By Ajibola Abayomi,
May 22, 2019.
National President of National Council of Managing Directors Customs Licensed Agents (NCMDCLA), Mr Lucky Amiwero has the raised the alarm on the dilapidated state of scanners at the Nigerians ports.
While the nation risks continued importation of illegal and dangerous ammunition through the ports owing to reliance on almost 100 percent physical examination being conducted by the Nigerian Customs Service across the nation borders posts, he called for urgent attention to revert the tide.
The former member of presidential task force on the reform of Nigeria Customs Service; presidential committee on destination inspection and ministerial committee on fiscal policy and import clearance procedure noted the state of the scanners was the cause of to undue delay in the Nigeria import, export, regulatory and transit procedures.
He said it has led to” lengthy, cumbersome procedures that is associated with unnecessary delays, high Transaction cost and increase of cargo dwell time, which makes our port the most expensive in the globe.
Furthermore the NCMDCLA stated that: “The acquisition of the Scanners was contracted under the Destination Inspection Scheme between the Federal government of Nigeria and some service providers, namely: CotecnaSGS and Global Scan on a Build, Own , Operate and Transfer(BOOT) Basis, for a period of seven years from 1st of January 2006 to 31st December 2012, which was finally extended for one year by the Federal government.
“The agreement for the provision, installation, operation and management of X-ray Scanning Equipment and Software for examination of goods between the Federal Republic of Nigeria and Cotecna Inspection Limited, Societe general de surveillance (SGS) and Global Scan System Limited as contained in Articles 4 to 4.3 which provides for ownership of equipment during the duration of the contract and the transfer to the Federal government as detailed below:
(a)4-Ownership of equipment.”
Below is the full text of his letter to President Buhari.
AN URGENT NEED TO INSTITUTE REFORM TO ADDRESS THE CHALLENGES ON IMPORT-EXPORT, AND TRANSIT REGULATORY PROCEDURE IN NIGERIAN PORTS
FORMER MEMBER PRESIDENTIAL TASK FORCE ON THE REFORM OF NIGERIA CUSTOMS SERVICE; PRESIDENTIAL COMMITTEE ON DESTINATION INSPECTION AND MINISTERIAL COMMITTEE ON FISCAL POLICY AND IMPORT CLEARANCE PROCEDURE
19th MAY 2019
PRESIDENT AND COMMANDER-IN-CHIEF
FEDERAL REPUBLIC OF NIGERIA
AN URGENT NEED TO INSTITUTE REFORM TO ADDRESS THE CHALLENGES ON IMPORT-EXPORT, AND TRANSIT REGULATORY PROCEDURE IN NIGERIAN PORTS
ISSUES, CHALLENGES AND REFORM OF IMPORT, EXPORT, REGULATORY AND TRANSIT PROCEDURES TO ADDRESS NIGERIA RANKING ON TRADING ACROSS BORDERS(TAB)
Nigeria Import, Export, Regulatory and Transit procedures, is encountered with lengthy, cumbersome procedures that is associated with unnecessary delays, high Transaction cost and increase of cargo dwell time, which makes our port the most expensive in the globe
1.THE NEED TO REFORM THE IMPORT-EXPORT, REGULATORY AND TRANSIT PROCEDURES IN NIGERIAN PORTS
The Reform of Import-Export, Regulatory and transit procedures, is to implement integrated set policy and procedures that is globally accepted, which will ensure effective Trade Facilitation by the reduction of transaction cost,(TC) cargo dwell time(CDT) and ensure safety and security(SS) of the processes in Nigerian Ports
2.BREAK DOWN SCANNERS AND THE EFFECT IN THE CLEARANCE OF GOODS AT THE PORT
The Breakdown scanners necessitate the adoption of 100% physical inspection/Customs examination that is quite laborious in the un-stuffing and loading of goods, which in most cases are destroyed during offloading and re-loading from the containers
It resulted to serious delays , with high Demurrage, Rent, and high security implication for non-application of scanners for the detection of unwholesome goods, arms and ammunitions in contravention of WCO KYOTO convention and WCO SAFE Frame work protocol ,that mandates contracting member to use Non intrusive Inspection(NII) (Scanners) as a security and Facilitating tool.
2.1THE DESTINATION INSPECTION CONTRACT BETWEEN THE FEDERAL GOVERNMENT AND THE SERVICE PROVIDERS ON THE PROVISION, INSTALLATION AND MAINTENANCE OF SCANNERS
The acquisition of the Scanners was contracted under the Destination Inspection Scheme between the Federal government of Nigeria and some service providers, namely: CotecnaSGS and Global Scan on a Build, Own , Operate and Transfer(BOOT) Basis, for a period of seven years from 1st of January 2006 to 31st December 2012, which was finally extended for one year by the Federal government
The agreement for the provision, installation, operation and management of X-ray Scanning Equipment and Software for examination of goods between the Federal Republic of Nigeria and Cotecna Inspection Limited, Societe general de surveillance(SGS) and Global Scan System Limited as contained in Articles 4 to 4.3 which provides for ownership of equipment during the duration of the contract and the transfer to the Federal government as detailed below:
(a)4-Ownership of equipment.
(b) 4.1- The location in the appendix 3 and property to remain that of the service provider during the duration of the agreement
(c) 4.2 The transfer at the end of the duration of the agreement to the Federal government, which, includes the Scanners and spare part, shall be absolute and unconditional with residual value of Zero
(d) 4.3 The Equipment transferred at the end of the Duration of the Agreement shall be covered by maintenance agreement providing for spare parts and labor of six(6) months, as confirmed by manufacturer of the Equipment in writing
2.2.THE TRANSFER OF SCANNING EQUIPMENT TO THE FEDERAL GOVERNMENT WITH SIX (60 MONTHS MAINTENANCE, LABOR AND SPARE PARTS, SUPPLY
The Articles 4.2 and 4.3 contained in the transfer clause , TRANSFER of the scanners to the Federal Government, which includes spare parts and labor for six (6) months after the expiration of the contract as confirm by the manufacturer of the equipment in writing , which presupposes that all the scanners handed over to Federal government/Customs must be in perfect working condition
Inline with the provision of the contact in Articles 4.2 and 4.3, the Scanners that are transferred to the Federal government/Nigeria Customs Service must be in perfect working condition, which includes unexpired six (6) Months maintenance with labor and spare parts
The present state of the scanning Equipment at the port was totally neglected by the government agency who supervised the transfer to take cognizance of the accommodation of six(6) months maintenance, labor and spare parts after the hand over, which should have transferred almost a new equipment to the Federal government going by the provision of Articles 4.2 and 4.3, that requires any fault part to be replaced in line with the agreement.
2.3 .THE PRESENT STATE OF THE COLLAPSE SCANNERS AND THE RECOMMENDATION BY THE TRANSITION IMPLEMENTATION COMMITTEE IN THE SMITH DETECTION REPORT TO RETURN THE BREAK DOWN SCANNERS TO THE DELIVERY STATE
Most of the Fixed Scanner where commissioned from 2010 to 2012 ,Cotecna, which includes two(2) of 9.0MeV Dual Fixed Scanners for Apapa and Tincan, GlobalScan 9.0 Mev Dual View Fixed Scanners and relocatable at onne ports
The Fixed Scanners falls within 7 to 9 years as at date, which is still operationally acceptable internationally either for upgrade, enhancement.
The report of Smith Detection contained the acceptance procedure, which specify the Vital refurbishments, necessary to return the system to an “ as” delivered state or include new technology as detailed below:
- UPGRADE: – these improvements will help fight obsolescence by replacing out- of –date items and systems
- ENHANCEMENT: – These optional additions, can add innovation new features to the existing Scanning technology.
- 4 UPDATE AS RECOMMENDED BY THE IMPLEMENTATION TRANSITION COMMITTEE
The total Cost submitted by Smith Detection for the Update of the five scanner as at Nov. 2013 to the delivered state: as contained in the report
- Fixed scanners Apapa Port——– Euro E76,152,00
- Mobile Scanners Idiroko Border—Euro E200,052,00
- Fixed Scanners Seme Border——-Euro E326,518,00
- Mobile Scanners Warri port——-Euro E663,645,00
- Mobile scanner Apapa port——-Euro E407,123.00
40% of the monthly fees of the service providers would be retained by the Government as a performance retainer until the completion of the acceptance procedure, before payment of the the retainer fees as contained in the report
(i)Re-evaluate the scanners to know the present state and update the scanners as recommended by Smith Detection the manufacturers of the scanners by procedure expert
(ii) Look into the main cause of the collapse scanners, and if possible work out a PPP arrangement to maintain the scanners by releasing part of 1% FOB provided for Inspection under Pre-Shipment Inspection Act 11 Section 3
3.0 THE IMPLEMENTATION OF EXECUTIVE ORDER IN THE PORT BY THE ENFORCEMENT OF PORT RELATED OFFENCES, ETC ACT 61 OF 1999 FOR ONE STOP-SHOP PROCESS
The Port Related offences, Etc. (Amendment) Act 61 of 1999, clearly spelt out Federal Government Agencies allowed in the Ports and the lead agency, which is contained in section (1A) and (1B), which conferred on the Nigeria Custom Service Lead Agency to Coordinate and controllaws relating to import and Export in the Port in line with international best practice
Inline with international best practice, one-stop –shop approach with lead agency coordinate all inspection activities, which will reduce bottle necks and cost of doing business.
The Act gave Nigeria Customs the power to Coordinate and invite any agency that their presence is required
4.0UTILIZATION OF PART OF NIGERIAN PORTS AUTHORITY COLLECTION OF 7% PORT DEVELOPMENT LEVY(PDL) FOR THE MAINTENANCE, MANAGEMENT AND CONTROL OF THE GRIDLOCK, THE BAD PORT ACCESS ROADS, HOLDING BAY AND TRAILER PARKS
The clearance of goods from Lagos Ports is associated with High Demurrage, Rents, Risk of carriage and continuous delay, which has heightened the cost of transportation, increase the number of days to access the port and exist the port, with attendant carriage risk of continuous falling of containers due to the terrible condition of the port access roads
7%(percent) Port Development Levy(PDL) is to develop port infrastructure such as holding bay, trailer parks and port access roads especially now that the Authority is not involve in cargo operation and port development
The Nigerian port Authority(NPA) allocation of the Port Development Levy collected under Custom and Excise (Miscellaneous provision) of Act No. 8 of 1978 Section 1-(2), should be utilized for the development, repairs of the Port Access Roads, Truck trailer Park and Holding bay in line with section 32-(a) of the Nigerian ports Authority Act, which conferred on the Authority Maintenance, control and management of the port access roads
Under the concession agreement between the Terminal Operators and the Federal government, the Licensed Customs Agents/Importers pays for the holding bay fees under cargo dues , there is the urgent need to provide holding bay that is missing in the concession arrangement
5.0 THE OVERLAPPING JURISDICTION OF COST AND PROCEDURE ON IMPORTED REGULATED PRODUCT
There is duplicated cost and procedure on same product by (NAFDAC) and (SON) and other regulated agencies , which contravenes the Articles VIII of WTO, (FAL) convention of (IMO) and (WCO) Revised Kyoto Convention on Harmonization, simplification and minimization of procedure and cost.
The pre-Shipment Inspection process of SON on SONCAP and duplication of local procedure and increase cost and time of doing business in the Port, which create bottlenecks that results to high Demurrage and rents as a result of delays
The duplication of cost and process on the same product should be streamlined, discountenance with and the duplicity of test, Pre-Shipment procedure and cost should be harmonized to reduce cost and time of clearance.
6.0 THE NEED TO COMPLY WITH THE STATUTORY WAIVER OF RENT/ DEMURRAGE ASSOCIATED WITH DELAYS OF GOODS SUBJECTED TO DISPUTE RESOLUTION AND INVESTIGATIVE ACTIVITIES AS PROVIDED IN CUSTOM AND EXCISE MANAGEMENT ACT SECTION 152
Dispute resolution and investigative activities is associated with delays that increase cost that leads to abandonment of cargo by the Importer,as a result of Rent and Demurrage accrue during the period of dispute settlement and the resolution of the Investigation activities.
The Customs and Excise Management Act section 152 conferred on the Customs Service the Right to grant waiver on cargos that is subject to dispute resolution and investigative activities in line international best practice, there is the urgent need to comply with the provision of the Act on cargo under investigative activities and dispute resolution mechanism
7.0 THE INCREASE OF REVENUE COLLECTION ON THE RECOVERY OF SHORT LEVIED DUTIES ON DISCREPANT CARGOS COVERED UNDER SECTION 142 OF THE CUSTOMS AND EXCISE MANAGEMENT ACT AND IMPORT GUIDELINE
The provision of Section 142-(2) of the Customs and Excise Management ActC45 of 2004 provided for cargos with discrepant nature to be assessed and issued with Demand Notice(DN) if is not contraband items.
Inline with Pre-Shipment of inspection Act 11 of 1996, and the import guideline, discrepant is defined as:
- Not compatible with the other fact
- In compatible
- Not in agreement
- At variance
- Not in accord
All shipments as discrepancy is covered under section 142 of the Customs and Excise Management Act, the Pre-Shipment Inspection Act and the Import Guideline asdiscrepancy cargos, which raise additional revenue to the economy instead of auction of cargos in line with global best practice that focus more on pecuniary penalty than seizure of goods without any security implication
8.0 THE IMPLEMENTATION OF SINGLE WINDOW ON IMPORT-EXPORT AND TRANSIT REGULATORY PROCEDURE
The coordination and Harmonization of a one-stop-shop operation of single window architecture on Import-Export and Transit regulatory procedure is Contained in the Port(related) Offences etc. Act 61 of 1999, Section 36-(1)(A_B) of the Customs and Excise Management Act C45 of 2004
Inline with international best practice and national demand, the present interoperability of (ICT) platform, should include Transit module in the process, which is required as a Transit State to reclaim our Transit Trade from our neighboring West African Ports that will generate wealth and create employments
The creation of national data sheet, to capture, define, analyze, reconcile, to use one single data element name with common definition or coding reconcile with international standard for a single National data sheet
Inline with global best practice, the single national data sheet will accommodate and harmonized, simplify and minimize duplication and redundancy, which enhance and facilitates trade with the signing of the (MOU) by all Federal Agencies for a one stop-shop operation.
9.0 THE UNWHOLESOME PRACTICE OF SHIPPING COMPANIES AND TERMINAL OPERATIONS AND CHARGES NOT TIED TO SERVICE
The shipping companies are owners of most Terminal e.g
(a) Maersk Line owns- ( APMT) Terminal
(b)Grimaldi Line owns- PTMLS Terminal
(c) Comet Line owns- Five star logistic Terminals
(d) Lagos and Niger owns TICT Terminals
The ownership allows the unwholesome practice that necessitate the High Demurrage, rent payment and the duplicated charges by shipping companies and Terminal operators, which allow the increase on Demurrage and rent at will.
There is the need to look in the shipping and delivery cost so as to reduce cost not tied to service and to check the unwholesome practice of contract of carriage as it affects the two parties on cargo operation
10.0 NIGERIAN PORTS AND THE DEVELOPMENT OF HUB/TRANSSHIPMENT PORT TO RECLAIM OUR SIPHONED CARGO FROM WEST AFRICAN PORTS
Nigerian cargos are moved to other West African ports as a result of inefficiency ofour port system and draught level, which cannot accommodate mega ships with 8000-20000 TEUs. For Millennium Ports, Preferred, Transshipment or Load center
Most West African ports that are building their ports for Nigerian cargo as with their various draft Level reflected hereunder:
(i)PORT OF LOME: have advantage of Draft up to 15,5 m
(ii)COTONOU PORT: have advantage of of Draft 15m
(iii) GHANA PORT: have advantage of Draft level of 19 m after the expansion and the commissioning in 2019
(iv) CAMEROON (IRIBI): Container Terminal with 16 m draft
(v) NIGERIAN PORT: is still under8- 13 m draft, which allow most Nigerian shipment to be transshipped through these Port
The Nigeria concept of Deep sea/ Transshipment center must be designed to accommodate Large E-Class Vessels/Mega ships of 8000- 20000 TEUs, which meets up with regional and global demand and stem the diversion of goods to neighboring Port
Look into Port inefficiency associated with unwholesome practice manipulated delays by providers of shipping services and other Government Agencies, which resulted to high Demurrage, rentand High Transaction cost that is inimical to the efficiency of the port.
There is the need to re-claim our Cargo from Neighboring West African countries that is now hub for Nigeria Cargos, by working out mechanism for a better developed regional HUB to consolidate on our destination of Nigerian cargo that has been syphoned by regional ports
11.0 MULTIPLE CHECKS, STOPPAGE BY FEDERAL OPERATIONAL UNIT AND DELAYS IN THE CLEARANCE OF GOODS
The process of multiple Alerts should be Harmonized and Comply with International best practice on a One-stop-Shop as Contained in WCO revised Kyoto Convention that compel contracting parties to harmonize, Simplified their procedure to remove complexities.
The Federal operation unit(FOU) should be streamline and concentrate on the Anti-smuggling activities 40 milesradius from the Port in line with its formation.
All import process should be conducted in the Port as One-stop-shop process and eliminate the double examination, delays Demurrage and theoff loading of goods at the Federal operation, which is additional cost to the Importer/Customs Agents.
The activities of multiple checks duplicate procedure and increase cost which contravene WCO Kyoto convention, IMO FAL Convention and WCOSAFEframe Work of Standard to Secure and Facilitate Global Trade, it increase cost, duplicate procedure and is a disincentive to Foreign Direct Investment(FDI) on the complying with international conventions and protocol which we are contracting and the concern of our international trading partners
12.0 THE NEED TO RECLAIM NIGERIA TRANSIT CARGO FROM NEIGHBORING WEST AFRICAN PORTS THROUGH THE DEVELOPMENT AND IMPLEMENTATION OF GLOBAL BEST PRACTICE
Nigeria lost the Transit status as a Transit state when all the Transit trade was relocated to our NeighboringWest African ports:-
(i)due to lengthy and cumbersome procedure,
(ii) diversion of goods into domestic consumption
(iii) out of date procedure
(iv) No national guarantee scheme to secure duty
(v) Lack of modernTransit facilities
(vi) No transit Module
(vii) Lack of coordination of government agencies
inline with international best practice Nigeria must design the following:
- A National Guarantee system to cover the Payment of Import duty taxes at the Time of Transit
- Custom Seal that ensure the physical integrity of the goods while in Transit, making sure that the goods start and exit the Transit in its original state.
- Implement electronic tracking system enabling Customs to track and locate transit Vehicles and guide intervention force including Customs Staff
- A document system to enable transit document issued at the start of Transit journey to be accepted by transport and Custom Authority along Transit.
- FACTORS HINDERING THE PROCESS OF EXPORT OUT OF NIGERIA PORTS
There is the need for a One-Stop –shop process on Export as applied internationally to encourage foreign exchange earnings and better balance of trade by the reduction and streamline the process.
It will reduce bottle necks of lengthy and cumbersome process that effect our product internationally due to delays
We have done elaborate work for the reform on Import, Export and Regulatory Transit procedure at the request of the Presidency( Secretary to the Government of the Federation(SGF) letter attached with detailed solution to address the vice inherent in the import, Export and Transit Regulatory procedure but still await Federal Government response
Thanks you in anticipation of your urgent response
CC: PRESIDENT AND COMMANDER-IN-CHIEF
CC: VICE PRESIDENT
CC: SECRETARY TO THE GOVERNMENT OF THE FEDERATION(SGF)
CC: HONORABLE MINISTER OF FINANCE
CC: HONORABLE MINISTER OF INDUSTRY TRADE AND INVESTMENT
CC: CG: NIGERIA CUSTOMS SERVICE