Ten years after the enactment of the Coastal and Inland Shipping (Cabotage) Act, the Lagos State Government has canvassed a review of the legislation to reduce the foreign share ownership of companies that engage in the participation of the trade to 49 percent.
The Cabotage Act 2003, which is a protectionist law, provides that vessels operating in Nigerian inland and coastal waters must be owned by Nigerians, must be built in Nigeria, must be registered in Nigeria and must be manned by Nigerians.
The Act in recognition of the low level of infrastructure and capacity of Nigerian operators both in terms of expertise and tonnage, however provides for a waiver clause to be granted by the Minister of Transport to foreign fi rms in a situation whereby Nigerians lack the capacity to render certain services.
Lagos State Commissioner for Ministry of Energy and Mineral Resources, Taofi q Tijani, who spoke at a recent training workshop on understanding the Cabotage and Local Content in the Nigerian Oil and Gas Industry (Upstream), noted that fi rms that would be considered for the waiver clause should have not more than 49 percent foreign ownership while the remaining 41 percent would be owned by Nigerians.
This is unlike the current situation whereby most of the companies that benefi t from the waver clause are 100 percent owned by foreigners.
According to him, the Nigerian cabotage scheme was designed to ensure Nigerians participate actively and also benefi t from this aspect of the economy and also ensure manpower and infrastructure development, which will be facilitated by this form of equity ownership structure.
The companies that would be affected by the share ownership structure include those that operate vessels that commercially engage in domestic sea transportation of goods and persons, various types of vessels used to provide services including technical repairs and vessels used by companies for their own purpose supplementary to their core business, among others.
He noted that the achievement of the objectives of the legislation has been impeded by inadequate human capacity, inadequate infrastructure, inadequate education and training, high and large fi nancial investments needed to make an inroad in the trade, politicision of the scheme and lack of political will on the part of the government and its agencies, among several other.
He regretted that currently there is no fi rm Memorandum of Understanding between the International Oil Companies and the Nigerian Content Development and Monitoring Board (NCDMB).
While citing the Indonesian example, which also operates a Cabotage Law called the "LOS"- Law no. 17 of 2008, he noted that there is an article in the law that stipulates that only Indonesian fl agged ships should operate within Indonesian waters, which also include ships that engage in commercial shipping activities within the inland and Coastal region, among others.
On the initiatives of the state, he disclosed that the Lagos State Government believes that there is a potential for commercial hydrocarbon discovery within the state's boundaries.
According to him, Lagos State lies in the Dahomey basin and that countries that have areas in the Dahomey basin have started producing hydrocarbon from their boundaries in the basin
National Mirror