Reducing government’s stake in port operations – the options

By Sulaimon Salau   |   06 August 2017   |   4:36 am  


Private participation in business enterprises is considered the lifeline of industries across the world, but the reverse seems to be the case in the country.

This untoward development, experts sayis traced to poor consideration for labour laws and imperfect implementation strategies, which in some cases leaves the privatised firms in worse conditions than they were before being privatised.
  
The privatisation of the defunct Nigerian Telecommunication Company Limited (NITEL), Power Holding Company of Nigeria (PHCN), and even the ports concession exercise, which reduced the workforce of the Nigerian Ports Authority (NPA) from 14, 000 to 3, 000, 11 years ago, all still reverberate with sad tales till date.

  
For the NPA workers, testy times are not yet over as the Nigerian Ports and Harbours Authority (NPHA) Bill, currently before the National Assembly, meant to repeal the Nigerian Ports Authority Act, Cap 126 LFN 2004, has raised the level of anxiety among port workers several notches higher.

Consequently, Maritime workers have raised the alarm, alleging that the bill as presently drafted, does not protect their interests, in other words, it is silent on employees’ fate on transition from NPA to the new entity.

Not long ago, the workers in a warning strike, shutdown the country’s ports for six hours in order to establish their grouse, and also warn against the dangers of ceding harbour operations to private entities.

They equally threatened to resort to more serious industrial actions, if the National Assembly fails to yield to their demands by addressing their grievances.
 
The Journey So Far
The Nigerian Ports and Harbours Authority Bill, which summarily seeks to repeal the NPA Act, is expected to create a leeway for the privatisation of ports’ harbour services, and to reduce government’s stake in ports operations, but maritime labour unions insists its intent and purposes have grave consequences to the security of the nation, job security, among others.
  
The Senate has specifically expressed hopes that if the new arrangement pans out well, it is capable of getting the country out of the current economic downturn, hence the importance both arms of the National Assembly accord it.
  
The bill, which was first read on the floor of the Senate on Thursday, May 26, 2016, and presented for a second reading on Thursday, September 29, 2016, is expected to provide an institutional framework for the ownership, management, operation, development and control of ports and harbours, and ensure the integrity, efficiency and safety of the ports, based on accountability, competition, fairness and transparency, and also encourage greater private sector participation in the maritime industry, through investment in infrastructures.
  
According to its promoters, the bill, which is sponsored by Senator Ossai Nicholas Ossai, also seeks to promote and safeguard the country’s competitiveness in trade objectives towards maximal profitability and stability; transform the maritime sector and promote both internal and international trade, and create adequate enabling environment for private sector operation.
 
Additionally, it is also expected to engender increased seaport capacity and productivity; reduce congestion at ship-to-shore interface; reduce city congestion; lower environmental impact; improve asset utilisation for port, road and railway transport providers, improve transport productivity; inter modal capacity, and lower transport costs.

Furthermore, the bill, which has been referred to the Senate Committee on Marine Transport for further legislative action, is also expected to be a major driver for the economic recapitalisation, especially with the quest to transmute from a mono-sectoral economy to a multi-sectoral one.

Maritime Workers Cry Out
The Maritime Workers Union of Nigeria (MWUN), and the maritime branch of Senior Staff Association of Communications, Transportation and Corporations (SSACTAC), (an affiliate of the Nigeria Labour Congress) are of the belief that the bill would not favour their members, who are in the service of the NPA.
 
Insisting that the bill will expose their members to job insecurity in the final analysis, the fuming unionists regretted that they were not invited to make any input into it by the National Assembly during debate on it.
 
It was in reaction to this that the peeved maritime workers recently downed tools for six hours to express their grievances. Expectedly, that warning strike led to the collapse of ports operations nationwide, and the loss of billions of naira by the Federal Government.
  
The protest, which took place simultaneously across all seaports in the country, also held at the Headquarters of the NPA in Marina, Lagos State.
 
President General of MWUN, Comrade Adewale Adeyanju, in his explanation said maritime workers embarked on the protest to kick against it since they were not carried along in the bill, which has passed first and second reading.
  
Adeyanju noted that if the bill is passed into law in its current form, it would lead to massive job loss among members of the union, as Item Six of the Second Schedule states that not all staff of the NPA would be absorbed into the proposed Nigerian Ports and Harbours Authority.
  
He alleged that the purpose of the bill is to strip workers of their commonwealth, through further concession of harbour operations in the guise of amending the NPA Act.
  
“In other words, the bill would send a large number of Nigerian Ports Authority staff into the labour market, including dockworkers, ship workers and seamen. When debate on the bill commenced, we were not called upon, as we would have dialogued with the government. So, that is why we are fighting for the rights of the workers.
 
“What we have done is just a warning; it is an awareness creation exercise for us to tell the world that we were not carried along in this discussion. If the government wants to do the needful, it should call us to a roundtable to discuss the matter,” he said.
  
The union leader, who also noted that the bill does not make provision for who will pay off workers that would be sacked once the port is sold off, urged the lawmakers to allow the bill die naturally because it also posts a security risk to the nation at large.
  
Adeyanju said: “Remember the recent discovery of a container at the Tin Can Island Port with 440 cartons of arms and ammunition. This is one of the reasons that we are sending a very strong signal to the authorities that this bill must not the see the light of day.
  
“Experience has taught us a lesson, when the ports were concessioned 11 years ago, we were told that nobody would lose his/her job. The NPA before concession had 14, 000 workers, but after the exercise, the workforce was reduced to 3,000. So, if this happens again, the NPA would go into extinction because there is not going to be a collector agent to the Nigerian Ports and Harbours Authority, who would regulate and supervise them and the security of the nation’s seaports,” he said.
 
President of SSACTAC, Benson Adegbeyeni, alleged that lawmakers were being cruel to Nigerian workers, who voted them into power as the bill failed to take care of NPA workers, who have all their lives worked for the government.

Describing the port concession of 2006 as a failure, Adegbeyeni maintained that same promises were made prior to the concessioning exercise, but they have remained unfulfilled till date.

“The lawmakers we voted are trying to shortchange Nigerians of their future. During the 2006 concession exercise, the government was not sincere with the promises it made and many workers were thrown into the labour market. This bill does not make provision for those who have spent all their lives working for the NPA.
  
“We have seen similar situations in NITEL, which was also privatised, but today where is NITEL? The same thing happened to NEPA, same thing happened to NPA. The NPA of 10 years ago compared with that of today is an eyesore. Government promised us that with concession in, the port would work better, but the reverse is the case today, and even access roads to the Lagos ports are in a terrible state,” he said.
 
In Port Harcourt, Rivers State, the protesting workers during the strike blocked roads leading to the two seaports – Onne Port and Rivers Port Complex wielding placards, some of which read: This bill will put our nation in danger, Harbour is not for sale, Promoters of Nigerian Ports and Harbours Authority Bill 2015 are out to milk the economy dry. Stop them now!’
  
Tunde Agboola, a member of SSACTAC maintains that: “The bill obviously is not in the interest of Nigerians because millions of maritime workers will lose their jobs if the seaports are privatised. This will affect the economy because not just the NPA workers will lose their jobs, dockworkers, seafarers and ship workers will all do.”
 
Meanwhile, the Nigerian Labour Congress (NLC) has thrown its weight behind MWUN, in the struggle against the bill.

Its national president, Ayuba Waba, noted that the bill if passed into law would be a repetition of the ports concession exercise, which he claimed has failed so far, then it should not pass.
   
He argued that the concession of harbours function of NPA to private hands, apart from its attendant negative effects on the economy, also portends grave national security risk and tantamount to loss of national pride.
 
He said already, the NLC has taken over the fight and has scheduled a meeting with promoters of the bill. He however, vowed that if the lawmakers fail to kill the bill, workers all over the country would stage a protest to the National Assembly.

Experts’ Verdict
The Chairman of the Association of Nigerian Licensed Customs Agents (ANLCA), Prince Olayiwola Shittu, thinks the bill should be considered in the interest of the larger society.
 
According to him, “The same complaints were made by maritime workers during the concession, at the end of the day, we did not see the effect. So, the Nigeria Ports and Harbour Authority Bill should be considered in the interest of the larger society, and not in the interest of influential individuals,” he said.
 
Legal practitioner with Maritime & Commercial Law Partners, Chief Osuala Emmanuel Nwagbara, who opined that the bill would also lead to job losses in the sector said: “We have to balance this with the benefits that the ports development programme will also bring. Port users complain of high cost of port services, inefficient port services, disorderly port environment, unpredictable government policies etc. My honest assessment is that port concessioning, if anything, has shown that when properly harnessed and managed would bring prosperity to this country. Yes, I think it is needful to further invite the private sector to participate in port operations in Nigeria. But we have to take a critical look at the concession agreement. We also have to look at how many employments it would create and how many opportunities would further be created in the industry. All of these we have to balance to really appreciate why we should accept the concession.”
 
Proffering the way forward, he urged all parties concerned to work together and look at the issues again from a passionate point of view in order to arrive at an acceptable position.
  
President, National Council of Managing Directors on Customs Licensed Customs Agent (NCMDLCA), Lucky Amiwero, on his part said since the ports were concessioned in 2006, all the things that workers are canvassing for now, ought to have been canvassed for 11 years ago.

He said the ports have been going through operational concession, but the legal concession is what the government is trying to put in place now, so that they can get things done properly.

Despite the position of by maritime workers, some stakeholders still believe that a lot still need to be done to encourage greater private sector participation in the maritime industry, through investment in infrastructures, transformation of the sector, promotion of internal and international trade, and the creation of adequate enabling environment for private sector operation.

This is all-important in the light of the revelation earlier in the week that no fewer than two million containers laden with various cargoes worth over N5 trillion are currently stranded at the Lagos Port Complex, due to the inability of importers to evacuate them.

As many of the cargoes continue to incur demurrage after enjoying three rent-free days from the day of discharge, the containers continue to accumulate due to the blockade of ports’ access roads for repairs.

This situation, according to experts, portends grave danger for the country’s economy, as it will trigger inflation and further discourage importers from choosing the country as the port of destination since trucks can no longer go in and out of the various terminals inside the port, without huge efforts at traffic control.

A clearing agent, Alade Omolaja said: “This is the first time in 11 years that congestion is happening and vessel queue is forming at the ports.”

The situation, he insists has invalidated Executive Order on Port Decongestion and government’s initiative on Ease of Doing Business in Nigeria.

However, a recent report by leading professional services firm, Deloitte Nigeria, tends to disagree with maritime workers that the concession done 11 years ago brought about job losses in the sector. In fact, it is of the opinion that one million jobs have been created directly and indirectly in the ports since after the exercise.

Giving an evaluation of the Nigeria ports concession agreement, it said, an evaluation or benchmark of the Nigeria port concession agreement with the standards contained in a report by World Conference on Transport Research Society (WCTRS), revealed that the Nigerian port concession agreement conforms to over 80 per cent of the identified elements and risks. The Nigerian concession agreement is in alignment with the standard concession elements, but partially aligned when considering the risks aspects of the agreement, which are categorised into commercial risk; exchange rate risk; policy risk; and tariffs.

  



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