Bottlenecks are hindering port reform -Nicol

Rev Jonathan Nicol, chief executive officer, Harlem International Limited and president, Shippers Association, Lagos State, speaks with Dike Onwuamaeze, associate editor, on the impact of the port reform on cargo clearance. Excerpts: How would you assess the impact of the port reform on cargo clearance? I believe that government opted for the reform because they were fed up with the complaints from the Nigerian shippers. And because it is a reform, it has to take a natural course of educating the port users, the operators such as the shipping companies, terminal operators and all those involved in doing business in port complex. So, as shippers we see the reform as a right action by the government and we have to assist government to make it successful. We are doing all we can to assist the government and they are listening to us. So, we will put in more effort to make this reform work. You said that the government embarked on this reform because of the cries of the Nigerian shippers. What were the problems you faced? Looking at when the Nigerian Ports Authority (NPA) was in charge of port operations, at that time we did not have modern equipment, yet Nigerian shippers were very much dynamic people. They were very much involved in bringing in quite a lot of cargoes, which was so much for the NPA. So, the government decided to shed the load by bringing in private participation. We felt at that time that it was a right decision by the government, and that it will bring some changes. We thought that the concessionaires would bring in equipment to modernize the ports. But over the years, we are amazed that most of the concessionaires just got to the ports to make money and were never interested in developing the Nigerian ports. The equipment we were expecting never came and some are still using obsolete equipment, maybe one or two plants to service more than 200 trucks. So, we are still going through harrowing experience to clear containers from the terminals. Also, the situation with the shipping companies remains the same. They are still short changing Nigerian shippers. We have only three days period of grace before we will start paying demurrages. We are already discussing with the Nigerian Shippers Council that we need seven days of grace, to enable importers prepare and get all the documentations in place before the arrival of their cargoes. I think this prompted the Nigeria Customs Service (NCS), to introduce the Pre Arrival Assessment Report (PAAR) in December 2013. We believe that with the current reforms in maritime industry, Nigeria will get there. In 2006, Nigerians were assured that Risk Assessment Report (RAR), which was just discarded in favour of PAAR, will guarantee 48 hours clearance. Are they not telling us the same story over and over again…….(cuts in) It is not question of us believing them. It is a question of what we have on ground. It is government’s intention that within 48 hours people should be able to clear their goods from the ports. Of course, we want to get rid of all the bottlenecks militating against this objective. At the moment, we still have a lot of government agencies in the ports that actually do not have business there. The port is exclusively the area of the NCS, the NPA and the shippers, who are the owners of the goods. So, the way we clear goods here is harrowing. There is a long list of government agencies; formerly, they were up to 18 until the Minister of Finance reduced their number to six. We don’t really need all those people. What are they examining? NCS is a paramilitary agency and they are well groomed to examine cargoes. They have the capacity to do that. We believe that SON should stop sub-standard goods before they get into the country. What are they doing with their regional offices? We don’t want SON to be in our ports anymore. There are other agencies like Quarantine. Quarantine cargo is internationally accepted and its parking list is part of the cargo, which are fumigated. But the Nigerian Quarantine will tell you the “pallets will bring disease”. We do not want Quarantine in our ports. We expect the Quarantine to take care of the forests and not to come into the ports to harass shippers and impose N40,000 charge for 20 feet containers so that an importer with 200 containers will be expected to pay N8 million. This is what has been going on and when you do not get their import licence, you are in trouble. Same with SON which expects you to pay N50, 000 per SON certificate. How much is the importer making? By necessity, the Nigerian shippers have brought a lot of people to form the maritime family, but most of them are not properly trained to examine cargoes. The most efficient of all is the freight forwarding companies who are trained by the NCS before being licensed. There is a long list of agencies that will examine cargo and it is assumed that once the examination has been done and customs duty paid, all those involved will sign an examination form and the cargo should be allowed a free exit. But it is not so. Even if you have gone through that process, it is really herculean. The NCS has released your cargo and its most senior officer, whose signature is recognized by the CBN, has signed the release, still a junior custom officer in the same port will query that signature. So, where is the harmony? Before now, the NCS was not like that. So, it needs a complete re-orientation of the minds of people operating in the ports. And what is the bottom line? Settlement! Of course, that is unfortunate for our people. How long are we going to keep on settling people? Sadly, all these charges will be added to the cost of the goods and the consumers will pay for them. What are the levies importers pay before they could take their cargoes from the ports? We still pay 7% surcharge even though port services have been privatized. So, why will the shippers be paying for port development when it is in the hands of private entrepreneurs? Surprisingly, nobody is addressing that issue. You have the ECOWAS Trade Liberalisation Scheme (ETLS) charge of 0.1% and the monster call 5% VAT paid to the Nigerian government. But it does not end there. When you go to the shipping companies they will give you another 5% VAT. Also, the terminal operators will take another 5% VAT, so how much is that? Is that how to do business? These are all the bottlenecks the Nigerian shipper goes through. You have just raised the issue of professionalism in the NCS. What do you expect now that the NCS is fully in charge of destination inspection of cargoes with the commencement of PAAR? First, I envisage that the NCS will stop the payment of one percent CIS charges. It should not be on the list anymore. Second, we expect the NCS to do a better job than what they have been doing in the past. We expect a new order from the NCS. We also want the NCS officers to be more respectful and more understanding because they are expected to solve problems through the classification of tariffs and not to create problems. With due respect, the Comptroller General of the NCS has done a great job. He fought hard to get back destination inspection duties for his officers. It is now left for him to educate his officers on how to solve people’s problems. What about the duplication of customs tables? It is prevalent in most of the ports. You do not need a country to perform customs’ duties. The bottom line is paying the customs’ duties. Once this is done, you do not need any compliance table because if your duty is not compliant, the system will reject it. So, we do not expect to see any duplication of functions in this new system. All the customs’ tables where they collect “tolls” should be dismantled. I think a new order is coming up, I am glad to see the future looking so bright. It is the wish of the Nigerian shippers to sit at their homes and have their goods cleared and delivered to them. What about the issue of network failures? I think it is a general problem. It is not limited to the NCS alone. Even mobile phones have the same issue. But sadly, the shippers are paying for it in terms of demurrage. What has been your experience with APM Terminals? Actually, we placed our documents before the NCS for scanning. We paid all the charges upfront to APM Terminal. The NCS gave us five days to scan the containers, which is enough time for APM to have found the containers and position them for scanning. But we were told that they have noeen able to locate the container, it took them 14 days.