetings, the chief executive officers of the agencies gave assurances of their support.
A senior official of the Federal Ministry of Transport confirmed that during the implementation of the port reforms, stakeholders noted a vacuum.
“The inefficiency in the procedures and operations of agencies and port users is adversely affecting and undermining Nigeria’s competitive advantage in international trade, which Jime is set out to correct,” the official said, adding that the effective regulation put in place by the immediate past Executive Secretary of the Council, Mr Hassan Bello, was paying off.
NSC to provide a level-playing field
Other stakeholders, however, said the regulator needs to provide a level-playing field, for among competitors.
“Apart from the private terminal operators, the government will also enjoy improved revenue generation, improved infrastructural development, creation of efficient market; reduction of cost of doing business; improvement of the nation’s Global Competitive Index and consequent attraction of FDI.
“The NPA will also enjoy the effect of the presence of an economic regulator because it will lead to enthronement of clearer Standard Operating Procedure (SOP) derived from International Laws (Conventions) and Practices. The NPA will also enjoy transparency, efficiency and effectiveness and consequently, improvement in image, improved revenue generation, improvement of competitive advantage in the sub-region, and strengthening of complaint and arbitration mechanisms among others,” said a maritime lawyer, Dr Dipo Alaka.
The NCS’ work, Alaka said, would boost revenue collection, enthronement of clearer Standard Operating Procedure (SOP) derived from international conventions and practices, improved level of compliance by importers, exporters and freight forwarders and others.
Those against NSC
It would be recalled that the council encountered one of its challenges in October 2014. The council had directed shipping firms and terminal operators to reduce certain charges, increase free storage time, and announced interventions in other pricies.
The move did not go down well with the firms and terminal operators. They, thereafter, sued the council.
Not done, 12 shipping line agents under the Association of Shipping Line Agents, sued the council, saying it does not have the power to impose charges.
But Justice Ibrahim Buba of the Federal High Court ruled that the NSC was properly appointed.
NSC Executive Secretary Bello said then: “We’ve resisted attempts to increase charges and we said no to impunity, economic brigandage, fleecing of Nigerians.”
It was not the only hurdle before the council. The council also had to take on other responsibilities to its mandate, which included the conceptualisation of Inland Container Depots (ICDs) and Container Freight Stations (CFS). It was championed the Council for the Regulation of Freight Forwarding in Nigeria (CRFFN).
Beyond that, the Council to protect the interest of shippers, has, for a long time, been perceived as a toothless bulldog because of the divergent interests operating at the nation’s seaports and the lackadaisical attitude of those in power. For instance, for many years, the Council fought to check the arbitrary imposition of charges by the multinational shipping lines. Expectations
Some importers, clearing agents and stakeholders, who spoke with The Nation, said prominent among them are competitive pricing, alleged arbitrary charges by shipping firms and other government agencies. They argued that these issues must be resolved so that importers, who patronise the seaports do not suffer in terms of delay and cost.
The Shippers’ Council, stakeholders said, needs the support of the Minister to regulate the commercial activities of all operators, which include terminal operators, shipping companies, the importers, exporters and clearing agents, among others.