Dr. Chris Asoluka, Maritime Consultant, former Member of the National Assembly and one time Chairman, Onne Oil and Gas Free Zone in this interview with The Nigerian Maritime News evaluates the contributions of the National Assembly to the maritime sector, the Cabotage Act and issues plaguing it. He also makes a case for the continuous review of Port Concession Agreement, Development of Shipping Competence and a way forward for the Maritime sector. TNMN brings the excerpts;
What is your assessment of how much the National Assembly has paid the Maritime Industry attention?
Dr. ASOLUKA: Well, I think you have had more than your fair share so to speak. You would recall that the first private members bill that this forth republic handled under the Fourth Assembly was Cabotage, which was passed in 2003. Apart from Cabotage, they passed the NIMASA Act. Apart from the NIMASA Act, they passed the Merchant Shipping Act. Apart from that, Local Content. I would say that the National Assembly has been a little bit partial having been a member of that house because it is like they are there for you.
Do you not expect more from the National Assembly?
Dr. ASOLUKA: Legislation is a work in progress. You don’t have finality because any law that legislates too much into the future is joking. In legislative practice we say that no parliament buys its successor so, you cannot finish the work of next year this year. As time goes on, for an industry as dynamic, competitive and sensitive as shipping, tomorrow’s forces may compel you to review a recent Act. Apart from that, some of these laws have what we call shelf life. In America, they call it the sunshine laws, laws that would be subject to review after a period because every law passed is to solve a certain problem. So, from time to time you ask yourself if that mischief or that promotional issue, has been handled. That is the nature of legislation. It is an on-going process.
Do the delays in execution of policies show a lack of understanding of the pivotal role the industry plays?
Dr. ASOLUKA: Every key sector is important and we have what we call the legislative engagement strategy. I think I would give some credits to the leaders in the Maritime industry, they have gotten more than their fair attention. Not every industry would have that kind of attention. In the Bible, when the Israelites would be rebellious and God is angry, he would thunder, are you not like the children of Ethiopia unto me? So is Maritime. Why should Maritime think that National Assembly is just there for them? You can only achieve that when you highlight your relevance, importance and what you can do because every public policy is expected to solve a given problem. You highlight your problem as being urgent then you strengthen what we call your agenda setting mechanism so that Maritime will always set the agenda. You talk about the Vice President launching ‘Ease of Doing Business’, the major indicator for ease of doing business resides in the Maritime sector. What is the ease of importation and exportation? If you don’t trade effectively, you are a poor nation. You don’t need to investigate why some nations are richer than others. Those who trade robustly, efficiently and effectively are the rich countries and shipping is a component of trade because about 90% of international trade is sea borne. That is why we created that joke that God must have been a shipowner because after creating the world, three quarters of the world is water. Not ending there, where he kept the raw material is different from where they are processed. How do you move? That created demand for shipping. The more the distance, the greater the demand because shipping is measured in what we call ton mile. To ship one ton of steel from Nigeria to Ghana, less than 900 nautical miles can generate far less than shipping the same into Senegal, which is why if there is any political upheaval that blocks the Suez Canal, the demand for shipping service would rise because you have created more distance. So, these are some major issues that the leaders in the industry can highlight. The gridlock in Apapa has become a shame. You cannot live with a problem; it is a crisis. Tincan and Apapa handling more than 70% of imports and exports yet it takes days to leave the port.
Another law that was passed is the Suppression of Piracy and Other Maritime Offences (SPOMO) Act. There was also the launch of the Deep Blue Project, what are your thoughts/expectations?
Dr. ASOLUKA: My expectation is that of Déjà vu, have I not seen this before? When Cabotage was passed, everyone screamed Uhuru. Why was Cabotage passed? I was at the centre. It took the resourcefulness of the legislative team led by Hon. Dr. Okey Udeh. The logic was a simple one but in retrospect, were we not mistaken? We felt that the National Shipping Act of 1987 failed because it overnight wanted to create Nigeria to be an international player. It is like a team in Oshodi trying to play against Man-U. So, it was felt that perhaps, if you create a local environment that would nurture shipping from the scratch, from coastal to regional, we would now have groomed sufficient shipping investors and interests that would compete internationally. That was the logic but in retrospect, it was too linear. Linear in the sense that we said two plus two must be four. We did not query certain assumptions. The same thing if I have to bring to your SPOMO Act. It is good that you now have a legal framework to prosecute and to bring Nigeria in line with UNCLOS (the United Nations Convention on the Law of the Sea)1982 and subsequent editions and SOLAS, Safety of Lives at Sea. These things require that you must domesticate and have a focal agency. NIMASA has both the Port and Flag State control in Nigeria so Deep Blue project as pioneered by NIMASA is a very good initiative but the equipment alone does not translate to effective implementation. When you have a multi-agency outfit, the more you worry about the contending cultures, control and the learning process which requires a good deal of training -not in terms of flying an aircraft, there must be blending -leadership training- to build a new culture, give a new vision, set new targets and monitor the performance otherwise, Navy could be very good but Navy has its own priority. I will expect Dr. Jamoh’s administration to do more because a new thing must be done. You don’t just go to sleep and say SPOMO would do it. It won’t do it. It has to be activated. As a management consultant, when something goes wrong, the suspicion has always been ‘do you have the framework?’ If you have the framework, why is water not running? When water is not running maybe the piping is deficient so there are some issues that must be addressed in order to shout eureka otherwise it would be a Deja vu.
Does the Deep Blue project have capacity to sustain itself after this administration?
Dr. ASOLUKA: It may have so long as there is performance. Every law is intended to solve a problem so, if there is a law and problems are not being solved, you query the relevance. In America that is what they call Sunshine laws. Sunshine laws mean we create this body for five years, after five years, you ask if the agency has justified why it was created. If it has not, it is scrapped. The American budgeting system is not like that of Nigeria. In Nigeria, salaries are guaranteed. No go area. But in America, any law that is created must be funded and the funding must specify how long because it is an abuse on their legislative powers for their laws to go unimplemented because the law of the legislature or National Assembly like in Nigeria is second to the law of God. The more your laws are played with, the more nonsense they make out of that legislative House. In America, every Law created has a budget so that it does not rely on the caprices of the new executives so it depends on the performance. If it does very well, it would have many fathers but if it does not do very well, it would be attacked and would now need to justify why it should even be funded. NIMASA can do it now but for how long? We have bought assets, these assets are expensive. The only way you can renew the acquisition is when people begin to see what this project has achieved. It is not hearing that some Maritime Workers were kidnapped and you say; ‘wait a minute, did we not launch a Deep Blue Project? What was it expected to do?’
How about Port concession? With some contracts expiring soon, will this be a good time to review the agreements?
Dr. ASOLUKA: In 2002, when it became necessary to secure legislative buy in on the issue of Port reforms, I took members of the House Committee on Transportation to Rotterdam. The best way to carry out advocacy if you have the means is to expose those who will make that policy to the gain because you don’t need to be a theorist to know that Machiavelli warned you that change is the most difficult thing because those who may even benefit would not know how they will benefit meanwhile those who would be dispossessed would arm themselves to the teeth to fight against it.
The first thing we did was to expose Members to how a modern Port works that the government does not need to own everything. You decide on the regulatory framework and allow individuals compete in terms of services they offer. It means that one leg of the port if it is more efficient would have more patronage than the other end. Would it shock you that Nike, that successful company is based in Rotterdam, right in the port because they realised that the critical stuff, the edge, the competitive advantage for them is distribution. It is not a production outfit because any outfit can produce canvas shoes but distribution is key. So, they took one part of the Port of Rotterdam. The most interesting thing was when members saw a ship with 8,000 to 10,000 containers and how robots picked the boxes to trailers and after about six hours, the ship was set to sail. Then the question was asked, “How much do you think the National Assembly can appropriate to Ports Authority so that we can get this level of proficiency?” It was a simple question. We needed more investment and Government has many children. Agriculture will claim it has priority, Health is a priority, every sector is a priority so, why do you think the Federal Government would starve Education, Health, Agriculture and put the money in Transport? It became clear that the only way to lift the Nigerian Port system was to invite people with their money. But when you are inviting them, you have to look at what we call milestones because your dream or what you want to achieve would have driven the contract and even the tenure. If you want me to have a Build, Operate and Transfer (BOT) agreement and you want me to install first-rate cranes and all that, I would ask a question, ‘in ten years would I have recovered my money?’, ‘how long will it take them to recoup?’ If you do not ask first questions first, you would go in circles. The review should have started from before that concession was signed. You know what you are looking for so if you have the checklist, you would mark as time goes on.
How do we develop Shipping competence considering the Ease of Doing Business?
You see, when you fail to plan, Peter Drucker tells you that you plan to fail. We should not politicise everything. Shipping is one area that your incompetence is easily seen because it is not like a domestic industry where you can refuse to grow. In shipping or international trade, if you do not grow when others are growing, you are a laggard and with time, you would be forgotten. In terms of shipping capital, Nigeria and South Africa would have been the contenders not Côte d’Ivoire or Ghana. Nigeria has an advantage of size over South Africa. I tried to talk Akwa-Ibom into being interested in bunkering service when I was in Oil and Gas. Singapore in terms of services is the leading bunkering station. Bunkering is a sizeable budget in shipping management. Do you know that even in chartering, the size of bunker is a very significant part of a contract? If you have Ibaka specialize in bunkering like Singapore, ships will come from Mauritania to Nigeria to bunker because Nigeria has crude, Nigeria can perhaps sell slightly cheaper. You develop shipping competence. When you talk about shipping in Nigeria, Nigerians think that shipping is an entitlement. It is not. The entitlement our people should have is the Ease of Doing Business backed with fiscal policies. If tax is N10 here, for pioneer shipping it should be a certain cost. You can tweak with all those things. So, when the environment is right the investors can take advantage. We should look at the environment, promote the areas you think you have a competitive edge like if you are talking about Seafarers, sailors, crewmen, you are looking at the Philippines; if you are talking of officers, you are looking at Indians; if you are looking at ship building, you are looking at Koreans. Shipbuilding is not a very big thing.
In your opinion, how far have we fared with Cabotage?
Dr. ASOLUKA: The passion that led Olisa Agbakoba, Capt. Ihenacho, Chief Jolapomo, Chief Oyesukun and others. How did Cabotage come into Nigeria? When we were doing the investigation and enquiry into the mishandling of the MV TRAINER which was part of the so called 19 vessels Chief Obasanjo bought in 1979. When he came back in 1999, he did not see any vessel. He left 26 vessels, he came back and met nothing so do not tell him anything about shipping. He had an argument, “why should I push money again into shipping?” Just 20 years interval and he did not find anything. One of the ships was sold, MV Sapele or Warri. It was sold for $500,000, we reacquired it after some two years thereabouts for $1.5million and used $2.5million for dry docking and putting it in place. The maiden voyage was to take copper ingots from Sweden to Mobil in Alabama. The so called seamen started fighting and complaining they were not paid on their way and raised an SOS. That raised a flag issue and by the time the vessel got to Mobil, Alabama and they boarded, the state of the ship was below par. For a ship that was just dry docked, it raised Port state issues. By the time you would have escaped with these ones, it now raised breach of contract summing up to arrest. After that we spent about a million or more dollars to get this ship released, then Nigerians were jubilating. Very observant eagle-eyed legislators said wait a minute, ‘why this jubilation? For a ship that was seized, we need to talk more about this.’ MV TRAINER was manned by Brawal. What happened? Too many hands. We could not run this thing as we ought to have run it. Even recruiting cadets, we needed people between 18 and 22 years meanwhile they gave us men of 30 years with beards who have promised their wives the regular remittance of dollar. Long story. Then the critical question Dr. Udeh asked, I was a consultant. I was the Adviser. Why did you need to do all these things? They said because we needed seatime for our Oron trained cadets. He said, “What is this seatime?” Olisa Agbakoba said; ‘if we had Cabotage, we would have had enough vessels and we would have grown from that for it to offer cadets coming out from Oron more opportunity for seatime’. Then they said; ‘consultant, what is this Cabotage or sabotage?’ The rest is history. We said, “hurray!” If we had done as Olisa and co advocated, we would have created more bottoms and we would have created more opportunities for seatime to make Oron cadets full sailors. We tricked ourselves. I may have been guilty too. We were overly ambitious and optimistic. We went for what we call full-scale Cabotage rather than partial Cabotage. We copied the Americans so the four requirements- ownership, crewing, registration and building- all in Nigeria. How could we do that? We thought we were smart. We made Section 13 waiver exceptions that has become a problem. Even when you read down to section 14, the review is periodic- five years- and the guideline to inform how you have met the condition to qualify you for waiver. So yes, Cabotage is a work in progress but it is no longer very fashionable and if it is, there are other ways of working for better implementation. If I say this in the open, the next question would be about Cabotage Vessel Financing Fund (CVFF) but we can write a book on that. CVFF was to assist Nigerians to acquire not just vessel but anything being classified as qualified for support including training; educational training to support the building of Nigerian capacity. It is the first step of the Local Content development.