By Oluyinka Onigbinde
The coming on stream of the Nigerian Ports Economic Regulatory Agency (NPERA) may have ushered in a new era of stronger economic regulation at Nigerian ports, but maritime stakeholders have warned that the reform could trigger fresh regulatory ‘wars’ and leave shippers vulnerable if the boundaries between NPERA and existing government agencies are not clearly defined.
The stakeholders, while welcoming the transition from the Nigerian Shippers’ Council (NSC) to NPERA, warned that the success of the new agency would depend largely on how effectively the Federal Government draws a clear line between its economic regulatory responsibilities and the existing statutory mandates of agencies such as the Nigerian Ports Authority (NPA), Nigerian Maritime Administration and Safety Agency (NIMASA) and Nigeria Customs Service (NCS).
They also expressed concern that without proper coordination, the new regulatory structure could create a situation where port operators are subjected to multiple directives from different government agencies, potentially defeating the objective of simplifying the business environment and reducing the cost of doing business at Nigerian ports.
Speaking with our correspondent, the President of the Shippers’ Association of Lagos, Nicodemus Odollo, said the possibility of overlapping functions under the new regime could not be dismissed, stressing that several government agencies had already been regulating different aspects of port operations before the emergence of NPERA.
According to him, the creation of a new statutory authority inevitably raises questions about what becomes of responsibilities that had previously been exercised by existing institutions.
“Before this Port Economic Regulatory Agency Act was signed, there have been other agencies or establishments that have been one way or the other regulating some aspects of port operations,” Odollo said.
“So now, in formation of a new authority and a new law, what happens to those who have been controlling or regulating some aspects of the port operations before? Definitely, there must be overlapping of authorities.”
He called on the Federal Government and the affected agencies to urgently review their respective mandates and establish a coordinated framework that would prevent institutional rivalry, duplication of functions and confusion among port users.
Odollo, however, stressed that the potential for regulatory friction should not overshadow what he described as the importance of having a dedicated institution responsible for economic regulation of the port industry.
He said the Nigerian port system had for years required a strong regulatory authority capable of setting clear rules for commercial activities and ensuring that stakeholders complied with established standards.
“To me, it’s a good thing to happen. It’s good that we have an agency to regulate do’s and don’ts in the maritime. This is very, very important,” he said.
But while welcoming NPERA as an impartial regulator, Odollo expressed concern about what he described as the changing institutional protection available to shippers, following the repeal of the law establishing the Nigerian Shippers’ Council.
He said the former Council had provided a platform through which the interests of shippers were represented, but that NPERA would now have to regulate the entire port value chain without being perceived as favouring any particular group.
According to him, the distinction between protecting shippers and regulating the industry could become an important issue under the new arrangement.
“NPERA is more or less like a referee in the maritime industry. A referee that wants to see that all the port users, the stakeholders are doing what they are supposed to do and that everyone must work by the law and the rules,” he said.
Odollo explained that a regulator acting as a neutral referee would necessarily have to treat all parties equally, raising questions about the specific mechanism through which shippers would continue to have their interests protected when confronted by more powerful players within the port value chain.
“The umbrella protecting the shippers has been taken away,” he said.
He consequently urged shippers across the country to strengthen their associations and develop stronger mechanisms for protecting their collective interests under the new regulatory structure.
“So, it affects us as shippers. We need to be protected,” Odollo pointed out.
Also speaking, a former National Secretary of the Association of Nigerian Licensed Customs Agents (ANLCA), Otunba Babatunde Mukaila, described NPERA as a welcome development, particularly because of the stronger enforcement powers that now accompany the economic regulatory mandate.
Mukaila argued that the previous regulatory arrangement had been weakened by limitations in enforcement, leaving several commercial disputes between port users and service providers unresolved or inadequately addressed.
“The new NPERA Act is a welcome development,” he said.
He identified demurrage, lost containers and delays in returning empty containers as some of the persistent issues that have imposed substantial financial burdens on importers, exporters and freight forwarders.
According to him, the new agency now has the statutory backing required to intervene more decisively in such matters and hold service providers accountable where necessary.
Mukaila was particularly critical of what he described as the imbalance in the relationship between shipping lines and their customers, arguing that the absence of effective enforcement had, over the years, allowed shipping companies to exercise excessive influence in commercial disputes.
“Right now, we have a judge, while the shipping line has been a judge and a jury up to now,” he said.
He urged freight forwarders and other port users to take advantage of NPERA’s dispute-resolution and enforcement mechanisms once the agency fully settles into its regulatory responsibilities.
“This is the port regulator we’ve been waiting for. And right now, everybody is excited that at least we have somewhere to go to,” he said.
However, Mukaila warned that the effectiveness of NPERA would be determined by its willingness to confront some of the commercial practices that have continued to increase the cost of cargo clearance and logistics at Nigerian ports.
He identified demurrage and other container-related charges as immediate areas that should attract the attention of the regulator, particularly where port users incur additional costs because of circumstances outside their control.
He said port users could be made to continue paying charges even where cargo evacuation or empty-container return was frustrated by port congestion, equipment breakdown, traffic restrictions or other operational challenges.
“A downtime in the port, you pay them more. A breakdown, you pay them more. There is a traffic lockdown, you cannot return your empty container, you keep on paying them more,” he said.
He urged NPERA to embark on extensive stakeholder consultations before introducing new regulatory measures, arguing that the experiences of operators and users would be critical to understanding the practical challenges within the port system.
“They should do more of engaging stakeholders, so that we can tell them where the rain starts beating us,” he said.
Meanwhile, Mr Adebayo Emmanuel; an importer and business man, raised another dimension of the challenge confronting the new regulator, warning that NPERA would have to carefully exercise its powers without encroaching on the statutory responsibilities of existing maritime institutions.
Emmanuel said the emergence of NPERA had created the need for a clear definition of regulatory boundaries, particularly because the Nigerian Ports Authority, NIMASA, Customs and other agencies would continue to perform functions directly connected to activities taking place within and around the ports.
He noted that the NPA, for instance, retains responsibilities relating to port infrastructure and its landlord functions, while NIMASA and Customs have statutory responsibilities covering maritime administration, safety, security, shipping and customs operations.
According to him, the challenge would arise where economic regulation intersects with these existing mandates.
He identified tariffs and charges, licensing, port concessions, service standards, commercial disputes, digitalisation, cargo clearance and the regulation of port-related services as some of the areas where the boundaries could potentially become blurred.
“The issue becomes particularly important because NPERA is expected to exercise economic oversight over commercial activities within the port environment, while other agencies will continue to exercise operational, technical, security and fiscal responsibilities,” Emmanuel said.
He therefore called on the Federal Government to establish clear lines of authority and develop effective inter-agency mechanisms to ensure that port operators are not subjected to conflicting directives from multiple regulators.
According to him, regulatory certainty is critical to the competitiveness of Nigerian ports, because investors and operators need to know exactly which institution has the final responsibility over particular aspects of their operations.
He also expressed concern about the relationship between NPERA’s economic regulatory responsibilities and the activities of terminal operators, shipping lines and other concessionaires, particularly in areas involving tariffs, charges and service standards.
Emmanuel said the government must ensure that the new regulatory framework does not inadvertently create another layer of bureaucracy capable of slowing down port operations.
He noted that although the government had presented NPERA as a mechanism for improving transparency, accountability and certainty in the port system, the real test would be in its implementation and interaction with existing institutions.
According to him, the new agency must be sufficiently independent to enforce its rules while also maintaining effective communication with other agencies whose statutory responsibilities intersect with its economic mandate.
