“Fresh Moves To Establish National Transport Commission Will Fail”
Even though he has relinquished his chairmanship of the famous Port Industry Anti Corruption Standing Committee, Mr Val Usifoh is still very actively engaged. Tracking him down for this encounter took almost two months. He is still the chairman, Shipping Association of Nigeria and also a very prominent member of the shipping community. He is one of the relentless voices of against the controversial Cargo Tracking Note. He spoke about this and other industry-centred issues.
The controversial Cargo Tracking Note has, obviously, sharply divided members of the shipping community, is there any need for that division?
That is not entirely correct. It has not sharply divided members of the shipping community; it has drawn some concerns from importers, agents and the Organised Private Sector. The shipping community, as you know, is made up of public and private interests. Shipping lines and agents in general have very simple functions. We have been told that from the 11th of January to ensure that all shipments coming into Nigeria carry CTN number on the bill of laden and the manifest and that is what we have been doing, they have not involved all the other details, there are also some misconceptions which some people are trying to sell to the public who are now even much wiser, and that is to the effect that the CTN charge is already embedded in the freight, this is entirely not true.
I have seen a bill of lading which carries a CTN number and I was told that the fee was collected by a shipping line
It is not the shipping lines. The agent for NPA on CTN has agents in most of all the load ports of the world. These are the people who deal directly with the shippers. You go with your shipment papers to their office and once you have confirmed that the cargo is being shipped on board, you pay the fee, they will allocate a CTN number to you which you will take to the shipping company to include in the manifest and the bill of lading, which is the process. All that the shipping company that carries the goods is interested in is that the shipper along with his other shipping documents presents the CTN number which they transfer into the bill of lading and the manifest.
Was there anything called CTN in any disguise before now?
As far as freight in Nigeria is concerned, the answer is No, it is not true at all, what has happened is that the members of the committee that was investigating these things stumbled on the bill of lading of some Nigeria- bound cargoes that came in through neighbouring countries where CTN is in use and it was then tagged that it is not new and that shipping companies have been collecting.
Do you think CTN is necessary at all?
Well, for the latest reasons given, CTN is useful. People sometimes like to say because America is doing this, then we must also do it. No, we should not do something because other people are doing it. We should do it because it adds value to the trade, but since government in their wisdom has done a thorough job of investigating it and now says – for security reasons, you must comply, then they also have to prove that it is for security reasons, like some elements are putting ISPS Code as the reason and so on, how has it made our port safer? It has not. Above all these, there are other issues also which people are querying, but we will leave that for now.
Looking at CTN as a concept, is it different in totality from normal documentation process?
For as long as you and I know, international shipping trade has been going on between Nigeria and the rest of the world and Customs in the port have the responsibility to enforce government regulation (and NIMASA of late) has all the documentations that are connected. After the 9/11 incident, the issue of security came in and then we had set up industry standards and procedures that are being complied with. In other words, the Customs, the ministry of finance and Central Bank of Nigeria over time have tried to improve the regulations and documentations of international trade particularly through the port. Customs have been fully trained to do everything regarding import and exports but overtime people have been saying that there are inadequacies and inefficiencies here and there. We had pre-shipment inspectors; now we have destination inspection, risk assessment and so on which is currently going on. So if you are saying that all these measures are not enough and then you are introducing the CTN to improve on it, cargo tracking is good, but I am surprised at what government is telling us that for all these past years until January 11 this year we have not been correctly tracking our cargo, that will be funny indeed. But the issue of saying that for security or other reasons, you need something to supplement what the regulatory agencies have already put in place; fine, but provided that it does not add any cost to the cargo
Then how did the issue of money come in?
That is the interesting aspect because we were told when the memo went to the Federal Executive Council for approval that it will be on the basis of no cost to the cargo. But in the process of implementing now, there is a cost to the cargo and the problem has been where do you position this cost? And people started finding excuses but eventually as the OPS have been telling you now the cargo owner eventually pays and that is where we are.
There are arguments that normally it should be Shippers Council that should collect the CTN
Well, in other West African countries, shippers’ council play a key role in the CTN and our shippers’ council has actually done a lot of preliminary work in the past but when we went for the Senate public hearing, we found out that it was the ministry that asked the agencies to look at it and advice it and from what we were told, it was only NPA that made a response. So they were asked to carry it out, but the ministry failed to coordinate the agencies involved because at that hearing, NIMASA made its own case, Nigerian Shippers Council made its own case and NPA also made its own case. So, if they had done this home work at ministry level even before submitting the final document to the Federal Executive Council it would have been clear that everybody is aware and so they will warehouse the project. That was the ministry’s mistake and we have to admit it. The ministry made a mistake of not actually taking the three agencies involved together, synthesizing their views and deciding about it.
Are you saying that Shipper’s Council did not get any proposal and NPA got one?
At the senate hearing, the shipper’s council CEO categorically said that they did not receive any letter, (that is an internal issue of the ministry of transport) but as I said they should have done a more thorough job and if it turns out that there will be some conflict or disagreement about who should collect the money, then they should have set up an independent committee comprising of the ministry and these three agencies to execute the CTN and by so doing most of these things that we are saying now would have been avoided.
If Ghana and Benin Republic have CTN, why should Nigeria be different?
I have not said that Nigeria should not have CTN.
But you have canvassed that it was not…..
What I am saying is that nobody has proved to us the value that it adds to the trade. If everybody is convinced that we need it, then why not? We should not be quoting these smaller countries; the bulk of the trade to the sub-region comes to Nigeria and these neighbouring countries will want part of Nigeria’s trade to pass through them. Benin Republic expanded its maritime capacity anticipating a flow through Nigerian cargo. If they do all these things to be able to track cargoes that come to them and earn extra revenue, then fine. Government should find very cogent reason why people should pay and above all the cost of doing it should be such that it will make sense to those who will bear the burden.
How much will make sense?
I don’t know how much will make sense; we are asking these questions because consultation is being done post-decision. In the previous administrations (sorry to say), all the ministers that we have had both at the transport, finance, commerce ministries and so on when things like this comes, they come to the stakeholders to brainstorm. You have been part of it; and then government will be richer by the synthesis of ideas that come forth. But this time, a small group was asked to investigate it, they took a decision and went to the council, and in implementing it, you are now telling us what you have done. They are always changing the goal post in trying to justify why this thing should be and we are now robed it in, in terms of security and additional information on cargo that comes and that is not very convincing. As I have said before that if it is for security and if you see the signs that the money is going to improve our security at the sea ports because the bulk of the business comes through the sea port and even at the airports and land borders, no problem.
So, what is the official position of the Shipping Association of Nigeria on CTN?
If it is a government decision as we were told, the role of the shipping company is to ensure compliance by all ports of shipments; that every cargo coming into Nigeria by sea must carry a CTN document which is being complied with and that is our official position. Don’t forget there are other stakeholders too who have voiced objections and it is not unlikely that some of them have told their shippers to withhold compliance until the issue is resolved with the government, that is beyond the control of the carrier, the carrier is just to obey the law here and there and carry the goods, that’s all
Have there been any effects on shipping into Nigeria since CTN started?
No. Whatever is happening to shipment in Nigeria are the causes of oil trade and finance.
From your point of view, are there any illegal port charges from the point of cargo delivery to clearance?
Who determines the legality of these charges? These charges are not statutory charges. Nobody is fighting against the statutory ones and the charges that are being protested are the ones that have to do with commercial relationships between two parties. As far as I know, the legitimate party which is the owner of the cargo have not come out to say that the charges are too high and if they do so, they will go directly to the person charging and in a commercial relationship the rate is not universal, the big customers get a fair advantage; either in terms of storage or in freight rates, that is the way to look at it. The minister decided to set up the task force base on complains but the problem with what the minister has done is that it is the complainants that are part of the task force investigating the allegation, this is not proper. If I have a complain against you and I complained to somebody above, the person above should get neutral bodies including the regulatory agencies to look at it and then call the two parties to bring their accusations and defence, but not to make the complainant who has no direct stake to have an advantage, the freight forwarder has no direct stake in the commercial relationship between the shipper and the carrier. He is only an agent, but in our environment where trading is a way of life, you will find out that the trading interests are substantial and tend to drive the barometer of criticism and observations against whatever party.
Are you not worried that for four years of port concession, we still don’t have a regulatory agency and the minister had to step into this matter?
I am worried because we have anticipated the situations. All the international bodies that assisted in the port reform established that one of the basic commandments of going into these reforms is to have a legal framework for it which we still don’t have. Government, through the BPE, midwife these things and we also know that there have been some variances in the opinions between the agencies involved and the BPE on the one hand, the outcome of the exercise and the way it is being implemented. So these laws should have been in place before the reform took place or immediately after. And you also know that there have been so many versions of the port reform Act until the final version now which is a property of the national assembly, they have done public hearing and it has also gone through first and second reading and they are now fine-tuning just the final processes, that document contains a provision for a regulatory commission within the Port and Harbour bill 2009. We know in the past that BPE has tried to present a format of a National Transport Commission bill before the National Assembly, but it did not sail through for so many reasons. The transport sector is so huge that it is difficult to have one regulator. We have to commend the National Assembly because they have so factored these things into the Port Acts. Trying to do it independently now, knowing that there is something in the works, can not work. To me, it is likely to be an exercise in futility, because if this group finishes its work, it takes it to the National Assembly. We can not quarrel with them, but remember that whatever we do we still have to go through the process of legislation. Some of them were even part of the National Assembly committee that worked on port regulatory commission within the context of the Port and Harbour Bill.
What is your assessment of the four years of port reform?
The four years of port concession have been very helpful. I think we should posit it against where are we coming from? Rather than where is our final destination. The destination is still far ahead, knowing that for over 30 years, the ports have not enjoyed any measure of infrastructural or structural improvement. What we could be quarrelling about now is that the people who should be assessing the performance are the ones we should be talking to. They are the ones to give a free assessment but looking at it as operators, imagine what some of these ports would have been without the changes that we are seeing now. There are still a lot of things to be done, there are still bottlenecks here and there, but relating to where we were coming from, I think the returns are very profiting.
Do we need another agency to handle maritime security?
I don’t know the sort of very powerful vested interest that is pushing for it. Experts even at the public hearing have said there is no need for another layer of agency, that we already have enough security agencies, just empower them financially and legally, if they are not doing well, find out why they are not doing well and change their orientation or do a sort of combination that will make them work and in turn move the country ahead in terms of security. We were talking of militancy formerly in the Niger Delta, which has been solved as far as we know. The current problem is piracy and I don’t want us to accuse the former militants of being the pirates, piracy seem to be as a result of economic challenges of certain classes of society. It could also be an indication that there are certain things that need to make our maritime environment more secure that we are not doing which is giving these people room to thrive. There are so many government security agents already that can look over the security of our maritime domain and they are still there, but are they being well funded? We need to provide for the training of manpower, software, hardware and logistics that are required, and since we know that there are more than one or two agencies that are doing it now, how do they coordinate their activities so that the effect of whatever they are doing is felt. Getting another layer of security agency without repealing all the laws that empowers all the former ones is just another layer of legislation and bureaucracy. We don’t want to look like a Goliath that is over dressed, but we need a simple, strong, well trained and equipped maritime security outfit. The signal they are giving now is that those who are there are not doing their job correctly. If it is so then disband them; we are falling into the same problem. For instance, the number of agencies that should be in the ports, the list is so long that everybody will want to quote a regulation or a law that empowers them to be there. NESREA is now trying to come in and we know that every day people import used things which go through the system. So if we have many agents at the port and we don’t change the legal system, it will multiply the problems.
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