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Ship Owners Cry Out, As NNPC Flouts Local Content Laws

Ship Owners Cry Out, As NNPC Flouts Local Content Laws

President of Ship Owners Association of Nigeria (SOAN) Dr. Mkgeorge Onyung

  • Lament $100m annual losses to foreign ships

By Kenneth Jukpor

Nigerian National Petroleum Corporation (NNPC) has come under serious criticisms for patronizing foreign ships for coastal shipping services, violating the local content and Cabotage laws in the country.

Consequently, Ship Owners Association of Nigeria (SOAN) has written a petition to both legistative chambers, urging them to commence an investigation on the continued jettisoning of Nigerian ships for NNPC coastal contracts.

This is coming as a sad development as numerous engagements with the NNPC by SOAN, Nigerian Maritime Administration and Safety Agency (NIMASA) and the Nigerian Fleet Implementation Committee, have been a waste.

According to the SOAN petition obtained by our correspondent titled, “Urgent Need to Investigate the Breach of Nigerian Content and Cabotage Laws and Abuse of Customs Regulations to gain Unfair Advantage in the Award of Contracts to Foreign Vessel Owners for Coastal Shipping of Petroleum Products in the Downstream Sector of Nigerian Maritime Industry”, SOAN registered its protest in the unpatriotic attitude displayed by NNPC, noting that Nigerian shipowners and operators have capacity to operate such contracts.

The group also stated indigenous operators have expressed willingness to accept freight payments in naira, whereas NNPC is presently paying UNIBROS in US Dollars further draining Nigeria’s extremely scarce foreign exchange resources.

“This contract award will result in amplification of capital flight, valued in excess of $100million annually to the detriment of our economy in addition to the fact that no Customs import duty has been paid for any of the 11 vessels in question again in breach of our nation’s fiscal and monetary policies. Nigerian owned and flagged vessels are made to pay full customs duty and appropriate taxes on earnings whch foreign shippng companies have continually evaded illegally UNIBROS and/or any other foreign shell company does not pay any tax to FIRS,” the SOAN letter said.

According to the letter signed by the SOAN President, Dr. Mkgeorge Onyung, multiple levels of dialogue on the above-mentioned subject with NNPC top management and the Senate of the Federal Republic of Nigeria have already held.

Part of the letter read: “Our letter to the Group Managing Director of NNPC, Mr Mele Kyari dated 9th December 2020 (attached) refers. The Senate sitting of Wednesday 11th December, 2019, wherein it deliberated on a motion on the Urgent Need to Investigate the Breach of Nigerian Laws by Foreign Vessels in Coastal Shipping of Petroleum Products in Downstream Sector of Nigerian Maritime Industry, culminated in its Committees on Local Content, Downstream Petroleum Sector and Legislative Compliance being mandated to carry out a holistic investigation in this regard.”

“It is on record that during the Senate investigative hearing of 8th December 2020, the NNPC GMD pledged publicly to support indigenous shipping development and tonnage capacity growth in line with the Nigerian Content (NOGICD) Act, with a view to reversing the nearly 60-year trend of foreign vessels’ dominaion of our maritime industry.”

SOAN also pointed out that in the area of capacity building, no seafarer training or local content strategic plan is in place in line with the NOGICD laws among the foreign vessels patronized for coastal shipping.

“Neither UNIBROS nor any foreIgn shipowner or shipping company is made to comply with one of the major prequalification requrements for consideraton im the Coastal and Bunkering Vessels Service tender process, being the submission and approval by NCDMB of Nigerian Content plan that demonstrates full utilization of Nigerian labour and services with deta fed description of role work scope and man hours in order ta achieve minimum target as set out in the requ rement of the NOGICD Act 2010,” SOAN stated.

Meanwhile the association reiterated that its members are standing by with Medium Range (MR), Long Range (LR), and Handy-size tanker vessels to meet NNPC’s coastal and import shipping requirements within short notice, subject to bankable contract terms and payment conditions.

Efforts to reach the spokesperson of NNPC and NCDMB were futile until presstime.

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