Challenges Confronting Ports Economic Regulation

Francis Ugwoke

As the ports economic regulator, the Nigerian Shippers Council (NSC) remains an umpire of the ports system. Its major task is ensuring fairness in charges as well as   efficiency in service provision. Observers believe that this is not an easy task considering the operating environment. Yet, expectations are high that the regulator brings its force to bear on this and also ensures  good equipment profile that will improve on efficiency in cargo handling operations. 

The biggest problem in the nation’s ports is the overwhelming power of service providers   in which case they are able to influence decisions and actions against them by agencies of government. This explains the illegal charges that have over the years lingered in the ports with all the efforts to check the service providers. The NSC is most times hindered by lack of strong provisions of the law to tackle these service providers.  Industry stakeholders believe that what is needed is more powers for the port economic regulator to penalize service providers that  breach  the regulations. Perhaps it was in realizing this  that the  Council  is calling for a review of its enabling Act  by the National Assembly (NASS). Executive Secretary of the NSC,  Hon. Emmanuel Jime  while recently pointing  out  these constraints against his  agency also identified  the issue of inadequate funding to carry out some  statutory obligations. With new role under the Port Standing Task Team (PSTT) to check corruption and ensure efficiency, the NSC according to Jime does   not have enough funding capacity to carry out some of these critical  national assignments.  Stakeholders  agree that this cannot be far from the truth as  the National Port Process Manual (NPPM)  carries with it a lot of logistics obligations to implement.  Jime  said the two percent being received from the   seven per cent Port Development Levy  is  not enough.  To industry stakeholders, the complaint by the NSC in terms of poor funding and lack of adequate power of enforcement  is true and should be addressed by the National Assembly. This should also receive the attention   of the Transport Minister, Eng.  Muazu Sambo, whose political will is needed for the Bill to sail through in the Presidency.

The NSC   has a case at hand on shipping charges. Both NSC and shipping service providers have remained in court for over seven years.  The case has progressively been in favour of the Council in both the High Court and Appeal Court. The matter is currently in the Supreme Court. But there are underground moves to settle out of court.  This is being handled by the Office of the Attorney General of the Federation.  The judgment   in the High Court was that the service providers should pay hundreds of billions of Naira to the shippers. This is being challenged by the shipping service providers.  It was gathered that what is being negotiated is how much each of the service providers should pay based on what the Court had ordered in its judgement. 

 Also of serious concern to the NSC as the ports economic regulator  is the status of the  National Transport Commission (NTC)  Bill which was initially denied assent by  President Muhammadu Buhari. Expectations are that Sambo pursues this matter to a logical conclusion   for the Bill to be passed and given assent before Buhari leaves office. The NTC is coming with a lot of benefits that will lead to transformation in the transport sector. If given assent by this administration, it will also be a credit to Sambo as part of his achievements.  Sources close to the National Assembly said the NSC CEO has been making frantic moves to ensure that the NTC Bill is passed before May 29 considering its importance to national transport development. It would be recalled that the former Minister of State for Transport, Senator Gbemisola Saraki, had earlier given strong indication that all hope is not lost on the passage of the NTC into law. Saraki had told newsmen in June that the Transport Ministry was working towards the passage of the Bill into law. She disclosed that the President could not give assent to the bill earlier due to technical issues that are being addressed.
But she described the technical issues as minor which have been taken care of, dismissing earlier speculations that the bill was dead and buried.
According to her, the bill will be passed in the next few months.
She had said, ” Perhaps you don’t know that my humble self worked on that bill at the National Assembly, it was not signed but it has made its way back to the National Assembly to be tidied up and it will be done   within the next few months.

“Every sector has to have it’s policy given direction, to define where the industry is headed and I think National Transport Commission   is a given.”

Industry stakeholders are of the view that the present Minister should step up his efforts in the National Assembly and the Presidency to ensure that  the Bill  is passed. This has remained the prayer of not just Jime who inherited the  Bill from the former Executive Secretary, Dr. Hassan Bello, but also the entire staff of the NSC, and indeed industry stakeholders. An industry analyst, Mr  Martins  Uba Nwamadi  believes that the passage of NTC remains imperative because of the  immense benefits to the industry. According to Nwamadi, “it  will provide mechanism for monitoring, compliance of government agencies and transport operators in the regulated transport industry with relevant legislation and advise government on matters relating to economic regulation.

“Other objectives are that it should also project the rights and interest of service operators and users while creating an enabling environment for private sector participation in the provision of services in the transport sector.

“Furthermore, it should also facilitate effective competition, promote competitive market, conduct and ensure that the misuse of monopoly or non transitory market power is prevented in the provision of transport services, amongst others.”

Besides, industry stakeholders believe that with the current scenario in which the NSC is suffering lack of adequate power of enforcement, NTC will come to fill the gap. Although the NSC has entered into Memorandum of Understanding with the Federal Competition and Consumer Protection Commission (FCCPC) on the issue of certain enforcement, this may not be enough as its independence is weakened by the arrangement.  

Few weeks ago, the   Shippers Association Lagos State   cried out over increasing costs of doing business at Nigerian ports as a result of illegalities being perpetrated by shipping service providers. The President, Evangelist Leo Ogamba, said shippers were being compelled to pay for the inefficiencies and inadequacies of shipping service providers. Worried about this development, he made an appeal to the NSC to,  “lobby for establishment of a maritime Court where cases of under-hand practices by providers of services will be prosecuted without delay.” In other words, the absence of NTC is impacting negatively on the industry, and it does not matter the arrangement between the NSC and FCCPC.  Earlier, another industry operator and National President of National Council of Managing Directors of Customs Agents (NCMDCA), Mr Lucky Amiwero, had noted  the difficulty in controlling  service providers  because of their connection with  those in government.  Most of the service providers have  former Heads of State or retired generals as Board Chairmen.  These people can stop any penalty against them just by placing a phone call. This is where a regulator  vested with strong powers like NTC comes in.  The Nigerian Communication Commission (NCC)  in the communications industry has been able to check the service providers in that sector  because of strong  constitutional provisions backing its actions.  A source said this is what the NSC whose Executive Secretary, Jime,   a lawyer,  seeks.  Apart from the NSC,   industry stakeholders  urge   the Transport Minister, Sambo,  and  members of relevant Maritime Committees of the National Assembly to go extra-mile to ensure the passage of the NTC bill before May 29, 2023.

Ugwoke is the Publisher, Shipping Day Online/Magazine