Lawyers and stakeholders in the industry have urged the Federal Government to change its Free-on-Board (FoB) policy to Cost-Insurance and Freights (CIF).
The FoB terms, they claimed, hinder the Cabotage Law implementation.
They said the Ministry of Transportation and the Nigerian Maritime Administration and Safety Agency (NIMASA) should intensify efforts to tackle the challenges in the industry.
Speaking at a forum held by importers, clearing agents and Shipping Correspondent Associa-tion of Nigeria (SCAN) in Lagos, at the weekend, Sea Logistics Managing Director Mr. Rufus Olanipekun said replacing Nigeria’s trade terms would help in rediscovering the insurance industry.
He expressed concern that foreign shipping lines would continue to exploit the country because of the selfish interest of a few, and lack of a functional shipping policy that identifies the strategic challenges of the sector.
Olanipekun said there were lapses in enforcing the Cabotage Law and domesticating international treaties and conventions in the sector, lamenting that the regime was yet to be implemented to meet the expectations of stakeholders.
He also identified a gap in the Act, which is yet to empower indigenous operators to take advantage of the Cabotage.
The performance of the Federal Government on trade facilitation, high port charges, infrastructure, safety at sea, protection of the marine environment and enhancement of maritime law and security, Olanipekun said, are below expectation. He added the ports were performing below expectation, despite their concession.
Olanipekun said foreign shipping companies were still dominating the industry.
The Chairman, Board of Trustee of SCAN Mr Bolaji Akinola said the Federal Government should do more to make the ports attractive to business and reduce piracy on the waterways.
Another maritime lawyer, Emeka Akabogu, agreed with Olanipekun on chaning to CIF and its impact on the insurance sector.
“NIMASA changing Nigeria Freight trade from FoB To CIF will help if they are committed to it and not paying lip service,” he argued.
He added that insurance companies could underwrite marine, which experts believe is capital intensive.
For him, irrespective of the type of insurance we are talking about, he said there are insurance companies that can underwrite for a vessel on a voyage, hull of a vessel or underwrite the cargo onboard a vessel.
He explained that an insurance company need not underwrite a policy, and that at times an insurance company works with reinsurance scompanies and reinsurance could be local or foreign, because what the companies need is appetite. When there is appetite, he further said, the firms will undertake any volume of risk as far as it is highly placed and taken through business review section.
“There are underwriters across the world who are looking for such risk so the local insurance take such risk, involve the reinsurance and they would cover adequately,” the lawyer said.
JM investment Chairman Mr. James Joseph said conspiracy was hindering Cabotage implementation
He said the implementation of the law would have been easier, but for the conspiracy by some past officials of the Ministry of Transport and foreign ship owners.
Joseph said the law could be implemented, if the Minister of Transport mustered enough political will to do so.
“The Minister of Transport needs to see to the full implementation of the Cabotage law before he leaves office. We are aware that some individuals within and outside the government are trying to frustrate the implementation.
‘’My suggestion to the minister is that he should make sure every ship that calls at the ports should first declare its arrival to the Nigerian Ports Authority (NPA), NIMASA and the Navy. By doing so, it would be easy to implement the law,” he said.
Poor policy implementation, he said, is the bane of the sector.
“No government agency needs to go to the jetty to arrest a ship. NIMASA, for instance, can ask any ship to tell her its point of loading. So, if it is offshore Lagos or offshore Cotonou, the agency can then verify, if it is on the list of Cabotage registered vessels. Therefore, if the Minister is determined, implementation should not be a problem.”
Joseph said Nigerian ship owners should be supported with good policies by the government and banks, so they could buy vessels to carry out coastal trade.
The Coastal and Inland Shipping Act, 2003, he said, is a protectionist law aimed at creating exclusive areas of operation in the coastal trade for indigenous operators.
“Much as it is estimated that marine transportation offshore alone has a potential yearly revenue/profit of millions of naira as against coastal trade in commodity and products, it is believed that harnessing the opportunities of effective implementation of Cabotage will provide a springboard for indigenous operators to acquire requisite capacity and expertise in launching them into global shipping.
“The target is for Nigerian carriers to have a share of about $4.5 billion per year gross value of freight in and out of Nigeria. Only 20 per cent share of the market will stimulate the local economy to the tune of about $600 million gross per year,” Joseph said.
The Cabotage regime, he said, covers ship building, ship ownership, manning and registration. Unlike the Cabotage Law in most nations of the world, he observed, Nigeria’s Cabotage law provides for waivers.
‘’Indigenous operators have complained that the waiver clause has helped make implementation of the law difficult, inefficient and faulty,” Joseph added.