The nation’s maritime regulator, the Nigerian Maritime Administration and Safety Agency (NIMASA), threatens to sanction all foreign petroleum vessels that do not comply with the nation’s Cabotage law from operating marine services in Nigeria.
The threat follows the agency’s concern that majority of the vessels providing marine services to international oil and gas companies (IOCs) in their upstream and downstream operations are neither registered with the agency nor compliant with the requirements of the Cabotage Act.
The Cabotage law
The Coastal and Inland Shipping (Cabotage) Act became effective from May 1, 2004; primarily to stimulate the development of indigenous capacity in the Nigerian Maritime Industry.
The Act seeks to reserve domestic coastal trade (cabotage trade) within Nigerian coastal and inland waters to vessels built and registered in Nigeria, wholly owned and wholly manned by Nigerian citizens.
Contravening the law
Temisan Omatseye, the Director General of the agency, said in a statement on Friday, “All vessels currently engaged in Cabotage trade in Nigeria but are not duly registered in the Special Register for Cabotage vessels are in the main, contravening Section 22 of the Caboatge Act and are, therefore, liable on conviction to the sanctions stipulated in Section 35 of the Act, including ultimately, forfeiture of the vessel.
“Owners of such vessels are hereby strongly advised to take immediate steps to comply fully with all relevant provisions of the Act as the Agency shall henceforth commerce full enforcement of its powers under the Act.”
He, therefore, challenged the international oil companies to “immediately review their marine service contracting process in a manner that ensures that only fully compliant Cabotage vessels are contracted to provide marine services.”
Mr. Omatseye also directed all vessels already in the service of the oil companies but not duly registered as required by the Act, to immediately do so within a reasonable time frame from now.
The NIMASA boss specifically noted that by the requirement of the Act, all Floating Production and Storage Offshore vessels (FPSOs), drilling rigs and mobile production platforms operating in the Nigerian waters, are all required to be registered with NIMASA by virtue of section 44 of the NIMASA Act.
“All IOCs operating FPSOs, rigs and platforms that are not registered, are doing so in contravention of the extant law of the land,” he said.
Mr. Omatseye further outlined key new areas for achieving increased maritime industry value, including a scheme for accelerated acquisition of cabotage service trading assets, provision of critical maritime infrastructure to domesticate asset maintenance services, and mass production of human capital to meet manning demand and other technical skills.
IOCs keep quiet
But the oil companies, which dominate marine operations in the upstream petroleum sector, are quiet about the NIMASA boss’ accusations.
Adeyemi Fakayejo, spokesperson for ExxonMobil, dismissed Mr. Omatseye’s claims. “That’s a generalised statement and I am sorry I can’t respond to it,” he told NEXT in a telephone interview. “If it concerns us, I’ll respond, if he mentioned our name then I’ll be compelled to respond.”
Other – Shell, Chevron, Total, and Eni – are also keeping a tight-lip on the issue. They did not respond to NEXT’s request to hear their side of the story.
But responding, Levi Ajuonuma, the Group General Manager, Group Public Affairs of the Nigerian National Petroleum Corporation (NNPC), the principal partner in the joint venture oil operations, said, “Cabotage is done to encourage ships owned or that carry the Nigerian flag.
So anybody who is using ships, or doing business that Nigerians can do with their own ships, the law frowns at that. Whatever allegations they (NIMASA) are making, we need to investigate it.”
A Powerless law
However, critics say the NIMASA lacks the capacity to fully implement the provisions of the Act, which further exposes the frailty of the law.
Six years after being signed into law (2003), the Act has failed to achieve its cardinal objective of promoting increased local shipping entrepreneurship, creation of jobs, and the provision of infrastructure at the nation’s ports.
Alluding to a recent failed attempt by the Indigenous Ship Owners Association of Nigeria, to seek redress against a foreign shipping company, MBX of Vincent and Granades, owners of MT Makhambet, accused of transporting petroleum products within the nation’s inland water ways, contrary to provisions of the Act, critics argue that the Cabotage Act’s implementation apparatus needs to be overhauled.