‘NNPC culpable for proliferation of foreign vessels engaging in cabotage trade’

Stakeholders in the shipping sector have said that the Nigerian National Petroleum Corporation (NNPC) cannot be extricated from blame over the engagement of foreign shipowners for lifting petroleum products on board the nation’s waters in violation of the local content and cabotage law.

Group Managing Director of NNPC, Mr. Mele Kyari had while speaking on Channels Television last week, blamed the Nigerian Maritime Administration and Safety Agency (NIMASA) for its continuous engagement of foreign ships, saying that the Corporation has only engaged shipping companies approved by NIMASA.

The NNPC boss stated that NIMASA has given waivers to the foreign companies engaged by NIDAS shipping, the shipping logistics arm of NNPC.

But reacting to the claim by the NNPC GMD, a shipowner and Chairman of the defunct Nigerian Maritime Expo (NIMAREX), Ayorinde Adedoyin in a chat with Maritime Today Online said NNPC was as culpable in the engagement of foreign shipowners as NIMASA who grants waiver to the foreign companies through the Ministry of Transportation.

According to him, if NNPC doesn’t give contracts to foreign shipowners, they won’t approach NIMASA for a waiver.

He said, “I am not surprised that the NNPC GMD will come out and say they are blaming NIMASA for engaging foreign shipowners. Yes, NIMASA needs to be blamed, but also, they (NNPC) themselves are guilty as NIMASA because if they don’t give contracts to foreign shipowners, they won’t approach NIMASA for a waiver. They (foreign shipowners) can’t ask for a waiver if they don’t have anything to do with the vessel. They will only approach NIMASA when they see the possibility of getting contracts and the terms and conditions will be that they will be able to work on our waters and the only authority who can give them that would be NIMASA. So, they won’t get a waiver before the contract, they will only get a waiver when they know that they have a contract or about to get a contract.”

Ayorinde said it is time the NNPC and NIMASA stop the blame game on the continuous violation and breach of the cabotage law at the detriment of local shipping business.

“Both organizations are killing the Nigerian shipowners business by their actions. The cabotage law actually specifies about 70 to 75 percent that the local shipowners should lift or carry every government cargo in and out of Nigeria.

“The implication of their actions is bad for business both for government and private businesses because if shipowners worked and make money, they will pay tax to the government, that is added value but if the foreign shipowners get the contract and they get paid, they pay in dollar, the tax will be paid to their government because that is where the company is registered not Nigeria. The best the government will do is to collect the cabotage fee but when you look at what the Nigerian shipowners will give to the nation, they will create employment, they will make profit with which they will pay tax to the government. The advantage that surrounds encouraging Nigerian businesses to win assets is far more than using foreign shipowners because they will use foreign crew,” he said.

On his part, a former Director of NIMASA, Captain Warredi Enisuoh, said the low standards of the nation’s maritime sector in both training and administration is one of the challenges affecting local shipping.

According to him, until the nation has a strong maritime administrative and training culture that will intentionally standardize the sector, we may never get it right.

In his words, “We need frequent audits and gaps closing culture. Our local ships find it difficult to compete favourably. Not until we have a strong maritime administrative and training culture that will intentionally standardize the sector, we may never get it right.”

Also speaking, a former Director General of NIMASA, Mfon Usoro, said the inability of indigenous operators to have a common position is being exploited by ‘those who want to subvert the law’.