Apparently worried by the inability of the Cabotage Act to help their lot, Nigerian ship owners, have taken the pains to the National Assembly to prevail on the Nigerian National Petroleum Corporation (NNPC) to stop favouring foreign ships.
In a letter dated April 22, 2021, addressed to the Speaker of the House of Representatives; Mr Femi Gbajabiamila and signed by President of Ship Owners Association of Nigeria (SOAN); Dr. Mkgeorge Okon Onyung, the group pleaded with the law makers to investigate alleged breaches of relevant local content laws.
In the letter, SOAN alleged that the Nigerian National Petroleum Corporation (NNPC) is breaching the Nigerian local content Act, the Cabotage Act.
The group also accused NNPC of abuse of “Customs regulations to gain unfair advantage in the award of contracts to foreign vessel owners for coastal shipping of petroleum products in the downstream sector of Nigerian maritime industry”
It also informed the Speaker that the Senate had on December 11, 2019, deliberated on the same issue, after which its Committees on Local Content, Downstream Petroleum Sector and Legislative Compliance was mandated to carry out a holistic investigation into the allegations against the NNPC.
“It is on record that during the Senate investigative hearing of 8th December 2020, the NNPC GMD pledged publicly to support indigenous shipping development and tonnage capacity growth in line with the Nigerian Content (NOGICD) act, with a view to reversing the nearly 60-year trend of foreign vessels domination of our maritime industry”, SOAN noted.
The group however lamented that, rather than fulfil its promise, “the NNPC proceeded to award the Coastal and Bunkering Vessels Service contract to a foreign shipping company. Messrs UNIBROS (operating under the guise of various foreign shell companies) with 11 foreign flagged coastal tanker vessels, in total breach and impetuous disregard for Nigerian Content laws, the Coastal and Inland Shipping (Cabotage) act and the Presidential Executive Order No 5. to the exclusion of Nigerian Shipowners and operators and to the detriment of the Nigeria economy”
The SOAN further lamented in the letter to the House of Representatives that, even though Nigerian ship owners were willing to accept Naira denominated payment, NNPC gave the contract to a foreign ship owner and is paying in Dollar.
“The Ship Owners Association of Nigeria (SOAN) hereby registers our protest in this show of bad faith and unpatriotic attitude displayed by NNPC, despite the fact that Nigerian Shipowners and operators have demonstrable capacity to operate this contract exclusively, and have expressed willingness to accept freight payments in Naira, whereas NNPC is presently paving UNIGROS in US Dollars further draining our extremely scarce foreign exchange resources”, it said.
“Take note Sir, at this contract award will result in amplification of capital flight, valued in excess of $100M annually to the detriment of our economy in addition to the fact that no Customs import duty has been paid for any of the 11 vessels in question again in breach of our Nation’s fiscal and monetary policies”, SOAN added.
The group lamented that, “Nigerian owned and flagged vessels are made to pay full customs duty and appropriate taxes on earnings which foreign shipping companies have continually evaded illegally”. It alleged that, “UNIBROS and/or any other foreign shell company does not pay any tax to FIRS”.
It added that, “in the area of Capacity Building, no Seafarer training or local content strategic plan is in place in line with the NOGCID laws. Neither UNIBROS nor any foreign shipowner or shipping company is made to comply with one of the major pre-qualification requirements for consideration in the Coastal and Bunkering Vessels Service tender process being the submission and approval by NCDMB of Nigerian Content plan that demonstrates full utilization of Nigerian labour and services with detailed description of role, work scope and man-hours in order to achieve minimum target as set out in the requirement of the MOGICD Act 2010”.
According to SOAN, Nigerian ship owners have the capacity to execute the same contract that has been awarded to the foreign ship owner.
“We are delighted to inform you that our members are standing by with Medium Range (MR), Long Range (LR), and Handy-size tanker vessels to meet NNPC’s coastal and import shipping requirements within short notice, subject to Bankable contract terms and payment conditions”, he assured.
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