THE NIGERIAN MARITIME ADMINISTRATION AND SAFETY

AGENCY (NIMASA)

THIS PAPER IS WRITTEN BY:

OTEBOLA OLUWASEGUN SOLOMON.

(LLB. BL. ACIS)

TABLE OF CONTENT

Page

ABSTRACT 3

1. INTRODUCTION 4

2. THE NATIONAL MARITIME AUTHORITY 4

3. THE MERGIN OF NMA AND GIS 8

4. THE MERGIN OF NMA AND JOMALIC 9

5. POWERS AND FUNCTIONS OF NIMASA 10

6. CABOTAGE IMPLEMENTATION 12

7. CABOTAGE VESSEL FINANCING FUND 23

8. NIMASA AND NSDP 25

9. NIMASA AND MARITIME SAFETY AND SECURITY 26

10. ENFORCEMENT OF MARITIME SAFETY AND

SECURITY CODES 28

11. CONCLUSION 29

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ABSTRACT

This paper explores the Creation of the Nigerian Maritime Administration and
Safety Agency and the purpose of the creation of the Agency. The extent of the
power and the success of the Agency so far. The paper will also look at the failure
of the Agency and the believed cause of same, proposing a way forward.

The paper will do the above mentioned task through the enabling act, which is
Nigerian Maritime Administration and Safety Agency Act 2007, and every other
relevant instruments such as the Merchant shipping Act and The Coastal and
Inland Shipping (Cabotage) Act 2003

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 1. INTRODUCTION
NIMASA is the foremost maritime regulatory agency in Nigeria1. It was established on 1st
August 2006, arising from the merger of the National Maritime Authority (NMA), Government
Inspector of Shipping (GIS) and the Joint Maritime Labour Industrial Council (JOMALIC), with
additional functions, and by a new Act which became effective from 25th day of May 2007 2.
By virtue of sections 2, 19 to 26 and 32 of Nigerian Maritime Labour Act, 20033, JOMALIC
was statutorily created to among other things register, keep and maintain the register of each
dock worker, seafarer, stevedoring company and seafarer employer, jetty and terminal operator,
regulate conditions of service and activities of dockworkers and seafarers for smooth operations
at the ports and off board vessel, enforce existing regulations and standards on crewing wages,
safety, welfare, training of dockworkers and seafarers at ports and on board vessels, act as a
medium of dispute resolution in the maritime industry and conduct a census of dockworkers and
seafarers in the pool every three years.

2. THE NATIONAL MARITIME AUTHORITY

The National Maritime Authority was established by the National Shipping Policy Act 4 (NSPA),
which commenced on 30th April 1987, and which in its sections 3 and 4 set out the aims and
objectives and functions of NMA thus:

3. Aims and objects of the Authority.

It shall be the objective of the Authority to-

(a) correct any imbalance in the Nigerian shipping trade for the purpose of
implementing the provisions of the UNCTAD Code of conduct for Liner
Conference, especially to observe the ration of 40: 40: 20 in respect of
carriage of goods to Nigeria ports;

1
Other maritime regulatory agency in Nigeria includes NPA, NSC, NIWA
2
Nigerian Maritime Administration and Safety Agency Act 2007
3
Nigerian Maritime Labour Act, 2003 (Act No. 10 of 2003).
4
National Shipping Policy Act (No. 10 of 1987) (Chapter 279).

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 (b) improve Nigeria’s balance of payments position by enhancing the earning
and conservation of foreign exchange from the shipping industry;

(c) use the national shipping policy as instrument of promoting the export
trade of Nigeria and this accelerate the rate of growth of the national
economy;

(d) ensure the greater participation of indigenous shipping lines in liner

conferences thereby influencing the decision making processes of such
liner conferences serving Nigerian international sea-borne trade;

(e) promote the acquisition of shipping technology by creating and

diversifying employment opportunities in the shipping industry, through
the stimulation and protection of indigenous shipping companies;

(f) assist in the economic integration of the West African sub-region;

(g) offer protection to Nigerian vessels flying the nation’s flag on the high seas
and world seaports;

(h) increase the participation by indigenous Nigerian shipping lines in ocean

shipping through the application of the provisions of the UNCTAD Code
on General Cargo and by entering into bilateral agreements, or other
suitable arrangements;

(i) encourage the increase of ownership of ships and the achievement of

indigenous skills in maritime transport technology;

(j) achieve a systematic control of the mechanics of sea transportation; and

(k) promote the training of Nigerians in maritime transport technology and

as seafarers.

4. Functions of the Authority.

The functions of the Authority shall be-

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 (a) to co-ordinate the implementation of the national policy on shipping as
may be formulated from time to time by the Federal Government;

(b) to ensure that Nigerian national carriers exercise fully, Nigeria’s carrying
rights of at least forty per cent of the freight in revenue and volume of the
total trade to and from Nigeria;

(c) to grant national carrier status to indigenous shipping lines;

(d) to monitor the activities of vessels of the companies granted national

carrier status;

(e) to grant assistance to indigenous companies for fleet expansion and ship
ownership;

(f) regulate liner conferences and national carriers; and

(g) to perform such other functions as may be required to achieve the aims
and objects of this Act or any national shipping policy as may be
formulated by the Federal Government pursuant to this Act.

5. Special functions of the Authority.

(1) The Authority shall investigate, determine and keep current records of-

(a) ocean services, routes and lines from Nigeria ports to foreign markets as
may be determined by the Minister to be essential for the promotion,
development, expansion in maintenance of the foreign commerce of
Nigeria;

(b) bulk cargo carrying services for the purposes of promotion, development,
expansion and maintenance of the foreign commerce of Nigeria, the
national defence and other national requirements provided by Nigeria flag
vessel whether or not operating on a particular ocean service, route or line;

(c) the type, size, speed, method of propulsion and other requirements of
vessels which should be employed-

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 (i) in such services or on such routes or lines and the frequency and
regularityof the sailings of such vessels, with a view to furnishing
adequate, regular, certain and permanent services, or

(ii) to provide the bulk cargo carrying services necessary for he promotion,
maintenance and expansion of foreign commerce of the Federal Republic of
Nigeria and its national defence or other national requirements whether or
not such vessel operate on a particular service, route or line;

(d) the relative cost of construction of comparable vessels in Nigeria and in

foreign countries;

(e) the relative cost of managing the commercial aspects of the shipping
industry such as scheduling, chartering in or chartering out of vessels,
allotment of cargo space cargo pricing and cargo soliciting, marine
insurance, maintenance, repairs, wages and subsistence of officers and
crew, and all other items of expense, in the operation of comparable
vessels under the laws, rules and regulations of Nigeria and under those
foreign countries whose vessels are substantially competitors of any such
Nigerian vessels;

(f) the extent and character of aid and subsidies granted by foreign
governments to their merchants marine;

(g) the number, location and efficiency of shipyards existing on the date of the
promulgation of this Act or thereafter built in Nigeria;

(h) new designs, methods of construction and types of equipment for vessels;

(i) the possibilities of promoting the carrying of the foreign trade of Nigeria
in Nigeria vessels; and

(j) inland water transportation including their relation to the transportation by

land and air.

(2) The Authority shall for the purposes of subsection 1(a) of this section
consider and give due weight to-

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 (a) the cost of maintaining the ocean lines;

(b) the probability that the ocean lines cannot be maintained except at a heavy
loss disproportionate to the benefit accruing to foreign trade;

(c) the numbers of sailings and the types of vessels that should be employed
in the ocean lines;

(d) the benefit the maintenance of the ocean line may afford to the foreign
trade of Nigeria; and

(e) any other facts or conditions which the Authority may from time to time
determining as necessary.

NMA was in charge of other regulations, including safety and pollution.

3. THE MERGING OF NMA AND GIS

Pursuant to section 395 of the Merchant Shipping Act5 (“MSA”) and Merchant Shipping
(Delegation of Powers) Notice which commenced on 27th September 1967, the Minister of
Transport delegated to the GIS the performance of certain functions conferred on him by the
provisions of the MSA. Some of the salient delegated functions (but which do not allow the
delegation to the GIS of any power to make regulations or orders for the purposes of MSA) are,
granting certificates of competency, designating times and places of and regulating all
examinations and qualifications of seafarers, keeping a register of all persons serving in Nigerian
ships, receiving and approving plans and specifications and ordering detention of ships without
approved plans and specifications, granting permits for ships to clear from Nigeria, issuing
certificates of surveys, safety equipment and radio and issuing notices of cancellation of
certificates. Other relevant ministerial functions delegated to the GIS include detaining and
releasing un-seaworthy ships, detaining unsafe foreign ships and ships without evidence of
ownership, recognising ship “builders”, granting new certificates of registry, approving
provisional certificates of registry for ships which in a foreign country become Nigerian ships
and giving necessary statutory consents. In 2003, the office of the GIS was merged with NMA
and a new department in NMA called Maritime Safety and Seafarer Standards Department, was
created. By that means, NMA took over and was performing those functions conferred on the
5
The Merchant Shipping Act cap. 224, LFN, 1990

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Honourable Minister of Transport by the MSA that were delegated by the Honourable Minister
of Transport to the GIS.

4. THE MERGING OF NMA AND JOMALIC

By virtue of sections 6, 7, 14, 123, 408(c),(d),(e),(f), (h),(l) and (p) of MSA, (ministerial powers in
respect of which had been delegated to NMA), and Merchant Shipping (Safe Manning, Hours of
Work and Watchkeeping) Regulations S.I. 11 of 2001 and Merchant Shipping (Training and
Certification of Seafarers) Regulations S.I. 12 of 2001, NMA became statutorily empowered to
issue certificates of competency and qualifications to persons who have been trained and who
qualify as seamen and officers of ships in line with the STCW 1978/95 after conducting
examinations for them. NMA also consequently keeps a register of all such persons who serve in
Nigerian ships (except where the vessels are solely employed in the navigation of the inland
waters of Nigeria).
The neeed to merge NMA and JOMALIC became imminent when it was discovered that there
were overlapping functions between NMA and JOMALIC concerning the issuance of certificates
of competency and qualifications, examinations, the registration of seafarers serving in Nigerian
ships and enforcement of the Cabotage Act6, which are bound to bring about struggles for
recognition, supremacy, control and friction in the implementation of those overlapping
functions by the two Agencies, for intance by virtue of sections 2, 19 to 26 and 32 of Nigerian
Maritime Labour Act, 2003 (under which JOMALIC was set up), JOMALIC is statutorily
empowered to among other things register, keep and maintain the register of each dock worker,
seafarer, stevedoring company and seafarer employer, jetty and terminal operator, regulate
conditions of service and activities of dockworkers and seafarers for smooth operations at the
ports and off board vessel, enforce existing regulations and standards on crewing wages, safety,
welfare, training of dockworkers and seafarers at ports and on board vessels, act as a medium of
dispute resolution in the maritime industry and conduct a census of dockworkers and seafarers in
the pool every three years.

6
Coastaland and Inland Shipping (Cabotage) Act2003 (No 5 0f 2003)

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 5. POWERS AND FUNCTIONS OF NIMASA

The Nigerian Maritime Administration and Safety Agency (NIMASA) is the apex regulatory and
promotional maritime agency of Nigeria, the Agency was established primarily for the
administration of Maritime Safety, Seafarers Standards and the obligation of regulating the
Maritime industry in Nigeria, NIMASA derives its power from the Nigerian Maritime
Administration and Safety Agency Act 2007, The Merchant Shipping Act 2007, and Coastal and
Inland Shipping Act 2003, other function of the Agency are Security, Maritime Labour, Shipping,
Promotion of Commercial Shipping and Cabotag the functions and the powes of the the agency
are spelt out in section 22 and 23 of the Act thus:

The functions and duties of the Agency. shall- be to :

(a) pursue the development of shipping and regulate matters relating

to merchant shipping and seafarers ;

( b) administering the registration and licensing of ships ; .

(c). regulate. and administer the certification of seafarers;

(d) established maritime training and safety standards;

(e) regulate the safety of shipping as regards the construction of ships

and Navigation

(f) provide search and rescue service;

(g) provide directions and ensure compliance with vessel security

measures;

(h) carry out air and coastal surveillance;

(i) control and prevent marine pollution;

(j) provide direction on qualification, certification, employment and

welfare of maritime labour;

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(k) develop and implement policies and programmes which will
facilitate the growth of local capacity in ownership, manning and
construction of ships and other maritime infrastructure;

(I) enforce and administer the provisions of the Cabotage Act 2003 ;

(m) perform port and flag state duties;

(n) receive and remove wrecks;

(0) provide National Maritime Search and Rescue Service;

(P) provide Maritime Security; and

(q) establish the procedure for the implementation of conventions of

the International Maritime Organisation and the International
Maritime LabourmOrganisation and other international conventions
to which the Federal Republic of Nigeria is a party on Maritime
Safety and Security, Maritime Labour, Commercial Shipping and for
the implementation codes, resolutions and circulars arising
therefrom.

(2). Without limiting the generality of the foregoing, the Agency

shall :

(a) inspect ships for the purposes of maritime safety, maritime

security, maritime labour and prevention of maritime pollution;

(b) make enquiries as to shipwrecks or other casualties affecting

ships, or as to charges of incompetence or misconduct on the part of
seafarers in relation to such casualties;

(c) administer policy for the development of shipping in general;

(d) provide on request services to the maritime industry on a

commercial basis;

(e) establish and manage maritime institutions for the training of

officers of the Agency;

(f) generally to perform any other duty for ensuring maritime safety
and security or do all matters incidental thereto;

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(g) provide consultancy and management services relating to any of
the matters referred to in this subsection; and

(H) perform any other prescribed functions relating to or incidental to

any of the matters referred to in this subsection.

(3) The Agency may provide its services both within and outside
Nigeria.

(4) Subject to the provisions of this Act, the functions to provide

services may be performed at the discretion of the Agency.

6. CABOTAGE IMPLEMENTATION

According to Black law dictionary7, it means “the transport of goods or passengers from one
port or place to another in same country” The word “cabotage” originates from the French
word “caboter”8. It means coasting-trade or navigating and trading along the coast between the
ports thereof, a coastwise transportation takes place when cargo or persons are loaded onto a
vessel at one location and unloaded at another location. The coastwise laws encompass both
locations, regardless of the origin or ultimate destination of the persons or merchandise. Thus,
cabotage regimes are laws regulating the transportation of persons and merchandise from one
point to another along the coastal waters of a nation. The (Cabotage) Act, also known as
Coastal and inland shipping Act 2003 defines “coastal trade or cabotage” to mean:

(a) The carriage of goods by vessels, or by vessel and any other mode of
transportation from one place in Nigeria or above Nigeria waters to any other
place in Nigeria or above Nigeria waters, either directly or via a place outside
Nigeria and includes the carriage of goods in relation to the exploration,
exploitation or transportation of the mineral or non-living natural resources of
Nigeria whether in or under Nigerian waters;
(b) The carriage of passengers by vessel from any place in Nigeria situated on a lake
of river to the same place, or to any other place in Nigeria, either directly or via a
place outside Nigeria to the same place without any call at any port outside
7
Black’s Law 7th Edition
8
Ibidem

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 Nigeria or to any other place in Nigeria, other than as an in-transit or emergency
call, either directly or via a place outside Nigeria;
(c) The carriage of passengers by vessel, from any place in Nigeria to any place above
or under Nigerian waters to any place in Nigeria, or from any place above Nigeria
waters to the same place or to any other place above or under Nigerian waters
where the carriage of the passengers is in relation to the exploration, exploitation
or transportation of the mineral or non-living natural resources in or under
Nigerian waters; and
(d) The engaging, by vessel, in any other marine transportation activity of a
commercial nature in Nigerian waters and, the carriage of any goods or
substances whether or not of commercial value within the waters of Nigeria;

The Nigerian Cabotage Act 2003 was fashioned after the US Merchant Marine Act of 1920,
otherwise known as Jones Act. TheJones Act, which is the cornerstone of the United States
cabotage regulations, created a coastwise monopoly to protect and develop the American
merchant marine. The law require that any “vessel” that transported “merchandise” by water, or
a combination of land and water, between “coastwise” points in the United States, must be: (1)
built in the United States, (2) owned by U.S. citizens, (3) documented (“flagged) under
the laws of the United States and (4) crewed by United States citizens or immigrant
aliens.

The government came up with cabotage as an intervention through the Nigerian Maritime
Administration and Safety Agency (Formerlly NMA) in a bid to perfectly break the dominance
of the Nigerian maritime industry by foreigners and save the indigenous operators from the
already foreseen imminent extinction. Which is termed: “An Act to restrict the use of foreign
vessels in domestic coastal trade to promote the development of indigenous tonnage and
to establish a cabotage vessel financing fund; and for other related matters”9 the main
purport of the law was for entrenching the country’s tonnage capacity as well as shipbuilding and
for indigenous seafarers to achieve the technical know-how in ship management and ship
manning, believing that if these are achieved, foreign exchange will be conserved and earned for
the nation; the internal and economic security of Nigeria will be preserved and much more there
will be creation of employment in the maritime sector. To be eligible therefore for the coastal

9
see Coastaland Inland Shipping (Cabotage) Act2003 (No 5 0f 2003)

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trade a vessel must be wholly owned and wholly crewed by Nigeria citizen, it must also be
built and registered in Nigeria. Section 3-6 of the Act (Cabotage Act) put it thus:

3. A vessel other than a vessel wholly owned and manned by a Nigerian citizen, built and
registered in Nigeria shall not engage in domestic coastal carriage or cargo and
passengers within the Coastal, Territorial, Island or any point within the waters of the
Exclusive Economic Zone of Nigeria.

4. (1) A tug or vessel not wholly owned by a person who is a Nigerian Citizen shall not
tow any vessel from or to any port or point in Nigeria Waters, or tow any vessel carrying
any substance whatsoever whether of value or not or any dredge material whether or not
it has commercial value from a port or point within Nigerian Waters.

(2) Nothing in this Section shall preclude a foreign vessel from rendering assistance to
persons vessels or aircraft in danger or distress in Nigerian waters.

5. A vessel, tug or barge of whatever type other than a vessel, tug and barge whose
beneficial ownership resides wholly in a Nigeria citizen shall not engage in the carriage
or materials or supply services to and from oil rigs, platforms and installations or the
carriage of petroleum products between oil rigs, platforms and installations whether
offshore or onshore or within any port or points in Nigerian waters.

6. A vessel of whatever type or size shall not engage in domestic trading in the inland
waters of Nigeria except a vessel that is wholly owned by Nigerian citizens.

By virtue of this law, only vessels, tugs or barges whose beneficial ownership resides wholly with
Nigerian citizens may engage in coastal trade with regards to the carriage of materials or supply
of services to and from oil rigs, platforms and installations, or the carriage of petroleum products
between oil rigs, platforms and installations. The cabotage regulation covers any point within the
Nigerian waters and is out of bounds to foreign vessel participation; the Nigerian waters is
defined by the statute to include inland waters, territorial waters of the exclusive economic zone

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(respectively, together or any combination thereof) and the meaning given to them by the
National inland waterways Authority Decree 199710.

The Nigerian Maritime and Administration Safety Agency is the agency of government
saddled with the responsibility of managing and enforcement of the cabotage Act. The agency
which has as parts of her objective the duty to promote the development of indigenous
commercial shipping in international and coastal shipping trade is duty bound under section
22 ( NIMASA Act) To:

(a) pursue the development of shipping and regulate matters

relating to merchant shipping and seafarers;

(d) established maritime training and safety standards;

(e) Regulate the safety of shipping as regards the construction of

ships and navigation;

(k) develop and implement policies and programs which will

facilitate the growth Of local capacity in ownership, manning
and construction of ships and other maritime Infrastructure;

(I) enforce and administer the provisions of the Cabotage Act

2003

Section 23 States:

( 1) In addition to any other powers conferred on it by this or

any Act, the Agency has, subject to this Act, power to do all
things necessary for or incidental to or in connection with the
performance of its functions

2) Without limiting the generality of sub-section (I), the powers

include, subject to this Act, power:

10
National inland waterways Authority Act No 13 0f 1997 LFN

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(a) to enter into contracts;

(e) to enter partnerships; and

(j) to do anything incidental to any of the powers specified in

this subsection or otherwise conferred on the Agency.

(3) Where the Agency may provide a facility or service, or

discharge a function, the Agency may do so :

(a) itself;

(b) in cooperation with another person ; or

(c) by arranging for another person to do so on its behalf.

(4) In subsection (3) of this section "person" includes:

(a) the Federal Government of Nigeria ;

(b) a State Government or that of the Federal Capital Territory;

(c) the government or an Agency of the government of a foreign

country; and

(d) any juristic or natural person.

39.-( I) The Agency shall undertake measures to eliminate

unfair and uncompetitive practices by shipping companies.

(2) The Agency shall develop and implement policies and

measures to promote indigenous ownership of ships and
shipping infrastructure

By these provisions of NIMASA Act 2007 it is evident that Nigerian Maritime Administration
and Safety Agency (NIMASA) is the agency of government given the responsibility of enforcing

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and administering the Cabotage Act, which means if this law will ever work, NIMASA as the
enforcing Arm of government saddled with such responsibility must do her work diligently and
thoroughly, likewise, an enabling environment must be given to such arm whose responsibility is
to do this great task. we should note here that the Act(Cabotage) itself only made reference to
NIMASA in its Section 30 where it gave the Minister the power to Constitute an enforcement
unit within the National Maritime Authority and also to give them appropriate operational
guidelines, Meanwhile the NIMASA Act did not stop at given NIMASA the authority to enforce
and administer alone, the act also went ahead to empower NIMASA to do all that is necessary to
ensure that the objectives of the Coastal and Inland Shipping (Cabotage) Act are achieved.
The law empowered NIMASA to do all things necessary for or incidental to or in connection
with the performance of its functions; the agency can also enter into a contract or partnership to
carry it out. The agency is authorized by the law to perform any of its function, and in this
instance with relation to the Cabotage Act, either itself, in cooperation with another person or it
may even arrange for another person to do it in its behalf, and such persons may be a state
government or Federal Capital Territory, the government or an agency of the government of a
foreign country and it may even be a juristic or natural person.

The Cabotage Act was originally passed in 2003, but the scheme took off in the year 2004 after
the release of the guidelines by the Federal Ministry of Transport, now nearly 12 years after
becoming law, many Nigerian, especially stakeholders in the shipping industry still wonders
whether the law is still in existence because the impact of the Act has not been felt by the
Nigerian in that sector of the economy, this is because of the inability of the indigenous shipping
firms to fully engage in the coastal trade as envisaged by the proponents of the law and as
provided by the law itself. The law according to many of them has placed the indigenous
shipping companies in the position whereby they eat the crumbs or leftovers from the foreign
operators, they concluded the law has not only failed them but has also worked in enhancing the
participation of the foreigners in coastal trade and today foreigners dominate more than 80
percent of coastal trade.

According to Chief Isaac Jolapamo, a former Chairman of Indigenous Ship Owners Association
of Nigeria (ISAN) and Managing Director of Morlap Shipping Company “… in the time past
you will not find ships not working no matter how bad those ships were, you will not find
them not working for three, four, five, six months or one year.? Today we have such a
situation, and these are not vessels that are not classed, that don’t have insurance, don’t
have P and I and all the rest. But the singular something is that oh! This ship is a

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Nigerian flagged vessel, it is being managed by a Nigerian, and we don’t want it .11” This
statement captioned the plight of an average ship owner in Nigeria today and the concomitant
effect is the depletion of the vessel fleet of the indigenous ship owners coupled with its negative
impact on the nation’s economy which Experts put at a loss of approximately $100million
annually12. As mentioned earlier the rationale behind Cabotage Scheme is mainly for the economic
purpose and to promote the development of indigenous tonnage, infrastructure and labour,
meanwhile there had been criticism against the law in the past years, because many believed the
law is not at all performing its function as it ought to, but instead, the law is working against the
indigenous ship owners that it was meant to protect, for this many fault have been brought
forward by the critics one of which is the provision for waiver in sections 9-11 of the Act13.
Which provides thus:

9. The Minister may on the receipt of an application grant waiver to duly

registered vessel on the requirement for a vessel under this Act to be wholly
owned by Nigerian citizens where he is satisfied that there is no wholly Nigerian
owned vessel that is suitable and available to provide the services or perform the
activity described in the application.

10.The Minister may on the receipt of an application grant a waiver to a duly

registered vessel on the requirement for a vessel under this Act to be wholly
manned by Nigerian Citizens where he is satisfied that there is no qualified
Nigerian officer or crew for the position specified in the application .

11. (1) The Minister may on the receipt of an application grant a waiver to a duly
registered vessel on the requirement for a vessel under this Act to be built in
Nigeria where he is satisfied that no Nigerian shipbuilding Company has the
capacity to construct the particular type size of vessel specified in the
application.

They believe that the act has woefully failed due to the inclusion of the waiver clause in it; their
position sprang from the fact that since Cabotage scheme is aimed at preserving coastal trade on
Nigerian waters for the indigenous ship owners, there should not be any other loophole through

11
Sabotage by Cabotage: Daily Independent Posted on Friday, March 8th, 2013

12
Cabotage regime: Nigeria still loses $100m annually business news of 30th January 2012

13 Coastaland Inland Shipping (Cabotage) Act2003 (No 5 0f 2003)

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which foreigners should be allowed to participate in coastal trade or that if the foreign vessel will
ever participate, the right of first refusal should be given to the indigenous ship owners. Some
have even said that the provisions of the law is not understandable because , the four pillars of
ship being wholly manned and owned by Nigerian and especially being wholly built or
assembled14 in the country are not presently achievable, they are wondering why the law will be
enacted for what is not provided. Many have even suggested that the government should inject
more fund into this sector to resuscitate that part of the economy; these and many more were
the suggestions of the concerned Nigerians who are tired of stagnancy and the status quo in the
nation’s maritime sector. While we agree with the proponents of these submissions, we should
note that the waiver clause has its very cogent purpose in the Act, so calling for the removal of it
might not be ripe. The Nigerian Cabotage Act came into force when the Maritime sector of the
nation was fully dominated by the foreigners who not only feed on this sector parasitically but
also failed, refused or neglected to develop the sector, to curb this menace was then, very crucial;
the initiatives was taken by the legislature, who though knew fully well that the indigenous

operators do not have the tonnage capacity to take over immediately, with respect to

infrastructural facilities and the required manpower, to mention but few. The government,
understanding that if the journey of a thousand mile will ever start, a step must be taken; came
up with the law in order to gradually develop indigenous operators’ capacity so as to attain
national sufficiency in tonnage capacity, shipbuilding and seafarer; to acquire technical know-
how in ship management and ship manning and to eventually take over the trade by vessels
within the Nigeria waters. In response to the capital intensive nature of shipping industry the Act
established the Cabotage Vessel Financing Fund under Section 42-45 with the aim of promoting
the development of the indigenous ship acquisition capacity by providing financial assistance to
Nigerian operators in the domestic coastal shipping, stating under section 45 that the
beneficiaries of the fund shall be Nigerian citizens and shipping companies wholly owned by
Nigerian. From the foregoing it is therefore right to say that the law was made to facilitate the
easier transition into indigenous capacity in coastal shipping through proper
implementation of the scheme coupled with active administration and enforcement of the law by
the appropriate agency of government empowered to do same.

Now, the law came into force more than a decade ago, yet we cannot boast of any laudable
achievement in any of the areas covered by the law, then stakeholders begin to wonder whether
it would have been better the law does not exist at all than to exist and not feel its impact. At

14 See section 3-6 Cabotage Act

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present, Nigeria has virtually negligible shipbuilding capacity, as the little shipbuilding undertaken
by Nigerian companies is restricted to barges, houseboats and some few small sized crafts, how
many maritime institutions has been established? or do we ask, how many seafarers has been
trained in these past years?, as at today this country does not have any standard shipyard and
working shipyard, the few maritime institutions we have in the country can barely compete with
their counterparts in developed countries like Japan, China, Korea or Germany which we have
to compete with, these countries have invested heavily in maritime infrastructure not by mere
enactment of the law and waiting for what will happen next, but with strong will and
determination to grow their economy and dictate the pace in the maritime arena of the world,
ensure that these laws are implemented giving the needed backing to this sector of their
economy via their government policy.

History has shown that there are lots of benefits from Cabotage Scheme, and little wonder The
United States has, after many years of attack against it, refused to Scrap her Merchant Marine
Act otherwise known as The Jones Act of 192015; The Act which does not even have waiver
provision has received various criticism from within and outside the United States especially
after the Macondo oil spill disaster in 2010 16,but because of the rationale behind the law which
the country believes is more important. than anything standing against it, the Act still remain
intact till date, the rationale is not in any way different from ours and it is provided in the
“purpose and policy” section of Merchant Marine Act of 1920 thus: It is necessary for the
national defense and for the proper growth of its foreign and domestic commerce that
the United States shall have a merchant marine of the best equipped and most suitable
types of vessels sufficient to carry the greater portion of its commerce and serve as a
naval or military auxiliary in time of war or national emergency, ultimately to be owned
and operated privately by citizens of the United States; and it is declared to be the
policy of the United States to do whatever may be necessary to develop and encourage
the maintenance of such a merchant marine17.

Sequel to the above paragraphs, our intention as a country to harvest the aim behind the
Coastal and Inland Shipping (Cabotage) Act requires a very serious approach which goes
beyond merely enactment of the law.

15
Section 27 The Merchant Marine Act of 1920
16
Read more about the Macondo Oil spill at http://www.bp.com/en_us/bp-us/commitment-to-the-gulf-of-
mexico/deepwater-horizon-accident.html.
17
Ibid Merchant Marine Act 1920

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We have therefore spelt out some of the various challenges as well as ways of solving this
problems facing the cabotage scheme in the country based on what obtain in some other part of
the world where cabotage is also in existence as well as suggestions from other stakeholders
which the writer deemed appropriate and expedient for this purpose.
I. Implementation and Administration of the law rather than just enacting the
law- the enforcement aspect of any law is very vital to its existence as no law will be
regarded as such if there is no apparatus set up for the main purpose of Implementing
it, in the case of Cabotage Act 2003, the law is very clear on the agency of government
to carry out the enforcement and the administration, as stated earlier in this paper, the
NIMASA Act 2007 empowers Nigeria Maritime Administration and Safety Agency to
implement the Act and this will be with the full support of the Federal Ministry of
Transport. NIMASA is to develop and implement policies and programs which
will facilitate the growth Of local capacity in ownership, manning and
construction of ships and other maritime Infrastructure and to enforce and
administer the provisions of the Cabotage Act 2003, it goes further to empower18
NIMASA to perform any of its function, and in this instance with relation to the
Cabotage Act, either itself, in cooperation with another person or it may even arrange
for another person to do it in its behalf, and such persons may be a state government
or Federal Capital Territory, the government or an agency of the government of a
foreign country and it may even be a juristic or natural person. This will then take us to
the question of, what has the NIMASA done in the past years to carry out this duties?
Are there some measures put in place to really administer and enforce the Act as it
were? If there are, how is NIMASA sensitizing the stakeholders on some of their plans
accordingly? I think NIMASA has failed in the Area of enforcement of the law even
when there is a Law (NIMASA Act 2007) through which NIMASA can achieve a lot of
success, though looking through the Law, it is very conspicuous that the failure of the
Act was due to the ineptitude of NIMASA.

II. NIMASA being an agency of Government has suffered many setbacks in the time past
due to inconsistency and too much interference in her affairs by the political
officeholders in the country over the years and this brought about the concomitant
effect of failure of the Cabotage Act, in the word of Dr. Alex Okwuashi19 “over the

18
Section 22(k) NIMASA Act 2007
19
Dr Okwuashi is The Registrar of Certified Institute of Shipping Lagos

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 years, the Nigeria Maritime Administration has become a political toy, drain
pipe where government and political cronies flex power, hire and fire DGs and
Board members and the sort. The muscling, and over interference in NIMASA
by the system that created it is responsible for the failure of policies and
precisely why the maritime sector is still where it is. Leave NIMASA to run for 5
years uninterrupted and the nation’s shipping will grow”20. it is very interesting to
note that the Nigerian Maritime Administration and Safety Agency has had not less
than ten Director Generals in the past seventeen years of its existence and the
appointments in NIMASA in the past have been to the detriment of proper policy
formulation, growth and development of the shipping sector, obviously NIMASA has
become a means of siphoning money from the government covert by the political
office holder which is the reason for the undue over-politicisation of appointments
into its Board and Executive Management at the expense of professionals.

Sequel to the above we propose that the government through the Federal Ministry of
Transportation should allow this institution to run as it ought, with very minimal meddling with
the affairs of the agency;. We also submit that the agency should go all out to implement the Act
ensuring that the Act is fully implemented and administer and the followings are the suggestion
of this writer:
I. In the area of shipyards building and repair of ships, foreign company can be invited for
this purpose and such company when registered in the country becomes a Nigerian
Company, and of course there is no provision in the law that discourages a shipyard
registered in Nigeria but being owned by foreigners. We believe that many teeming
unemployed youth will be gainfully employed as jobs will be created through this and will
thereby bring about an economy growth.
II. In the area of manning of a vessel by seafarers who are Nigerian, we believe this can also
be achieved through many programs designed to build human capacity in this Area,
presently there are very few maritime institute in the country and many of our seafarer
are also ageing, NIMASA through the federal ministry of transport can encourage the
growth here by establishing more maritime colleges with adequate and up to date
facilities and to encourage Nigerians to take part in this, NIMASA can create a system of
scholarship whereby a student in such institution will go through the institution free of

20
Cabotage review: ‘Nigeria can’t do without waiver clause’ National Mirror April 12,2013

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 fees and to serve the country for a certain year after graduation and the money will be
deducted from such person’s salary for a particular period of time in order to pay back
the money into the government coffers for the purpose of continuing such system and
to benefit others, likewise an update courses should always be organized by NIMASA to
ensure that our seafarers and other stakeholders are up to date in their knowledge of
every development with regard to each person’s area of specialization.
III. On the issue of Waiver, it is our humble suggestion that the waiver clause is still relevant
in the Act as it is very obvious in the sector that Nigeria still lacks the capacity in the area
of human and infrastructure, and in order not to cause great problem in a bid to solve
smaller one, the clause should be left for the time being and we want to state here, that
Nigeria cannot be compared with the United States as The US already has what it takes
to do without the waiver clause, what is much more important is for NIMASA to ensure
the proper and careful implementation of the Act without fear of intimidation from any
quarters and to prosecute offenders accordingly.

7. Cabotage Vessel Financing Fund

Under the two Acts, (NIMASA Act 2007 and Cabotage Act 2003) 21 there is a provision as to
how the Scheme is to be funded, Section 17 of NIMASA Act made provision for what is termed
‘Maritime Fund’ which purpose the law says is only for the furtherance of the objectives and
function of NIMASA under the Act, the money accordingly may be used to promote the
development of indigenous shipping and shipping infrastructure and the beneficiaries shall be
Nigerian Citizens22.

Meanwhile, Section 42 of the Cabotage Act established the Cabotage Vessel Financing Fund23,
with the purpose of promoting and developing indigenous ship acquisition capacity by providing
assistance to the Nigerian operators in the domestic Coastal Shipping 24, the fund is to be
accumulated by dedicating 2 percent of the contract sum performed by any vessel engaged in
coastal trade and also through the National Assembly who shall also determine and approve a
particular sum from time to time to be saved for that purpose, monies generated under this Act

21
See section 17 NIMASA Act 2007 and section 42 Cabotage Act 2003
22
Section 17 (1)- (5) NIMASA Act 2007
23
Section 42 (1) Cabotage Act 2003
24
Section 42 (2) Cabotage Act 2003

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including the tariffs, fines and fees for licenses and waivers and such further sums accruable to
the fund by way of interests paid on and repayment of the principal sums of any loan granted
from the fund25. The fund is to be collected by the NMA (NIMASA) and deposited in
commercial banks and administered under guideline that shall be proposed by the minister and
approved by the National Assembly26, the beneficiaries of the fund shall according to the Act be
Nigerian citizens and shipping companies wholly owned by Nigerians27. It is very unfortunate
that several years after the Act has come into existence, a total of more than N40bn realized
under the CVFF is said to have been trapped in banks28. It is in line with its mandate that
NIMASA selected four commercial banks as Primary lending Institutions (PLIs) which are Sky
Bank Plc, Sterling Bank Plc, Diamond Bank Plc, and Fidelity Bank Plc and to make certain the
successful disbursement of the fund, the Federal Government, in 2010 signed an agreement with
the four PLIs, reports however shows that since the agreement, though modalities for the
collection of the Cabotage Vessel Finance Fund (CVFF) have been developed, there has been
nothing serious till date, as regards the disbursement of the fund to the expected beneficiaries.
Many, especially the stakeholders in the Maritime sectors are watching with amazement what will
eventually happen to the fund as it is already believed in some quarters that the fund might have
been pocketed by the privileged few in the country. it is also believed in another quarters that the
money is just locked in the PLIs who are using it for their own purpose and who will not release
same on time because of the mouth-watering interest involved. Recently the House of
Representatives ordered an investigation into this Cabotage Vessel Financing Fund said to have
been trapped in local banks, the House directed its ad-hoc committee to identify the banks and
the actual amount trapped in their vaults, nothing has been stated to be the cause of the delay in
the disbursement of the fund till date and this raises plethora of questions in the mind of
stakeholders. A former Director General of NIMASA Mr. Ziakede Patrick Akpobolokemi in
2014 stated that the agency will not be stampeded in giving out the funds. He said “We are going
to take our time to see who and who are businessmen and give the funds to business people”
that the agency would want beneficiaries to produce evidence of their bank accounts and obtain
undertakings from their banks, The DG submitted that the abuse of the Ship Acquisition and
Ship Building Fund (SASBF) would not be replicated saying that some people collected the
funds and did not repay. He said that no amount of pressure would make him disburse the funds

25
Section 43 (a)-(d) Cabotage Act 2003
26
Section 44 Cabotage Act 2003
27
Section 45 Cabotage Act 2003

28
Reps probe NIMASA, banks over 40bn cabotage fund. Punch, May 9, 2013

[Type text] Page 24

to those that were not in shipping business. Efforts to implement the cabotage regime are on
and a committee has been set up on how to properly implement the scheme”29 this apparently
might be the reason for the delay in the disbursement of the fund. While we are not saying that
NIMASA should make an hasty decision in the disbursement of the fund, this truth is that the
delays is affecting the Nigerian shipping industry and the economy of the Nation as a whole and
therefore knowing fully well that there are not many options open to this indigenous ship owners
with regards to means of accessing funds in the country and since the Cabotage Act has made
provision for such, it is mandatory for any agency that has the responsibility to disburse the fund
to do it and even on time.

8. NIMASA AND NSDP

In furtherance of a part of its functions under the NIMASA Act the agency appears to have
developed a comprehensive training programme for seafarers called the Nigerian Seafarers
Development Programme (NSDP) which was designed to develop the capacity of workers in the
maritime sector. Under thisprogramme from 2011 till date NIMASA was reported to have spent
N20 billion in training some 2,500 seafarers, The NSDP, a scholarship scheme was supposed to
have been jointly funded by NIMASA and State governments in the ratio of 40:60 but due to
the huge capital requirement and the seeming poverty of so many States NIMASA ended up
funding the scheme xclusively, there has even been a situation where NIMASA has seized
certificates of some graduates of the Nigerian Seafarers Development Programme (NSDP) over
alleged non refunding of school fee by their various states government30.. This program is no
doubt a laudable scheme and it will go a long way to enhance the capacity in the shipping sector
of the country if it is well managed.
The program though laudable as stated above, it will be more effective if the seafarers are not
just trained to become graduates but developed as professional seafarers by ensuring they are
engaged in sea-time training in any of their institution. According to Greg Ogbeifun 31 “If a
product of NSDP come into my office and say I am one of the cadets of this scheme and
I went to Malaysia or Philippines and I came out with first class, I will congratulate him.
But we ship-owners do not need graduates; but professionally trained cadets...” If the
scheme is to be effective, it must not only be better structured, the training institutions must also
be tied to train the cadets; a task most foreigners would rather not want to perform, because they

29
Ibid

30
http://transportandmaritime.com/investigation-nimasa-confiscates-certificates-of-nsdp-cadets-cut-cadets-
allowance-from-250-to-50/
31 Engineer Greg Ogbeifun is the President of Shipowners Association of Nigeria (SOAN)

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believed that any trained Nigerian has become a noteworthy asset. As a result of this anomaly,
you see a backlog of already trained seafarers who are not employable, likewise this student
research and enquiry at the (NSDP) office shows that there is barely no employment opportunity
in the shipping industry for the beneficiaries of NSDP, then one begins to wonder the essence of
the program, NSDP is a commendable effort but why should government use its resources to
train cadets and mariners that will be employed in other countries and used for companies’
commercial benefit? NSDP must not be reduced to a mere jamboree. It must be redesigned to
benefit the country and it must be tied to the opportunity in the country.

9. NIMASA AND MARITIME SAFETY AND

SECURITY
By section 22(2) of the Act, NIMASA shall inter alia inspect ships for the purposes of
maritime safety and security and generally perform any other duty for ensuring maritime
safety and security or matters incidental thereto. Under sections 23(5)(j) and 23(6) of the Act,
NIMASA can enter ports, terminals and vessels to monitor and investigate matters related to
maritime safety and security and its officers were for the purpose of the Act given powers
which any enforcement agency may exercise under any Federal Act applicable to the Nigerian
Maritime Zone. Although not specifically set out, these law enforcement agencies would
definitely include the Nigerian Navy, Marine Police, Nigerian Police Force, Nigerian Customs
Services, Nigerian Immigration Service and Nigerian Air Force. Evidently, section 23(10) of the
Act gives NIMASA the mandate to collaborate with, request for and be entitled to assistance by
other designated Government Agencies responsible for the maintenance of security in Nigerian
Maritime Zone. Sections 40(1) and 40(3) of the Act also allow NIMASA to detain unsafe ships
and mandate NIMASA to have regard to the ISM Code, ISPC Code and other international
conventions and Acts on ship safety and security.

(A) THE ISM CODE

ISM32 (The International Safety Management Code, 1993) effectively requires shipping
companies to have a licence to operate. Companies and their ships must undergo regular audits

32 ISM Code and Guidelines on Implementation of the ISM Code,

http://www.imo.org/en/OurWork/HumanElement/SafetyManagement/Pages/ISMCode.aspx

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to ensure that a safety management system is in place, including adequate procedures and lines of
communication between ships and their managers ashore.

The purpose of this Code is to provide an international standard for the safe management and
operation of ships and for pollution prevention.
The Code establishes safety-management objectives and requires a safety management system
(SMS) to be established by "the Company", which is defined as the shipowner or any person,
such as the manager or bareboat charterer, who has assumed responsibility for operating the
ship. The Company is then required to establish and implement a policy for achieving these
objectives. This includes providing the necessary resources and shore-based support.

Every company is expected "to designate a person or persons ashore having direct access to the
highest level of management".

The procedures required by the Code should be documented and compiled in a Safety
Management Manual, a copy of which should be kept on board.

(B) ISPC CODE

ISPS (The International Ship and Port Facility Security Code, 2002)

This convention contains recommendatory and mandatory requirements to ensure ships and
port facilities are secure at all stages during a voyage.

In reaction to the World Trade Center, New York bombing on September 11, 2001 and the
bombing of the French oil tanker Limburger in October 2002, the International Maritime
Organization (IMO) in December 2002 amended its Safety of Life at Sea (“SOLAS”)
Convention (1974/1988) by enacting the International Ship and Port Facility Security Code (the
“ISPS Code” or the “Code”) which prescribes the responsibilities of governments, shipping
companies, shipboard personnel, and port/facility personnel to detect security threats and take
preventive measures against security incidents affecting ships or port facilities used in
international trade.

Maritime Security aims to provide a standardised, consistent framework for evaluating risk,
enabling Governments to offset changes in threat with changes in vulnerability for ships and
port facilities through the determination of appropriate security levels and corresponding security
measures.

It is noted that measures to enhance maritime security call for the establishment of appropriate
operational measures and procedures to prevent unauthorised access, to prevent the introduction

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of unauthorised weapons, incendiary devices or explosives, to provide means of raising an alarm,
to ensure efficient and effective communications and to enhance awareness and vigilance.

These measures have a protective character and have been developed for the purpose of
preventing the occurrence of a security incident.

Suppression, containment and control of a situation in case of breach of security or of a security

incident, has been and remains a matter for the police and the security services of each state.

10. EFORCEMENT OF THE MARITIME

SAFETY AND SECURITY CODES

Earlier in 2016, 33 th IMO Needs Assesment Team, led by Gisela Vieira, commended the
Management of NIMASA for the commitment and zeal shown towards ensuring the effective
implementation of the ISPS code. It was stated that Nigerian Maritime Administration and
Safety Agency (NIMASA) has been able to achieve 83 percent compliance level in the
implementation of International Ships and Ports Security Code compliance,34 which is a very
commendable news.

Prior to the time NIMASA became the Designation Authority (DA) for the implementation of
the ISPS Code in Nigeria, there were less than 10 port facilities that had effective anti-terrorism
measures in place. Then, a committee, Presidential Committee on Maritime Safety and Security
(PCOMSS) was in charge of the implementation and Nigerian ports were almost slammed with
Conditions of Entry (COE), with the agency as the agency as the DA for the implementation of
the ISPS Code, the compliance level rose from 7 percent to 83 percent within two years.

The compliance level eliminated wharf rats, hawking and even touting within the ports’ vicinity,
and unlike in the past; importers can import goods and be sure that the goods will arrive intact
without the usual dreadful experience, some facilities were adjudged non-compliant despite

33 ISPS Code implementation: NIMASA’s long road to success, News Drect February 15, 2016

34
IMO commends NIMASA for surpassing benchmark for ISPS code implementation, Ships & ports January 26
2016.

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repeated warnings and extension of time graciously granted its management over the past year,
and they were thereby shut, last November Obat Oil and Petroleum Limited Jetty at Ibafon,
Apapa, Lagos was shut, also in December 2015, the agency shut the Magcobar Manufacturing
Limited jetty at Reclamation Road Port Harcourt and Shoreline Logistics Limited at Old NPA
Port, Marina Road Calabar. in its bid to ensure total compliance with the provisions of the code,
the agency instituted stringent measures against defaulting facilities, having worked hard to attain
its present position of over 80% compliance with the nation’s 129 ships and ports facilities.

While we commend NIMASA for a job weldone, it is very important that we also state that it is
better to ensure our ports are safe hundred percent, though, NIMASA has surpassed the
benchmark set by the International Maritime Organisation (IMO) for the actual compliance level
of the International Ships and Ports Facility Security (ISPS) Code, very recently Dockworkers
under the Maritime Workers Union of Nigeria (MWUN) expressed their fears, saying that
Nigerian ports are currently vulnerable to attacks, due to having not totally complied with the
International Ships and Ports Facility Code (ISPS), and a recent visit to the Tin Can port and the
Apapa port by this student can conveniently corroborate this position.

11. CONCLUSION
Evidently there lies before the Nigerian Maritime Administration and Safety Agency a very
enormous task which can only be achieved by the commitment and total dedication of all the
stakeholders in the maritime industry of the nation. We are where we are today because of our
commitment and dedication to the development of the industry and we can only get to where we
need to be only by commitment and dedication, it is on this note we suggest that the govermnet
should ensure that the board and the director general of the NIMASA are not appointd on the
basis of political platform but proffesionalsm should take priority over polits in the appointment
of the Director general of the agency, Likewise we submit that NIMASA should take advantage
of the all the legal instrument at their disposal especially the NIMA Act 2007 to develop the
industry.

NIMASA, being a federal agency established to operate within the long-term policy plans of the
Federal Government and for the benefit of the Federal Republic of Nigeria must operate with
that as an overriding objective. What is clear is that the efficient and transparent management of
the agency and its revenue stream is imperative to the delivery of a public sector without
corruption. In order to achieve its mandate under the Act, NIMASA must be re-focused,

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repositioned and restructured for the greater good of the regulation of our maritime sector, a
sector with enormous potential to generate much needed income for the government and boost
employment, though the challenges such as poor credit financing, infrastructural deficit,
ineffective implementation of the laws and in the past, a lack of political will, cannot be
underestimated.

Last Wednesday, 17th of August 2016 an MOU was signed between Nigeria and Singapore Port
Authority subsidiary shipping company, Pacific International Lines (PIL) on the proposed
National Fleet for the Nigerian maritime industry according to the report35 the MOU is to
“establish a private sector driven Nigerian National Fleet to fly Nigerian flags Container/Dry
Cargo Vessels, Crude Oil Tankers and offshore Supply Vessels (OSVs) to operate in the
International, African and Nigerian Cabotage Waters. “...So, the role of government is to
support, facilitate, and make it easier for the private sector to make this happen”. While we belief
the creation of a national fleet will affect our mono economy positively, we also hope that this
will not go along the path of the defunct Niational Shipping line.

35 Shipping position daily Friday 19th August 2016

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