Why Top Shipping Nations Killed Cargo Sharing Policy

Why Top Shipping Nations Killed Cargo Sharing Policy
Maersk Stadelhorn vessel, the biggest container ship to call at Nigerian ports, when it called at Onne port in Rivers State, recently.

·  Experts seek UNCTAD trade policy revival

·  40-40-20 trade formula covertly utilized in America, Europe – Egesi

·   Nigerian airports, seaports shut as workers enforce strike

By Kenneth Jukpor

The United Nations Conference on Trade and Development (UNCTAD) may have been genuinely set up to address the special needs and challenges faced by developing countries concerning liner conferences, however, there are indications that the absence of this policy has become a major impediment to shipping development in Nigeria and most developing countries.

Economic experts have cited the swift jettisoning of the UNCTAD cargo sharing formula, also known as the 40-40-20 rule, as a major factor that shows the grip of major shipping nations on less sophisticated countries.

UNCTAD’s 1974 Code of Conduct for Liner Conferences was triggered into force in 1983 after 24 member states ratified it and the combined tonnage of over 25 percent was attained.

One of the important elements introduced by the Convention was the cargo sharing formula applicable to conferences, also known as the 40-40-20 rule. It suggested that cargo should be divided 40 percent each to national vessels of the originating and destination country, and 20 percent to other vessels. The purpose of this formula was to ensure that vessels of developing countries had an opportunity to participate in the carriage of their trade.

This rule granted certain rights and also imposed obligations as it aimed at protecting the shippers’ interests and those of the national shipping lines of third world countries; however, the free market strategies practiced today depicts subtle imperialism which negates the goal of UNCTAD.

Although this trade system was abandoned following newer strategies overtly proposed to curb actions contrary to the principle of free circulation of shipping in international trade and free and fair competition; economic experts posit that top European nations as well as the United States of America (USA) covertly maintained the 40-40-20 rule to sustain indigenous shipping in their countries.

Speaking with MMS Plus newspaper last week, a former Director General of National Maritime Authority (NMA) now known as Nigerian Maritime Administration and Safety Agency (NIMASA), Dr. John Egesi stated that it would be rewarding for Nigeria to explore avenues to revive the 40-40-20 trade rule.

His words: “The UNCTAD 40-40-20 cargo sharing formula is an old policy and it is apt to ask if it is relevant today. This important convention was sidetracked by top shipping nations, especially European countries that are the shipping giants. It was unfortunate that the protagonist of 40-40-20 including Sri-Lanka and other developing nations couldn’t prevent this change in policy directive.”

“Shipping is a derived demand and what dictates this demand is the availability of cargoes. Today, several countries are surreptitiously utilizing the 40-40-20 sharing formula in conjunction with the governments. For instance, the carriage of charitable goods in Nigeria should be given to Nigerian ship owners. The country could quietly discuss this with the donors exploiting the 40-40-20 rule.”

Noting that the trade rule is no longer in contention overtly, he said, “Covertly, this rule is still in place in America that continues to protect its trade rules and freight. Charitable goods and Cabotage trade in the USA is restricted to indigenes which is a trait of 40-40-20. The rule was sidelined following intrigues from international politics. Nonetheless, trading nations should have Memorandum of Understanding (MoU) with top shipping nations.”

Egesi, a former Chairman of the Technical Committee of UNCTAD African group, added that the top goal should also be that Nigeria becomes a production nation and moves away from the overdependence on imports.

In another development, the nation’s seaports and airports would be shut as maritime workers join trade unions in the nationwide strike to commence on Monday, September 28, 2020.

The nationwide strike is to protest the recent hike in petrol pump price and electricity tariff. The Federal Government through the Petroleum Pipeline and Product Marketing Company (PPMC), a subsidiary of the Nigerian National Petroleum Corporations (NNPC), increased the price of Premium Motor Spirit (PMS) also known as  petrol from N151 per litre to N160 – N170per litre depending on your location in Nigeria.

This increase in petrol pump price followed the 70 percent increase in the tariff for power supply which took effect from September 1, 2020. Economic experts and other stakeholders have posited that these hikes in basic commodities would further impoverish Nigerians.

Senior Staff Association of Statutory Corporations and Government Owned Companies (SSASCGOC), Maritime branch and Maritime Workers Union of Nigeria (MWUN) confirmed that they would join the strike on Friday last week.

The General Secretary, SSASCGOC, Mr. Akinola Bodunde, disclosed this while speaking with MMS Plus on Friday last week, noting that the officials would be marking a public demonstration/ peaceful protest on the streets of Lagos on Monday, this week.

His words: “We have received the notice of strike action from the national body which is Trade Union Congress (TUC) and Nigerian Labour Congress (NLC). Consequently, Nigerian seaports would be shut down and we would comply with the strike action. On Monday, we have arranged to have an entourage to monitor the events and mark the strike”

In the aviation sector, four aviation unions have backed the organized Labour nationwide strike expected to commence on Monday.

The unions have asked their members to withdraw services from all aerodromes nationwide indefinitely. With this, airspace may not be open for operations from Monday.

The four aviation unions joining the strike are; the National Union of Air Transport Employees, National Association of Aircraft Pilots and Engineers, Air Transport Services Senior Staff Association of Nigeria and the Association of Nigeria Aviation Professionals.

A statement from the unions on Friday read, “As you are aware, the NLC and TUC have declared indefinite nationwide strike action with effect from Monday, September 28, 2020.

“Our unions as above named are in full support of the strike action.  As such all workers in the aviation sector are hereby directed to withdraw their services at all aerodromes nationwide from 00hrs of 28th September 2020 until otherwise communicated by the NLC/TUC or our unions. All workers shall comply.”

On the price hike, the President of NLC, Ayuba Wabba said: “Clearly, the action of the Federal Government is most insensitive and an affront to the Nigerian people who are bearing the heavy burden of the COVID-19 pandemic. Everywhere in the world, governments are granting various types of palliative but ours is interested in piling more miseries on its citizens. We will resist this latest move to impoverish the mass of the working people.

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