Shipping Charges: Again, NSC, Service Providers At Loggerheads
Council Moves To Stop Alleged Violation Of Court Order
IN SPITE of the landmark judgment of a Federal High Court sitting in Ikoyi, Lagos, on December 17, 2014, which upheld the appointment of the Nigerian Shippers’ Council (NSC) as ports economic regulator and granted it the go ahead to reposition the nation’s maritime sector, especially as it affects arbitrary port charges, orderliness is yet to return to the sector. This is because shipping service providers — terminal operators and shipping companies — have continued to collect the same charges that the court stopped them from collecting.
The court had dismissed a case filed by the shipping service providers — the Seaports Terminal Operators Association of Nigeria (STOAN) and the Association of Shipping Lines Agency (ALSA) — against the NSC over some reforms embarked upon by the NSC as ports economic regulator. The suit, filed on October 31, 2014, was as a result of a publication by the Council, announcing the reversal of storage fees at the ports to what obtained as at May 1, 2009.
The NSC had, after carrying out a study in the neighbouring ports of Cotonou, Ghana, Gambia and Cameroun, also ordered an increase in the free storage period at the ports from three to seven days. The Council equally directed shipping companies to reduce their shipping line agency fees from N26, 500 to N23, 850 per 20 ft container and from N48, 000 to N40, 000 per 40ft container. It also directed shipping agencies to refund container deposits to importers and agents within 10 working days after the return of empty containers. It also increased Container Demurrage-free days to 10 days.
Although stakeholders had seen the policy decisions as well thought out, the service providers considered felt they were unconstitutional and headed to the court, where it prayed for an order to quash them.
The counsel to the plaintiff, Mr. Chidi Ilogu, had argued that the first defendant assumed unlimited power to impose charges, noting that “no power had been conferred on the council by the President before November 10, 2014, and there is no amendment to the NSC Act as at today to make laws in the maritime industry.
“Section 5, Sub-Section 7 does not say the NSC should make law. Regulation 2, Sub-Sections 2 allowed international best practices,” Ilogu said.
He further argued that there was a mixture of facts, saying that the issues raised by the defendant were not in line with the 2001 Memorandum of Understanding.
He, therefore, urged the court to strike out the case of the defendants and grant its prayers.
But counsel to the NSC, Mr. Emeka Akabogu, had argued that the plaintiff had deliberately removed the crucial facts, which was the foundation of the claim.
Akabogu maintained that the plaintiff had not disclosed the facts, adding that on the basis of this, the court was not in any position to take cognisance of the issues.
“The Federal Government, having the approval of President Goodluck Jonathan, and the letter from the Federal Ministry of Transport directed the Shippers’ Council to exercise the power of Economic Regulator since Feb. 20, 2014,” he said.
After listening to the issues canvassed by both parties, the court dismissed the case filed by members of STOAN and ALSA against the NSC. Dismissing the suit, Justice Ibrahim Buba said: “It is easier for the camel to pass through the eye of the needle than for this court to uphold the prayers of the plaintiff.”
However, findings have shown that the shipping service providers have allegedly continued to collect the charges in defiance of the court ruling, arguing that it had applied to the court for a stay of execution. The development has again put the sector on the spotlight with concerned stakeholders wondering why the shipping serve providers have chosen to ‘violate’ the law.
But the NSC is unrelenting in its quest to reposition the ports in line with global best practices and to the economic benefit of the country. In a swift reaction to the alleged illegality being perpetrated by the shipping service providers, the Council has adopted measures to bring them to book. According to a source, who does not want his name in print, “the Council has asked its Shippers’ Complaint Unit to compile evidence of the illegal charges being collected by the shipping companies and terminal operators. The idea is that when the time comes, the affected shipping companies and terminal operators will be forced to refund the money involved. It has directed all importers and associations, including freight forwarders to also compile evidence of all illegal charges being collected by the terminal operators and shipping companies against the order of the court.”
Deputy Director, Public Relations, NSC, Mr. Ignatius Nweke, confirmed the intervention of the regulatory agency, noting that the management of the Council wants to ensure that its decision as upheld by the court was carried out. Nweke said the Council would continue to protect the interest of the Nigerian shippers by making the operating environment conducive for business.
Nweke warned that the nation and the economy would not be allowed to suffer through the action of any group. He stated that the management team led by Barrister Hassan Bello was determined to introduce efficiency and cost effectiveness in ports operation.
“As a lawyer, Bello is determined to ensure that the cost of doing business in the ports is reduced in line with neighbouring ports. The Council had carried out a study of ports operation in neighbouring ports of Ghana, Cotonou, Cameroun and Cote d’ Ivoire as a guide in some of the decisions it has taken. The Council is waiting for the resumption of the courts in Nigeria whose workers have been on industrial action before bringing the matter against the terminal operators and shipping companies,” he added.
The Guardian also gathered that stakeholders in the sector like the Nigerian Shippers’ Association (NISA) and the National Association of Government Approved Freight Forwarders (NAGAFF) have also directed their members to compile all the illegal charges allegedly being collected by the shipping service providers for necessary action.
Other stakeholders like importers and customs brokers have also criticised the terminal operators and shipping companies over their alleged acts of illegality. They lamented the arbitrary collection of the charges by STOAN and ALSA, noting that the situation has been made worse by the industrial action embarked upon by the judicial workers.
President of Nigerian Shippers’ Association, Rev. Jonathan Nicol, said his members were bitter about the action of the shipping service providers, adding that they should not be allowed to continue to break the law.
Nicol confirmed that his members have been advised to compile the illegal charges being collected from them by the affected shipping companies and terminal operators for necessary action at the right time. He argued that since the shipping companies and terminal operators reportedly applied to the court for ‘stay of execution of the order’ after the judgment, they ought to have waited until their application is granted.
According to him, the court has not sat to consider their prayers in view of the ongoing industrial action embarked upon by judicial workers. He described the action of the shipping service providers as “a deliberate violation of the court order.”
President of the National Association of Government Approved Freight Forwarders (NAGAFF), Dr. Eugene Nweke, who described the action of the service providers as “flagrant abuse of the law”, said that such should not be allowed to happen in Nigeria.
Nweke, who said that the terminal operators and shipping companies should be called to order, disclosed that the Intelligence Unit of his association would ask every member to put the charges together for necessary action at the right time.
“The shipping companies and terminal operators should not act above the law. Such thing should not be allowed to happen in this country. The port industry is very fragile and we all want a healthy process,” he said.
President of the National Council of Managing Directors’ of Customs Agents (NCMDCA), Mr. Lucky Amiwero, who also reacted to the development, said the service providers have no legal right to go against the order of the Federal High Court.
Amiwero called on the Shippers’ Council to take immediate action by setting up a committee that would see to the enforcement of the court order, adding that except an urgent action was taken, the service providers would continue to perpetrate the illegality. He further argued that the order of the court should be obeyed until there was another order vacating the earlier one. According to him, the action of the shipping service providers was what has been killing the shipping industry and the country’s economy.
President of the Nigerian Licensed Customs Agents (ANLCA), Prince Olayiwola Shittu also expressed disappointment over the development. He stressed that the order subsists until the Appeal Court grants a contrary order.
Commenting on the matter, a Maritime lawyer, Mr. Emmanuel Ofomata described the action of the terminal operators and shipping companies as an “impunity of the highest order”.
Ofomata said such behaviour by the service providers cannot be tolerated in advanced countries, adding that government should move fast in enforcing the order of the court.
He described the action as having great consequences on the shipping industry and so should be condemned by all and sundry.
Also, rights activist and maritime lawyer, Mr. Olisa Agbakoba (SAN), had recently vowed that the terminal operators and shipping companies would be forced to return about N1trillion which is the estimated amount collected illegally from importers at the ports.