The regulatory challenges ahead of us are huge, but we are ready! – Hassan Bello
In February 2014, the Shippers Council was appointed interim economic regulator for the Nigerian ports industry. In this interview with THEODORA KIO-LAWSON, Executive Secretary, Hassan Bello speaks on the challenges of regulating the maritime sector. Excerpts:
Q:WHAT DO YOU THINK PROMPTED THE APPOINTMENT OF SHIPPERS’ COUNCIL AS AN ECONOMIC REGULATOR FOR THE MARITIME SECTOR?
The Federal Government has shown so much concern about activities at the ports and this appointment is a confirmation that Shippers’ Council has always had some regulatory powers. The government has realised the importance of the ports to the economy of this country, so it has made concerted efforts to make sure that our ports are efficient, our ports are competitive and that our ports should be positioned so that the contributions of the maritime sector to the national economy will be substantial.
AS A NEW ECONOMIC REGULATOR ARE YOU POISED TO DEAL WITH THE INNATE REGULATORY CHALLENGES OF THE SECTOR?
According to the concession agreement, there ought to have been an economic regulator right from the onset, nonetheless, it isn’t too late. Indeed, we do have a peculiar task ahead of us, given that, activities have been on before we came in as regulators, that notwithstanding, our pedigree and experience at the NSC, we are braced up and ready to tackle the challenges before us.
TELL US ABOUT YOUR FIRST STEPS TOWARDS EFFECTIVE REGULATION
The step we took was to consult widely with stakeholders. This consultation yielded a lot of positive results. Firstly, we were warmly welcomed as arbiter, referee and a transparent neutral party. We are adopting a scientific approach to sanitising the ports, so as to make our ports friendly, quite efficient; competitive, as well as ensure that Nigeria becomes not just another business hub, but an efficient commercial nerve centre in the region.
HOW HAS THIS BEEN GOING?
We started the process; we have been on it and have met with various divisions and units of the ports system and even beyond. We are speaking with truckers, the freight forwarders, the terminal operators, we are speaking with the shipping companies and the Nigerian Ports Authority (NPA).Other meetings involve the Nigerian Maritime Administration and Safety Authority (NIMASA), the Nigerian Customs Service and the Immigration Services amongst others. We have met with them to explain our role in the system and the consolidation of efforts and processes.
IN ALL OF THIS CONSOLIDATION PROCESS, HOW ARE YOU DEALING WITH ISSUES OF ARBITRARINESS?
While actual negotiations with the Shippers have commenced , and we are focused on eliminating arbitrariness in the system, a situation where certain individuals and divisions fix prices arbitrarily without reference to the Nigerian Shippers Council be it NPA, terminal operators of a freight forwarder. It must be understood that there is an economic regulator. We are on the right path, it is not a quick fix and I also know how impatient Nigerians are, they should give us time to firm up our activities before the results will manifest. Already, we have abrogated certain charges and this will go a long way in consolidating our position.
WHERE DOES THIS ABROGATION LEAVE THE SECTOR?
Well, we are not just abrogating charges, we are also ensuring that each participant or player in the port industry does their work properly, efficiently, with a high level of transparency within the ambit of the law and in the overall interest of the Nigerian economy.
WHAT LEVEL OF SUPPORT HAVE YOU ENJOYED FROM THE GOVERNMENT AND OPERATORS IN THE PORT SYSTEM IN PURSUANCE OF THESE OBJECTIVES?
We have had tremendous support from the Bureau of Public Enterprises (BPE), they have given us tremendous support, we also have had support from the Nigerian Customs Service and the Immigration, players like the shipping companies and terminal operators, the freight forwarders. So we are going scientifically, we are working systematically, openly and transparently to do these things.
ONE OF THE KEY ELEMENTS OF A GOOD PORT SYSTEM IS AN EFFICIENT TRANSPORT SYSTEM. APAPA ROAD IN RECENT TIMES HAVE BECOME A DREADFUL SITUATION FOR PORT AND ROAD USERS, HOW DOES THIS AFFECT YOUR REGULATORY ROLE IN THE PORTS? WE ALSO UNDERSTAND YOU ARE WORKING WITH THE SPECIAL ASSISTANT TO THE PRESIDENT ON VALUATION AND MONITORING OF PROJECT TO CO-ORDINATE THE CURRENT TRANSPORT CRISIS IN APAPA. TELL US ABOUT THIS.
The Federal Government is concerned about what is happening in Apapa that they have taken practical steps to find a solution to it. The Special Assistant to the President on Valuation and Monitoring of project, Prof. Monye Sylvester together with the Special Assistant to the President on Maritime affairs, Olugbenga Leke Oyewole, Shippers Council, NPA, other stakeholders had a meeting recently , this role has been given to us to co-ordinate because of what is happening in Apapa.
We are currently in talks with the Federal Roads Maintenance Agency (FERMA), the Lagos State Government, a task force set up for this purpose, as well as other agencies. It is the whole system of traffic management that has to be overhauled. We are aiming for a well regulated system to ensure efficiency and this forms part of our discussions with the Federal Government.
THE LAGOS STATE GOVERNMENT AMONGST OTHERS HAS CALLED FOR THE RELOCATION OF TANK FARMS AS A SOLUTION TO THE PROBLEM, WHAT’S YOUR TAKE ON THUS? IS IT QUITE POSSIBLE AT THE MOMENT?
The location of the tank is part of the causes of these obstructions at the ports. We hope to find an effective way to manage the tank farms. It is not just talking about it. We must study the system to see how best we can handle the situation.
Apapa ports are city ports; and access to the ports is mainly by roads. A port should have other modes of transport; they should have a well-defined expansive rail system and linkage with inland water ways so that goods can be effectively evacuated. Instead, what we have are roads that are not exclusive to the ports. They lead to several other destinations and are equally used by individuals. We all use the roads to the ports, so do the trucks and the tankers, resulting in constant chaos in the area, such that we don’t see in other regions.
BEFORE YOUR APPOINTMENT AS THE EXECUTIVE SECRETARY OF THE COUNCIL, YOU HAD ADVOCATED FOR THE EXPANSION OF THE PORTS THROUGH THE ESTABLISHMENT OF THE DRY PORTS, OTHERWISE CALLED THE INLAND CONTAINER DEPOTS ( ICD). WHAT IS THE ROLE OF THE ICDS IN THE CURRENT CHAOS IN APAPA?
The ICDs are also long term solution to the congestion at the ports. At the Dry Ports, the goods will be inspected and duty paid. They are other ports just like Apapa port or Tincan Island port, only without water. This definitely reduces congestion. Trucks cannot come all the way from the North to Lagos to carry goods, nobody does that in any part of the world, so we have to rely on these Dry Ports.
The Minister of Transport is currently on top of it and a committee was set up to provide legal solutions to this development. There are ports of origin and ports of destination which means that you can consign your goods to these ports. E.g. A bill of lading can read Liverpool to Isiala Ngwa thus, will be inspected there. We do not need all these trucks in Apapa and we are working towards achieving this. A public declaration will be made soon enough.
IT WAS RECENTLY REPORTED THAT YOU MET WITH THE CENTRAL BANK OF NIGERIA (CBN) IS THE BANK PART OF THE AGENCIES WORKING AT THE PORTS, WHAT IS THEIR OWN ROLE IN THE SCHEME OF THINGS?
The CBN, and in fact all banks are critical to port operations. Since 2008, the Nigerian Shippers Council has been confirming the reasonableness of trade freight rates as a precondition for the purchase of foreign exchange from the CBN by commercial banks on behalf of shippers for the payment of freight rates or Charter party fees. This is done to stem capital flight from the country and to ensure that these freight rates are reasonable, because some people inflate this freight rates and the Nigerian Shippers Council is statutorily enabled to make sure that these freight rates are reasonable, they are obtainable in the market, what we have is the use of freight rates as capital flight. Shipping companies operating in Nigeria are supposed to have disbursement account through which their principals abroad will finance them for any payment that is not done in local currency.
All local port charges are supposed to be paid in Naira, not in U.S. Dollars, many deposit banks were not aware of the illegality of sourcing foreign currencies locally for the payment of freight related charges. The payment of such fees with Nigeria’s foreign exchange amounts to capital flight, that affects the nation’s balance of payment negatively. So, we have collaborated with the CBN and our position is that we have statutory powers regarding monitoring and stabilising of freight rates in Nigeria which by extension gives us the power to know how much a shipper has paid to the shipping companies for the purpose of negotiation of freight rates or charter party fees.
The purpose of this was to stem capital flight and also to make sure that these freight rates are reasonable because some people inflate rates and Nigerian Shippers Council is statutorily enabled to make sure that these rates are reasonable, they are obtainable in the market.
I commend the CBN Governor for continuing this platform, this no doubt, emphasises the seriousness the Federal Government has placed on it fiscal and monetary policies, on its trade policies and on its maritime policies.
HOW EASY HAS IT BEEN EXECUTING AND IMPLEMENTING THE AGENDA OF THE FEDERAL GOVERNMENT FOR THE MARITIME SECTOR?
The first thing that we did was the gap analysis, what do we need internally first as Shippers Council and you know that we have some deficit also in terms of capacity and we have started addressing that .We had serious intensive courses for our staff which is a serious thing because if you are regulating, you have to be more educated and informed than the people you are regulating. We also need a new cultural orientation, the orientation is that we not a travel a cargo biased institution any more, we are now the referee, we carter for everybody in the industry because we need this harmony, we need this symmetry, we need this unity.
WHAT HAS BEEN THE OUTCOME OF THE RECENTLY HELD MARITIME SEMINAR FOR JUDGES IN NIGERIA?
The 13th edition of the Maritime Seminar for Judges has been adjudged yet another success, what is frightening is that every time we have this seminar, the bar keeps on rising , what was unique about the 13th edition of the seminar was that it was organised by a couple of young men in Nigerian Shippers Council who were my successors in the legal department and you could see the difference they brought in, the innovation and this time we had the highest participation of judges.
TELL US MORE…
The Chief Justice of Nigeria, Miriam Aloma Mukhtar was in attendance, the Attorney-General and Minister of Justice Mohammed Belo-Adoke was also there, and so were the Minister of Transport, The chairman of the Senate committee on Marine transport, Senator Zainab Kure, the President Court of Appeal, Chief Judge of the Federal High Court, all the heads of our superior courts of record were there. We had six Supreme Court Justices, 31 Judges of the Court of Appeal, and 30 Judges of the Federal High Court, but more instructive is that we about 80 Judges from the States High Courts. We also had about 54 members of the public, mostly lawyers who paid a token fee to participate in the Seminar.
There was also adequate representation from Ghana’s Judiciary, the Union of African Shippers with headquarters in Cameroun and also Niger Shippers Council. So it was attended by Judges and lawyers all over the Country and beyond; as well as a cross-section of the maritime industry.
WHAT WERE SOME OF THE LEGAL AND REGULATORY ISSUES ADDRESSED AT THIS EVENT?
The issues discussed were quite germane for the growth of the Nigerian economy. These include, piracy which remains an ever- burning issue in Nigeria. We called for the implementation of municipal laws to govern piracy because there is a lacuna there, we talked about the liability of terminal operators, insurance of oil and gas carriage and the Admiralty Jurisdiction Act (AJA). More significantly, we also looked at the introduction to maritime law and admiralty Jurisdiction for the new Judges who were there in the over all, I think that we had a very successful Seminar by all dimensions.