A cascade of directives in the dying days of former president, Dr Goodluck  Jonathan’s administration created eerie feelings in many a department of the country’s life.

The maritime industry is one of the casualties of the former president’s agility at dusk. One of such alleged directives, gleefully carried out by the Nigerian Ports Authority (NPA) ordered LADOL Integrated Free Logistics Zone Enterprise to relocate its $500 million Egina FPSO currently going on in Apapa, Lagos, South-West Nigeria, to Bayelsa State in South-South Nigeria or to any convenient facility in the area.

Now, the only convenient facility that LADOL could possibly relocate its massive Egina Project to, is the Onne/Ikpokiri Free Zone which is exclusively controlled by INTELS.

What this directive connotes then is that LADOL, an INTELS’ competitor, should run its business from INTELS’ facility, under INTELS’ control.

The grave implication of this ominous directive is a tragic economic prognosis for LADOL. It will in lucid language put a tinge of distress for LADOL and its Egina FPSO facility projected to employ about 50,000 Nigerians in the next five years; a massive project hailed worldwide as a magnificent milestone in Nigeria’s Local Content drive. Therefore, any fracture or even strain of the economic hope held aglow by LADOL, the poster child of local content and other Free Zones, which will be the inevitable grim consequence of this monopoly inspired directive, will spell failure for Nigerian content Law, a revolutionary edict that has attracted over $5 billion investments into Nigeria’s petroleum industry since its signing in 2010, with a projection of another $10 Billion between 2015 and 2016.

But let us pause and look at the second arm of the directive. Here, the NPA says that all oil and gas cargoes must be handled at the designated terminals at Onne, Warri and Calabar Ports. Again these three ports are controlled exclusively by INTELS.

Before coming to the economic implications of this branch of the directive, let’s ask a vital question. And it is this, “what does NPA mean by ‘oil and gas cargo’?” This question becomes very critical because the term ‘oil and gas cargo’ was neither mentioned in the contract between the sea ports and terminal operators on the one hand and NPA and Bureau of Public Enterprises (BPE) on the other nor was it in the 2004 Oil and Gas Export Free Zone Act (OGEFZA). Indeed Section 1(1) of OGEFZA states, “The President hereby designates the Onne/Ikpokiri area of Rivers state as an Export Free Zone. (in this Act referred to as “The Export Free Zone”. There was no mention of ‘oil and gas’ anywhere.

This monopoly coated move to hand over oil and gas cargo to one organization was totally rejected by Jonathan’s predecessors, former Presidents, Olusegun Obasanjo and significantly, Umaru Musa Yar’dua whose family are shareholders in INTELS. And these rejections were based on the clear dire economic consequences a monopoly would have on the ports and the nation generally. Despite the patriotic stance taken by Obasanjo, late Yar’dua and the House of Representatives in 2012, the oil and gas cargo issue sizzled again in 2013. Precisely on April 22, 2013, Ports and Terminal Operators Nigeria Limited (PTOL) sent a petition to the House Committee on Marine Transport to the effect that vessels carrying cargoes to its terminal were being diverted to Onne terminal controlled by INTELS Nigeria Limited because such cargoes were wrongly and strangely tagged ‘oil and gas cargoes’, causing PTOL to lose millions of dollars and naira.

The House Committee held a Public Hearing of the Stakeholders on the matter on April 30, 2013 where INTELS, NPA and PTOL, all made presentations. At the end, the House Committee on Marine Transport upheld the House Resolution of 2012 – That operators should be free to choose ports of discharge of their cargoes within designated ports of Onne, Calabar, Port Harcourt and Warri”. By their pronouncement, they asked that the status quo prevailed while INTELS’ attempt to justify the ‘oil and gas cargo’ theory fell flat on its face.

Even as late as September 18, 2014, the Senate Committee on Privatization waded into the same simmering issue after a protest letter from the Seaport Terminal Operators Association of Nigeria, (STOAN).

In its letter to the Honourable Minister of Transport, which it copied the Managing Director, Nigerian Ports Authority, Director General, Bureau of Public Enterprises and Nigerian Seaport Concessionaires/Seaports Terminal Operators Association, the Senate committee stated clearly that “Terminals in Eastern Ports, in particular, are all general cargo terminals ……………That the Lease Agreements contain the operations which each Terminal is entitled to undertake and none was designated for any special purpose. The distinction as to oil and gas cargo therefore does not arise under the terms of the Lease Agreements.”

The Senate committee, importantly, concluded, “That the diversion of oil and gas related cargoes from one port to another and /or one Terminal to another is contrary to the concession agreement and the spirit of competition and efficiency which the ports reform seeks to engender”. It then urged the minister to advise NPA to adhere strictly to the terms of the extant Lease Agreements.

Despite the Senate committee’s directive, NPA continued with its dubious diversion of vessels to INTELS ports forcing the committee to write the Honourable Minister of Transport for a second time practically warning the Minister and directing him, as a matter of utmost urgency to urge NPA to carry out its observation. The committee, perhaps, to press down its seriousness, directed the Minister “to submit a position paper on the reasons a particular terminal operator is being favoured at the expense of others in relation to the handling of a particular type of general cargo that has been termed “oil and gas” cargo as against the agreement signed with all parties to the concession with the Federal Government”.

Sadly, it is this same fraudulent interpretation and implementation of the concession agreement by the Minister of Transport and NPA that former president, Jonathan gave a seal of approval by his directive of April 27, 2015. Ironically it was the same issue which the Senate Committee on Privatisation patriotically condemned twice, that the Senate now reversed itself to endorse when on May 7, 2015, it passed the amendment to the Oil and Gas Export Free Zone Authority Act (OGEFZA).

In a position paper presented to the Joint Senate Committee on Trade and Establishment and Public Services, on the Act to amend OGEFZA, on September 24, 2014, Mike Igbokwe, (SAN), captured the economic implications of Jonathan’s directive and the amended Act. In his words, “The discriminatory exclusion of the Port Harcourt Ports and Western zonal ports from the ports of discharge of ‘oil and gas related cargoes’ will adversely affect them financially, and make it impossible for them to fulfil their obligations to NPA and the Federal Government and frustrate them out of business”.

Some of these seaport and terminal operators pay as much as US $11 million – U$12 million annually as lease fees. This apart, they had invested massively in oil and gas related cargo handling equipment, specified costly plants, and assets based on the nature of cargo (general, bulk and container) and which they must maintain at heavy costs. To crown it all, the NPA imposes on the terminal operators the obligation to guarantee minimum tonnage, handle and achieve 90% of forecast or projected volume or as contained in their technical proposals. Failure to achieve this would result in payment of penalties.

Jonathan’s directive will inevitably reduce the cargo coming to and being handled by the seaport and terminal operators and thus render them financially incapacitated. They will therefore not be able to meet the minimum throughput they had projected as their fortune will take an abysmal slide. And thousands of Nigerians gainfully employed in their firms will be thrown back into the harrowing street of unemployment. This certainly would not be the prayer of any government.

And this is just enough for President Mohammadu Buhari, a leader with an uncommon carriage of his personal and patriotic convictions, to dig deep into this looming maritime catastrophe and act now.

It has indeed been alleged that the OGEFZA mysteriously passed by the Senate on May 7, 2015 had a list of 12 Free Zones that must be moved under the Oil and Gas Free Zone Authority. Some of the Free Zones include Olukola Free Zone, Ondo state, Ibaka Deep Sea Port, Akwa Ibom, LADOL Free Zone, Lasgos, Snake Island Free Zone, also in Lagos and Brass, Bayelsa state, among others.

By Sadiq Abubakar