Isaac M. Jolapamo is Chairman/Chief Executive, MORLAP Shipping Company. He doubles as Chairman, Indigenous Ship Owners Association (ISOA), which is on the verge of being renamed Nigerian Ship Owners Association (NISOAN) by stakeholders. In this interview with Joke Kujenya, he speaks on the obstacles and prospects of shipping business in Nigeria and other salient issues. Excerpts:
Are the fears real or unfounded in some quarters that local vessels and ship operators are losing businesses to foreign counterparts due to adverse working environment, a development many argue may soon force them into extinction?
The fears are right, let me put it succinctly. It is so in the sense that we had a law which came into force about thirteen years ago or so called Inland Shipping Cabotage Law. It says you have the exclusive preserve to your cargo within your country. That was the intention. It followed after the Jones Act in America and all other areas that are practicing it. But our major problem in this country is that our contemporaries are usually ahead of us.
Let me first pause on shipping and paint the more practical scenario for you. We are currently importing refined petroleum products into this country. And we have sufficient oil in the country that we are exporting on the average of about two or more million barrels a day because we cannot refine by ourselves. So, we are compelled to import. Some smart foreign people have made sure that that is the way things must be done whether by hook or crook. And all these are for their own interest. They run down our refineries and leave them in a comatose because they want to continue holding on to the ace.
It also follows too with the cabotage law that we say we have that they want to control our local shipping. So, the whole game is about controlling local shipping. Some of us have been in this business for the last three decades before the law. And we were doing well because we were cooperating with the foreigners to do it. But when the law came, we thought that at last, we would stop taking crumbs from the tables. Unfortunately however, the people are quite ahead of us. Because they are ahead of us and have control of the cargo and shipping activities in our own water space, how then will the law that we have work?
That is how we have been blaming ourselves, throwing brickbats, shouting that the flag administration is supposed to do this and that; whereas the people we are dealing with are always a step ahead of us.
What is the Flag Administration supposed to do in all these?
The Flag Administration is the NIMASSA. The agency is supposed to make sure that this law works by enforcing it. But how can they enforce it? But I have a different view from that of others. In the sense that is it only NIMASSA that is involved? What about the Nigerian National Petroleum Corporation (NNPC), that owns the oil, that imports the refined products, which does not believe in Nigerians doing the job? How then can NIMASSA be able to enforce?
The Nigerian Ports Authority (NPA), that brings the vessel in, does not bother to find out whether this vessel that has brought a particular cargo is complying with the rules.
The Navy that says it has given the vessel clearance does not find out the traders that are Nigerians or wants to get near a Nigerian vessel because of the peculiar Nigerian factor. The problems that we have in the country of course, goes to every Nigerian whether you are in the air, water or land. And this is a very big challenge. But of course, if there is synergy, which hopefully, we expect to be, because it is in the process, things might begin to work.
Do you share the perception that the non implementation of the Cabotage Act has been blamed for the parlous state of the nation’s marine sub sector?
Did you say implementation? I ask you, who is going to implement what? If we say it is NIMASSA that should do that, I put it on record today that, the agency is constrained. But it is not the only agency that controls the movement of the ship or knows about how things operate. If you say you are practicing a law and want every ship to comply with such, but the authorities tasked with the duty to ensure that such is done, don’t believe that our own people can do that job. So, how will the law work? That’s the point we are making. I am now saying that there is a synergy that NIMASSA is putting in place that every other people involved can key into. It is after everyone has locked into this that we can begin to have some positive result. Already, a lot of people have burnt their fingers before that.
Business associations are often seen as pressure groups to demand proper working of things in their sectors. What is NISOAN doing?
We have done a lot. I say this because we have drawn the attention of government to what the country stands to gain in terms of employment generation and empowering Nigerians. We didn’t paint only the challenges. This also called for a retreat that the President had to set up a committee to look at the entire issues that were raised.
On top of the agenda is, if you can create so much jobs, then, let us try and make it work. These recommendations are already with the government. However, it is also the willpower of the government to implement some of these recommendations because so many factors that I am not able to tell you for the pages of the newspapers, must be reversed.
But there are forces contending against the willpower that, if care is not taken, could truncate the vital points in the recommendations. All of these stem out of nothing else, but selfish-interests, which is more of a Nigerian factor.
But we know all this is tough. And if we look at the history of shipping in the country, we are just resolute that we will make a success of what we are doing. There hasn’t been any success story in shipping in Nigeria thus far. And that is why the formation of our association is based on the doggedness that Nigerian shipping business will scale the hurdles and record commendable success in our businesses.
It’s an open secret that shipping business is very capital intensive. So, what are the steps to take for a prospective investor?
Clearly, you can’t buy a ship with your own money. But of course, they do it in Nigeria because there are some with so much easy funds around. But in other climes, you go to the bank or financiers to get a ship. However, you don’t get a ship first without business to do with the ship.
It is actually the business you have to do with the ship that the bank will look at to know that your initiative will be profitable or not. But our own situation has been that we put the horse before the cart. They ask you to go and bring the ship before they give you the job, which is not appropriate. The way shipping business runs is that you have a job first. Now, a job, in shipping is, the cargo you will be carrying with the vessel.
You must know what you want to use the liner for, how much you are going to make monthly and the amount you will expend on it. When the bank looks at all these, they will know how much money is involved, how long do you have the contract, will you be able to pay for the ship? These are all the very important aspects to consider. Sadly, in our own clime, what we see is the reverse. The current trend is so hard to explain, I must confess.
Do you think the FG’s recent idea of insurance for local vessels can work?
Insurance for local vessels has always been an issue. And there are two types of insurance for every vessel, both local and international. There is haul and machinery. This is for the haul of the ship as it is, its engines and everything. And then, there is the Protection & Indemnity (P & I), which is a third party liability insurance that in case, a vessel hits another vessel. But just as we are clamouring to have the chunk of the businesses here, so also is the insurance group hollering to have their own.
But of course, there are forces at play that has not allowed them to get what they want. However, the chunk of most insurances of Nigerian flag vessels today i.e. haul and machinery, is being done by domestic insurance companies. It may not be a hundred percent, but it is up to a level. They share it with a foreign group. But today, the P & I is not being done anywhere in Africa.
Our association has been on the drawing board to set up one called ‘African P & I’.
Till date, it is yet to see sunshine because of our insurance law which does not allow such. But it is being looked into by the Presidential Committee set up by the FG.
But we are trying to do a few things that will make the business better because of those coming in the nearest future. That is why we are not going to leave it as it is but make sure there is a turn-around for the better for the younger ones to build on.
What could make a ship not have jobs?
Here in Nigeria, what happens is that you can be given a job to come and do for one year, but that cannot sustain you or your loan in the bank. You are supposed to be given that job for about five years. Those are some of the reasons that brings about a ship not having a job. You can even lose a contract because they don’t want you.
There is so much espionage and Mafia sort of pranks in shipping. I believe that some of our people are just being frustrated. If they think your crew is not good, and you have Indian crew that are smart and know their onions on a Greek vessel; and a trader needs to charter a vessel, he would go for the Greek vessel. He would rather patronise the Indian crew than a vessel with Nigerian crew.
The operator of such a vessel has it at the back of his head that these Nigerians want to be like him. And that is so because we ourselves have thrown our profession to the dust. But in those other places, they still maintain high ethical standards. These are the hard facts that we must admit but which in some quarters, they don’t want said. We must seriously look for a way out of this.
I recently had a discussion with some NIMASSA topnotch. Our talks bothered on their importance of training people that are under them. If they don’t do that, those under them would just think that all about shipping is ‘waivers’ because that is something in the cabotage law that says if you can’t find a Nigerian vessel, then, take a foreign vessel and issue it a waiver. We have kicked against the idea from day one, sadly, it is still there.
Now, it was something meant to be in place for just about five years. But from what we are seeing, it could survive the next 100years if it is not taken out. The people that run the place would just be concerned about collecting their own two percent just for the foreign vessels to work. If it however gets to the point we say, this is our own, then, somebody should ask, why can’t you take a Nigerian vessel. If they say there is none, you direct them to where they can find one or two.
That is how it is done in other places. If the Navy want to give approval for any ship, they would ask why it is a foreign one being sent; don’t we have our own? So, there is need to educate everybody. If a ship wants to come in, it involves so many organs such as Customs, Navy and others. So, if all of them demand that they want things to work around the shipping business; it would work. Again, that’s where the synergy comes into play.
