Maritime Levy: NLNG Bows To NIMASA Under Peterside

By Stephen Ubanna

After several years of behind the scene maneuvering and litigations, the Nigerian Liquefied  Natural Gas, NLNG, limited,  a subsidiary of the Nigerian National Petroleum Corporation, NNPC, has finally bowed to the superior maritime powers of  Dakuku Peterside, the no nonsense  Director General, Nigerian Maritime Administration and Safety Agency, NIMASA. 

The Nigerian Apex Maritime Regulatory Agency has been on the neck of  the NNPC subsidiary, over the years  for the  payment of the statutory  Shipping , Cabo age and sea protection levies which the Company had been reluctant to pay despiration of their 10 years tax holiday. 

 Recall that at  the start of operation in the country in the late’ 90s   past and present   Director Generals of the Agency  had  taken up the  issue of statutory payment of the maritime levies with the Company but met   stone wall. They could not understand why the  NNPC subsidiary  company  are proving too tough to manage in  in the payment of the  statutory  levies to the Agency  to cover their operational cost   after the expiration of the  10 years  tax holiday, granted it   by then Ibrahim Badamosi Babangida, popular, IBB,  a retired Army  General  and former Head of state.   

Dakuku Peterside: Director General, NIMASA

  The Value News learnt   that the Agency made repeated  appeals including sending  reminder letters to the Company  on the need   to pay the statutory levies of  three percent  levy on ship s   on the Gross freight on the free On Board, FOB,   on the  in-bound and out-bound  international  cargoes, two percent Cabotage Levy  and sea protection levy .

   It was gathered that the pressure  piled on the NLNG   by the Agency  the Agency Director Generals including    Tony Attah, the present Managing Director, could not be ignored that  they were forced to do a rethink on the  payment of the levies. This may have  prepared their mind that no matter how they tried to avoid the Agency or make trouble with it, the levies are still waiting for it because it is contained in the Act establishing the Agency in May 2007 by then government of Babangida.

  The Nigerian Maritime Authority, NMA, now baptised  NIMASA  ,was armed  with the powers  to collect  such levies from Ships and Shipping Companies operating within Nigeria shores.  take for instance, the NIMASA Act , Cabotage Act,  Marine Environment Regulations  and other extant  laws of the Federation  which made it clear that  all operators within the country’s water ways  ,including  the NLNG must pay the levies. 

It was not surprising why  NIMSA has insisted that  the NNPC  subsidiary  must  pay the statutory  three percent ship levy, two percent Cabotage levy  and the sea protection levy .  Indeed, the deliberate  refusal of  the NNPC subsidiary to pay the levies    may have encouraged  Patrick Akpobolokemi, then Director General of  NIMASA  , to drag the company to Court to force it to pay the outstanding levies which run into millions of dollars in 2013.

A Statement issued  by Isechei  Osamgbi, a Deputy Director  and Spokes person of the Agency ,  said the NNPC , subsidiary  ought to have paid  an outstanding  surcharge of $283 million  on Cabotage l trade  undertaken by its vessels  within 200 nautical miles of the baseline s and Nigerian coastal and Inland  waters ways  as  contained  in the coastal and Shipping Cabotage  ,Act of 2003.

Insiders told the value News that the  Agency  provided soft landing for the Company t to settle the matter in the case brought against it out of Court .   The Agency, according to a source has  sought an interpretation  of the relevant  Act of the Company’s  approved Fiscal Incentives, Guarantees and Assurances Act , Cap N87  laws of the Federation of Nigeria 1990  in contrast with the NIMASA  Act of 2007.

 The dispute became so pronounced  that Sambo Dasuki, a retired Army Colonel and then National Security Adviser. NSA,  to President Goodluck Jonathan, , had no option but to  intervene to save the situation from degenerating.  A  NIMASA  source confirmed that the intervention was at the instance of the  former Bayelsa state born President to ensure that the country’s gas business thrive.

 Given the deal brokered by the  NSA, between the parties, it was  revealed that the NNPC subsidiary  ”undertook  to pay up  all outstanding  $20 million  levies  as well as  agreed to comply with  the requirements   of the NIMASA  ACT 2007 as well as the Cabotage Act.  With the resolve of  the Company to pay the levies,  the government  apex regulatory maritime Agency was  forced to  lift the blockade placed  on its ocean going vessels in January 2013. It was said to have gone a step further  to withdrew the case filed  against the Company   in Court  to create room  for amicable settlement  of the dispute out of Court.

  In apparent  moves to enforce  the NIMASA  Act in May , 2013, and to ensure total compliance by the NNPC, subsidiary , i the Agency was said to have  met stubborn resistance by the Company which was not ready to  comply with the laws. Perhaps, angered by the action of the Company,  Akpobolokemi, then NIMASA boss , was said to have ordered  the arrest  and detention of its vessels for non compliance.

Kudo Eresia Eke,  then Spokes person of  the Company   disclosed  that  the following vessels: LNG  Enugu,  LNG Oyo,  and LNG Imo , were barred by the Agency from accessing  or leaving  the Company’s loading bay at Bonny Island, Rivers state. The NLNG Spokes person  disclosed  that  the Agency  has no reason   to take  such drastic action against the Company  because of its implication   on its international LNG buyers.

He claimed that  the NNPC subsidiary   had paid   about N3.2 billion from  its  outstanding levies  to NIMASA,  amidst protest.  But the Company may have shown that  it was  not ready to make  peace with the Agency   when  in June 18, 2017,  it  dragged NIMASA to Court  to seek  legal interpretation  on the legality of the levies.

The  Company may have taken advantage of the  30 days notice  allowed it to pay the outstanding statutory levies  to run to the Appeal Court in 2017. Andy Odeh, Manager , Corporate Communication and Corporate Affairs , of the Company   said they had gone to Court to  seek legal  interpretation  of certain issues in the case from  Abubakar Malami, a  Senior Advocate of Nigeria and the Attorney General of the Federation  , who incidentally  is the Minister of Justice and Global  West.According to him,  the issues in the NIMASA  Act ,  which the Company needed legal interpretation  include the legality   or otherwise  of the  levies  , NIMASA , had imposed on its operations despite being an Agency of government.

  Worried by the alleged obnoxious levies, the NLNG, which   had headed to  Court was s said to have got a favourable  judgment  which exempted  it  from paying the NIMASA  levies.   The Management of NIMASA, under  Perterside, did not find it funny. It could not understand  why the NNPC subsidiary , which  had earlier given its words to pay  all statutory  levies  accruable  to the Agency , including the three percent levy on   Gross freight  on inbound and outbound cargoes , two percent Cabotage levy  and sea protection levy  would hide under the cover of the Court not to pay the levies again.

 The Rivers state  born  NIMASA boss, who was not ready to sit by and watch  the NNPC  subsidiary, make  mockery  of the  Nigerian Maritime laws has no option but  to prepare the ground for the Agency  to appeal against the Judgment  exempting   NLNG, from paying the statutory levies as  contained in the Act establishing  the Agency.

Tony Attah: Managing Director: NLNG

The Agency was said to have  headed to an Appeal Court in Lagos Division. On Friday,  March 29, 2019, NIMASA heaved a sigh of relief  over the case as  the Court set aside  an earlier judgment of  a Federal High Court  which had exempted  the NLNG ,from payment of the NIMASA levies . The Appeal Court had justified its decision on the grounds that ” NIMASA  was not given  a fair hearing  at the lower Court”. Justice Mohammed Lawal Gruba , who  delivered the Judgment  was said to have ordered that the” case be sent back to the High Court  for a fresh trial under a different Judge”.

An elated  Peterside,  said the” Court  Judgment  has shown that  the  nigeria Judiciary is unbiased  and a beacon  of hope  for Nigerians”. He disclosed  that the Agency  and the NNPC Subsidiary  are neither  foes nor competitors  but two Organisations    working together  for the common good of the country.  He disclosed that the landmark Judgment would go a long way to ” strengthen  the institution and  ensure greater  bonding” . 

The questions on the lips of most Nigerians was: why the NLNG  which is making millions of dollars from its trading  business in Nigeria is  reluctant to obey the country’s maritime laws to pay  its maritime levies which is not different from what obtain in other  IMO  member nations .

 This is where Rotimi Amaechi, a former governor of Rivers  state and minister of Transportation  who has the ear of President Muhammadu Buhari has  to throw his weight behind  Peterside, the NIMASA  boss, to succeed in his plans to ensure that NLNG and other recalcitrant shipping Companies  pay the statutory maritime  levies to boost the revenue of the Agency.

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