Nimasa, Isan Sign MoU on Cabotage Enforcement

Nigerian Maritime Administration and Safety Agency (Nimasa) and Indigenous Ship-owners Association of Nigeria (Isan), have signed a memorandum of understanding to work together to check the activities of foreign vessels that contravene the Nigeria cabotage act.
This new partnership will further boost current efforts to ensure effective implementation of the cabotage regime in the country.
In the almost seven years of the cabotage law in Nigeria, the nation and indigenous ship owners are still deprived of the needed revenue from haulage of petroleum products which ordinarily should help drive the country’s economy forward.
The cabotage act was passed into law on April 30, 2003 with the release of guidelines for the implementation of the provisions on June 7, 2004. However, the inability of Federal Government to implement the act gives foreigners the leeway to invade the country’s waterways to carry out all sorts of illegal shipping activities, which have in turn impoverished Nigerian ship owners.
Vessels owned by indigenous ship operators are considered substandard with poorly trained crew. This provides the ready-made excuse for the oil majors to ignore indigenous operators. In the past when the cargo allocation and reservation principle worked well, a lot of indigenous operators could charter vessels to carry petroleum cargo, but now, most of them simply serve as agents or representatives to foreign shipping companies in Nigeria.
The foreign shipping lines carry petroleum products while the indigenous shippers beg to be given the crumbs. Indigenous operators account for less than 10 percent of the total domestic crude cargo moved through the nation’s coastline of more than 2,000 km, dotted with eight ports.
The discrimination has placed the indigenous shippers at a massive disadvantage to every other flag in the world. Although the indigenous shippers are being over-taken by the better capitalized foreign shipping companies, the contention is that the cabotage laws reserve the haulage of crude oil within the nation’s territorial waterways to indigenous operators.
According to the act, foreign vessels are not allowed to partake in any domestic coastal trade as obtainable in other developed countries of the world, while it will at the same time, promote the development of indigenous tonnage and establish a Cabotage Vessel Financing Fund (CVFF) and for related matters.
The law stipulates that Nigerians should carry goods, passengers by vessel, or any other mode of transport, from one place to the other, either directly or via a place outside the country. It further stipulates that only vessels wholly owned, manned, built and registered by Nigerian citizens, shall be engaged in the domestic coastal carriage of cargo and passengers within the coastal territorial inland waters or any point within the waters of the exclusive economic zone of Nigeria; except a foreign vessel is given waiver by the Minister of Transport to carry out such job.
But seven years after the law was enacted, none of the provisions of the Law has been fully implemented by the supervising agency. Rather, waivers have been granted to foreign shipping companies to do jobs which Nigerians could do.
Temisan Omatseye, director general of Nimasa, who spoke at the signing ceremony noted that there cannot be an effective implementation of cabotage in the country without collaboration between Nimasa and Isan.
Omatseye, assured Isan members that their interest will be well represented by Nimasa, and disclosed that the agency is presently negotiating with a Malaysian finance group to help indigenous operators access long term loan through alternate source of funding.
Also speaking, Isaac Jolapomo, Isan chairman, commended the initiative and noted that the arrangement would curtail the excesses of foreign ship-owners.
However, Jolapomo called on Nigeria ship-owners to always work in conjunction with Nimasa for effective implementation of the cabotage act.