NIGERIAN CABOTAGE: IT’S POLICY, PROBLEMS AND PROSPECTS

By

EMMA O. OMUOJINE B.Sc, LL.M, MBA, BL, FNIVS.

1.0 INTRODUCTION

1.1 DEFINITION

Cabotage otherwise known as coastal or coasting Trade involves carriage of

goods (and passengers) within the territorial and inland waters of any nation state

by ship or by ship and any other means of transportation from one place in the

state to another place or part of that state.1

Black’s Law Dictionary (6th Edition) defined Cabotage as “The caring on of trade

along a country’s coast; the transport of goods or passengers from one port or

place to another in the same country” The Webster Dictionary defined Cabotage

as “ the navigation and involvement of ships in coastal waters; restriction of the

use of coastal waters and airspace by a country to its own domestic traffic”

Following from the above definitions we can derive the meaning of “Cabotage

Law” as the law reserving the coastal trade of a nation to vessels flying its

national flag2.

1.1.1 Under Section 2 of the Coastal and Inland Shipping (Cabotage) Act 2003

Cabotage is defined copiously as

1 Ilogu, L. Chidi Esq. “ Memorandum On Proposed Cabotage Bill submitted To The Committee on Transport, House of Rep. Abuja 9th April 2001.2 “Practical Implementation of Cabotage” being a paper presented at the NBA Conference Abuja 22nd – 27th

August 2004.

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(a) The carriage of goods by vessel, or by vessel and any other mode of transport,

from one place in Nigerian waters to any other place in Nigeria or above

Nigerian waters, either directly or via a place outside Nigeria or to any other

place in Nigeria and includes the carriage of goods in relation to the

exploration, exploitation or transportation of the mineral or non - living

natural resources in or under Nigerian waters.

(b) The carriage of passengers by vessel from any place in Nigeria situated on a

lattice or river to the same place, or to any other place in Nigeria, either

directly or via a place outside Nigeria to the same place without any call at

any port outside Nigeria or to any as in – transit or emergency call, either

directly or via a place outside Nigeria,

(c) The carriage of passengers by vessel from any place in Nigeria to any other

place in Nigeria, or from any place above Nigerian waters to the same place or

to any other place above or under Nigerian waters where the carriage of the

passenger is in relation to the exploration, exploitation or transportation of the

mineral or non – living natural resources in or under Nigerian waters and

(d) The engaging, by vessel, in any other marine activity of a commercial nature

in Nigerian waters and, the carriage of any goods or substance whether or not

of commercial value within the waters of Nigeria.

1.1.2 From the foregoing academic and statutory definitions one can safely

summarise Cabotage Law as the Law restricting the coastal and inland waters

trade in a country to vessels flying its state flag.

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1.2 CABOTAGE REGIMES.

Cabotage is the carriage of cargo or passengers by sea between ports

located within a state. It generally connotes the idea of trans – national coastal

navigation and covers the movement of vessels from one cape to another

along the coastlines of a nation and on a much wider scale; it includes

navigation within a nation’s inland waters (Agbkoba 2004). Principally these

activities are reserved for national flag vessels, indigenous vessel owners and

citizen crewmen. Essentially it is the trade implications of Cabotage that make

it such an important part of the lexicon of international law and domestic

policy, being the restriction of coastal and inland waterways’ trade to vessels

of the nation State (Akabogu, 2004). Cabotage Law is a law empowering

navigation and trading within a country’s coasts or from port to port within a

nation (domestic shipping) to be reserved exclusively for and carried on by its

national flagships and nationals (Igbokwe M. 2001). The Cabotage law can be

contained in a single legislation or in a combination of shipping legislations of

a country.

Two forms of Cabotage regimes exist depending on local situations

and the type that suits a nations interest, namely, strict Cabotage laws and

relaxed / modified / liberalized Cabotage laws.

1.2.1 Strict Cabotage Legal Regime.

In a strict maritime Cabotage regime three elements of restriction of coastal trade

are conspicuous, namely, that Cabotage is restricted to ships “built, owned,

crewed and operated” by citizens of a country. One of the best examples of a

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regime of strict Cabotage laws is as found in the United States of America by a

combination of some of its shipping laws. By virtue of its Jones Act3 which was

passed for the promotion, protection and maintenance of a US domestic merchant

marine and consequently all waterborne goods between US ports, are carried in

US flagged ships, built in the USA, owned by US citizens and crewed wholly by

US citizens. Before the Jones Act the US had forbidden foreign ships from trading

within its coasts since 1817. The 1886 passenger services Act states that no

foreign vessel shall transport passengers between ports or places in the US under

a penalty of US 2000 dollars for each passenger so transported and landed. The

US Merchant Marine Act of 1936 also allows the government to bar foreign

vessels, which have been built cheaply by means of subsidy if they operate in the

US domestic trade. Following from the above and other shipping laws, the

transportation of goods and passengers within the US ports and coastal trade are

exclusively the hands of US citizens and ships. The Laws are deliberate US

protectionism policies put in place in order to protect its domestic maritime

industry from foreign participation, control or domination at the expense of its

nationals and its domestic shipping industry4. It is instructive to note that inspite

of globalization, liberalization and anti – trust initiatives and promotions of and

by the US and the US backed WTO, there is immense support in the US from its

policy, law makers for retention of its strict Cabotage laws without any form of

relaxation5.

3 Section 27, Merchant Marine Act of 1920 Public Law 66 – 261.4 Igbokwe, Mike Esq. “Advocacy Paper for the Promulgation of A Nigerian Maritime Cabotage Law”, 2001. www5 Op cit.

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1.2.2 Relaxed Cabotage Legal Regime.

Relaxed Cabotage legal regime is a non strict Cabotage regime where the laws are

relaxed, modified or liberalized and the elements of a strict legal regime are not

strictly enforced as there are some levels of foreign participation, in ownership or

building of the ships and nationality of the operators or foreign registered ships

involvement, in a nation’s coastal shipping and trade6. Examples of relaxed

Cabotage laws are India, the Philippines, Australia and Malaysia where certain

aspects of their Cabotage laws are already relaxed or liberalized. In 1992 India

relaxed its Cabotage laws, allowing foreign shipping lines for a period of five years,

only to consolidate export containers at an Indian port and transship them to a

foreign port and to run feeder services to reach import containers at various ports.

In Australia where Cabotage is based on the Navigation Act of 1972 customs

requirements and Immigration Laws, 90% of its coastal trade is by Australian crewed

ships and all foreign vessels operating along its coast are licensed or permitted under

certain conditions7. Australian Cabotage laws allow only Australian flagged and

crewed ships on its domestic shipping and where there are no Australian ships

available, foreign vessels are granted single voyage permit8. The Maritime Union of

Australia usually argued that shippers are manipulating the system by waiting until an

Australian – manned vessel sails out and then rush to contract a foreign – flagged ship

with third world low – paid crew and substandard ships to participate in its coastal

shipping thereby putting off work, Australian ships and seafarers.

6 Op cit.7 In 1996, the Government of John Howard set up the shipping Reform Committee to advise it on options for the wind back and removal of its Cabotage Laws after whose report the Government had among other things liberalized the license permit system enabling greater participation by foreign vessels in coastal waters.8 Igbokwe Op cit.

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Malaysia is another country whose relaxed Cabotage laws permit foreign registered

vessels to be temporarily licensed by the Domestic Shipping Licensing Board

(DDSLB) to carry on coastal trading where there are no available Malaysian vessels.

There are complaints by Malaysian ship owners Association (MASA) of

circumvention and manipulation of the system by Malaysian shippers especially in

respect of oil tankers where there are insufficient Malaysian registered vessels, by

falsely misleading the DSLB and by acting as “fronts” for foreigners9.

1.3 Historical Perspective.

Before the enactment of the Cabotage Act, there was absolutely no legal provision

reserving the operation of marine transportation services to Nigerians or to Nigerian –

owned and or registered vessels. Foreigners dominated the maritime trade, coastal

and inland water transportation. Even to date foreigners own the bulk of the feet

operating in Nigerian waters and foreigners feature significantly as service providers

and intermediaries such as pilots, captains, engineers, crewmen, bunkers etc10.

The reason for the dominance of the industry is not far fetched, shipping is a highly

capital intensive business. Any visible attempt by the Federal Government to

ameliorate the situation was the promulgation of the National shipping policy Decree

No. 10 of 1987 which established the National Maritime Authority (NMA) Section

13(2) of the Decree states that the NMA shall “establish a fund which shall assist

Nigerians in the development and expansion of National fleet”

Historically the Nigerian shipping industry can properly be traced to the early 20 th

century with the activities of Colonial British Companies like Elder Dempster

9 Op cit.10 Akinjide-Bologun, Jumoke ‘Making Waves In Nigeria”; The Maritime Advocate. Com, issue 15, May 2001.

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Agencies, John Holt, Liver Pool Limited and United Africa Company (UAC) who

were primarily involved in merchant shipping. Credit for commercial freight services

is attributable to UAC when in early 50’s it floated Palm Line Limited to provide

shipping services to the public on commercial basis. The foreign colonial enjoyed a

monopoly and kept their shipping business doors shut on indigenes and local

entrepreneurs.

At Independence in 1960, Nigeria inherited a Maritime trade system dominated and

controlled by foreigners. However the Nigerian National Shipping Line (NNSL) had

earlier in 1959 signaled the birth of an indigenous shipping line. There is no record to

show that any Nigerian individual other than NNSL, owned any ocean going vessel

until 1972 when Late Chief Henry Fajemirolain’s Nigeria Far East Company blazed

the trail, followed by Wahab Folamiyo’s Nigeria Green Lines and Alhaji Mahmud

Waziri’s African Ocean Line11. As stated earlier, the foreign dominance of the

industry led to the setting up of NMA in 1987 primarily to develop the local shipping

industry by assisting Nigerians to acquire ships, ocean vessels and training seafarers

for the industry, through the Ship Acquisition and Ship Building Fund (SASBF) and

access goods for lifting via the Cargo Allocation. However due to mismanagement,

ineptitude and corruption the NMA derailed from it’s set goals leading to the

scrapping of the Cargo Allocation Policy and the SASBF12 . With the advent of

democracy in 1999 stakeholders and professionals in the shipping industry have made

a clarion call for the reordering and restructuring of the maritime industry as it affects

11 Adewale, Francis “The sale of MV Abuja and the Failed War On Corruption” ganmji. Com / NEWS2601. HM 11 / 15/ 2004.12 Nigerian Maritime Directory. Com 11/11/2004.

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domestic trade for the benefit of the citizenry and the Nigerian economy one of the

major fall – out of the reform proposal is the Cabotage Law.

2.0 THE POLICY OBJECTIVE OF CABOTAGE.

Generally, shipping plays a pivotal role in the economic development of many

nations. Maritime transportation generally has been regarded as a veritable vector of

world trade, accounting for about eighty percent (80%) of world trade. However the

acquisition of ships is not only very complex but highly capital intensive, its

acquisition and building process is long tenured and the cost largely dependent on the

size of ship, its physical condition, the type of cargo it is designed to lift and the

prevailing cost of funds13.

It was the dire necessity to assist Nigerians to acquire and own their own ships and

make a break through, in the Nigerian Maritime Industry that Nigeria promulgated

the Nigeria National Shipping Policy known as Decree 10 of 1987 which established

the Nigerian Maritime Authority (NMA) and provides for the setting up of national

carriers i.e. vessels eligible to benefit from cargo – allocation, cabotage, access to

special cargo, training of seafarers and the ship acquisition and ship building fund

(SASBF) to assist Nigerians in the development and expansion of the national fleet.

The SASBF has long been scrapped due to mismanagement dearth of funding. Also

the Nigerian National Shipping Line the NNSL, the one time national carrier, which

at its peak owned about 27 ocean liners, had by 1995, gone moribund without a single

vessel to its name. Its successor the Nigeria Unity Line (NUL), which owned and

13 Adewale, Francis Op cit.

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operated only one dry bulk ship MV Abuja bought in 1995 after series of vicissitudes,

was finally sold in 200314.

It was as a result of the abysmal state of the Nigerian domestic fleet that urgent calls were

made by the Federal Ministry of Transport and other stakeholders in the maritime

industry for the promulgation of Cabotage Laws.

In considering the Cabotage Bill prelude to its enactment, the Chairman of the House of

Representatives Committee on Transport Dr. Okey Udeh in his letter to President

Olusegun Obasanjo urging him to support the Cabotage Bill enunciated the benefit of the

Cabotage Law thus:

“We believe that the enactment of Cabotage in Nigeria would lay a solid

foundation for the domestic maritime industry, and stimulate and contribute

significantly to the Nigerian economy. It would help to develop the domestic

maritime fleet, create employment opportunities for over 30, 000 trained but

unemployed seafarers, boost training requirements at the Maritime Academy of

Nigeria, lead to optimal exploitation of the currently under – utilized facilities at

Nigerdock, and encourage the development of required infrastructure and

technical know-how in the inland waterways, transport and haulage system”15

According to the Minister of State for Transport, Alhaji Inua Musa Mohammed the

Cabotage Law was enacted to encourage indigenous companies’ participation in

shipping, increase capacity building and provide employment for Nigerian seafarers,

adding that it was in line with the Federal Government and Development scheme

(NEEDS) strategy.

14 Vanguard of 18/6/2003 15 Guardian Newspapers 9/12/2004.

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Many countries with a view to safeguarding their national security and promoting and

preserving their national shipping operator have resorted to legislating to reserve such

transportation of goods and services within territorial and inland waterways for their

national flag ships to the exclusion foreign shipping operators such legislation are to be

found in over 40 major maritime and industrial nations such as United State of America,

Canada, Germany, France, Japan and Mexico.16

The introduction of a Cabotage Law was seen in Nigeria as the only veritable way for the

development of a national fleet. For one it has long been accepted that the US – flag

Jones Act fleet, that operates under US maritime Cabotage Laws is the foundation upon

which US maritime power and the national maritime infrastructure rest. The general view

in Nigeria being that what is good protectionist policy for the United States of America

must be good for Nigeria, a developing economy whose local companies are forced to

compete against formidable foreign opposition.17

From the foregoing the policy thrust of Cabotage legislation can aptly be summarised (as

follows) to wit.

1. Protection of territorial waters, safeguarding national security.

2. Promoting and preserving national shipping operators.

3. Development of the national fleet.

4. Development of intermodal transportation…

5. Expansion in domestic trade.

6. Creation of more job opportunities especially for indigenous seafarers.

7. Training of maritime and seafaring personnel.

16 Ilogu, Chidi I. Esq. Op cit.17 The Maritime Advocate. Com Issue 15, May 2004.

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8. Freight generation and capacity building.

9. To stimulate and expose Nigeria’s indigenous shipping firms to coastal shipping

business as a launch pad to deep sea and international shipping.

10. Acquisition of shipping technology creating and diversifying employment

opportunities in the industry.

11. Improved environmental safety.

12. Promotion of economic growth and national development.

3.0 THE COASTAL AND INLAND SHIPPING (CABOTAGE) ACT 2003.

The purpose of the Act is to restrict the use of foreign vessels in domestic coastal

trade and promote the development of indigenous tonnage18. The provisions include

restrictions, waivers to meet lack of capacity, enforcement, Cabotage vessel financing

fund among others.

3.1 Restrictions.

A vessel other than a vessel wholly owned and manned by a Nigerian citizen, built

and registered in Nigeria shall not engage in the domestic coastal carriage or cargo

and passengers within the coastal territorial, inland waters, island or any point within

the waters of the exclusive economic zone of Nigeria19. This general restriction order

is of general application pertaining to Nigerian ownership, manning, building and

registration of vessels and applicable to the carriage of all manner of cargo and to

passengers but not absolutely applicable to towage or salvage services. The Act

further provides that a tug or vessel not wholly owned by a Nigerian citizen shall not

18 Preamble to the Coastal & Inland Shipping (Cabotage) Act 2003.19 Section 3

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tow any vessel from or into any port or point in Nigerian waters or tow any vessel

carrying any substance whatsoever, whether of value or not or any dredge material

whether or not it has commercial value from a port or point within Nigerian waters20.

It follows that the vessels that may be used for towage must be owned by Nigerians

and need not be built or registered in Nigeria, or manned by Nigerians. The restriction

does not preclude a foreign vessel from rendering assistance to persons, vessels or

aircraft in danger or distress in Nigerian waters21. thereby acknowledging the salvage

convention and international customary law for vessels on distress22.

3.2 Carriage of Petroleum Products.

A vessel, tug or barge of whatever type other than a vessel, tug and barge whose

beneficial ownership23 resides wholly in a Nigerian Citizen shall not engage in the

carriage of materials or supply services to and from oil rigs, platforms and

installations or the carriage of petroleum products between oil rigs, platforms and

installations whether offshore or onshore or within any ports or points in Nigeria24.

Though there is no express provision for Nigerian-build and manning, these

requirements still subsist as they are covered by the general restriction which deals

with domestic coastal carriage of cargo and passengers.

3.3 Navigation in Inland Waters.

A vessel of whatever type or size shall not engage in domestic trading in the inland

waters of Nigeria except as a vessel that is wholly owned by Nigerian citizens25. The

20 Section 4 (1)21 Section 4 (2)22 Articles 10, 11, & 12 Salvage Convention. Articles 18 & 21, UN Convention on the Law of the Sea.23 Section 8 defines beneficial ownership as minimum 60% shares ownership by a Nigerian Citizen.24 Section 5.25 Section 6.

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general restriction order also applies here as regards the requirement of manning by a

Nigerian citizen, building and registration in Nigeria26.

3.4 Shipbuilding and Rebuilding A Vessel

The Nigerian-build requirement is subsumed in the general restriction order27.

However this requirement of the Act does not seem to cover all Cabotage trade. For

example there is no mention of Nigerian built ship requirement in the towage

restriction nor in that for carriage of petroleum products. However while the towage

restriction does not cover foreign built tugs or vessels, the petroleum products carriage

restriction does28. The Nigerian build requirement is not applicable where the vessel is

owned by Nigerian Government through forfeiture or capture29. The requirement for

Nigerian built vessels, barges etc. in the domestic coastal carriage of cargo and

passengers carries the immediate prospects of the shipbuilding industry. The same

goes for the rebuilding a vessel provision, to the effect that rebuilt vessels shall be

eligible for Cabotage services if the entire rebuilding including the construction of any

major components of the hull or superstructure of the vessel is effected in Nigeria30.

Ships are not built and displayed for sale in an open market; they are built according

to demand and specifications relating to particular contracts. A ship building facility is

dependent for its survival on demand for its services. The essence of the Cabotage

shipbuilding provision therefore, is to create this demand31.

26 Section 3 27 Ibid28 By virtue of Section 3 which covers domestic coastal carriage of cargo, which includes materials as used in Section 5. on carriage of petroleum products.29 Section 7(2).30 Section 7(1).31 Akabogu, Emeka & anor, “Maritime Cabotage In Nigeria”, 2004. p. 20.

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3.5 Ownership.

The Act talks of beneficial ownership32. The essence of this requirement is to prevent

proxy ownership of shares in the vessel by Nigerian fronts for foreign equity owners.

Where a person beneficially owns shares, he has full dealing powers over those shares

and can derive maximum equity from his ownership thereof33. A demise or bareboat

charter would not ordinarily qualify or be regarded as a beneficial owner34. However,

the Act makes provision for demise chatterers to have the same benefits as beneficial

owners by providing that a vessel shall not be registered or beneficially owned by

Nigerian citizens, unless that the Minister is satisfied among others, that the vessel is

on bareboat charter to Nigerian citizens and is under the full control and management

of Nigerian citizens or a company wholly and beneficially owned by Nigerians35. It

should be noted here that the admiralty law rule in respect of arrest of a ship is that

part beneficial ownership of shares in a sister ship by owners of an offending vessel is

not to justify arrest36 The Act makes provision for vessels that are partly, though

substantially beneficially owned by Nigerians to be registered for domestic trade37.

3.6 WAIVERS.

The Minister is given powers under the Act38 to grant waivers to foreign vessels to

partake in Cabotage trade where he is satisfied that there is no capacity on the part of

Nigerians with respect to satisfying the requirements as contained in Sections 3-6 of

32 Section 533 Op cit 14 34 Congresso del Partido (1978) 1AUER1169 @ 1201 – 1202.35 Section 23(1)(b).36 The Loviersgracht[1995]2Lloyds Rep 411.37 Section 23(3)38 Sections 9-11 Minister’s powers to grant waivers.

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the Act. This is premised on the fact that Nigerian capacity at this time is not such that

can carry the volume of business trade usually associated with the Cabotage trade. The

capacity shortfalls are in various fronts. Currently Nigerian owned vessels are few and

limited in number relative to activities to be undertaken under the Act; without doubt

there are quite a number of Nigerian trained seafarers39 but only a limited few are

qualified with all the requisite international certifications and practical on board

expertence40.

3.7 Minister’s Powers To Grant Waivers.

The Minister may on the receipt of an application grant a waiver to a dully registered

vessel on the requirement for a vessel under the Act to be wholly owned by Nigerian

citizens where the Minister is satisfied that there is no wholly Nigerian owned vessel

that is suitable and available to provide the services or perform the activity described

in the application41. Also where there are no qualified Nigerian seafarers in an

application which has been made, the Minister may grant a waiver to a duly registered

vessel where he is satisfied that there is no qualified Nigerian officer or crew for the

position specified in the application42. Further where the Minister is satisfied that no

Nigerian Shipbuilding Company has the capacity to construct the particular type, size

of vessel specified in an application, the Minister may grant a waiver to a dully

registered vessel on the requirement for a vessel under the Act to be built in Nigeria43.

The granting of waivers by the Minister is discretionary and he may not be compelled

to do so. However where an applicant feels strongly about the Minister’s refusal, he

39 30, 000 by 2001.40 Op cit. 14. 41 Section 942 Section 10.43 Section 11(1).

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may seek judicial review of the Minister’s exercise of his discretion44. The waiver

system adopted by the Act is based on grounds of non-availability. However other

internationally accepted principles of waivers include reciprocity or bilateral

agreements. In Germany for instance, waivers are granted to non – EU vessels only on

the basis of non – availability or if they are available but at very unfavorable

conditions. Spain, Portugal and Sweden grant waivers if no vessels are available for

the particular service. Greece, Germany and Canada grant waivers based on

reciprocity to vessels that allow each others country to participate in their Cabotage

trade. Finland, Norway and Sweden grant access to vessels on the basis of bilateral

agreements45. The granting of waivers on the basis of reciprocity or bilateral

agreement was probably not incorporated into the Act because of the well founded

fears that this might work only to the advantage of foreign operators in view of the

fact that Nigerian operators are not at all involved in international ocean

transportation. It is noted that even where the fact of inadequacy of indigenous

capacity is established the Act provides that a waiver should be granted by the

Minister, in the first instance, to a shipping company and vessels owned by a joint

venture arrangement between Nigerian citizens and non-Nigerians and the

shareholding or equity participation of the Nigerian joint venture partner in the vessel

and the shipping company shall not be less than 60% free from any trust or obligation

in favour of non-Nigerians46. It is only in the absence of such joint venture company

that in the second instance, the waiver may be granted to a vessel registered in Nigeria

44 Op cit 14 p.24.45 Usoro, Mfon Ekong, “Cabotage Bill: Understanding The Issues”, www.16/11/04.46 Section 12(a).

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and owned by a shipping company registered in Nigeria, provided that the applicant

company complies with the relevant provisions of the Act47.

The policy consideration here is to make it possible for Nigerian operators, in the spirit of

the Cabotage regime, to participate in the coastal maritime trade thereby acquiring

relevant experience, even in the present circumstance of gross domestic inadequacy.

Aside from the long-term advantage of the policy, the measure it is hoped will in the

short term break the present foreign monopoly48. Worthy of note is that waivers granted

under the Act are for a specific duration which shall not in any circumstance exceed one

(1) year49. Also the waiver system provided for under the Act may be reviewed after five

(5) years by the National Assembly50. This measure has the attribute of Nigeria

transforming from a relaxed cabotage regime to a stricter cabotage regime with

improvement in maritime experience and capacity of the citizenry.

3.8 CONDITIONS FOR GRANTING OF WAIVERS/LICENSES

Aside from the stated terms of granting waivers, an application must comply with the

procedure and guidelines established and issued by the Minister51. A foreign owned

vessel can only be registered for participation in the Cabotage trade upon obtaining a

license from the Honourable Minister of Transport52 in compliance with the Act and

implementation guidelines. Licenses may be considered by the Minister on the basis of

need for such and where he is satisfied that the applicant has met all the necessary

requirements and paid all the prescribed fees. Other requirements are that the owning

47 Section 12(b).48 Op cit. 29 p.249 Section 1350 Section 14(2)51 Section 14(1); The Hon. Minister of Transport, Dr Precious Abiye Sekibo issued the Implementation Guidelines on Cabotage on 7/6/04.52 Section 15(1)

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company of the foreign vessel has a representative office in Nigeria, all applicable

duties, levies and tariffs imposed by the relevant authorities applicable to foreign

vessels have been paid, the vessel possesses all certificates and documents in

compliance with international and regional maritime conventions and the foreign

vessel meets all safety and pollution standards imposed by Nigerian Law53. Licenses

issued must be carried on board the vessel at all times54. All waivers and licenses are

issued on a one-year tenor55. Applicants wishing to renew same will be required to

produce evidence of improved level of compliance with the provisions of the Act on

manning, ownership and building in the following parameters

a) Evidence of provision of practical training for Nigerian cadets on board the vessel

for the previous year.

b) Evidence of dry – docking and ship repairs in Nigeria where applicable in

addition to the following documents

c) Evidence of payment of 2% surcharge required under the Act where applicable,

and

d) JOMALIC56 certificate and declaration of compliance with seafarer’s condition of

employment.

3.9 REGISTRATION

Registration is compulsory for all vessels intended for use in the Cabotage trade and

shall be dully registered by the Registrar of ships in the special Registrar for vessels

53 Ibid.54 Section 47.55 Section 17.56 Joint Maritime Labour Industrial Council.

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and ship owning companies engaged in cabotage57. Vessels eligible for registration

under the Act include58.

a) Passenger vessels

b) Crew boats

c) Bunkering vessels

d) Fishing Trawlers

e) Barges

f) Off – shore service vessels.

g) Tugs.

h) Anchor handling tugs and supply vessels.

i) Floating petroleum storage.

j) Dredgers.

k) Tankers

l) Carriers, and

m) Any other craft or vessel used for carriage on, through or under water of persons,

property or any substance what so ever.

The Act provides for the following types of registration

1. Wholly Nigerian owned vessels

2. Joint venture owned vessels.

3. Bareboat chartered vessels

4. Foreign owned vessels, and

5. Temporary registration59.57 Section 22(1)58 Section 22(4).59 Section 27 empowers the Minister to grant temporary registration to foreign owned vessels engaged in domestic trade prior to commencement of Cabotage Act for the duration of their existing contract.

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In order to obtain the relevant registration certificate of special Registration60 for each of

the above category of vessels the applicant must meet the requirements prescribed under

the guidelines for registration of Cabotage vessels.

The certificate shall thereafter be carried on board the vessel at all times, endorsed

annually61 and renewable every five years. All such registered vessels which are above

fifteen years of age shall continue to be eligible for participation in the Cabotage trade for

a period of five years provided they possess a certificate of sea worthiness from a

recognized classification society62. Foreign vessels must first obtain a license to trade in

the coastal and inland waters before they can be registered in the special Cabotage

register.

Failure by a vessel to comply with the foregoing requirements before engaging in

domestic trade constitutes an offence under the Act which attracts on conviction a fine of

not less than 5 million Naira63. Further a person shall not in purported compliance with a

requirement under the Act proffer misleading information in any material particular. The

penalties range from payment of a fine to forfeiture of the offending vessel64.

3.10 ENFORCEMENT

The Minister is empowered to create a Cabotage enforcement unit within the

National Maritime Authority (NMA) with appropriate operational guidelines and

However, the implementation guidelines limit the grant to one year after which the condition for foreign owned vessels under the Act will prevail.60 Section 29(1).61 For annual endorsement, an applicant company must as in renewal of license produce (1) evidence of payment of 2% surcharge where applicable and (2) copy of JOMALIC Certificate of compliance.62 Section 28.63 Section 35(1).64 Section 37(2).

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designate the officers in the unit enforcement officers65. The enforcement officers are

empowered to stop and board a vessel which they believe on reasonable grounds to

have contravened the provisions of the Act and to detain such a vessel or officers and

with or without a warrant, to search the vessel and seize anything found which they

believe may afford evidence of contravention of the Act66. An enforcement officer

may where necessary enlist the assistance of the Nigerian Customs Service, the

Nigerian Navy, the Nigerian Police and any other law enforcement agencies as he

may deem necessary67. Also the enforcement officers of NMA are expected to work

in collaboration with officers from other Agencies like the NPA, National Inland

Waterways Authority (NIWA), Joint Maritime Labour and Industrial Council

(JOMALC) where an enforcement officer believes on reasonable grounds that an

offence has been committed under the Act by or in respect of a vessel, the officer

may without a court order by reason of exigent circumstance make a detention order

in respect of the ship68. Upon detention of a vessel the enforcement officer shall issue

a ship’s Detention Order Form, which must as soon as possible be filed at the Federal

High Court69.

Jurisdiction over matters and offences referred to in the Cabotage Act lie with the Federal

High Court. The Court will be expected to adjudicate widely on matters arising from the

Act; particularly the exercise of Minesterial discretion in the grant of waivers is expected

to generate actions for judicial review70.

65 Section 30(1)66 Section 31(1).67 Section 31(3)(d).68 Section 32(1)69 Minister’s Implementation Guidelines. Enjoins E.O’S NOT TO BOARD VESSELS ON INTERNATIONAL trade for purposes of Cabotage & restrict boarding of vessels to port / jetty/anchorage/terminal to avoid security breaches.70 Op cit. 14 p.38.

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3.11 CABOTAGE VESSEL FINANCING FUND (CVFF)

The Act establishes a fund to be known as the Cabotage vessel financing fund71. The

purpose of the fund is to promote the development of indigenous ship acquisition

capacity by providing financial assistance to Nigerian operators in the domestic

coastal shipping72. The sourcing of the fund3 shall be from

a) A surcharge of 2 percent of the contract sum performed by any vessel engaged in

the coastal trade;

b) A sum as from time to time to be determined and approved by the National

Assembly;

c) Tariffs, fines and fees for licensing and waivers;

d) Such further sums accruable to the Fund by way of interest paid on and repayment

of the principal sums of loans granted from the Fund.

The Fund shall be managed under guidelines to be proposed by the Minister and

approved by the National Assembly73.

While the Fund is salutary, it is hoped that it will not have to go the way of the

SASBF, which was bedeviled by corruption and bad management. The fund on its

part will in all probability not be enough to satisfy the demands that would be made

on it. Recourse will have to be made to other sources of funds like commercial banks,

multilateral and development institutions assistance, grants aid and shipyard credit74.

The target funding level of NMA is to attain a funding base of 500 million dollars,

with no upper limit75. The NMA intends that the Fund will be applied towards vessel

71 Section 42(1).72 Section 42(2).73 Section 44.74 Modalities for the Implementation of the coastal and inland waters by NMA 2004.75 Ibid.

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acquisition, infrastructure and manpower development. The Oil and Gas sector will

enjoy considerable leverage, due to its guaranteed cargo traffic. Also priority

allocation will be given to the acquisition of off-shore crew/supply coastal vessels76.

4.0. OPPORTUNITIES IN THE NIGERIA CABOTAGE REGIME.

The scope of cabotage operations under the Act covers the country’s entire territorial

waters including the Executive Economic Zone (EEZ) stretching up to 200 nautical

miles from the coast baseline. There are twenty one (21) ports on the over 800

nautical miles stretch of Nigeria’s coastline in addition to river ports and private

jetties77. The coastline and territorial waters are replete with vast living and natural

resources including oil and gas with an extensive offshore oil – industry where

shipping services are critical operational factors78. According to Dr. Ebiye Sekibo79

oil and gas sector plays a predominant role in Nigeria’s sea trade, estimated to

contribute about 95% to coastal and inland shipping allied marine activities. He

added that fishing trawlers and break-bulk carriers make up the remaining five

percent80. The physical and economic environment, therefore, throws up

opportunities in a well-implemented Cabotage regime such as envisaged by the Act.

The Cabotage law policy which causes all cargos and passengers in the inland and

coastal waters to be transported by ships and ferries built, owned, crewed and

manned by Nigerian citizens will inevitably lead to the development of support

industries such as moving, towage, pilotage, dredging and waste disposal. Also the

development of the inland waterways by dredging coastal waterways and silted

76 Ibid.77 Akabogu, Emeka Op cit. p. 41.78 Okonma, Kelvin. Cabotage Law & Investment Opportunities, Internet service, posted 11/22/2004.79 Nigeria’s Minister of Transport.80 All Africa. Com/stories/200412170362 1/5/2005.

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channels of about 3, 000 kilometers of inland waterways under the jurisdiction of

National Inland Waterways Authority. The rehabilitation of the Onitsha Niger River

port and the planned development of the Oguta Lake River port for loading and

unloading passengers81. Further, waterfront activities such as port operations,

stevedoring, freight forwarding and customs agent, marine environmental

management, survey, engineering and research services, navigation and

communication services82. All these will enhance national economic development

through the contribution of domestic shipping and transportation to national gross

domestic product. A developed, safe, reliable and efficient domestic marine

transportation will relieve a lot of pressure from road and rail transportation in the

movement of petroleum products, fertilizers, cement and other heavy equipment

from the coastal region to the hinterland.

Since the Act bars foreigners from the operation of coastal shipping, it follows that

cargo especially oil and petroleum being lifted solely by foreign registered ships will

now be reserved and guaranteed for Nigerian registered or owned vessels. This

means additional business. “The availability of cargo and passengers to sustain their

business makes domestic shipping companies attractive to credit facilities for fleet

and business expansion and attracts more investors into coastal shipping business”83.

The Cabotage regime creates a domestic market, which ordinarily did not exist,

facilitated by the exclusive control of cargo by Nigerians. Cargo moves through

various ports within the country, through ports to offshore locations, from offshore

81 Igbokwe Mike Esq. Advocacy Paper for The promulgation of A Nigerian maritime Cabotage Law. Mi – Law office @ nova. Net.ng.82 Akabogu. loc. cit.83 Igbokwe Op cit p. 47.

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locations to the inland waterways, from foreign bound vessels going through local

ports, which may have to be transshipped through Nigerian waters84.

Transshipment, lightering and offshore support services will of necessity become

major areas of need. Support services offer an enormous range of opportunities due

to the heavy movement required between the offshore platforms and land locations

for movement of equipment, food service provisions and fabricated machines85.

Insurance Companies will be engaged to insure cargo and vessels and seafarers. Presently

hull and machinery (H & M) insurance is low in the country while Protection and

Indemnity (C&I) insurance does not exist86. Act does not have provisions, which will

directly alter the situation; however its operation will to intents and purposes excite the

market87. It will be most convenient and economical for local ship owners, fabricators and

other operators, to insure hull, machinery and cargo with Nigerian insurers for ease and

smoothness of operation and nearness of claim settlement.

Calls will be made on banks to finance the building and the acquisition of coastal vessels

while the Nigerian shipyards and dry – docks will have greater patronage in building and

repairs of ships. The construction industry would also benefit from the construction,

expansion and repairs of ports and dredging of inland waterways. Information

Technology Systems will be involved in the supply and maintenance of marine radio

communication and radar systems for safe coastal navigation.

The fact that the ships and vessels must be Nigerian-crewed creates employment

opportunities for Nigerian seafarers to run and man the ships88. This will enhance the

84 Akabogu op cit p. 43.85 Ibid.86 Akabogu op cit p.45.87 The Insurance Act 2003 creates an opening for Cabotage insurance under its domestic insurance or reinsurance provisions. Vide Section 72(1) Insurance Act 2003.88 As at 2001, Nigeria had 30, 000 trained but unemployed seafarers.

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training and accumulated experience of Nigerian seafarers89. There is no doubt that the

regulated cabotage regime will create wholesome opportunities within the domestic

maritime industry that will lead to increased economic activities and immense economic

growth in Nigeria.

5.0 THE CHALLENGE .

The opportunities and benefits of the Cabotage regime is acknowledged and no way

in doubt. However the challenge lies in the successful implementation of the

legislation because of pervading tripodal challenges namely, institutional, operational

and economic challenges.

5.1 Institutional

Prior to the enactment of the coastal and Inland Shipping (Cabotage) Ad 2003 a

number of institutional structures that will define the building blocks for the

implementation of Cabotage regime had been in place. Some of the institutions are:

1) The Nigerian Ports Authority (NPA)

2) The National Maritime Authority (NMA)

3) The Nigerian Shippers Council (NSC)

4) The Joint Maritime Labour Industrial Council (JOMALIC)

5) The Government Inspector of Shipping. (GIS)

6) The National Inland Waterways Authority. (NIWA)

While there may be need to tinker with these institutions, the main institution that needs a

total and complete overhauling is the Nigerian Port Authority. (NPA)90. There has been

89 NMA in 2003 sent a set of seafarers to Malaysia under a professional training scheme sponsored by the Malaysian Government..90 Established by the Ports Act of 1954 is saddled with the responsibility of providing an integrated approach to port administration in Nigeria. The port system includes 21 ports. The NPA is charged with the regulation of ports, priers & jetties, pilotage services, berthing, discharging and boarding of cargo from ships and other transport modes.

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consistent call for ports reform and government has been making considerable moves in

this direction.

The Nigerian Ports are generally regarded as far below international standards and

commercially unfriendly, charging high tariffs and delivering poor service. The problems

are myriad and include an inadequate supply of craft and plants, a cumbersome

documentation system, dilapidated port infrastructure, law labour productivity and

volatile dock labour, corruption, vandalism, criminal damage, multiplicity of government

and security agencies. The multiple government agencies include the NPA, Federal

Environmental Protection Agency (FEPA), NMA, Nigeria Customs Service Nigeria

Police Force, Standards Organization of Nigeria, Nigerian Navy, SSS, Directorate of

Military Intelligence, JOMALIC and the National Agency for Food and Drugs

Administration and Control (NAFDAC). Ironically despite the presence of these

multifarious security and regulatory agencies performing duplicated functions, Nigerian

Ports are generally regarded as unsafe91. There is the problem of low or non –

maintenance of existing facilities resulting in dilapidated Port infrastructure and obsolete

plants and equipment with the attendant decline in quality of services and labour

productivity. Others are those of berthing problems arising from quay congestion through

lack of deep water berthing space, reduced channel widths due to silting and other

obstacles and poor lighting in ports. Above all is the shortage of capital for the

improvement of the Maritime infrastructure which reflects in the comparative high port

costs.

The importance of the Ports to Cabotage administration cannot be overemphasized. There

cannot be regulated loading or discharging under the Cabotage trade without proper

91 The Maritime Advocate, issue 15, May 2001 www.maritime advocate. Com. 11/17/2004.

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systems for controls. The Ports Authority should have regulatory control over all harbors,

piers and jetties used in the Cabotage trade92.

The continuing deregulation reforms by way of investing the Ports Authority with only

landlord functions suits the Cabotage regime. In order to achieve the desired objectives,

the Port reforms would include achievement of efficiency in Port operations reduction of

Port costs, reduction in bureaucracy, 24 hour port operation, provision of modern cargo

handling equipment, easy clearance of cargo, efficient pilotage, port services, reduced

tariffs and increased level of productivity93.

Too many government regulatory agencies at the port collating levies and charges may

hamper the successful implementation of the Act, as operators will have to deal with

customs, Ports Authority, Federal Environmental Protection Agency, Directorate of

Petroleum Resources, the Navy, the SSS, Police, Federal Inland Revenue Service and

now the Special Enforcement Unit of the Nigerian Maritime Authority (NMA)94.

5.1.1 Another major challenge is the nations ship building capacity; the technological and

financial inadequacy to build our own vessels by Nigerians. Central to Cabotage vessel

operation is the ship building industry, which is at par with that of vessel acquisition.

All domestic operators in the Cabotage regime will be required to build maintain and

repair their vessels at local shipyards unless where there is no capacity locally for

the construction or repairs of a particular size of vessel95. The main and major

shipbuilding and ship repairing in Nigeria is the “Nigerdock Nigeria Plc. Apart from

Nigerdock Plc with an upgraded capacity to build 10, 000 tons vessels, the capacity and 92 Akabogu op cit. p.72.93 Akabogu. loc cit.94 Business News December 9, 2004 posted on the internet.95 Section 11.

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efficiency of other yards are doubtful96.“Nigerdock Nigeria Plc is the leading West

African fabrication facility for offshore Oil and Gas Industry and is a major ship repairs

and shipbuilding yard. Coming out of a restructuring exercise and now operated by

private investors who are undertaking a major investment programme in capital resources

and people to meet the demands of the projected huge growth in its market97.

“It is hoped that the Cabotage Vessel Financing Fund (CVFF)”98 will constitute a

veritable fund for assisting Nigerian citizens and shipping companies, wholly owned by

Nigerians for vessel acquisition and for promoting the development of indigenous ship

acquisition capacity.

Mr. Uche Nwokedi opined that government proposed Cabotage vessels Financing Fund

(CVFF) should also include maintenance and repairs of vessels used for Cabotage trade99.

With the restructuring going on in the banking sector it is also hoped that specialized

banks will emerge in the near future to fund maritime industry and activities:100

5.2 OPERATIONAL

The operational challenges to be found in the practical working of the Cabotage are

those that border on infrastructural constraint, inadequate capacity and fair trade. The

provision of the waivers/licenses clause in the legislation was to circumvent the problems

of inadequate infrastructure and local lack of capacity in the immediate term. However it

must be borne in mind that the mischief of the Cabotage Act was meant to remedy is the

domination of the Nigeria’s coastal marine services and waterborne trade by foreigners

and the need to empower Nigerian operators; and that foreign firms which can provide

96 “Cabotage Law & Investment Opportunities” by Kelvin Okonma. posted on internet November 22, 2004.97 Advert in The Guardian Tuesday, January 11, 2005.98 Section 42.99 Mr. Nwokedi’s opinion contained in his address at a 2 day seminar in December 2004 in Lagos. Reported Business News of Dec. 9, 2004.100 Some writers have muted the idea of a Maritime Bank.

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necessary services, in the absence of indigenous capacity, do so after servicing a waiver

from the Minister of Transport.

Since the take off of Cabotage on the 1st of May 2004, the indigenous operators have

been complaining that they have not enjoyed the best of the regime. They claim that there

are so many vessels belonging to foreign firms providing shipping services locally

against the provisions of Cabotage Laws101

In raising an alarm, The Managing Director of Express Cargo (Liner) Shipping Company,

Mr. Abel Edijala disclosed that most of the foreign ships are hiding under the provision

of waiver in the Cabotage Law to continue to use foreign crew instead of employing

Nigerians to man their vessels. This development, according to him has impacted

negatively on the Cabotage Law as it is denying Nigerians the benefits of getting

employment opportunities;102 Responding, the NMA has defended this situation by

explaining that indigenous firms failed in responding to the call to register their Cabotage

vessels as against foreign firms which have obeyed this directive103.

An analyst has estimated the number of ships currently used in the Nigeria’s coastal oil

trade at 3008 And of the 58 coastal tankers now owned by Nigerians, 22 are foreign

flagged and would constantly be in need of waivers until a different registration

arrangement is attained104. The newly formed Indigenous Ship owners Association of

Nigeria reckons a tanker tonnage of over 290, 000 tons as belonging to its members105.

5.2.1 Another problem to contend with in the operational challenge of Cabotage regime is

the so-called “cowboys” in the Nigerian Coastal tanker business. These fly – by – night

101 This Day of December 9, 2004.102 This Day of December 2, 2004.103 Ibid.104 TM cover story posted on the Internet Dec. 2001.105 Only Bulkship Nigeria Ltd. possesses an ocean going ship within the Association.

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operators are said to be vessels owned by foreigners but trading in Nigeria under

questionable circumstances. It is alleged that these category of vessels are often

patronized by the oil majors in less than Legal transactions and that they keep changing

names and flags at will, some of the vessels being investigated by the authorities in this

category include MT. Bora, MT Desert King, Magic Wage, MT Golden Sunrise MT

Imperial, MT Searacy, MT Alfatem, MT Wappen, MT Travira, MT Celtic Terriea, MT

African Pride, MT Maria NE and MT Adriana. Industry sources say most of the accused

vessels do not have up-to-date survey and requisite certificates to trade in other overseas

countries and so are stuck in Nigerian waters106.

One of the frontline maritime operators Captain Emmanuel Ihenacho has opined that a

successful Cabotage regime in Nigeria will essentially require to be conditional on the

availability of Nigerian owned registered and crewed vessels of the appropriate market

role and description. He stated that in the context of the current effort of Nigerians to

optimize the Cabotage potentials of the nation there must be emphasis on the need to

provide adequate funding support for asset acquisition if the expected results are to be

achieved107. Ihenacho further noted that aside from the funding requirements for ship

acquisition, given the apparent inbalance which currently exists between supply and

demand factors in Nigeria’s coastal cabotage trade, some of the funding may be made

available for the acquisition of equity interests in existing shipping businesses108.

106 The most contentious of these vessels is the MT African Pride which was owned by a creek flying Panama flag and crewed by Russians. It also led to the sacking of 2 top Naval Officers over their involvement in the disappearance of the ship.The National assembly is still investigating; the House of Rep. recently ordered the arrest of some officials including the hirer of the controversial vessel.107 Captain Ihenacho, MD Genesis Worldwide Shipping was reported in the Daily Champion, December 10, 2004. Posted on the web.108 Ibid.

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On the question of waivers the waiver clauses are inevitable and they are the price for our

under capacity, “impelled by extant practical constraints of capacity shortfall”. These

types of clauses are not novel and are used even by experienced seafaring nations109.

What the situation calls for is honesty and commitment on the part of operators and

implementers alike. “The scrutiny and emphasis…could be more sensibly channeled

towards better effective enforcement of the terms of the law”. The National Maritime

Authority and the regulatory bodies, it is suggested, must be fully resourced, competent

and properly trained and comprehensive, as well as transparent monitoring systems put in

place to achieve compliance with the law by indigenous operators110.

Oil and gas industry account for more than 80% of Nigeria’s Cabotage industry111.

Currently, transportation of Nigeria’s oil and gas materials is done almost entirely by

foreign vessels, but government has said that the Cabotage Law is part of its policy of

raising the local content of the oil and gas industry from its current level of about 10% to

about 40% by the year 2007112.

According to Dr. Abiye Sekibo, Minister for Transport “the oil and gas sector has

hitherto contributed about 95% percent to coastal and inland shipping and allied marine

activities being dominated by foreign operators”. The Cabotage Law he further stated

was enacted to encourage indigenous companies participation in shipping, increase

capacity building, and provide employment for Nigerian seafarers, adding that it was in

line with the Federal Governments’ National Economic Empowerment and Development

Scheme (NEEDS) strategy consequently the enactment of the nation’s Cabotage Act was

109 Cabotage in Nigeria & Waiver Clauses: A Critical Appraisal of Control Options – Andrew Obinna.Onyeru. www. Nigerian maritime.com.110 ibid.111 Vincent Nwanma Don Jones Newswire website 12 – 02 - 04112 Vinwanma @ beta. linkserve. com.

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no doubt a response to the yearnings of Nigerian stakeholders in the oil and gas as well as

the maritime industries for policy intervention113.

5.2.2 However the argument that offers a challenge to the object of the Cabotage Act is

that the regime is a protectionist policy, which violates the spirit of the World Trade

Organisation (WTO) especially the General Agreement on Trade In Services (GATS),

cabotage principles as it were, runs against the globalisation philosophy of the new world

order, the principle of Most Favoured Nation (MFN) and National Treatment, it amounts

to closing our doors to foreigners and depriving the wider market of the benefits of

competition.

The consequential backlash may result in retaliatory measures and withdrawal of

reciprocity privileges against Nigeria by other trading nations and trading.

As logical as the arguments are, they are not absolutely reasonable. First, cabotage is for

the regulation of domestic maritime industry and does not stricto sensu constitute a

barrier to international trade since it does not close the borders to entry of goods but only

makes regulations for the movement of goods and passengers and the provision of

attendant services within the country.113b

Also it is interesting to note that the ardent protagonists of globalisation and trade

liberalization, the developed world economies of United States of America, United

Kingdom, Japan, Canada, et al, practice cabotage and have strong cabotage laws in their

respective countries e.g. USA has a strong Cabotage Law in Jones Act.

Further about 43 countries of the world have Cabotage Laws and practice cabotage in one

form or the order and restrict the participation of foreigners in their local maritime

113 Law and the Oil and Gas Industry Two Day Seminar on Cabotage Regime co – sponsored by NMA & NAPIMS December 2004. www.guadiannewa. Ngr.com. 12/9/2004

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industry. There is the question of national interest and Security, which is the prime

benefit of Cabotage. According to Clyde J. Hart Jr. “Cabotage laws are critical to every

Maritimes nations security interest. More than 40 nations including all G8 members –

agree that free markets are bedrock idea’s but secondary to the welfare of their

citizens…”114. The foregoing facts are self-evident and Nigeria cannot afford to be an

exception; National interest must not be sacrificed on the alter of globalisation and free

trade.

6.0 CONCLUSION

The provisions of the Coastal and Inland Shipping (Cabotage) Act 2003 represent the

foundation of the Nigerian Maritime Cabotage System. It will not be unusual to find

initial difficulty in the implementation of the Act, indeed a significant volume of

adjudication will be expected in the Courts. However it is in the course of

implementation that loose ends will be highlighted and necessary amendments proposed.

Institutional, operational and economic challenges have been identified as key

considerations for a successful implementation of Cabotage in Nigeria. Meeting these

challenges in line with the law and policy of the regime will throw up the envisaged

benefits to the nation and its citizenry. Further, it is the expectation that the Cabotage

regime will stimulate and expose our indigenous shipping firms as a stepping-stone to

deep-sea shipping. For in the immortal words of Sir Walter Raleigh “Whoever commands

113b “The Oscar Chinn Case” ICJ Dec. 12, 1934.114 Clyde J. Hart Jr. was addressing the students of the US Merchant Marine Academy (Kings point on Jones Act; cf. Mikee Igbokwe Esq. op cit.

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the sea, commands the trade. Whosoever commands the trade of the world commands the

riches of the world and consequently the world itself.”115

115 Judicious & Select Essays and Observation by Sir Walter Raleigh upon the First Invention of shipping London. H. Moseley, 1650, quoted by Stop Ford in maritime Economics’ (London, Unwin Hyma) p.138. cf. Principles of Cargo Reservation & Their Effects on capacity Building In Nigeria, workshop paper by Chris Asoluka; April 2001.

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