By Stephen Ubanna
This is not the best of times for the Nigerian Liquefied Natural Gas Limited, NLNG, and Sea drill Mobile Unit Nigeria Limited, an oil service Company. The Company had
NIMASA may have initiated the legal battle when it took on NLNG, in 2010 to force the Joint Venture Company, JVC, between the government and the Shell Petroleum Development Company, SPDC, Nigerian Agip Oil Company, NAOC, popular , AGIP, and Elf Nigeria Limited, to comply with the Nigerian Laws and pay the necessary levies and other charges.
Past Director Generals of the agency knew that cargo vessels and the drilling platforms in the nation’s oil sector up to be paying the country’s maritime levies going by the law setting up NIMASA and the Cabotage Act but failed to implement the law to force the Companies to do so to avoid stepping on toes.
Dakuku Peterside, the Rivers state born Director General, of the maritime regulatory agency who may have taken time out to study the NIMASA Act, Cabotage Act and other laws governing the nation’s maritime sector and had seen that the oil sector was an untapped source of revenue for the agency because of non compliance of the maritime laws.
Acting under the NIMASA Act and other maritime laws of the country, he had decided that the right thing must be done: NLNG and other Companies in the naton’s oil secor must pay the country maritime levies.
At the instance the NIMASA Director General, the Enforcement officials were said to have piled up pressure on the Companies, particular , NLNG, to pay the levies to forestall its trading vessels from being detained. The Company may have thought that it could be sttled in Court as it dragged the case to Court, arguing that it must be exempted from the payment of such maritime levies contained under the NIMASA Act, Cabotage Act, Marine Environment(Sea protection Levy) Regulations and other laws of the country.
Note that the Company had repeatedly refused to ”pay the 3 percent of the gross freight on all international outbound and inbound cargoes carried by ships chartered by the Company or its wholly owned subsidiary.
More frustrating was the refusal to” pay also the two percent surcharge on Cabotage trade undertaken by its vessels within 200 nautical miles of the baselines of the nation’s Coastal and Inland water ways.
The JVC may have infuriated the Dakuku Peterside, led NIMASA, when itgave its words that it would not ”comply with the ” marine environment (sea protection levy) Regulations of 2012 and the Merchant Shipping Ship Generated Marine Waste Reception Facilities, Regulations 2012.
Recall that the agency had commenced a legal proceeding against the JVC, in 2010,to force it to pay the levies but, however, bowed to pressure from powerful quarters to withdrew the case from Court to prepare the ground for out of Court settlement.
Insiders told The Value News that the agency gave the JVC enough time to settle their indebtedness but that was how far it could go. The situation was so bad that the agency had no option but to resort to plan B to force the Company to make the maritime payments or be prepared for the consequences. The battle line was drawn between the Company which has link with the Nigerian National Petroleum Corporation, NNPC, an agency under the ministry of Petroleum Resources and NIMASA, an agency under the ministry of Transportation, saddled with the responsibility of enforcing the country maritime laws. The detention of NLNG vessels for non compliance with the country maritime laws may have sent a signal to the Company’s management that the game was up.
The Company may have lost millions of dollar within the few days that its cargo vessels wereout of business that the officials quickly cried out to NNPC and Ibe Kachukwu, a former minister of state, ministry of Petroleum Resources, to help out.
They had expected force the maritime Regulatory agency to lift the ban on their detained vessels to resume its trading activities. Kachukwu, may have read the hand writing on the wall that it would be a difficult task as the two Organisations which are into business were not ready to shift ground.
Giving the direction the case was taking with the involvement of Rotimi Amaechi, a former minister of Transportation who was not happy that the NLNG and the other Companies in the nation’s ol sector, had failed to comply with the nation’s maritime laws, let alone pay the mritime levies, decided to take up the matter with President Muhammadu Buhari to save the situation from degenerating.
The Katsina state born Nigeria President was said to have mandated Babagana Munguno, a retired Army Major General and the National Security Adviser, NSSA, to mediate on the crisis to resolve the conflict of interest between the two parties.
The two parties may have reached a compromise as the JVC, was said to have agreed to make an outstanding payment of $20 million to NIMASA , forcing the agency to lift the blockade placed on the Company to resume normal lifting of gas to its oversea buyers.
The agency, according to sources, may have relaxed that the matter has been settled with the intervention of the NSA , but the company returned to Court which may have been what the NIMASA officials may have been waiting for to finally put the matter to rest.
the two parties in the dispute were said to have canvassed various issues to support their case quoting various laws of the Federation. The NLNG, Lawyers were very optimistic that the Court ruling would be in their favour but got it wrong. They were disappointed when the Court ordered the JVC to pay the country maritime levies, an indication that there was no hiding place for them any longer.
NLNG loss of the case was a bad news for Seadrill Mobile Unit Nigeria Limited which had also dragged the Federal Ministry of Transportation ,FMOT, to Court over the payment of the maritime levies.
The Company had included NIMASA in the case to ensure that it would not impose the Maritime levy on them. The case was said to have gone the NLNG, way as the Court ”confirmed NIMASA’s right to collect fees from drilling Companies”.
Many believe that if either the NLNG or Seadrill Mobile Unit Nigeria limited had won NIMASA in Court , it would have emboldened other Companies operating in the nation’s oil sector who were waiting in the wings f to start their own legal proceedings against NIMASA to ensure that they were exempted from payment of the maritime levies.
They see Court rulings as a sweet victory for NIMASA that could enhance its yearly revenue generation as the Companies in the nation’s oil sector have no option but to pay the maritime levies which had been a tug of war over the years.
An elated Peterside described the Seadrill Mobile Unit Nigeria Limited judgement as “ another landmark attempt by the judiciary to set the record straight and boost implementation of the Cabotage law”, that would create more job opportunities for the teemining unemployed in the country.
While NLNG , had instituted a suit against NIMASA to be exempted from payment of the three percent maritime levy and other charges, that of Seadrill Mobile Unit Nigeria Limited was basically to ”determine whether drilling operations fell within the definitions of “Coastal Trade” and “Cabotage” under the Coastal and Inland Shipping (Cabotage) Act. It was said to have asked the Court to give them a” proper interpretation of the Cabotage Act, drilling operations and the definition of “vessels” under the Act”.
The court, presided by Justice Babs Keuwumi, may have shocked the Company when he ruled that drilling operations fell within the ambit of exploration, exploitation, or transportation of the mineral resources or non-living natural resources of the country, whether in or under nation’s waters, as provided under the definition of coastal trade fall under the Cabotage Act.
The court was said to have also ruled that the combined reading of the Admiralty Jurisdiction Act, Interpretation Act, and Cabotage Act, meant that” drilling rigs fell under the definition of vessel under the Cabotage Act”.
the Court Orders may have emboldened NIMASA officials to proceed without further delay to collect all the agency outstanding payment of the 2 two percent Cabotage surcharge from owners of drilling rigs and associated platforms.
Appealing to aggrieved persons engaged in inland trade who were not initially willing to pay their Cabotage fees to do so, he opined that that it is the the only they would operate in the Nigerian waters without running into NIMASA troubles of getting their vessels detained. He reaffirmed the Agency’s commitment to the” enthronement of global best practices in the Nigerian maritime sector”.
” Maritime watchers aver that the Cabotage Act was very clear on the payment of the levies by the Companies and has again been interpreted by the Court” for all parties to Comply with the Country’s maritime laws. ”We expect that with the Court rulings , all aggrieved parties will obey it and do the needful”, he had said. ” It is for the growth of the nation’s maritime sector and the economy at large”, he further said.
He has assured stakeholders that they have no cause to worry as the agency will continue to do everything within its powers to sanitise the sector for all players to be happy but warned that ”every craft that is involved in Coastal trade must pay the two percent Cabotage levy”.
The NIMASA DG re-echoed the determination of the Agency to end the Cabotage Waiver regime in the next five years. He disclosed that necessary measures had been put in place in collaboration with stakeholders to achieve a” seamless waiver cessation”.
Given an insider information, Isichei Osamgbi, a Deputy Director, and NIMASA, Sp
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