By Kenneth Jukpor
Nigeria’s efforts to enhance the ease of doing business and reduce the cost of using the nation’s port is set to take a back stage as freight forwarding associations and organized private sector groups have endorsed the return of Standards Organization of Nigeria (SON) to the ports.
The problem is more worrisome as the Director General of SON, Mallam Farouk Salim indicated that the organization is set to explore new measures to generate funds having seen its allocation from annual earnings slashed by 50% from N7billion to N3.5billion.
While speaking at a sensitization programme in Lagos, last week, Salim revealed new fiscal challenges confronting the organization even as he opined that the agency will consider re-opening talks with the National Assembly to collect 1 percent taxes from companies under its regulation.
“The issue of charges is N3,000 for 20ft and N7,000 for 40ft. Most of you are businessmen and you can attest that you can’t fill a 20ft container with less than N1million. The Customs duty is also about N2million. It is the accumulation of the N3,000 that SON uses to acquire operational vehicles for inspection, pay for office rent, renovation and other costs.”
“Last year, SON collected N7billion for the government and this isn’t sufficient to run an organization of over 1,700 people in numerous offices in Nigeria. With the new Finance law, SON has to remit half of its earnings to the federal government and utilize a budget of N3.5billion. All the substandard goods in Nigeria are blamed on SON, from petroleum to food items and sometimes drugs. We need to train stakeholders and do more sensitization but there is the challenge of funding”
“Our annual staff salaries are about N5billion and the government has been responsible for the payment. We don’t have an alternative because we don’t generate sufficient revenue. Another option is to go to the National Assembly to collect 1 percent taxes on individuals who are doing business on products we regulate. We can ask the government for this so that we don’t have to charge for some of our services. If the National Automotive Council (NAC) could have its charges, SON should be able to collect a percentage of taxes,” he said.
Stressing the need to have SON stationed at seaports to prevent influx of sub-standard products, the SON Director General stated that the judiciary system in Nigeria doesn’t encourage victims to get compensation and sufficiently prosecute non-compliant traders who import substandard products.
“Who knows of a case in Nigeria where someone as an individual pressed charges against substandard goods in a court and won compensation in millions of naira? We don’t have structures to pursue these cases successfully like the developed nations. In the USA, the consequences of non-conformity to standards are so great that customers easily win charges on sub-standard products. A lady bought coffee at McDonalds in the USA and while she was trying to drive out it spilled on her laps. The coffee burnt her and she went to court to sue that the temperature of the coffee was too high and she won $2.9million damages,” the SON boss argued.
Contrarily, the Executive Secretary of the Institute of Export Operations and Management (IEOM), Nigeria, Mr. Ofon Udofia condemned this argument in favour of SON’s return to the ports, stating that SON could minimize substandard imports with proper utilization of SONCAP.
“I want to differ from the opinion of freight forwarding practitioners in Lagos. When people import things into the country, there is a requirement known as Standards Organization of Nigeria Conformity Assessment Program (SONCAP). SONCAP is a pre-inspection process as all imports ought to have it. So, how do goods get into the country without SON-CAP or fake ones? If the requirements for issuing SONCAP are met before issuance to the manufacturers is fully implemented, we wouldn’t have these lapses,” Udofia told our correspondent.
Udofia, who is also the President of Rivers/Bayelsa Shippers Association (RIBASA), encouraged SON and port stakeholders to tilt towards a functional single window platform where all agencies could see the consignments as soon as declaration is done.
“If we are bringing SON back to the ports, the number of agencies will increase and that will make the port process more cumbersome. The idea is to minimize human contact at the ports and deploy automation. SON can do its business effectively without staying at the ports,” he added.
Meanwhile, the accord by freight forwarders and OPS groups operating at the Lagos ports to call for a return of SON to the ports is alleged to have been influenced by monetary rewards to leadership of the groups.
Although freight agents have become perplexed by the overzealous operations of SON officials on the roads and believe that having SON stationed at the ports will eliminate such commando activities; sources alleged that leading freight forwarding groups received N1million each ahead of the meeting on Thursday last week to campaign for SON’s return to ports.
On his part, the Vice President of the Association of Nigeria Licensed Customs Agents (ANLCA), Dr. Kayode Farinto noted that if the country must win the war against importation of sub-standard goods in the country, there is a need to return SON back to the seaports.
When quizzed on SON’s dire need of funds and its return to ports possibly hijacked as a leeway to raise funds violently, Farinto said “This issue of SON coming back to the port isn’t a big deal to me because it is when they return to the port that we will be able to tackle some of the excesses. They will no longer intercept cargoes on the roads and arrest our members after goods have exited the ports. When there is connivance at the ports, it’ll not be our problem and they will no longer harass our members.”
While Farinto’s position seems ideal, there are concerns that SON’s presence at the ports may not stop the sharp practices on the roads because Nigeria Customs Service (NCS) organizes examinations at ports and still operates numerous units on the roads.
He, however, expressed optimism that the current Port Standing Task Team (PSTT) will deal with such excesses when SON is back at the ports.
Also speaking, a former President of National Association of Government Approved Freight Forwarders (NAGAFF) Dr. Eugene Nweke told MMS Plus that SON’s non participation in physical examination or as christened “non presence” in the port has little or nothing to do with the influx of the substandard goods into the ports.
According to Nweke, the SON should be bold to confront the fearful monsters of shipping lines and their political cohorts for the sake of national security and safety, and stop playing to the gallery.
“In America, Britain, South Africa, and many other countries who also import from Asia countries, especially China, imports are done under strict adherence to specified nations quality for compliance on safety and security purposes. These nations signed a CSI known as the Advance Manifest Rule aka Automated Manifest System ( AMS) , with the China/Shipping line.”
“Under the CSI , Six rules are involved to drive the security initiative. One of such rules states that Carriers will have to transmit cargo declaration to the nation’s custom Authority at least 24 hour prior to commencement of loading operations at the port of loading. After checks by Customs and other regulatory agencies, the Customs will notify the carrier of those shipments that are permitted to enter the nation’s respective port of discharge,” Nweke explained.
He stressed that under the rule, Carriers who load without submitting documentation 24 hours prior to loading will face fines and risk delays, including denial of permission to unload.