Port Reforms: Government, Concessionaires not fair to us – Bonded Terminal Operators

Panel Discussion at the PortNews Newspaper Summit. The discussion was moderated by a seasoned journalist Mr. Funso Olojo, Editor in Chief of Eyewitness Newspaper. L-R: Mr. Funso Olojo; Founder of NAGAFF, Dr. Boniface Aniebonam, Captain Kunle Olayiwola, first African Chartered Master Mariner; and Aare (Asiwaju) Haruna Omolajomo, General Secretary, Association of Bonded Terminal Operators, and Managing Director, Harsecom Logistics Ltd.

By Aare (Asiwaju) Haruna Omolajomo

This is an interesting topic. In 2004, the Federal Government initiated a process of handling over the ports to private operators under a concession agreement. This eventually became a reality in 2006 where Apapa port was handed over to APMT etc. Our understanding, though mutual, as Bonded Terminal Operators, was that our relationship with the Federal Government through Nigeria Ports Authority (NPA) was going to be sustained. The Concessionaires would continue to patronize us. We believe it as government is a continuum, based on local content policy. We were then shocked that immediately the concessionaires took over, they shut their doors against us despite our cashable bank bond of N100m.

Bonded Terminal Operations are globally recognized by World Trade Organization (WTO), United Nations Committee on Trade and Development (UNCTAD), World Customs Organization (WCO) etc. They form an integral part of ports operations. It is therefore not new that the government licensed us to operate as Bonded Terminal Operators. Premier Ports are to be transit zones. We are still shocked up till now why the Concessionaires are treating the Bonded Terminal Operators as “danger species”.

As you all know, local content operations are operations undertaken by small local investors e.g. clearing agency, ICD, empty holding bay, barges, local shipping and haulage etc.

To be candid, there is no indication or signs that our ports reforms have any positive relationship with the local content because no local content operation is accommodated in the reforms. Even if yes, it is on paper; not in practice. The reforms were hastily done not considering how local shipping would have future growth. Therefore, my submission is that the local content did not fare well for Nigeria or Nigerians. The port reforms never translate into the growth of local content as it is obtainable in Ghana, for example. Rather, it is a case of re-colonization.

As we speak now, and if care is not taken, local content through Bonded Terminal Operations would soon be on its way to extinction. From 2006, ports concessioning, up till date, has never fulfilled the local content policy. The Bonded Terminal Operators are still struggling to survive. It is a pity to state that the seminars organized, petitions, series of complaints and lobbying etc that the terminal operators were making from 2006 up till date had not yielded any fruit. It is a case of what Fela said “suffering and smiling”. As at 2012, out of 25 registered members of Bonded Terminal Operators, 5 had closed shop due to serious debts that threatened their lives and existence.

For record purpose, I hereby make reference to the letters of 20/08/2007 and 10/10/2011 written to the National Assembly. The letter was titled “Improper Operation Of The Ports And Marginalization Of The Private Bonded Terminal Operators By The Concessionaires”. A letter too was written to the Presidency on 12/08/2010 among other several letters to different government agencies. Nothing was done. Even, the letter to Nigerian Shippers Council (NSC) titled “Challenges Facing Bonded Terminal Operators And Way Out” dated 22/06/2016. Bonded Terminal Operators were seen as a „child of circumstances‟ before the Concessionaire era. The Concessionaires have no respect for local content. They offered door-to-door services and left the local content operators with little or nothing. This is economic sabotage that make Nigerians not to fare well.

It is no longer news that the Bonded Terminal Operators in 2001 to 2008 rescued the nation from congestion at the ports. Over 500,000 TEUs were handled by 14 Bonded Terminal Operators to avoid diversion of vessels to Cotonou. These operators were Creseada, Migfo, Duncan, AML, Port Express, Denca, Sifax, Michelle, Mid-Maritime, NACFA, SAVOL, Tha Shipping, ITC and Classic Marine.

THE WAY OUT

1. Based on Federal Government policy on local content, I still believe we can put in place a conscious policy of patronage of the Bonded Terminal

Operations by the Concessionaires. As a result, I pray the Federal Government should urgently review its contractual obligations with the Concessionaires for the sake of the indigenous bonded terminals via 60:40 ratio respectively.

2. If possible, separate operations of local content from the foreign content in the area of clearing agency, I.C.D., empty holding bay, inland ports, barge, shipping etc. As a result, the Nigeria Ports Authority (NPA) should be allocated some berths to operate in order to serve the local content.

This will enable the local content operators to be engaged and fare well and to be free from the Concessionaires‟ oppression and frustration

3. Just as in the pre-concession era when indigenous bonded terminals and off-dock terminals were collecting certain fees and rents according to the tariffs agreed with the NPA for services rendered. The same should be regulated now. No bonded terminals should be made to collect fees on behalf of third parties.
4. The NPA should be made to promote, facilitate and regulate the development of off-dock cargo handling facilities / bonded terminals and warehouses and facilitate their entry into cargo stemming contracts (40% of the physical containers) with the authority‟s Concessionaire for the transportation, storage, handling, delivery and or release of cargo for and to relevant cargo interest under Nigeria Customs Services clearance.
5. The government should encourage or enforce the use of the ports as cargo transit area and not cargo storage area.
6. That the Federal Government makes the Concessionaires to comply with section 16(c) of the 1999 constitution. This is in relation with Nigeria / local content policy of the Federal Government which the Concessionaires had violated
7. That the containers sourced for by the indigenous bonded terminal or inland ports should be allowed to go to these terminals without any hindrance from the Concessionaires. They should give a 7 day free demurrage within which to complete the processing and effect transfers
8. That the indigenous bonded terminal operators should not be grouped together and treated as ordinary agents. Rather, they should be seen as major stakeholders in the industry as they are employers of labour.

Being an except of a paper delivered by Aare (Asiwaju) Haruna Omolajomo, General Secretary, Association of Bonded Terminal Operators, and Managing Director, Harsecom Logistics Ltd, at the PortNews Newspaper Summit 2024 recently. The original title of his paper is “Port Reforms and Local Content: Has Nigeria Fared Well? – My Contribution”