Why We Abandoned PAAR FoR Cargo Tracking Note(CTN)- Shittu

By Okey Mark

The League of Maritime Editors and Publishers(LOMEP) conceived and delivered a new baby of intellectual and professional conversation with business and maritime stakeholders called “Roundtable”. It is an engaging session that spares no moment as a value definer in the industry. This was birthed as a forerunner to its multi-million naira Centre for Maritime Journalism and Research fitted with e-library portal for enhanced capacity in the industry. With guests already lined up for appearances, the foremost Customs Broker and a walking maritime and logistics encyclopedia, Prince Olayiwola Shittu, who is the Managing Director of Skelas Group Limited opened the gate at the maiden The League’s Roundtable. Shittu,a former President of the Association of Nigerian Licensed Customs Agents(ANLCA)was at his best and overtly frank as usual on the sparks and spikes in the maritime industry. Enjoy the reading.

 

On What Should Be Done To Get The Best of Eto

The electronic call-up system, called Eto became a tool of political maneuvering within the maritime industry except if we’re not being sincere with ourselves, NPA sees itself as a body that heads the port that other agencies within the transport sector must bow to.

We all contributed to Eto and with the opportunity I had with Hadiza, I advised her to do more of consultations with people, even with people that were not friendly to her, she should go outside the box and seek consultations.

I recommended a monthly meeting of all heads of agencies in the port headed by NPA, and a quarterly meeting of all stakeholders in the port and with this platform  people will create ideas. Unfortunately, not all the ideas she worked with. I know of some top agencies of government that made presentations to Hadiza on Eto but she chose to work with what she wanted.

Hadiza may have reasons for not listening to advice but not listening to advice that may enhance her is her fault.

But we all know the reasons we have congestion, nobody has appreciated the fact that Customs and tanker operations also add to congestion and these are the facts Hadiza should have taken note of. Those who go to the tank farms to load, some of them come all the way from North east and spend one week stationery waiting to load.

Eto was designed not intentionally not to succeed but was not packaged enough and there is no way the new acting MD will be able to do much if he doesn’t take Eto back to the drawing board and if he choose to fine tune it, it’ll remain the same. Let NPA adopt multi-modal form of transportation. The barges were neglected because of lack of supervision and regulation, also the fact that NPA doesn’t want the Nigerian Shippers Council, NSC to serve as the economic regulator. Even the NPA and Customs need to be regulated, because there are some expenses that need not to be paid but because there’s no opportunity of seeking a redress people are forced to pay. All these are things that need to be regulated but nobody wants to be regulated.

Eto needs to go back to drawing board, there’s even need to device movement into the port according to needs because of the closeness of the tank farms to port operations. They already said it in NNPC that tank farms can never be relocated. We have done some research to effect that the cost of dismantling a tank farm is the same as building a brand new one. And in a country where nobody pays for the consequences of his actions, the people who gave the approval for those tank farms are not prosecuted. The congestion at the port is less than 20 years but those who were giving the approval to build tank farms close to other serious commercial activities have done this country no service. Right now, the port should have been expanding to build up area, build up in the sense that they’ll demolish buildings to expand the port and they’ll pay compensations for the demolished buildings and I’m sure many building owners in Apapa would be happy to do that but right now that can’t be done because the port is surrounded by tank farms.

Another thing they can do is to take their goods to outer port. NPA needs to encourage people to patronise other ports. I can tell you other ports in the country are functioning, as I’m talking to you now we’re taking delivery of barge with my company in Warri port, the Warri port is functioning. We have 385 truck load of cargo on the berth in Calabar. So if people say that the ports are not working then it’s because they’re not ready. NPA needs to diversify and make other ports attractive and ensure security too. The security we’re facing today for ships coming into our channel is not as much as 200 km outside our shores. Other government agencies need to make inputs also to make it work.

The Nigerian Ports Process Manual (NPPM)

When NPPM was unfolded, I personally queried it because the first Presidential order on ease of doing business was not well thought out. It was driven by the Vice President, they were thinking like we were abroad where the whites know how to manage their lives. They didn’t know that there’s this peculiarity with Nigerians of seeing new process of doing things as a way of hindering their livelihood and the first thing they do is resist it.

How can we be talking of ease of doing business in an environment where the government policies and agencies are creating avenue of not meeting the ease of doing business. An example is Customs’ 100% examination and multiplicity of check points which negate the process of ease of doing business in Nigeria. We should be able to address how customs officers sent to the port for physical examination sign satisfactorily that a container has met all the condition for release but is subjected to the scrutiny of other groups outside the port who now find that same container that was satisfactorily released in port faulty and there’s no consequences on the officers that released it and you want to do ease if doing business?

NPPM came out of the thought of ease of doing business but it wasn’t well thought out. How can you ask people to bring you their standard operating procedures (SOP)? It is the government that’s supposed to do that. They’re supposed to set up time study committee to go into all agencies operations to see how they work and write them down so that they can eliminate and improve on some areas before coming out with the best SOP. But in a situation where each agency writes its own SOP and then now banded together into one won’t work, does not guarrantee success. I personally reviewed  it with some enlightened friends  before it was made into hard copy, and I can say that it is just like a self appraisal. Do you see anyone fail itself in a self appraisal?  NSC who is even asked to enforce the use of NPPM in line with government policy don’t have the capacity to do it, even if they continue to pretend they have the means to enforce. NSC is yet to be given that power of enforcement even with the Executive Order, rules are being flawed in the port even with the executive order on ease of doing business, nobody is thinking of ease of doing business, people are concerned with doing business and making money and it starts from the low to the top. That’s the crisis is in the port .

Through the NPPM, we told them that if they don’t make the NSC to be able to enforce, seal up some places, arrest some government officials for prosecution then it can’t work when it’s a situation people do things and get away with them. Can you imagine NSC wants to have meeting with terminal operators  and they’re telling NSC they have to get permission from NPA to hold meeting. NPA as a technical regulator can’t stop any government agency from carrying out their respective operations.

For NNPM to be successful or fail rest upon the government , if they can seek professional advice and ask questions it’ll work.  If you look at SOP for Quarantine, it’s like 6 persons, it’s too much for joint boarding, they don’t need all that crowd. Joint boarding in those days, you’ll see officers come down from vessels with ice cream and cash but I think they’ve made some arrest now and there’s sanity but there are still so many other areas to work on.

On The Port Concessionaires

From the beginning, it’s like building a house and you know you are going to have columns and you say you want to manage 2 bags of cement, are you not creating a problem for the future? That’s what is happening to the concession. Concession is good, many countries engage in it too, government can’t run enterprise compared to those running it for profit.

Concession was a political consideration. The sharing of the port into concession areas for political reason is the penalty we’re serving now because all the terminals from APM to ENL should have been one terminal so that they’ll be able to map out terminal for other uses. When ship drops container, the empties must come back but you don’t have room for empties because you want to make profit. Government says you’re going to pay so much, there’s a minimum tonnage you must handle and meanwhile you want to make profit so it’s no longer their concern whether people carry goods or not because if they carry the goods you’re collecting your demurrage which makes it easier for you to make money without cooperation.

Because every little part of the port is now being utilized to receive containers so there’s no left over areas to keep empties. The failure of that concession is the reason every terminal wants to maximize profit not on ease of doing business. The failure of Eto gave room for trailers to be parked on the road. Those who are supposed to bring ideas are now benefactors in Eto. Go and look at the people behind Transit Truck Park (TTP) it is another means of making money. People are not working in the port for the long term, they want to maximize what they can get because no one knows if the policy would be changed or not. The amount the Concessionaires pay to NPA is so much that they prefer to listen to NPA compared to other agencies of government as far as the terminals are concerned. The shipping companies are another issue entirely. During my tenure we were members of International Federation of Customs Broker Association and then Nigeria got two seats as board members, the idea was to use the platform to invite them to address the Nigerian government on the role of customs broker in the industry. When you’re within the midst of people from other parts of the world and you’re raising issue relating to congestion and where to put empty containers they’ll look at you somehow. They see it as not an issue to be brought to the association for discussion.

In America, the CG of customs is a serving customs broker, the idea is that knowledge is something that should be shared and not exclusive but our operation here is that the man in charge of the law does not want you to know the law so that he can capitalize on your ignorance.

 Cargo Tracking Note (CTN)Re-introduction

We stopped it then because the introduction of Pre -arrival Assessment Report (PAAR). The PAAR was supposed to be a final document for Customs for you to pay your duty and carry your cargo. And which is also called destination inspection. So we said why would we need a CTN when we’re going to inspect the cargo when it arrives here and we have a document from Customs that calculates, clarify and tells what to pay? And once the money is paid, you take your cargo so why the need for CTN?  Is that not obvious, how can you now be looking for additional document from what you ran away from? We used to do pre -shipment inspection, so can we now have a CTN to replace a one shipment inspection when we’re already using destination inspection that’s why we clamoured for the stoppage.  We wanted to save the Comprehensive Import Supervision Scheme (CISS) , we even muted the idea to government that the CISS payment that was being paid to pre shipment inspection should rather be added to welfare of customs so that they can do their job well. Beautiful as it sounds we didn’t know we were digging ourselves into a pit, because at the end of the day,the PAAR was turned to an instrument of oppression. Officers in the field now capitalize on PAAR, whether it’s deliberate action or not, every PAAR is queried, it can be for clarification or for value. The PAAR itself will uplift your value either by freight or by the component itself. After payment, an officer in the field will now tell you the value is not correct and now reference you to online: Alibaba or Jumia technique. An officer can decide to use 50% and decide that your value is N500, 000 additional payment. There’s no yardstick. The online reference like Jumia or Alibaba are illegal because there are six steps of valuation that every officer must follow but all those steps have been jettisoned now, so PAAR has become advisory. So every customs broker is yawning for intervention by a third party that can over rule the excess power of officers to determine and not follow the rule of guidelines. That’s why the re- introduction of CTN became inevitable. We tried it but it was at cross purposes with PAAR then. Even the Customs have adopted the CTN. Before you could do your examination without the PAAR inspection provided your invoice is stamped by the Chamber of commerce of the country of origin, it was regarded as authentic to calculate your value and pay your duty, that’s about 15 years back. But now everything has been modernized, young boys who are brainy in computer manipulation were employed by Dikko then to add value to the system,  those boys are now terror to the port . If you ask any agent now, which rank of officers do they fear most they’ll tell you those one star officers. When they want to do examination, what will be the experience of a one star officer?  Probably, a graduate of 2 years to determine value and quality of cargo compared to an experienced officer. What all these young boys do is extortion at the examination bay. One of the boys is boosting that if he gets N500, 000 in a week that means the week is bad. The CAC on the other side wants to meet the revenue target, he doesn’t see any anomalies at the port.

On The Campaign To Return Standard Organization of Nigeria (SON) To The Ports

SON is supposed to be online for everybody, I asked them what is the standard. We told SON when I was still in Office then that we engaged the International Standard Organization (ISO).  Apart from SON being a Nigerian government arm to standardized product, there are companies all over the world that have work for ISO, they are like consultants to SON of individual countries. So if a bottle of wine from Italy is going to be produced in Greece or Lagos then it must be the same standard, it’s not a private thing. Customs extortion and arrest of containers to pay additional duty slows down trade facilitation. Customs have Internationally sanctioned post clearance audit,  it’s a creation of World Customs Organization to help trade facilitation, investigations on a cargo can be done through this without impounding goods on the road. Importers bribe to get fake SONCAP abroad to move goods into the country, if not substandard goods won’t be coming into the country. it’s not only Nigerians that are fraudulent. All these actions negate ease of doing business in the port. SON’s presence in the port is like asking FRSC to work in the port.

 

On Carriage and Freight Business Being Dominated by Foreigners

Anything that takes so long to destroy is very difficult to rise immediately. Nigeria is a maritime nation, what killed all the carriages we had before are policies, also the abnormal change of head of organization to serve their own selfish interest. In 1977, there were businesses that were exclusively reserved for Nigerians then because the experiment being performed by our leaders, Nigerian is on perpetual experiment, it’s like a laboratory, every leader comes to try it’s own. Just like this RUGA, they’ve been existence for so long they’re just fine tunning it. You cannot dictate for the owner of vessel where to go, that is why the cost of bringing one container to Apapa is different from the same port in Onne, why should it be so? Our policies killed all the initiatives.

During Obasanjo era as the President, he cried he left 29 vessels in 1979, forgetting that he was part of the people that killed the initiative because he was the one that said Nigeria should rely more on foreign direct investment so all those areas that were exclusively for Nigerians were now allowed to have foreigners operate. There’s a barbing saloon in Apapa owned by a foreigner so which other business is left exclusively for Nigerians?

On Cabotage Vessel Finance Fund Administration 

Cabotage Vessel Financing Fund (CVFF)was supposed to complement the Cabotage. The operations of Cabotage in US, is such that all vessels coming in must be owned by Americans. That owned has a clause, once you’re a member of the board or director, American owns you. Between you and I, how can you give customs licence to a foreigner and a foreigner tells you I’m in Nigeria because this company is a Nigerian company. Every company that has a Nigerian on board is a Nigerian company, so can’t a Nigerian company get customs licence and we’re crying that foreigners are taking our jobs. Two hundred million naira cannot buy a vessel, it can buy a boat. That CVFF is not working. If not for the fact that Nigerians are not credit worthy abroad, especially Nigerian government, we’re not talking of individuals because Dangote is raising money and they can see the money rise but a vessel, a vessel can be crossing Suez canal and sink, insurance can only pay what they can afford, nobody would put their money on vessel so if we must buy it must be a fresh.  The vessel owned by Yardua and Bamanga Tukur, run by Dokpesi went under because of politics, you don’t need politics or family in trade. I’ve been approached to bring in foreigners into my company, they said they will expand it, what you foresee might be over shadowed by the interest of others and it gets out of hand. The little I’m getting from this company is enough for me. Foreigners will continue to dominate because there are no policies on ground

People should go and investigate how CBN repatriates funds for Nigeria, for example,in MTN there are Nigerians on board, how do they repatriate funds? The earnings, that’s where shipping companies representing shipping lines are reaping Nigeria off.

On Container Deposit Management 

Container refund is the least of problems in Nigeria maritime industry, once you deposit money just forget it because all their actions is for you not to return the container and the containers coming into Nigeria are old containers. Containers are supposed to do a minimum of 20 round trips in the world before it starts degenerating, so all those old containers are what they use for Nigerians. So by the time it gets to Nigeria the owners have already discarded it. These people now live on it. They ask you to deposit money for a container that is already gone, who determines the money? Now NSC came with the idea that instead of paying cash for container deposit, take an insurance so if you bring it back, it’s ok and if you don’t insurance takes it up. But nothing has come out of NSC desire to implement that.

We have pre shipment inspection, government was collecting CISS, who is paying them? It’s the shippers. And then what they were giving us was not adequate because we know Nigerians can do that job. So destination inspection came up and tied to that destinations inspection is the issuance of PAAR. And how do you get PAAR? If you buy something for $10 it’s the job of Customs to go and find out what is the average price of the item all over the world and they now confirm a figure, let’s say $12 instead of $10, you’ll pay that $12 and carry the cargo. But when the $12 you have paid is now subjected to another scrutiny, because of official interest, it gets bad. This scenario here explains it all.  Government said Customs your target is N1. 2 trillion, the CG wants bring in 1.5 because that would make him retain his seat so he puts everyone on job to meet the target. Officials are now using the demand target to help themselves, some agents use the opportunity to help themselves. The preference for destination inspection is for loyalty and patriotism. PAAR has now been made  advisory, it’s no longer final document and subject to final interpretations by government officers in the field and patrol. People are now looking at the pre shipment inspection with nostalgia because in these days they issue CRI, once that is paid no one looks at your cargo again, examination was not even necessary. We need the CTN because it serves as another proof of being genuine. They treat all Nigerians as being dishonest, once they sight your documents, it’s suspicious. The fear of every shipper is demurrage, if your document is with Customs for weeks or months, your fee is accumulating.