The Nation Newspaper

Tag: NIMASA

  • Maritime institute for September

    Maritime institute for September

    Academic activities are expected to take off at the Institute of Maritime Studies, Ibrahim Badamasi Babangida University, (IBBU), Lapai in September.

    Chairman, Curriculum Development Committee of the Institute, Prof Dalhatu Umaru Sangari said necessary arrangements that will ensure a smooth start have been concluded.

    He said relevant faculty, support staff, and required learning and infrastructure that would help the take off of the institute as scheduled would be sourced internally.

    He said the curricula of the programmes have been developed to explore new areas of study in Postgraduate Diploma and undergraduate programmes in Maritime Studies.

    The postgraduate programme will run full-time for 16 months and part-time for 24 months; while the the undergraduate programmes, approved by the Nigerian Maritime Administration and Safety Agency (NIMASA), would focus on Maritime Economics and Finance as well as Radio and Maritime Telecommunications and Technology.

    The Chairman expressed optimism about the socio-economic benefits impact the Institute would have on Niger State, including influencing the revitalization of the Baro Trade Outpost and all Inland Water ways to resume full commercial activities.

  • NIMASA, others object to NLNG’s suit

    NIMASA, others object to NLNG’s suit

    • Hearing for today

    A Federal High Court, Lagos, will hear a preliminary objection brought by the defendants in a suit by the Nigeria Liquefied and Natural Gas (NLNG) Limited against the Attorney-General of the Federation and others.

    Justice Mohammed Idris refused to re-affirm an order he made restraining the Nigerian Maritime Administration and Safety Agency (NIMASA) from detaining NLNG’s vessels.

    The blockade was over NLNG’s alleged failure to pay statutory charges to the Federal Government.

    Justice Idris made the order on June 18 against the Attorney-General of the Federation, Mohammed Adoke (SAN), Global West Vessel Specialists Nigeria Limited and its Managing Director Mr Romeo Itima.

    It was an order of interim injunction restraining the defendants, either acting for or deriving authority from the Federal Government, including NIMASA, from charging three per cent of gross freight earnings, tax, charges or dues on all of NLNG’s international-bound and out-bound cargo, owned by it or its contractors or subsidiaries, pending the hearing and determination of the motion for interlocutory injunction.

    The Federal Government and Global West had asked the court to vacate or discharge the ex-parte order on the ground that it was made against NIMASA, who is not joined as a party to the suit, and that full facts were not disclosed to the court in seeking the order.

    But Justice Idris struck out the Attorney-General’s application on the ground that it was filed outside the time permitted by the court rules.

    The court also dismissed Global West’s application on the ground that there was no suppression of any material fact, and that the company could be sued on behalf of its principal (NIMASA).

    Shortly after the ruling, NIMASA’s lawyer Wole Akoni (SAN) urged the court to reaffirm the ex-parte order.

    But Global West’s lawyer Abiodun Owonikoko (SAN) vehemently opposed the application. He urged the court not to be tempted to fall into such trap.

    Justice Idris ruled that since the defendants are challenging his jurisdiction to entertain the suit, he would deal with the issue first.

    He said: “The only jurisdiction I have now is to hear the objections of the defendants.”

    He adjourned till today for hearing.

    NLNG said the respondents “have caused their agents, privies and other third parties particularly NIMASA to brazenly disregard and flout the extant Interim Orders of this Honourable Court, per Idris J. made on 18th June.

    “On 21st June, 2012 at about 5pm, about 15 officers and men of the Nigerian Navy in two NIMASA patrol boats accosted NLNG Security Patrol Team at the NLNG waterfront and ordered the applicant’s vessel, LNG Imo and a chattered vessel, Torm Thames to remain at the NLNG loading bay while LNG Oyo should remain at the Bonny Channel until further notice,” the applicant said.

    NLNG said despite being aware of the order, the respondents and their agents, “particularly NIMASA”, issued ship detention orders dated June 21 against its vessels.

    “The respondent’s agent has procured the services of the Nigerian Navy to intimidate, harass, prevent and block the applicant’s vessel and is currently patrolling the applicant’s waterfront to carry out the respondents’ orders and ensuring that none of the applicant’s vessels approach or leave Bonny Channel without being detained.

    “The activities of the respondents are in disobedience of the orders of this Honourable Court made on 18th June, 2013.

    “As a consequence of the respondents’ activities, the applicant is being compelled to shut down its plant as it can no longer export its products…

    “If the respondents are not immediately committed for contempt, the integrity and sanctity of our judicial system will be seriously eroded,” NLNG said.

  • NLNG may shut down operations over NIMASA feud

    NLNG may shut down operations over NIMASA feud

    The dispute between Nigeria Liquefied Natural Gas Limited (NLNG) and the Nigerian Maritime Administration and Safety Agency (NIMASA) may have reached the climax with NLNG planning to shut down its entire operations from tomorrow, it was learnt.

    The Nation gathered that the management of NLNG decided to shut down operations following the blockade of its Bonny channel since June 22 by NIMASA in defiance of an existing court order. The blockade has prevented NLNG’s vessels from entering or leaving the channel in the last nine days.

    NLNG declared ‘force majeure’ on Friday, June 28, 2013 to protect it from supply obligations to its international LNG buyers and other responsibilities. Gas purchase agreements span several years and breaches have serious legal implications.

    Dr. Kudo Eresia-Eke, General Manager of External Relations, Nigeria LNG Limited told The Nation on Sunday that “because of the blockade, we have had to drastically reduce production and gas intake. We cannot meet obligations to our buyers.”

    He declined to put a figure on how much the blockade was costing the country, simply saying: “We are counting because it is incremental, but certainly huge. When the blockade is lifted, we can then have a cost.”

    Industry operators have condemned NIMASA for not obeying the court order. They are of the view that the agency as a responsible corporate citizen ought not to have acted unilaterally given the likely adverse effect of its action on Nigeria’s economic interests. NIMASA had prevented some NLNG’s vessels from operating, which the firm saw as violation of court order.

    Eresia-Eke in a statement said that on Friday June 21, two NIMASA boats with 15 naval officers on board, ordered that one NLNG vessel (LNG Imo) and one chartered vessel (Torm Thames), remain at NLNG’s loading bay, whilst another NLNG vessel (LNG Oyo), remained outside the Bonny Channel until further notice.

    NIMASA, he said, subsequently issued Ship Detention Orders on 22nd June, specifically detaining three NLNG ships (LNG Enugu, LNG Oyo, LNG Imo) and barring them from accessing or leaving the company’s loading bay.

    He said: “These developments are in flagrant disregard of the court injunction issued by the Federal High Court in Lagos in Suit No FHC/L/CS/847/2013 by Honourable Justice M.B. Idris, presiding, on Tuesday 18th June 2013, against the Attorney General of the Federation, Global West, and any other parties including Nigerian Maritime and Safety Agency, NIMASA, from imposing any charges or taking any steps to block, detain or prevent access by the company’s owned or chartered vessels, whether inbound or outbound from Bonny channel or elsewhere in Nigeria.

    “It will be recalled that on 3rd May 2013, NIMASA blocked the Bonny Channel preventing entry and exit of NLNG vessels. This led to a series of meetings at the instance of the Federal Government which eventually ordered that the company should pay NIMASA its purported levies.

    “In deference to the Government, NLNG made a payment, under protest, in the sum of US$20 million (approximately N3.2 billion) into NIMASA’s designated account and subsequently approached the court to seek proper judicial clarity and a lasting resolution to the conflict between the NLNG Act and NIMASA Act.

    “The potential implications of this current action by NIMASA on NLNG operations are enormous and would impact negatively on its international LNG buyers, the international financial market, Nigeria to which NLNG contributes four per cent of the country’s GDP, its shareholders and the investment climate in Nigeria, let alone the reputational impact this may have on Nigeria’s image within the international investment community.”

    NIMASA’s Deputy Director/Head, Public Relations, Isichei Osamgbi, said the blockade of the channel was necessitated by NLNG’s action. He said: “This course of action was forced on NIMASA by the NLNG’s refusal or/and failure to abide by the outcome of the negotiated settlement arrived at through the mediation process it willingly instigated and subscribed to, after reaching agreement with NIMASA on its outstanding debt and paying US$20million out of it and its continued flagrant disregard for Nigerian laws. “Contrary to NLNG’s position, NIMASA is not aware of any court order against it or any suit brought by NLNG against NIMASA.

    “By its action, the NLNG has trivialised the mediation process and the position of the Federal Government of Nigeria whose Nigerian National Petroleum Corporation owns and holds 49 per cent of the shares in NLNG and which endorsed the agreement reached that NLNG should pay its taxes/levies and observe all its obligations under the laws of Nigeria in which it is operating.”

    As at the time of filing this report, there were no signs of a quick resolution of the crisis with both sides sticking to their guns. Responding to a query as to whether there was ongoing dialogue within government circles to resolve the dispute amicably, Eresia-Eke curtly replied: “The matter is in court.”

     

  • NIMASA vs NLNG: War without end

    NIMASA vs NLNG: War without end

    The lingering crisis involving the Nigerian Maritime Administration and Safety Agency (NIMASA) and the Nigerian Liquefied Natural Gas (NLNG) could damage the country’s economic interests, reports Ibrahim Apekhade Yusuf

    “No  Agreement Today. No Agreement Tomorrow. No Agreement Now. Never! Never! Never! No Agreement Never…”

    The lyrics above, created by the inimitable Afrobeat legend, Fela Anikulapo Kuti, perhaps captures the difficulty in reaching a resolution of the current dispute between the Nigerian Maritime Administration and Safety Agency (NIMASA) and the Nigerian Liquefied Natural Gas (NLNG) over whether or not the latter ought to pay 2 % cabotage surcharge, sea protection levy, 3 % freight levies for shipping undertaken by Bonny Gas Limited, a subsidiary of NLNG, whose conservative estimates is valued at over $400million to NIMASA from September 2007 till date.

    NLNG is owned by four shareholders, namely, the Federal Government of Nigeria, represented by the Nigerian National Petroleum Corporation, NNPC (49%), Shell Gas BV, SGBV, (25.6%), Total LNG Nigeria Limited (15%), and Eni International (N.A,) N. V. S. a. r. l (10.4%).

    Renewed hostilities

    Though the crisis between NIMASA and NLNG has been festering for some time, it appears to have come full circle in the last few months.

    Recall that on 3rd May 2013, NIMASA blocked the Bonny Channel preventing entry and exit of NLNG vessels, a development which led to series of meetings at the instance of the Federal Government which eventually ordered that the company should pay NIMASA its purported levies.

    Even as the dust was yet to settle, just last week, NIMASA detained the three vessels belonging to the NLNG due to what it described as the latter’s failure to pay levies due to the Nigerian government.Justifying the Agency’s action in a statement signed by the Deputy Director, Public Affairs, NIMASA, Isichei Osamgbi, which reads in part, he said, “The Nigerian Maritime Administration and Safety Agency (NIMASA), has today (last weekend) in its enforcement of Nigerian laws, served detention notices/orders on vessels belonging to/chartered by the Nigerian Liquefied Natural Gas Company Limited (NLNG).

    “This course of action was forced on NIMASA by the NLNG’s subsequent refusal or/and failure to abide by the outcome of the negotiated settlement arrived at through the mediation process it willingly instigated and subscribed to after reaching agreement with NIMASA on its outstanding debt and paying $20m out of it and its continued flagrant disregard for Nigerian laws.

    “By its action, the NLNG has trivialised the mediation process and the position of the Federal Government of Nigeria whose Nigerian National Petroleum Corporation owns and holds 49 per cent of the shares in NLNG and which endorsed the agreement reached that NLNG should pay its taxes/levies and observe all its obligations under the laws of Nigeria in which it is operating.”

    While giving an account of what led to last week’s blockade, Dr. Kudo Eresia-Eke, General Manager, External Relations, NLNG, recalled that: “Two Nigerian Maritime Administration and Safety Agency (NIMASA) boats, with 15 naval officers on board, ordered that one NLNG vessel, LNG Imo, and one chartered vessel, Torm Thames, remain at NLNG’s loading bay, whilst another NLNG Vessel, LNG Oyo, remains outside the Bonny Channel until further notice.”

    Speaking exclusively with The Nation, as to why NIMASA issued detention orders on NLNG Vessels namely: LNG Enugu, Oyo and Imo respectively, the NLNG, through its spokesman, Eresia-Eke, “They (NIMASA) would know better. What we know is that a court injunction was served on them prior.”

    On possible cost implications of detaining the NLNG vessels, the company said: “When the blockade is over we can then give you a reliable figure. But a certain loss is of the reputation of the country, and the implications of that for foreign investment flow into Nigeria.”

    While commenting on insinuations that the Attorney General of the Federation/Minister of Justice, Mohammed Adoke had allegedly sought an out-of-court settlement for NIMASA/NLNG, the NLNG argued that: “The matter is in court necessarily, in need of judicial interpretation given apparent conflict of two Acts- the NLNG ACT, and the NIMASA ACT.”

    The N3.2 billion, the company paid, Eresia-Eke insisted, “was part payment, made in protest clearly, but in deference to the Federal Government that directed payment, while going to court to seek a proper interpretation.”

    He was however quick to add that: “We intend to follow the court processes, in line with the rule of law, until the matter is resolved.”

    The Nation can authoritatively report that there appears to be no love lost between the parties in the dispute considering the fact that they are both lock in fierce legal battles of their lives.

    Already, the NLNG has filed a suit against the AGF and Global Star, but never joined NIMASA in the suit, a development seen by legal analysts, as a technical flaw.

    NIMASA Act says the agency requires at least one month notice to be joined in a suit, and this according to experts, has created a leeway for it.

    Echoing similar sentiments, Mike Igbokwe (SAN) in a statement noted that NIMASA was not joined in the suite as such was not technically liable.

    Crux of the matter

    But how did things came to this sorry past? An innocuous question no doubt, but with no ready answers.

    At issue is that the protracted dispute between both parties is as a result of perceived conflict in the enabling Acts of both organisations, namely the Nigeria LNG (Fiscal Incentives, Guarantees and Assurances) Act on one hand and Nigerian Maritime Administration and Safety Agency Act, Merchant Shipping Act and Coastal and Inland Shipping Act on the other hand.

    NIMASA holds the view and very strongly too that its levies were applicable to NLNG, while the latter argued that they were exempted from such levies and charges by virtue of the NLNG Act.

    It would be recalled that NIMASA had filed a suit against NLNG in 2010 claiming entitlement to these levies. Following preliminary proceedings, NIMASA filed an application to withdraw the suit, and on 3rd May 2013.

    But in a volte face, NIMASA had reportedly resorted to self-help by blocking NLNG vessels from entering the Bonny Channel for days.

    History of controversy

    Investigation by The Nation revealed that the controversy over payment of cabotage and freight levies first came to the fore under the administration of Dr. Ade Dosunmu, who as the DG made all entreaties to NLNG to pay up to no avail.

    His predecessor, Temisan Omatseye, who took over the case, was desirous of amicable resolution of the impasse such that he sought a judicial review of the NLNG Act at the court but may have stepped on toes in the process and that reportedly led to his exit as DG and he been on suspension in the last two years, sources said.

    Findings by The Nation revealed that the matter hitherto under Justice Nyako of the Federal High Court, and later before Justice Rita Ofili-Ajumogobia of the Federal High Court, Lagos, was reportedly withdrawn.

    The Nation reliably gathered from informed sources that the AGF who seemed not comfortable with the turn of events, had issued a directive to the management of NIMASA to have the case withdrawn without further delay in order to settle out of court.Informed sources further told The Nation that the AGF had made frantic moves to have the matter withdrawn in court by the NIMASA management under the former DG, Omatseye, since 2010 but could not have his way because the then management insisted that he had to follow the due process.

    The Nation had reported exclusively that parties to the dispute in the instance of the Attorney General of the Federation and Minister for Justice, Mr. Mohammed Adoke (SAN) had sought an out of court settlement.

    The litigation between the NLNG and NIMASA had been ongoing in the past few years. The Nation gathered that the NLNG management under the former Managing Director, Chima Ibeneche, had asked NIMASA to go to court to contest the NLNG Act, which granted the NLNG and its contractors a tax holiday and several other incentives.

    However, following discussions with NIMASA and NLNG, both parties had agreed that the latter should carry out some projects in lieu of payment.

    The communiqué issued at the end of the parley in 2009 tagged: “Proposal on Projects that will Assist the Development of the Safety Administration in Nigeria”, addressed 14 critical areas of need namely: purchase of two number surveillance helicopters at the cost of $18.0million; four number pollution monitoring, control boats at $20.0m; five number defender, bullet proof patrol boats at $30.90m; two number offshore patrol boats with fire fighting capability at $30.0m; funding of PICOMMS projects at $26.0m.

    Besides, it was agreed that a sensitivity atlas mapping/charting of the Nigerian coastline would be embarked upon at the cost of $25.0m, as well as dredging/reinforcement of the jetties in Kirikiri channel, Pathfinder in Port Harcourt and Warri, in Delta state, just as mobile search and rescue clinic was going to take $5.0m.

    However, following renewed negotiations, the parties couldn’t reach a consensus on the means and ways to implement the terms of the proposal.

    Outsiders’ perspective

    Mr. Peter Sunday Adebola, Managing Director, BGL Securities Limited, who has been following the issue had this to say.

    Speaking exclusively with The Nation over the weekend, he said: “Without taking sides with either of the parties, one thing I know is that whatever the situation, companies must not evade taxes and the regulation should be in such a way that it is not ambiguous because most of our laws are full of ambiguity that you need somebody to come and interpret at one time or the other.

    “It should be made very easy for people to understand. Unlike in the advanced economies, ordinary school leavers understand what the law is all about. But our own, you may even need somebody to interpret the laws for you to be able to understand. I think what is pertinent is that the regulatory framework should be easy and simple so that the partners in the Joint Venture Agreement will not do something in such a way that they are not going to circumvent the laws.”

    Giving a legal perspective to the issue, a maritime lawyer, who would not be named and who has been following the developments argued that the AGF cannot form a committee to adjudicate on the crisis between the NLNG and NIMASA because they are both legal entities which can be sued.

    “The AGF cannot adjudicate in the matter. It is the court that can adjudicate and nothing else. I think I sense a lot of mischief in the air. Without prejudice to what is happening right now, I think NIMASA appears to be in hurry,” the source said.

    Expatiating, he said: “The question to ask is who is pushing NIMASA? It is true that the agency is in some form of financial crisis? The AGF can only step in if the case involves the Federal Government. “It was wrong for the AGF to have sought to broker truce knowing full well that the solution lies with the court.”

    The company, the source informed, “May have no choice but to declare a force majeure and this will not augur well for the country.”

    Implication on the economy

    In the view of analyst, the potential implications of the current impasse between NIMASA and NLNG have dire consequences on the economy as well as the nation’s reputation in the international community.

    The NLNG is reported to contribute at least 4 % of the country’s GDP. From available information, the agency stands to make at least $5million monthly from NLNG.

    Raising a poser, the BGL boss said: “Do you know the amount of income that government is losing from all these other arrangements?”

    Government, he emphasised, “Is losing a lot because you can see that there are leakages and people want to take advantage of that. So, the faster the issue is resolved, the better for the country.”

    Way forward

    In the contention of experts, one of the lasting solutions to this kind of issue is full automation of payment system.

    The BGL boss shares the same sentiments. “Once the system is digitalised, you won’t even need to negotiate with anybody. Once the system is automated, there will be no need for dispute arising over payments of dues because the template will be available for anybody to see. That’s the way it is done elsewhere,” Adebola stressed.

    Continuing, he said, “Just like the banks now, they will tell you, you’ll pay N3 COT for every N1, 000. At the end of the month, if you check your statement, it would have been generated electronically. With such a template, banks don’t need to explain anything to anybody because it is the operating template in the bank which you as a customer have to key into.”

    But a lawyer and also a member of the Rule of Law Development Foundation, led by Joseph Dauda, who asked not to be named, said the only solution is for the court to adjudicate, this, he argued, is a quicker and better way to resolve the lingering impasse.

    Pray, is someone listening?

  • NIMASA seeks tighter ports security for US ships

    Nigeria must upgrade its ports security status within the next 34 days to enable ships from the United States enter its ports, the Nigerian Maritime Administration and Safety Agency (NIMASA) has said.

    NIMASA Director-General Mr. Ziakede Patrick Akpobolokemi said there was need for the country to meet global mandate on port security.

    He spoke at an International Ship and Port Security (ISPS) Code Implementation and Governance Conference in Lagos.

    NIMASA, according to him, convened the conference for stakeholders to articulate the agenda for ISPS Code implementation on behalf of the Federal Government

    Tracing the origin of the ISPS Code, Akpobolokemi said: “After the terrorist attacks on the World Trade Centre in New York on September 11 2001, the vulnerability of lives, property and other assets to attacks by criminal-minded elements under whatever guise became a global reality. The unconventional manner in which the infamous attacks were successfully carried out and the frightening devastation they caused brought to the centre of global discourse, the need for a concerted effort to ensure the safety of lives and property everywhere.

    “As much as terrorism is unacceptable, what is even more unacceptable is a lack of proactive response by independent nations to the constantly evolving menace of terrorism. I am pleased to note that the Federal Government of Nigeria has consistently demonstrated its awareness of the imperatives of making our nation safe and secure. It is in pursuance of our government’s commitment to combating terrorism by applying global best practices, that we are gathered here today.

    “Different responses to the increasing wave of global terrorism have been adopted by nations across the world and solutions have been and are still being fashioned out for different sectors. The one, which most concerns us today as stakeholders in the maritime community, is the protocol put in place by the International Maritime Organisation (IMO), in the form of the ISPS Code, to ensure that the global maritime arena is free from the threat of terrorism and other maritime crimes.”

    Noting that, until recently, the phenomenon called terrorism seemed alien to Nigeria, the NIMASA boss said that, at the inception of the ISPS Code, many were averse to this concept “as it was viewed as a western problem.”

    He said: “Today, we have three states in the Federal Republic under emergency rule as a result of terrorism. This new challenge requires an articulated and comprehensive response in the form of developed and workable protective measures if our maritime sector is to remain mitigated from this scourge. There is, therefore, no better time to have this issue in the front burner than now.”

    In his speech, the Senior Special Assistant to the President on Maritime matters, Mr Leke Oyewole, said the ISPS Code is the standard international framework through, which contracting governments, government agencies, local authorities, port and ship industries can cooperate and be assessed in the global commitment to detect security threats in the maritime transportation sector.

    Beginning from July 1, 2005, he said the ISPS Code became mandatory for contracting governments and member states of the International Maritime Organisation.

    He, however, commended the federal Government for embracing the ISPS Code and the need for its implementation in the nation’s ports and its environs.

  • NIMASA,NLNG unending levy quarrel

    NIMASA,NLNG unending levy quarrel

    Since last month, the Nigerian Maritime Administration and Safety Agency (NIMASA) and the Nigeria Liquefied Natural Gas Limited (NLNG) have been quarrelling over levy. NIMASA is insisting that it has right to collect levy from NLNG, which claims it enjoys a levy holiday. How can this issue be resolved? EMEKA UGWUANYI Assistant Editor (Energy) writes.

    They are government children with a difference. While the Nigerian Maritime Administration and Safety Agency (NIMASA) is fully owned by government, the Nigerian Liquefied Natural Gas (NLNG) is a public-private initiative, with government owning 49 per cent of its equity.

    They next highest shareholder has 25.6 per cent interest.

    The duo early last month reopened an old conflict, on payment of levies by the NLNG. However, the Federal Government through the relevant agencies intervened appropriately and arrived at a resolution that NLNG should pay its levies, including the arrears from 2009. The two organisations, it was learnt, were asked to discuss on modality of payment. The stakeholders in the petroleum and maritime industries hailed the resolution as a welcome development considering the roles and importance of the two firms to the economy.

    But barely a month into the settlement, a fresh conflict has begun to brew between the two institutions resulting in court action and disruption of operation. The disagreement may have arisen as a result of non-compliance with the resolution by the government and taking of NIMASA to court last week by NLNG, which sought injunction to prevent NIMASA from imposing any charges or taking any steps to block, detain or prevent access by NLNG’s owned or chartered vessels, whether inbound or outbound from Bonny channel or elsewhere in Nigeria.

     

    NLNG’s position

     

    NIMASA had at the weekend prevented some NLNG’s vessels from operating, which the NLNG saw as violation of court order. NLNG’s General Manager, External Relations, Kudo Eresia-Eke, in a statement said on Friday June 21, two NIMASA boats with 15 naval officers on board, ordered that one NLNG vessel (LNG Imo) and one chartered vessel (Torm Thames), remain at NLNG’s loading bay, while another NLNG Vessel (LNG Oyo), remains outside the Bonny Channel until further notice.

    NIMASA, she said, subsequently issued Ship Detention Orders on June 22, specifically detaining three NLNG ships (LNG Enugu, LNG Oyo, LNG Imo) and barring them from accessing or leaving the Company’s loading bay.

    She said: “These developments are in flagrant disregard of the court injunction issued by the Federal High Court in Lagos in Suit No FHC/L/CS/847/2013 by Hon. Justice M.B. Idris, presiding, on Tuesday, June 18, 2013, against the Attorney-General of the Federation, Global West and any other parties including Nigerian Maritime and Safety Agency (NIMASA) from imposing any charges or taking any steps to block, detain or prevent access by the company’s owned or chartered vessels, whether inbound or outbound from Bonny channel or elsewhere in Nigeria.

    “It will be recalled that on May 3, 2013, NIMASA blocked the Bonny Channel preventing entry and exit of NLNG vessels. This led to a series of meetings at the instance of the Federal Government, which eventually ordered that the company should pay NIMASA its purported levies.

    “In deference to the Government, NLNG made a payment, under protest, in the sum of US$20 million (approximately N3.2 billion) into NIMASA’s designated account and subsequently approached the court to seek proper judicial clarity and a lasting resolution to the conflict between the NLNG Act and NIMASA Act.

    “The potential implications of this current action by NIMASA on NLNG operations are enormous and would impact negatively on its international LNG buyers, the international financial market, Nigeria to which NLNG contributes four per cent of the country’s GDP, its shareholders and the investment climate in Nigeria, let alone the reputational impact this may have on Nigeria’s image within the international investment community.”

    On the reason NLNG went to court, Eresia-Eke said it was instructive to note that Nigeria LNG Limited and its shareholders still firmly believe in the rectitude of their earlier position that NLNG is duly protected by the provisions of the NLNG Act against the payment to NIMASA of the Sea Protection Levy, the three per cent freight levies on cargo exports shipped by NLNG, and that the two per cent Cabotage Levy on LNG carriers is inapplicable because NLNG’s LNG vessels are not involved in coastal trade or cabotage.

    She said “NLNG is a Nigerian company involved in, almost exclusively, international export business and is thus subject to all relevant national and international laws, standards and ethos with which it must comply. This, amongst others, requires that all its dealings are governed and premised on the universal principles of the rule of law to which the Nigeria Government also affirms its commitment.

    “The company has often clarified that the issues it has with payment of any levy, charge or impost has little to do with the amounts involved, but more with the principle of the rule of law, so that it can safeguard its international business, which rests squarely on its reputation as a law abiding company, as well as Nigeria’s reputation in the global community.”

     

    NIMASA’s stance

     

    NIMASA’s Deputy Director/Head, Public Relations, Isichei Osamgbi, said payments of the levies demanded of NLNG have been long overdue. He said the Act that established NLNG exempted it from paying levies as incentive to enable the shareholders recoup their investment. However, it stated clearly that the incentive was not meant to last forever. He noted that Section 2 of the NLNG Act also limits the tax holiday of the company to 10 years “or when the cumulative average sales price of LNG reaches US$3 in million metric British Thermal Units (MMBTU) as calculated in the First Schedule to the Act, whichever is earlier.”

    But as of January 2004, the New York Mercantile Exchange (NYMEX) indicated that the price of gas stood at US$9 per million metric British Thermal Units, indicating that the milestone for the expiration of the exemption granted to NLNG had been surpassed by 200 per cent in the cumulative average sales price.

    Besides, he noted that NIMASA is funded by money accruing to it through the three per cent of gross freight from all international inbound and outbound cargo from ships or shipping companies operating in Nigeria as stipulated in NIMASA Act of 2007. Also refusal to pay NIMASA levies by one company may induce others to follow suit, he explained.

    On the blockade and alleged of violation of court order, Osamgbi said: “The Nigerian Maritime Administration and Safety Agency (NIMASA), in its enforcement of Nigerian laws, served detention notices/orders on vessels belonging to/chartered by the Nigerian Liquefied Natural Gas Company Limited (NLNG).

    “This course of action was forced on NIMASA by the NLNG’s subsequent refusal or/and failure to abide by the outcome of the negotiated settlement arrived at through the mediation process it willingly instigated and subscribed to, after reaching agreement with NIMASA on its outstanding debt and paying US$20million out of it and its continued flagrant disregard for Nigerian laws.

    “Contrary to NLNG’s position, NIMASA is not aware of any court order against it or any suit brought by NLNG against NIMASA.

    “By its action, the NLNG has trivialised the mediation process and the position of the Federal Government of Nigeria whose Nigerian National Petroleum Corporation owns and holds 49 per cent of the shares in NLNG and which endorsed the agreement reached that NLNG should pay its taxes/levies and observe all its obligations under the laws of Nigeria in which it is operating.”

    Osamgbi also explained that besides being a regulator and ensuring safety of the Nigerian waters, NIMASA has other responsibilities. For instance, he noted that about $6 billion is raked in as tax by Filipinos that operate vessels in Nigeria. Also Nigerians, he said, don’t own vessels, adding NIMASA is trying to develop capacity and competence in these areas.

    He said: “Iin these areas, NIMASA plans to give up to 50 per cent support, while banks can give up to 35 per cent and the person or firm will provide 15 per cent but the banks have to guarantee our support and that of the firm or person by conducting or carrying out due diligence on the person or firm to confirm if such beneficiary is qualified.”

    On training aimed at human capacity development, he said NIMASA has three programmes. The agency, he explained, sponsors one of the programmes wholly while the second programme is sponsored jointly by agency and the state government of the beneficiary on the ratio of 60:40 per cent and the cost of the third programme is wholly borne by the beneficiary while NIMASA gives the necessary guides.

    He said it is only the Oron Academy that develops human capacity for the maritime industry and it doesn’t award degrees. Consequently, he said the agency wants to enter into partnership with some institutions including the University of Nigeria, Nsukka, University of Lagos, and Niger Delta University, among others to produce the right personnel for the industry.

    NIMASA, he noted, needs funds to meet its obligations of developing the right skills among Nigerians, create employment and most of all, ensure Nigeria waters is safe and operations carried out with best global practices and in conformity with laws.

    NLNG is owned by four shareholders, namely, the Federal Government of Nigeria, represented by the Nigerian National Petroleum Corporation (NNPC) 49 per cent; Shell Gas BV, SGBV, (25.6 per cent); Total LNG Nigeria Limited (15 per cent); and Eni International (N.A,) N. V. S. a. r. l (10.4 per cent).

  • NIMASA stops NLNG vessels

    Our Action in order -NIMASA

    Three Nigerian Liquefied Natural Gas (NLNG) vessels were at the weekend blockaded by two Nigerian Maritime Administration and Safety Agency ( NIMASA) boats.

    This is contrary to court order by the Federal High Court delivered on June 18 by Justice M.B. Idris. A statement by NLNG General Manager, External Affairs, Kudo Eresia-Eke, said “two NIMASA boats with 15 naval officers on board ordered that one NLNG vessel, LNG Imo and one chartered vessel, Torm Thames, remained at NLNG’s loading bay, whilst another, LNG Oyo, remained outside the Bonny Channel until further notice. The statement also says that NIMASA subsequently issued Ship Detention Orders yesterday (Saturday), specifically detaining three NLNG ships (LNG Enugu, LNG Oyo and LNG Imo), thereby banning them from accessing or leaving the company’s loading bay.”

    NIMASA had blocked the Bonny Channel on May, preventing entry and exit of NLNG vessels, a decision that led to a series of meetings between both organisations at the instance of the Federal Government. Subsequently, the Federal Government ordered NLNG to pay NIMASA its purported levies, which the former promptly did by making a payment of $20 million (approximately N3.2 billion) into NIMASA’s designated account, before approaching the court to seek proper judicial clarity and lasting solution to the conflict.

    According to Eresia-Eke, the current imbroglio between the two organisations, if unresolved, could impact negatively on NLNG’s international buyers, the Nigerian international financial market, to which NLNG contributes 4% of the country’s GDP, its shareholders and Nigeria’s investment climate as a whole.

    In its response, NIMASA in a statement late yesterday by its Deputy Director/Head, Public Relations, Isichei Osamgbi, said that the agency was forced to take the action due to NLNG’s refusal or/and failure to abide by the outcome of the negotiated settlement arrived at during a mediation process it instigated and subscribed to. It said the action was taken due to NLNG’s continued disregard for Nigerian laws after initially complying by paying the US$20m.

  • NLNG sues NIMASA

    NLNG sues NIMASA

    The Nigeria Liquefied Natural Gas (NLNG) Limited yesterday filed a case at the Federal High Court, Lagos against the Nigerian Maritime Administration and Safety Agency (NIMASA) seeking judicial interpretation of the legality of the levies imposed on it by NIMASA.

    The company said it has also begun payment of the levies in installment ‘under protest, with the Government’s directive to pay the said levies’.

    The protracted dispute between both parties arose as a result of perceived conflict in the enabling Acts of both organisations, namely the Nigeria LNG (Fiscal Incentives, Guarantees and Assurances) Act on one hand and Nigerian Maritime Administration and Safety Agency Act, Merchant Shipping Act and Coastal and Inland Shipping Act on the other hand.

    NIMASA said its levies were applicable to NLNG, while the latter argued that they were exempted from such levies and charges by virtue of the NLNG Act.

    NIMASA had filed a suit against NLNG in 2010 claiming entitlement to these levies. After preliminary proceedings were taken and concluded, and the matter was ready for hearing, NIMASA filed an application to withdraw the suit, and on 3rd May 2013 resorted to self-help by blocking the Bonny Channel for 2 days, thereby preventing ingress and egress of NLNG chartered vessels with attendant financial losses and reputational damage to NLNG and Nigeria in general.

  • ‘I did not probe if ex-NIMASA DG gained from contract’

    A Federal High Court, Lagos, yesterday heard that the Economic and Financial Crimes Commission (EFCC) did not investigate whether the former Director-General (DG) of the Nigeria Maritime Administration and Safety Agency (NIMASA), Raymond Omatseye, made personal gains from a contract awarded for the supply of 100 Blackberry smart phones.

    An EFCC investigator, Ibrahim Ahmed, said his enquiry indicated that the phones were actually delivered.

    The contract was said to be worth N22,050,000.

    “I did investigate whether the accused made any financial gain from the contract,” Ahmed said.

    He said he also did not find out whether the contractor, Anchor Offshore Services Limited, was specially promised the contract by Omatseye.

    He was testifying in the trial of the former NIMASA boss, who EFCC re-arraigned before Justice Rita Ofili-Ajumogobia on an amended 27-count charge bordering on a contract scam.

    He pleaded not guilty to the counts.

    His re-arraignment was due to the transfer of the former judge, Justice Binta Murtala-Nyako.

    He was charged with alleged illegal transfer of the agency’s fund and contract splitting estimated at over N1.5 billion.

    During cross-examination by defence counsel Olusina Sofola (SAN), Ahmed said the other contractors who bid for the supply did not make any complaints about Anchor enjoying any special favour from Omatseye.

    Justice Ofili-Ajumogobia adjourned till June 26 for continuation of hearing.

  • How importers lose N2b weekly

    Shipping companies are depriving importers of over N2 billion weekly for allegedly refusing to refund their container deposit fee, The Nation has learnt.

    The Save Nigeria Freight Forwarders, Importers and Exporters Coalition (SNFFIEC) has appealed to the Executive Secretary, Nigerian Shippers’ Council, Mr Hassan Bello, to address the problem.

    The President of the group, Chief Osita Patrick Chukwu, told Bello that the shipping companies hide under different guises to perpetrate the fraud. He alleged that agencies such as the Nigeria Maritime Administration and Safety Agency (NIMASA) are being included among agencies that should collect revenue through debit notes.

    “Freight forwarders lose N2 billion weekly as regards container deposits. Some shipping companies fraudulently use one system or the other to exonerate themselves from paying the shippers back. Initially, we thought the concessioning will be of elevation from where we were before; the question now is, is it not better to go back to where we were before the concession?” he asked.

    Replying, Bello said the port reform embarked upon by the government seven years ago was to reduce the cost of clearing goods and eliminate corruption.

    Nigeria, he said, was still grappling with high cost of doing business, which should have been reduced after the port reforms.

    “The issue of corruption if care is not taken will work against the port reforms. In the past six years, we have been making reforms, and corruption is the victim of these reforms. Port reforms are supposed to address issues of corruption. Fighting corruption does not mean to arrest people and prosecute them. The moment you reform a system, it means you are fighting corruption,” he stressed.