Overview of Licensing and Regulation of Maritime Service Providers in Nigeria

CONTRIBUTED BY CHIBUEZE. K. JAMES

INTRODUCTION

The maritime transportation industry in Nigeria is undeniably important to the country’s economic growth as its role can either have a positive or negative impact on the economy. The Nigerian economy is classified as a mixed economy and the maritime industry of Nigeria is a major sector of the economy taking into consideration, the fact that the country’s status is that of a major oil-producing and exporting country.^[1]

Maritime transportation operations and services consist of three types of activities. They include; International maritime transport; Maritime auxiliary services; and Port services. These services and operations require one form of regulation or the other^[2] which certain institutions and agencies in Nigeria regulate in accordance with a wide range of laws, rules, and regulations, the majority of which are in support of their commitments under an international regulatory legal framework. These legal regulations give the institutions the framework and resources they need to carry out their regulatory duties.

This article provides an analysis of the relevant regulatory maritime laws in Nigeria and the institutional framework under which the regulatory regime operates viz-a-viz available licenses and permit requirements for maritime service providers.

APPLICABLE LAWS & REGULATORY FRAMEWORK

The following legislations are necessary to comprehend the body of laws and the procedures governing the operation of the transportation of goods and passengers, the use of mineral resources, commerce, and navigation on Nigerian waters.

1. Coastal and Inland Shipping (Cabotage Act) 2003

The Cabotage Act governs maritime transportation activities. The Act is intended to limit the use of foreign vessels in domestic coastal trade, promote the development of indigenous tonnage, establish a cabotage vessel financing fund, and for other purposes.

The Act’s main purpose is to promote Nigerian ship ownership and limit the use of foreign vessels in Nigerian marine trade while boosting the nation’s economy through ship ownership and the carriage of goods and services on the Nigeria inland waterways domain.^[3] The Act allows Nigerians involved in maritime activities the ability to invest primarily in domestic coastal trade, but it also allows Nigerians to manage vessels in collaboration with foreign partners.^[4]

1. Merchant Shipping Act 2007

The Merchant Shipping Act regulates labour-related issues and merchant shipping in general. The Act created the Agency for Maritime Safety Administration, which is in charge of maritime administration, security, and safety.^[5]

In accordance with the Act, a certificate of license is required for all ships engaged in commercial operations in or out of Nigerian waters.^[6] A licensed Nigerian ship or a class of licensed Nigerian ships that are operating outside the territorial waters of Nigeria^[7] may be exempted generally or specifically from registration under this Act by notice from the Minister.

The Merchant Shipping Act also limits actions in Nigeria for maritime liens or claims made against a ship or its owners for any loss or damage.^[8] Proceedings regarding such damage or loss must be initiated within one year of the date the damage, loss, or injury occurred or the salvage services were provided.^[9]

1. Nigerian Maritime Administration and Safety Agency Act 2007

The Nigerian Maritime Administration and Safety Agency (NIMASA) Act addresses maritime safety and security, marine environment protection, shipping registration and commercial shipping, maritime labour, the establishment of the Nigerian Maritime Administration and Safety Agency, and other related issues. Its goal is to promote indigenous commercial shipping in international trade.^[10] This Act applies to all ships, whether small ships or crafts that are registered in Nigeria, and to all other ships flying a foreign flag in the Exclusive Economic Zone, territorial and inland seas, inland waterways and the ports of the country.^[11]

Section 22 of the Act provides for the functions and duties of the NIMASA. These functions and duties include: Administering ship licensing and registration; Regulating and managing seafarers’ certification; Pursuing the advancement of shipping and legal issues pertaining to seafarers and commercial shipping; establishing standards for maritime safety and training; Establishing guidelines and monitoring adherence to vessel security requirements; Regulating ship construction and navigation-related aspects of shipping safety; Providing services for search and rescue; Air and coastal surveillance, marine pollution prevention and control, guidance on maritime worker certification, employment, and welfare; and Establishing convention implementation procedures are all tasks that must be completed.

1. The Nigerian Port Authority Act 1999

This Act establishes the Nigerian Ports Authority,^[12] outlines its duties, authority, and obligations, and governs its internal structure and financial matters. The Act also addresses issues related to port operations, such as pilotage,^[13] as well as the Authority’s right to compulsorily acquire land.^[14]

Section 32 of this Act empowers the authority, with the Minister’s approval, to make regulations for all or any of the following purposes regarding the management, control, and maintenance of any port’s good order: controlling traffic within a port’s boundaries or on its approach: regulating the berths and stations that ships must occupy, and overseeing the movement of ships between berths, stations, or anchorages, as well as the timeframes within which these movements must be carried out; regulating ships while they are loading or unloading ballast or cargo; and maintaining open passages of the width that is deemed necessary within any port as well as along or near the piers, jetties, landing places, wharves, quays, docks, moorings and other similar works in or adjoining the port and for marking out the spaces to be kept free.

Other Maritime legislations include: The National Inland Waterways Authority Act 2004; The Oil in Navigable Waters Act 2004; The Sea Fisheries Act 2004; and The Territorial Waters Act 2004.

LICENSE AND PERMIT REQUIREMENT FOR MARITIME SERVICE PROVIDERS IN NIGERIA.

Modern commercial activities must have the proper regulatory framework in place, as various maritime business value propositions in Nigeria are governed by the Nigerian Ports Authority (NPA). The Nigerian Port Authority also provides requirements for the license available to maritime service providers in Nigeria. They include;

1. Shipping Company License:

A shipping company or agency manages a ship’s business in every port that the ship visits or docks in addition to managing shipments, cargo, and general customer interests on behalf of shipowners, managers, and charterers.

The requirements for licensing as a shipping company in Nigeria are as follows:

1. A letter of application addressed to the Eastern and Western Ports General Manager at the Nigerian Ports Authority;
2. A Certificate of Incorporation from the Corporate Affairs Commission (CAC) & MEMART (Memorandum/Articles of Association);
3. A bank referral and Tax Clearance Certificate (TCC) valid for 3 years; and
4. Registration fee of Two Hundred Thousand Naira only.^[15]
5. Shipping Chandler License:

A Chandler is a retailer with a focus on providing supplies or equipment for ships. The requirements for a shipping Chandler license include:

1. A letter of application addressed to the Eastern and Western Ports General Manager at the Nigerian Ports Authority;
2. A Certificate of Incorporation from the Corporate Affairs Commission (CAC) & MEMART (Memorandum/Articles of Association);
3. Tax Clearance Certificate (TCC) valid for 3 years; and
4. An executed Form C1 showing approval from the Nigerian Customs Service.^[16]
5. Clearing and forwarding Agent licenses:

A clearing agent is an authorized service provider who makes sure that paperwork is organized and sent to the appropriate regulatory agencies (typically the Nigerian Customs Service), figures out the proper Customs duties, and makes sure that any unforeseen delays are eliminated to prevent demurrage charges.

A forwarding agent or freight forwarder on the other hand is a licensed service provider that ensures that freight/trade cargo is delivered on behalf of a client/customer to a prescribed destination in good condition. The requirements for a Clearing and forwarding agency include:

1. A letter of application addressed to the Eastern and Western Ports General Manager, at the Nigerian Ports Authority;
2. A Certificate of Incorporation from the Corporate Affairs Commission (CAC) & MEMART (Memorandum/Articles of Association);
3. A bank referral and Tax Clearance Certificate (TCC) valid for 3 years;
4. Evidence of registration with the council for the regulation of freight forwarding in Nigeria; and
5. Registration fee of Two Hundred Thousand Naira to the Nigerian Port Authority.^[17]
6. Bonded Terminal licensing:

A bonded terminal is a building or space designated for storing imported goods temporarily and approved by the appropriate authorities. The requirements for bonded terminal licensing include:

1. Letter of Application to the General Manager (Eastern/Western Ports) with the following accompanying documents;
2. Company Registration with CAC;
3. Three years Tax Clearance Certificate;
4. Tax Identification Number (TIN); and
5. Insurance Cover.

The Nigerian Ports Authority typically processes licenses in 6 weeks, and they are valid for a year until renewal.^[18]

1. Service Boat Operator Licenses:

A service boat operator offers docked ships logistical support, including supplies of fuel, and other necessities for the ship and its crew. The requirements for this license category are:

1. Letter of Application to the General Manager (Eastern/Western Ports) with the following accompanying documents;
2. Certificate of Incorporation from the Corporate Affairs Commission (CAC) & MEMART (Memorandum/Articles of Association;
3. NPA Shipping Company Registration Certificate;
4. Three years Tax Clearance Certificate; and
5. Registration fee of Two Hundred Thousand Naira to the Nigerian Port Authority.^[19]

CONCLUSION

Nigeria’s maritime industry has witnessed significant growth, yet further development is essential to attract investment and bolster the economy. Key to this progress is the robust regulation of licenses for maritime service providers. While the Nigerian Port Authority oversees primary registration, other regulatory bodies, including the Nigerian Navy and Nigerian Customs Service, may impose additional requirements. This multi-level regulatory framework ensures adherence to high standards.

Collaboration between stakeholders is crucial for a thriving maritime sector. The interplay between regulatory oversight and seamless service provision is pivotal. This overview contributes to the ongoing dialogue on licensing and regulation in Nigeria’s maritime industry.

1. Alari Emomoemi Faith ‘The Maritime Industry of Nigeria. Challenges and Sustainable Prospect’ Danjubois Journals [2020] available at https://dj.univ-danubius.ro/index.php/DWP/article/view/126/285. Accessed on 25^th September 2023 ↑
2. Galadima Shekwonya ‘The Analysis of the Legal & Institutional Framework for the Regulation & Transportation of Persons & Merchandise under Nigerian Maritime Law’ ABU Zaria open repository [2017] available at https://kubanni.abu.edu.ng/items/a41220b5-e004-41b0-a243-424d048489c3. Accessed on 25^th September 2023 ↑
3. Dr Samuel C Dike and Prince Godwin Gininwa ‘An Appraisal of the Nigerian Legislation and Institutions Governing Maritime Environment’ SSRN Electronic Journal [2019] available at https://10.2139/ssrn.3514479/ accessed on 25^th September 2023. ↑
4. Ibid. ↑
5. Merchant Shipping Act, Section 2. ↑
6. Ibid, Section 5(1). ↑
7. Ibid, Section 5(2). ↑
8. Ibid, Section 343. ↑
9. Ibid, Section 343(1). ↑
10. Dr Samuel C Dike and Prince Godwin Gininwa ‘An Appraisal of the Nigerian Legislation and Institutions Governing Maritime Environment’ SSRN Electronic Journal (2019) 10.2139ssrn.3514479. ↑
11. Ibid. ↑
12. Nigerian Port Authority Act, Section 1. ↑
13. Ibid, Part X. ↑
14. Ibid, Section 24. ↑
15. Emmanuel Ogbuka ‘Available Maritime Business Licence’ available at https://www.tekedia.com/available-maritime-business-licenses-in-nigeria/ . accessed on 26^th September 2023 ↑
16. Ibid. ↑
17. Nigerian Ports Authority: Available at https://nigerianports.gov.ng/operational-services/clearing-and-forwarding-agents/ accessed on 26^th September 2023 ↑
18. Nigerian Ports Authority, Available at https://nigerianports.gov.ng/operational-services/bonded-terminals/ . accessed on 26^th September 2023 ↑
19. Nigerian Ports Authority, Available at https://nigerianports.gov.ng/operational-services/service-boat-operator/. accessed on 26^th September 2023 ↑