STOAN applauds liberalisation of terminals

It Will Create Employment Opportunities

Following the recent policy review by the Federal Government in the maritime sector, which guarantees the right of importers to choose terminals or ports of their choice for discharge of their cargo, major operators in Nigeria’s oil and gas logistics business under the aegis of the SeaPort Terminals Operators of Nigeria (STOAN), has projected that the policy would make the sector number one foreign currency revenue earner in Nigeria.

The presidential approval, which was contained in a letter dated May 5, 2017, and signed by the Managing Director, Nigerian Ports Authority (NPA), Ms. Hadiza Bala Usman, brought to an end the dominance of oil and gas logistics services by Integrated Logistics Services Limited (Intels) over the years.

In a release issued by the leadership of STOAN, the body stated that liberalisation of the business environment would lead to creation of over 200,000 new jobs for teeming Nigerians and also help reduce high rate of unemployment in the country.

The reversal of Intels’ dominance of the sector is seen as a big relief to the over 170 operators, whose businesses had been forced to close shop owing to the diversion of oil and gas cargoes to Intels’ terminals on the grounds that they were designated as an oil and gas terminal.

“Industry players, particularly in Onne Port, Warri and Calabar, were left with almost nothing as a result of the monopoly. Some of the investors went out of business directly (due to diversion of their ships and cargo to Intels), while others indirectly pulled out, as a result of high prices by Intels. Meanwhile, the total control on the business exercised by Intels was given tacit support by government agencies saddled with the responsibility of regulating port operations, as most cargoes in that sector were directed to its terminals for discharge.”

STOAN had tabled their complaints at several fora over the years, detailing how Nigeria recorded over USD 10 billion in lost investment during the 20 years of monopoly.

“Other losses brought upon the sector as a result of the dominance of Intels, according to the body, include N3 billion that the Nigerian Ports Authority (NPA) paid Intels as compensation for their facilities in Onne and Lagos, as well as USD 10 billion in excess charges that International Oil Companies (IOCs) paid Intels for using the facilities that NPA had paid for,” the statement read.

With the advent of the current leadership of the NPA with Ms. Hadiza Bala Usman, as Managing Director, the regulatory body promised to act on their petition.

Last September, Usman established a policy reform committee, whose recommendations were approved last month by the president. The Presidential document, ‘Conveyance of Presidential Approval – Re: Report on Concessioned Terminals in the Ports’, reads in part: “Following a review of the Federal Government of Nigeria’s (FGN) policy directive over the years in respect of the concessions and applicable legal regime by the Office of the Honourable Attorney General of the Federation and Minister for Justice, touching upon reform initiatives and implementation as a veritable mechanism for the development of the maritime industry, investments made to date, general global practice in designation of terminals, right of importers to choose terminals or ports for discharge of their cargoes, streamlining of shipping and other fees, His Excellency, the President of the Federal Republic of Nigeria, has conveyed approval on 21st April, 2017 to the Honourable Minister of Transportation on the final position in the following terms:

“FGN remains guided by the general global practice in the designation of Terminal/Ports operations into three broad categorisation of bulk cargo, container cargo and multipurpose cargo. Accordingly, the FGN rejects the categorisation of oil and gas multi-purpose cargo terminal, as this is alien to the relevant concession agreements and inconsistent with global shipping practices.

“The non-designation of the Onne Oil and Gas Free Zone as an ‘Oil and Gas Multi-purpose Cargo Terminal’ does not in any way legally obstruct or compromise the operations of the Free Zone as an Oil and Gas Free Zone, but rather, it merely indicates that all cargo including oil and gas can be discharged at the terminal.

“FGN reaffirms past presidential directives that all importers are free to choose any terminal or port for the discharge of their cargoes, subject to the presence of all requisite regulatory agencies at such ports as required by extant regulations and in line with its policy of promoting competition and value for money. Consequently, any policy that designates certain ports by cargo type is cancelled.

“The Nigerian Ports Authority and the Bureau of Public Enterprises (BPE) are to streamline the payment of shipping and other fees at various terminals in a manner that ensures such fees are based on cargo type rather than on the basis of designation of terminals, to ensure that there is no loss of revenue due to FGN based on terminals that importers choose to bring cargoes into the country.”