· Schedule meeting with Global Shippers Forum leaders
· STOAN, NSC file briefs at Supreme Court, expect date
By Kenneth Jukpor
As part of efforts to declassify Nigeria from the War Risk Zone in the international maritime community and remove the fiscal burden of extra war risk charge, which has led to the increase in prices of imported goods, Nigerian Shippers’ Council (NSC) has begun talks with the Union of African Shippers Councils (UASC) over the charges.
The meetings are part of efforts to develop the issues for the discourse during the next Global Shippers Forum (GSF).
GSF is a global Non-Governmental Organization (NGO) with the mission to influence regulatory developments affecting international freight transport and the policy decisions of governments and international organizations as they affect shippers and receivers of freight.
In recent times there have been several questionable charges and penalties in Nigeria on ports and cargoes as a result of the environment and other issues but the aspect of negotiation with the Council involved as it affects the country which is the Nigerian Shippers’ Council has been ignored.
However, the Council has begun moves to network global shipping stakeholders such as the GSF, global insurance bodies, underwriters as well as the UASC, to review these charges to reflect the true state of the nation’s ports and security of the waters.
The Director, Legal Services at Shippers’ Council, Mr. Samuel Vongtau revealed this during a chat with MMS Plus last week, noting that the problem had become a great concern to the leadership of Shippers’ Council.
“We have been meeting some authorities that are relevant to this. We are taking the issues up to the Global Shippers Forum which is a body of Shippers all over the world. We have also started speaking with the Union of Africa Shippers Councils (UASC) on this issue”, he said.
Vongtau also stated that the Council had extended the deliberation on the issue to shipping companies operating in the country.
“The Chief Executive has always been talking about this issue and he has been speaking with the shipping companies. Also, we have scheduled a meeting where the global representative of the Global Shippers Forum is going to attend and I am sure that my Chief Executive will also raise up that issue. So, we are working very hard to resolve it. We are trying to reach a Memorandum of Understanding where all these extra charges would be streamlined by the NSC”, he assured.
Recall that in April, the Executive Secretary of NSC, Mr. Hassan Bello revealed plans to protest against the classification of her territorial waters as War Risk Zone at the next Global Shippers Forum.
Nigeria is a member in the group which represent shippers in all the world’s major trading regions, including Europe, Asia, North and South America, Africa and Australia.
Although the international underwriters classification of Nigeria as “War risk zone” is not because of an actual war but on account of piracy attacks, it is important to note that the Nigerian Maritime Administration and Safety Agency (NIMASA) and the Nigerian Navy have been able to massively curb the menace to only few cases of armed robbery at sea recorded in the nation.
The International Maritime Bureau (IMB), a specialized department of the International Chamber of Commerce, in its report for the first quarter of 2019 also recorded an increased level of safety in the Nigerian maritime domain, another fact which makes the persistent ‘War Risk Charge’ worrisome.
According to the International Maritime Bureau (IMB), Nigerian shippers in the last three years have paid about $2.74 as insurance premium on vessels and cargoes destined for Nigeria account of what Nigerian maritime stakeholders described as wrong classification.
Speaking on this, the President of Ship-Owners Association of Nigeria (SOAN) Dr. Mkgeorge Onyung has indicted support of the Council’s move to curb frivolous charges, however, he admonished the Council to note that the global shipping companies have to make profit.
“There are definitely some security threats in our waters and this is business. These companies must find a way to cater for any perceived risk in shipping to Nigeria” he said.
However, noting that the Council was formulated to create a balance and look into such issues, he commended their efforts while he called on advocacy groups like the Nigerian Chamber of Shipping (NCS), among others, to bring stakeholders together to discuss these critical issues.
He expressed confidence that the IMB recent positive appraisal in its 2019 first quarter rating which stated that Nigerian waterways are now safer, creates an opportunity for the nation to appeal for the reduction of extra war risk charges.
However, he maintained that NIMASA, Nigerian Navy and other stakeholders involved in the security of nation’s waters must put in more efforts to ensure the piracy report keeps getting better.
Commenting on the IMB 2019 first quarter report, he said; “These indices will help to guarantee progress and ensure that certain reports can be reviewed. It is an effort in the right direction. It gladdens my heart to hear such kind of report. I believe that if NIMASA, Navy and stakeholders who are involved improve on the security of our waters, the report will keep getting better. When the report gets better, then you can now begin to advocate”
In addition to Nigeria, other African nations categorized as war risk countries are: Togo, Libya, Somalia, Benin Republic, Eritrea, the Gulf of Guinea, and some parts of Cameroon.
This classification, according to industry experts is done by international underwriters, who in cases declare certain areas “War risk zone” not because of an actual war but on account of piracy attacks.
Technically, war risk insurance is a type of insurance which covers damage due to acts of war, invasion, insurrection, rebellion and hijacking, which could be piracy in the case of West African countries. Some policies also cover damage due to weapons of mass destruction, and these are commonly used in the shipping and aviation industries.
Meanwhile, in another development, Shippers’ Council has called on the Supreme Court to expedite the hearing of its case against the Seaport Terminal Operators Association of Nigeria (STOAN) concerning shipping charges and another against shipping lines on the Port Regulatory role of NSC and the collection of Shipping Lines Agency Charges (SLAC).
Vongtau revealed that the Council as well as aggrieved terminal operators have filed their briefs at the Supreme Court on pending case as both parties await the announcement of a date for the hearing by the Supreme Court.
STOAN had gone to court to challenge the decision of the NSC reversing the storage charges collected by the terminal operators and the increase of the free storage period at the ports from three to seven days.
“The cases started at the Federal High Court and the judgment was given in favor of the Shippers Council. The shipping companies and the terminal operators who were involved appealed to the Court Of Appeal and we got victory there also. They were not satisfied and that is why they decided to appeal to the Supreme Court” he said.
Noting that Supreme Court cases take quite some time because of the number of cases they have, the NSC Director admonished the government to realize the need to accelerate the hearing of the cases because it hinges on serious economic issues.
“The Supreme Court may want to give priority to cases like that. Otherwise, the cases can remain in the Supreme Court for up to 5-10 years and this is bad for the economy and the sector in particular” he added.
