The Senate on Wednesday, 11 December, 2019, mandated its Committees on Local Content Legislative Compliance and Petroleum Downstream to investigate the influx of foreign vessels into Nigeria’s coastal region and the level of patronage of Nigerian shipping companies.
The upper chamber directed the committees to investigate the flagrant abuse of the NOGICD Act 2010 and Cabotage Act 2003 respectively, by operators and stakeholders in the Maritime Industry.
The Senate also resolved to dig into foreign ship owners of freight associated with downstream activities repatriated overseas by the Nigerian National Petroleum Corporation (NNPC) to the detriment of the economy.
These were resolutions reached by the upper chamber sequel to the consideration of a motion on the “Urgent need to investigate the breach of Nigerian laws by foreign vessels in coastal shipping of petroleum products in downstream sector of the Nigerian maritime industry.”
Sponsor of the motion, Senator Olalekan Mustapaha (APC, Ogun East), noted that the National Content (NOGICD) Act 2010 was enacted to promote value addition to the National Economy by stimulating growth and industrial development in the Oil and Gas Sector of the Economy.
According to the lawmaker, “The influx of foreign vessels into the Nigerian downstream sector is alarming against the Coastal and Inland Shipping (Cabotage) Act 2003 which clearly restricts vessels engaged in domestic coastal trade.”
He added, “Only wholly-owned, manned and registered Nigerian vessels can engage in the domestic coastal carriage of Petroleum products within the Territorial and Inland Waterways.”
Senator Mustapha said that over the last fifteen years, indigenous tonnage capacity and coastal shipping capabilities have grown exponentially with Nigerian operators owning multiple tanker vessels in their fleet.
The lawmaker stated that though NNPC is the largest employer of downstream shipping services in Africa, the corporation’s activities in terms of opportunities and indigenous capacities have not been enhanced.
He stated that the Capital freight spent by NNPC through Direct Sale of Crude Oil and Direct Purchase of Petroleum Product (DSDP) is approximately USD$60 million monthly to about USD$720 million annually.
“The value of DSDP for 2019/2020 contract period is at the range of USD$9 billion, out of which foreign ship-owners amount for one hundred percent of freight associated with this downstream activity, most of which is repatriated overseas to the detriment of the Nigerian economy”, Senator Mustapha lamented.
The lawmaker added that the lack of Contract of Carriage and the absence of guaranteed cargo tonnage in the Maritime Industry have led to significant loses and collapsed of domestic and indigenous shipping.
Consequently, the Senate, in its resolutions, mandated its Committees on Local Content; Petroleum (Downstream); and Legislative Compliance to investigate the reasons for the dominance of foreign vessels above locally owned, manned and registered vessels in the domestic carriage of petroleum products within the coastal territory and Inland waterways of Nigeria.