Shippers’ Council committed to port standardisation, competitiveness – Bello

The Nigerian Shippers’ Council (NSC), the country’s port regulatory agency, has moved to ensure standardisation as well as competitiveness of the ports. Hassan Bello, executive secretary of the council, in this interview with PHILLIP ISAKPA, executive director/editor of BusinessDay, clarifies the council’s position on the issues around port tariffs and other related issues. Excerpt:

Q:In our interface with importers, particularly the manufacturers who import, they always have complaints, but this will be the first time that concrete evidence is being provided about arbitrary port charges. Can you talk us through how you came to find out about this extraneous charges that have been placed on importers?

A:The mandate of Nigerian Shippers’ Council is not only on tariffs but also on standard procedures in cargo clearance. We are disturbed by cargo dwell-time at Nigerian ports, which is longer and is therefore making Nigerian ports non-competitive and then also the tariffs. So we are concerned with the cost and the ease of doing business in Nigeria.

Now for the tariffs, what we are abhor is the unilateral where they are fixed, the arbitrary way they are fixed. That should be of concerned to every economy if people could just wake up, without any authorisation, without negotiation, without any agreement and just increase their charges. That is chaos, that is lassez faire and that is unacceptable.

So, what we are doing now is to remove arbitrariness and that is why we do not agree with certain charges; not the charges themselves because we are not a price-fixing institution. We know the vagaries of the market, we know tariffs could go up, sometime they come down. But there must be some indices, there must be some variables, some key issues in the way we fix tariff.

There must be some benchmarks, there must be some caps, upper, lower limits of charges. The charges are scientifically arrived at after negotiations and having in consideration your competitiveness, what entails in other competing ports. So that is what we are against. We are not against increase in tariffs. But we are against arbitrariness, unilateral charges, we are against impunity.

Now trying to help the system work seamlessly, how do you intend to ensure that going forward this (arbitrary charges) no longer happens; how are you putting things in place to make sure they do do not happen anymore?

That is a very important question because it goes to the heart of regulation. Number one, there must be some predictability and regularity for planning. An importer or user of port services should have some reasonable expectations of predictable costs and he would feature it in his planning. But when he goes to the port and the issues like unexpected, unforeseen charges jump up, that makes doing business extremely tedious.

Now it is not only the operators but there are so many things that have ganged up against an importer; he imports things but the clearance processes take a lots of time, energy and the cost; and that would refer to official delays and delays are dangerous in importation especially on certain types of goods and certain contracts. Maybe he has a contract to deliver. So that will be a breach of contract and the whole logistics thing is not efficient.

That is why we are concerned with the service delivery, not even the tariffs. The concessionaires have signed a contract with the Federal Government to do certain things, one of which is efficiency and this efficiency includes the management of materials, the equipment they put at the ports, the time they take to position containers for inspection and so on and so forth.

Now we have the Customs. The Customs are very key because all ports are Customs ports, the issue of examination whether we have scanning or physical examination which takes so much time, the issue of sometimes double examination, trailers, containers are outside and then they are checked again by Customs and so many other issues, you know it is not only one-sided.

We also have the problem of freight forwarders, millions of them swarming at the port when they have no business there. We also have the problem of truckers, the road owners who use 19th century trucks to ferry these containers and the containers overturning and even killing people, obstructing traffic and so many other issues.

So what we should concentrate on is, what is the responsibility, what is the obligation, the duty of each interest at the port? Each operator at the port has his work cut out for him. If we go that way we put in place key performance indicators (KPIs) which we are still working with our consultants to do; even to examine the efficiency or otherwise of the terminals. And if we examine this terminal and find that it is not working at optimum and efficient level, we sit down with them and see how we can make it efficient.

The thing is, Nigeria attracts 80 percent of the cargoes in the whole sub-region and even beyond. For Nigeria, why wouldn’t they (the cargoes) come through Nigeria so that it can be formal and Nigeria will gain the much needed revenue and the economy would be boosted?

That is why it is important to be focused; we at the Nigerian Shippers’ Council are focused on sanitising the ports by making them efficient, by making them competitive because we have the revenue aspect of it, we have the employment aspect of it and we know that if Nigeria is competitive, then all the diversion of cargoes to competing ports will not happen again.

There is a sense in which I see you moving in direction of running the Shippers’ Council as a business; how has been the move towards your desire to put a competitive system in place at the port?

We should be appreciative of the recognition of the Shippers’ Council by the stakeholders as a regulator. That did come at a price. This is a kind of sector that is not used to a regulator, especially economic regulation. So we are the referees who have been appointed after the game had already started. We are trying to bring order, we trying to bring sanity, we trying to bring equilibrium, a level playing field, and so many things but most of all we are the coordinators.

There should be some symmetry, some reason in the operations of the ports. The many interests must have a common unifier and that is Nigerian Shippers’ Council. Now if we do that then you will agree with me that this is the first time recognition has come our way.

The second step is enforcement of mutually beneficial things that we are supposed to work out. And we do this by saying, ‘Don’t do this, this is what you are supposed to do’ and then obedience to whatever the regulators say. These are doing it transparently, we are doing it democratically, because we never push an issue until we have not only consultation but the buy-in him of the stakeholders. And many stakeholders have spoken lately about how we operate and it is because we always consult them.

Are there challenges in terms of you, the Council, trying to regulate the sector which has been for long without any regulator?

That is a very important question which you have asked because firstly, you have to listen to your principal, and for us that is the Federal Government. In this case, the Federal Government is very sensitive about transportation. It is also very sensitive to its ports system, to the infrastructure and so on.

You have seen what the Federal Government has done in terms of the rail system for example. It has been revived with revolutionary impact on the general economy. Now, our challenges are acceptability, recognition and also ability to enforce what we think is a regulatory framework. Now the Federal Government has given us that duty of providing regulatory functions.

Now there are two things: internal and external adjustments; internally, we have to look at our structure as the Nigerian Shippers’ Council, we look at our attitude, we look at our habit, we look at our culture; all these we have been trying over the years, over the years since we have been appointed; so many training, capacity building, change of culture from cargo buyers’ institution to a regulatory institution.

Now externally as I have said, is to have the recognition of the stakeholder. But this recognition must come with an instrument, and that instrument is a legal framework. The legal framework has been worked out. We already have an existing framework in the form of the Nigerian Shippers Council Act, and also a regulation called Nigerian Shippers’ Council Local Shipping Charges Regulations made pursuant to the Act, which says nobody can increase tariffs, nobody can published tariffs without coming to agree with Nigerian Shippers’ Council.

But then we have to up it, we have to up the regulatory framework to suit the current situation. That regulation was made in 1997. You see the passage of time, you see trade has developed so the legal framework must match what is happening now.

And therefore, the Federal Ministry of Justice, the Federal Ministry of Transport, the Bureau for Public Enterprise and many stakeholders like the Customs, Nigerian Ports Authority, NIMASA; all came together to develop a legal framework for the operations of Nigerian Shippers’ Council and we have been able to come out with the Order of the President, we have been able to come out a regulation and this regulation will become effective soon.

In specifics now, what are those things that you need to enable you to enforce?

We do want enforcement of sanctions entrenched into the regulation. We need also the administrative backing because even the President’s approval said we need administrative backing from our parent ministry, the Federal Ministry of Transport. But most of all, we need the knowledge. Knowledge is the issue that will even make enforcement at the background.

Our aim is not really sanction and enforcement but understanding. So enforcement and sanction, are the last resort. We think this is a knowledge based sector and everybody should understand the need to focus. This we are doing because this is what Nigeria needs. Nigeria is growing everyday; the transport sector, particularly the port sector will never be left behind.

In terms of efficiency and cost reduction, what have you put in place to ensure that efficiency exists and that cost reduction can be felt?

You see, on our own because everything has to be relative to what we are talking about, and comparative to what obtains, we have made adjustments; we have had capacity in determining tariffs, which is so scientific, we have capacity in determining procedures to see comparative costs, what obtains in other places.

We have the complements of about three world renown consultants who is working with us; very soon they would start working with us. We are just about signing the agreement so that these things are done openly, scientifically. But we are also working, because the cost element is not only in the tariffs, the cost element is also in the cost inefficiency, now inefficiency breeds chaos and chaos breeds cost. Sometimes they are deliberately triggered and that is what we are looking at now.

We have got to go and look at the key performance indicators of each terminal. We have to look at what the Customs are doing; eliminate certain unwholesome practices at the ports by the Customs; eliminate unwholesome practices with the freight forwarders, with the truckers; other agencies at the ports. And there is so much corruption at the ports, there is nothing to hide.

We have to attack corruption at the ports, and this we do through automation. Sometimes when you automate a place through information communication technology the whole problem disappears. When the Lagos transport system, (for example) applied automation, nobody said, ‘Molue, pack and go’; then you put buses and you could see the preference; that’s why it is competitive.

Competition is supposed to drive efficiency. That’s what we going to insist on, it must be competitive, so that unwholesome practices will disappear, we put robust system in place. For example, you can clear your goods sitting here in my office. You don’t need to be there in person. Your presence at the ports is anachronistic, you do not need to do that. So we started putting these things in place; and we have to.

Now what we are doing is, we have to have the operating manual of every organisation at the ports. We have to put the infrastructure in place. If Immigrations are going to rummage through a ship, how many minutes will it take them? Sometimes you find such simple procedures taking time, leading to delay costs, inefficiency costs.

PHILLIP ISAKPA