How NIMASA Frustrates Cabotage – NNPC

By Kenneth Jukpor
How NIMASA Frustrates Cabotage – NNPC
Kyari and Jamoh

·    Indigenous ship-owners lose $100m yearly

·    4000 Nigerian seafarers await seatime opportunities

Nigerian National Petroleum Corporation (NNPC) has blamed the Nigerian Maritime Administration and Safety Agency (NIMASA) for its continuous engagement of foreign ships for lifting petroleum products onboard the nation’s waters.

Over the years NNPC had come under serious criticisms for patronizing foreign ships for coastal shipping services, violating the local content and Cabotage laws in the country; however, the approvals have been hinged on the waivers processed from NIMASA via the Ministry of Transportation.

The objective of the Cabotage regime is primarily to reserve the commercial transportation of goods and services within Nigerian coastal and inland waters to vessels flying the Nigerian flag, owned and crewed by Nigerian citizens and built in Nigeria.

In a strange twist last week, the Group Managing Director of NNPC, Mr. Mele Kyari while speaking on Channels Television, claimed that the Corporation has only engaged shipping companies approved by NIMASA.

Kyari was responding to an onset query by the President of Ship Owners Association of Nigeria (SOAN), Dr. Mkgeorge Onyung who criticized the continued jettisoning of Nigerian ships for NNPC coastal contracts.

In his defence, the NNPC boss opined that NIMASA has given waivers to the foreign companies engaged by NIDAS shipping, the shipping logistics arm of NNPC.

According to the Coastal and Inland Shipping (Cabotage) Act 2003 Revised 2007, a foreign vessel and its company must obtain a Ministerial Cabotage license for registration to operate in coastal services in Nigeria.

A recent contract to foreign vessel owners for coastal shipping of petroleum products in the downstream petroleum sector saw NNPC award the coastal and bunkering vessels service to Messrs UNIBROS Shipping Company with eleven foreign flagged coastal tanker vessels.

The company has thirteen Liberian flagged vessels, which are; BORA with 46,700 DWT, CAPT GREGORY – 31,259 DWT, COROMEL – 12,279 DWT, KOWIE – 16,885 DWT, LESTE – 46,803 DWT, LEVANTO -19,117 DWT, MAESTRO – 17,575 DWT, NOTUS – 12,681 DWT, OSTRIA – 40,316 DWT, STELLAR – 40,316 DWT, TORNADO – 40,316 DWT, VARDAR – 40,225 DWT, ZONDA – 46,803 DWT.

No Customs import duty has been paid for any of the vessels Unibros is deploying to execute this contract, again in breach of the nation’s monetary and fiscal policies. Nigerian owned, operated and flagged vessels are made to pay full Customs duty and appropriate taxes on earnings which foreign shipping companies have continually evaded.

A peek into the profile of Unibros Shipping as displayed on its website may even spark worry for Nigerian indigenous operators; the Greece based shipping company’s website states: “The African hub of Unibros Shipping is located in the business and economic heart of the continent with offices in the Nigerian cities of Lagos and Abuja. Unibros is active in all aspects of the Nigerian energy market. The company is a trading partner of the NNPC and its shipping arm, NIDAS. Unibros is also involved in bunkering and other offshore services. From our headquarters in Nigeria we also offer both a wide range of marine fuels (predominantly marine diesel oil and fuel oil) and marine lube oils.”

Unibros has no seafarer training or local content strategic plan whatsoever in place in line with the Nigerian Oil and Gas Industry Content Development (NOGCID) laws. In terms of capacity building, neither Unibros nor any other foreign shipping company is made to comply with the major pre-qualification requirement for consideration in the coastal and bunkering vessel services tender process, as required by the Nigerian Content Development and Monitoring Board (NCDMB).

According to shipping experts, there are over thirteen vessels currently engaging in coastal and bunkering services in Nigeria having been given waivers by NIMASA, but awarding this contract to indigenous operators would have seen Nigerians earn over $100million yearly.

Speaking with MMS Plus newspaper, the President of SOAN, Onyung noted that such a category of vessel earns $20,000- $22,000 per day that would amount over $260,000 for 13 vessels daily and exceed $100million per annum.

In terms of seafarers’ development, it would also have availed over 100 people seatime experience if an average of 8 Nigerians is taken onboard these vessels over a period of one year.

“The problem of seafaring and seafarer’s training in Nigeria is that there are no ships. We have taken the NNPC to an investigative hearing at the National Assembly. We have petitioned them for hiring foreigners instead of Nigerians. It is when we have these opportunities that we can have ships and subsequently train seafarers to stabilize the industry,” the SOAN President said.

Noting that indigenous ship-owners have explored several strategies to support seafarers, even via a Memorandum of Understanding with the Maritime Academy of Nigeria (MAN) Oron, Onyung stressed that the lasting solution would be an availability of contracts for indigenous ship-owners which would better position them to absorb more seafarers.

He opined that the claim by NNPC Group Managing Director that the oil corporation engages companies which obtained waivers from NIMASA means that the apex maritime agency and the Ministry of Transport has a lot to do with regards managing the waiver structure given to foreign ship-owners.

“The story was that NNPC was flouting the Cabotage law and the Local Content; but NNPC says NIMASA keeps giving waivers to the ships that allow NNPC to engage them. Nevertheless, the law stipulates that such ships can’t stay for more than one year. The reality is that several of these ships have stayed for more than 5 years, depriving indigenous operators of the opportunities,” he posited.

On his part, the Chairman of Nigerian Ports Consultative Council (PCC), Otunba Kunle Folarin noted that NIMASA has spent over N30billion to procure seatime onboard foreign vessels in the last six years.

The PCC boss in an exclusive chat with our correspondent, noted that there are over 4,000 Nigerian seafarers in search of seatime opportunities, despite NIMASA’s efforts to secure seatime opportunities onboard foreign vessels for Nigerian seafarers.

His words: “Nigerian international trade generates freight cost worth over $20billion annually. Since the demise of Nigerian National Shipping Line (NNSL) which was carrying some of the cargoes, the nation has been unable to develop independent indigenous shipping lines that can carry Nigerian cargoes. We need these ships for import and also crude oil export.”

“Nigerians who worked with NNSL are ageing and the youngest of such officers should be about 70 years old presently. Years ago, we agreed that there should be a succession plan to train those to take over from these veterans when they retire. That was how the Nigerian Seafarers Development Programme (NSDP) by NIMASA came onboard.”

“Training seafarers isn’t just about sending them to colleges or learning institutions. These practitioners also have to go onboard vessels for seatime to show that they can apply what they learnt theoretically in real-life experience. No one would give a ship of $50million to someone who hasn’t undergone practical training.”

Offering solutions, he suggested that seafarers be sent to institutions to get a bachelor’s degree in nautical sciences or engineering at institutions which have MoU with shipping companies to enable the officers get opportunities for seatime after the theoretical training.

“In Nigeria, an average of 5,000 ships call at the nation’s ports yearly. Why can’t we solicit with them, especially countries like Norway, Iceland, Belgium, Finland and others who are huge maritime nations? Some of them don’t have crude oil but they carry over 40% cargoes worldwide. We can also have MoU with ship-building nations like; Korea, Japan and Russia to have at least one Nigerian cadet onboard their vessels.”

“Some people suggested that Nigeria acquire a ship specifically for the purpose of training cadets for seatime. Nevertheless, one can’t just operate a ship for the purpose of training because the ship should be trading to give those onboard real situations encountered on merchant vessels. Those onboard ships should be handling cargoes and not just sit onboard and claim to have gotten seatime. They must be able to get the experience that can be beneficial when they are employed by Maersk Line, MSC or any other shipping giant across the globe,” Otunba Folarin said.

At the recent World Maritime Day celebration in Lagos, the Minister of Transportation, Hon. Rotimi Amaechi stated that the country had trained over 7,000 seafarers but he didn’t reveal the state of training attained by the seafarers.

What percentage of the 7,000 seafarers is currently employed? How many have successfully completed the training and are unemployed? How about those who still await seatime opportunities, what’s the figure?

MMS Plus also recalls that the former Director General of NIMASA, Dr. Dakuku Peterside had reeled out the same statistics of 7,000 trained seafarers in his valedictory speech last year.

Ideally, the training of a seafarer should be adjudged complete when the individual obtains Certificate of Competence (CoC) which qualifies him or her to be employed onboard any vessel across the globe. If that is the case, why has there been a controversy with 7,000 ‘trained seafarers’ announced by the Transportation Minister and NIMASA bosses in recent years?

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