Stakeholders in the maritime industry have kicked against the physical examination of goods by the Nigeria Customs Service (NSC). In this report, OLUWAKEMI DAUDA says the manual process is ineffective, inefficient, expensive and breeds corruption.
Operatives of the Nigeria Customs Service (NCS) working at the seaports are reportedly the only ones still physically sorting out imported goods in the subregion, thus increasing cargo dwell time, fuelling corruption and killing the trade facilitation programme of the Federal Government.
100% physical examination
by Customs
A 100 per cent examination by Customs occurs when every box, carton, or other package is opened and the goods examined to prevent export or import of contraband, counterfeited, improperly declared, prohibited, embargoed, or any other goods that don’t conform to the Customs and Border Protection stipulations.
Challenges of port operations
Some of the challenges confronting seaport cargo operations are inadequate equipment, dominance of foreign vessel and deficiency in export and lack of regulatory oversight.The seaport cargo operations constitute the hallmark of key maritime activities done in every port.
Stakeholders said the inability of the Service to use the new multi-billion naira scanners effectively is affecting port efficiency and promoting corruption.
Fraudulent importers and clearing agents, findings have shown, are having a field day because the scanners deployed by the Nigeria Customs Service (NCS) are not enough, a reason the Service is still doing 100 per cent physical examination of most of the containers.
Investigation by The Nation show that fraudulent importers misinterpret imports to shortchange the government during duty valuation on imported cargo as they collaborate with some Customs officers.
Also, stakeholders said, the scanning regime by the service has failed because it could not meet the expected 400 containers examination daily.
Customs’ reaction
Last year, the Assistant Comptroller-General of Customs on Modernisation and ICT, Saidu Galadima, had told stakeholders in Apapa, Lagos that “the new technology is based on trade facilitation. Only compliant traders will celebrate. If you are compliant enough, you won’t have any contact with any Customs officer. Cargoes will be released without anybody needing to go to any Customs office.”
When asked how the system will work, he said: “All activities will start after the scanning has been completed. When the vessels berth, the containers will be scanned before they are taken to the stacking area where cargo declarations will start. All the scanning would have been completed before agents make their declarations.
“On capacity, the scanners will scan 400 containers daily with four hours to rest. For every 20-feet container, the scanner will take an average of 35 seconds each to scan. For every 40ft container, the scanners will scan them at an average of 55 seconds each.”
“For physical examination, we aim to ensure that the scanning percentage will be higher than the number of containers that will be subjected to physical examination.
“We all have to make it work. If agents decide to cut corners, they will bear the cost of delay associated with a physical examination. So, being compliant will benefit all of us.
Former President, Association of Nigeria Licensed Customs Agents (ANCLA), Prince Olayiwola Shittu, said: “Despite the provision of scanners at the port, the Nigeria Custom Service still subject most of the scanners to physical examination but is not supposed to be so.
“The scanners are not enough and because of the push to meet the revenue target of the government and to maximise how much income they can generate to justify their appointment, Customs are not doing trade facilitation.
“The incoming administration should get professionals to do the job. It should also de-emphasis revenue generation by Customs and leave the job for the Federal Inland Revenue. Let Customs facilitate trade to help industries to survive.”
National Single Window
On the National Single Window, Shittu said the incoming administration needs to adopt it at the port.
“It is a trade facilitator and we need it in our ports because what happen is that every government agency wants autonomy. There is no platform that units all of them. You have to clear your cargo through several agencies before it can leave the port. Therefore, we need a national single window through which goods can be cleared at once.
NPA said
Managing Director, Nigerian Ports Authority (NPA), Muhammed Bello-Koko, said 100 per cent physical inspection of cargo by the service “constitutes delays with attendant negative impact on Cargo dwell-time”.
What other clearing agents say
To many clearing agents and freight forwarders doing business at the seaports, the most painful part of the experience is cargo clearing.
Physical examination difficult, dangerous
To NCS, there are two categories of cargoes -the Fast-Track goods that do not need to go through 100 per cent physical examination and another category that must be examined 100 per cent physically.
The fast-track is further categorised into Green, Blue and Red; for goods that need to be investigated and those that can be given clearance without investigation.
The ports handle over 1.5 million 20-foot containers yearly and out of this, less than 200,000 go through the fast-track channel, leaving about 1.3 million TEUs for the physical examination process.
For the examining officer, physical cargo inspection are life-threatening.
“The stacking of goods in containers are most times done in very disorganised fashion,” an official at one of the major seaport terminals in Lagos, who did not want to be named, told our correspondent.
“If you examine a container carrying clothes, for instance, an importer may decide to conceal a motorbike on top of the consignment.
“The examining officer has to crawl inside the container to move the items out one after the other. While he is lying on the floor of the container, the motorbike or even car could fall and crush him.
“Many officers have sustained injury this way; some have even lost their lives.”
Physical examination of one container takes an average of five hours: Physical examination of one container takes an average of five hours and the regulators only work from 8 am to 5pm.
On a good day, there are more than 40 containers waiting on the examination bay at Lagos port and more than 60 at Tin Can Island port.
It is after the examination that the importer is cleared to move the consignment to the gate of the terminal.
However, the agent could avoid his cargo being subjected to the physical test by parting with some money.
This, in itself, the tendency for corruption among Nigerians and the distrust in the Customs, is the reason containers that have been duly cleared by Customs to leave a terminal gate gets examined by the same Customs outside the terminal gate.
“The reason there is a buildup of trucks at the gate entrance is that goods inside have not been evacuated so. It becomes difficult to accept trucks coming in with empties or to pick cargo because there is no space inside,” said a truck driver, Lekan Ajayi
Stakeholders blame corruption
Stakeholders have argued that the process at the seaport is not supposed to defy solution.
“They deploy scanners to examine goods and luggage at the airports,” Ajayi said.
He maintained that Nigeria was aware that if it tried the physical examination for cargoes at the airport, its airports would be empty.
He wondered why that scanners could be used at the airports but the country “finds it so difficult to deploy enough same at the seaports”.
It is not even a question of costs, the stakeholders argued.
“The cost of an average scanner is around $600,000. Ten of them can serve the ports in Lagos and that would amount to $6million.
“It is not rocket science. There is certainly something behind their reluctance to deploy enough scanners.”
Expressing the same sentiment, an importer, Seyi Badejo, attributed the practice to corruption.
Badejo said the use of scanners would make it hard for corrupt Customs officers to have physical contact with agents where they could be bribed for easy passage of goods.
He said the ports were the only places where cash still exchanged hands and people refused to embrace cashless policy.
“They know that the cash could be traced,” he said.
His submission is reinforced by recent stories of operators taking millions of naira in cash to the port to carry out transactions and, in some cases, losing the cash to robbers.
Background
In 2006, cargo scanners were acquired by service providers, namely Coctena Destination Inspection Limited, SGS Scanning Nigeria and Globalscan System. Each was allotted specific Customs commands they were to supply the scanners to.
The contract, which was based on build, own, operate and transfer terms, also provided that the service providers were to give training and technical support to the NCS on risk management, valuation and classification.
Cotecna, a leading, testing, inspection and certification company with over 40 years’ experience, was charged with managing the scanners. The contract, which ran for six years, ended in December 2012 but while it lasted, the number of containers scanned daily went up to 150.
At the expiration of the initial six-year contract, the Federal Government opened a transition contract agreement with the service providers to ensure a seamless transfer of functional scanners to the NCS. This new contract was extended to November 2013.
A Transition Implementation Committee on Destination Inspection Scheme was constituted by the then Coordinating Minister of Finance, Ngozi Okonjo-Iweala, in July 2013 to oversee the transfer.
By the end of that year, the transition was completed and the scanners handed over to the NCS. Unfortunately, this giant leap in modernising the NCS did not last very long. A year after the handover, the scanners had stopped functioning and ports and borders were once again returned to the analogue era.
Berating the service, Badejo wondered why the government did not provide spare resources to send some Customs officers on further training overseas to learn how to operate the scanners.
“Why spend so much money on scanners without taking time to build the manpower that could handle the equipment?
“What would it have cost them to send Customs technicians abroad for further training on how to handle the scanners and after that, regularly upgrade their training on how to handle subsequent modern equipment?” he asked.
For years, there has been this huge debate, on scanners acquisition while the ports keep bursting at the seams with cargo volumes and Customs continue their 100 per cent physical examination of cargoes.
It was gathered that the 100 per cent cargo examination has gained intensity because of the distrust by some importers.
