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Cabotage/Oil rig judgment: How NASS was lobbied to remove rigs from original bill

By Godfrey Bivbere

AS the concerns over the recent Court of Appeal judgement on the status of oil drilling rigs as the vessel continues, indications have emerged that oil rigs were in the original copy of the Cabotage bill sent to the National Assembly for consideration but was removed during the review.

Oil rig

A source involved in the drafting of the then bill who spoke with Vanguard Maritime Report said oil drilling rigs were included in section 25 sub-section 2 of the bill and expressed shock that it was absent in the final bill that former President Olusegun Obasanjo finally signed into law.

The source explained that it was discovered after the signing into law of the bill that some powerful interests in the oil and gas sector were actively involved in lobbying members of the National Assembly for the removal of the oil drilling rigs from the list of platforms in that section of the law.

The source explained that the reason for seeking the removal may not be connected with economic benefits from non-payment of the 2.5 per cent Cabotage levy and the technical benefits to the country.

According to the source: “These people lobbied members of the National Assembly hard to ensure that rigs were removed from the bill. They know what the country stands to gain will run into several billion, if not trillions of naira. The judgement is faulty because there are other areas of the law that talk about platforms used in the exploitation of the resources above and below the sea.”

Also read: Gas flare out programme to revive oil industry fortunes – FG

Speaking on the issue, Emeka Akabugo of Akabogu & Associates, a law firm, faulted the judge explaining that the judge relied on section 25 sub-section two which did not list drilling rig as one of the craft to be registered under the Cabotage Act.

According to him, “The matter brought before the court was whether a drilling rig is a vessel, but at the end of the day, the court ruled that drilling rig is not a vessel. I think they just strictly relied on the provision of the Cabotage Act which did not include the drilling rigs as one of those vessels/craft which is eligible for registration under the Cabotage Act because if you look at section 22 subsection 5, of the Cabotage Act it is not listed.

“It lists about twelve specific items and then under subsection 21, it makes a provision for any other craft. Section 22 subsection two states that vessels eligible for registration include towboats, cargo vessels, bunkering vessels, ocean trawlers, badges, offshore service  vessels, tugs, supply vessels, floating petroleum storage, dredgers, tankers, carriers and any other craft used for carriage on, through or underwater of persons, property or any substance whatsoever.

He further noted that the judgment “Only means that the court narrowly interpreted the convention of the Cabotage Act failing to take cognizance of the wider range of the intentions of the Act and why I said that is, in my personal opinion, the judgment is a judgment which is unfair to the state of the Cabotage Act and it is a judgment which would potentially be set aside.

Legislative review

“The reason I said that is because the state of the Cabotage Act is to ensure that all craft which are operating within Nigerian waters and which are operating economically and commercially are able to ensure it is covered under the Cabotage and that the Nigerian government and ship owners should be able to take advantage of that to promote shipping.

“I certainly was part of the drafting and in the drafting, we tried as much as possible to incorporate everything possible both specific and general. What happens in the process of legislative review of bills is very familiar to you and I. There are different interests. So whether it happened or not I cannot use my mouth to specifically tell you. But you should know what happens. What is possible and what is not possible.

“There must be an importance placed on the need to ensure that every potential definition which affects the conversion operation especially in the critical oil and gas sector of the vessel is included.

“So the draft bill which is for the re amendment of the Cabotage act which should be before the National Assembly now, we should ensure that it is there. Good enough it is not yet being considered so it is a good opportunity for that to change otherwise it would take another ten years before the Supreme Court would have the opportunity to review this case,” he noted.

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