In this report, OLUWAKEMI DAUDA looks at the allegation by the National Association of Government-Approved Freight Forwarders (NAGAFF) that the bonded terminals approved by the Nigerian Customs Service (NCS) are ill-equipped in contradiction of the Customs Excise and Management Act (CEMA).
Worried by their performance, the National Association of Government Approved Freight Forwarders (NAGAFF) has criticised bonded terminals, saying they have failed to carry out their responsibilities.
For instance, the NAGAFF’s 10 per cent Compliance Team complained that members of the Association of Bonded Terminal Operators of Nigeria (ABTON) imposed demurrage, storage and transfer charges, among other illegal fees, on importers and freight forwarders, even though they lacked the capacity to deliver quality and efficient services.
NAGAFF Coordinator of the Compliance Team, Alhaji Ibrahim Tanko, alleged that that when it rains, operators of bonded terminals suspend examination of cargoes, leading to an increase in demurrage charged owners of the cargoes.
Also, NAGAFF alleged that the bonded terminals, which were approved by the Nigerian Customs Service (NCS), were ill-equipped for operation in contradiction of the Customs Excise and Management Act (CEMA).
The allegation was contained in a letter dated July 28, 2021, which the association sent to the Comptroller-General of Customs, Hameed Ali (rtd). It stated that some approved terminals operated without relevant cargo handling equipment and that their environment was not conducive.
Bonded terminal
A bonded terminal is a warehouse or a storage area approved by the Customs for a temporary storage of imported goods. The goods are kept until the Customs duty is paid or are cleared by the owner.
Businessmen who invested in the ports logistic value chain with the establishment of bonded terminals have expressed anger about alleged neglect of the facilities by the Nigerian Ports Authority (NPA) and the NCS, among others.
Why bonded terminals were created
The creation of bonded terminals was aimed at decongesting the ports. Between 1980 and 1982, the Federal Government responded to the challenges at the ports then by establishing the two container depots in Kano and Kaduna with a combined capacity of 8000 Teu. These terminals were policed by officials of the NSC and those of other related government agencies.They were conceived as a viable channel of supplying the much-needed industrial raw materials, spares and agricultural materials for the development of hinterland states, local governments as well as assist the organised private sector in manufacturing and agriculture.
How bonded terminals operate
A bonded terminal must have a licence to handle laden containers on bond either by road or rail, and transfer of containers from seaport to its depots in Lagos and other places. The depot must have officers of NSC and security agencies, who ensure clearing of cargo to their final destination through less cumbersome documentation.
The standard practice is that on arrival, containers clearance must not exceed 24 hours, far ahead of the unattainable 48-hour clearance in the seaports. To ensure safe transit, the NSC officers ensure that bonded containers arrive in the depots on time and with seals intact. The terminals, therefore, provide quality services to meet customers ‘just-in-time’ needs. The systems guarantee quick service delivery.
But a senior official of one of the bonded terminals in Lagos, who does not want to be named, said the NPA should be blamed for the collapse of the Lagos ports’ roads and the gridlock it engendered, for failing to implement a working template on the bonded terminals to achieve a seamless cargo distribution and evacuation system.
He accused NPA of failing to honour the agreement reached between the government in 2003 and the bonded terminal investors who were brought onboard to support the evacuation of containers from seaport terminals to bonded terminals, to create a seamless logistics chain.
Govt’s investment agreements
The source said though some bonded terminal owners were asked to provide bonds by some of the terminal operators, the later reneged after N100 million bonds were provided.
“Then APMT asked some of us to provide bonds, I provided N100 million bond, but nothing came out of it. The government is a dream killer. They lack honour, ethics and respect for investment agreements.This is very bad. The bank pulled us here and there for the loans we got. Tell me, can anybody take our government serious anymore having deceived and left us struggling for breathe?” he asked.
With the high volumes of import and the unnecessary bottlenecks in the clearing process, a lot of goods have ended up staying longer than necessary at the ports, leading to a serious congestion of the available space in the ports, thereby causing delays in the discharge of cargo by vessels.
The delays, which also affected the vessels turnaround time, led to the creation of bonded terminals that have full complements of NCS and other security agencies.
Complaints
He noted: “If I want to examine my containers, it takes me days. They don’t have a good floor to drop containers during the rainy season. We cannot examine in the rain because the goods will be soaked in water and demurrage will accrue.”
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Blames
Tanko condemned the issuing of licences by NCS to the operators, who could not meet international standards viz a viz the CEMA Act.
He urged Customs to revoke the licences of bonded terminals that fail to meet the standards.
ABTON reacts
However, ABTON said the allegations were baseless as over 40 bonded terminals in Lagos alone operate in accordance with the standards contained in their operation licences issued to them by the Customs.
According to ABTON’s General Secretary, Alhaji Haruna Omolajomo, there were guidelines for operating a bonded terminal, adding that Customs inspects the terminals regularly even after they are approved, while the operators renew their licences yearly.
He explained that the charges the freight forwarders complained against were in the agreements.
Facts
The ABATON scribe said bonded terminals with sufficient equipment were not patronised by freight forwarders and importers, noting that they preferred to take their containers to those with fewer facilities and end up complaining of not getting adequate service.
Omolajomo explained that bonded terminals do not bill customs agents and freight forwarders illegally, saying that 70 percent of the charges at the bonded terminals were infused by the shipping firms and terminal operators.
He said the operators had invested trillions of naira into the business, saying that shutting the business would keep many out of jobs and their equipment wasted.
Deficiency
Notwithstanding, the ABTON scribe admitted that there were a few bad eggs in the industry. He suggested the erring operators should be punished rather than condemning all the operators.
He stressed: “There is no sane society that expects everything to run 100 per cent. There would still be black sheep that will default. You cannot push for all bonded terminals to be thrown out of business because of one or two operators that erred in their operations. This is not fair as many people would be out of jobs for a crime they did not commit.
“Those people defaulting are not members of the bonded terminals association which is recognised nationwide. How can we account for them since the Federal Government, through Customs, licensed them? If they violate the law, the Customs sanctions them and brings them to book just as they have been doing to erring operators. The terminal operators and shipping companies reach an agreement with the bonded terminals for patronage.
“They give the bonded terminals conditions that if they must patronise them, they must help them to collect certain money and this money is infused into what the bonded terminals will collect from the shippers and freight forwarders. This is one of the challenges the bonded terminals are facing and this is very bad because it is painting us black.”
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