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29 May 2019
The Nigerian Maritime Administration and Safety Agency (NIMASA) has announced a five-year strategic plan to stop the issuance of cabotage waivers. Cabotage waivers were introduced in the Coastal and Inland Shipping (Cabotage) Act, under which the commercial transport of goods and passengers within Nigerian coastal and inland waters is reserved for vessels which are:
Specifically, Part III of the act establishes a legal regime whereby waivers of any of the abovementioned requirements may be granted to otherwise unqualified applicants. The procedure for obtaining such a waiver is set out in the Guidelines for the Implementation of the Cabotage Act 2007. Paragraph 5.3 thereof requires that applications be sent to the federal minister of transport through the NIMASA. For its part, the NIMASA must process all waiver applications and, if satisfied that the applicant has met all of the requirements and paid the prescribed fees, make recommendations on the application to the minister.
Against the backdrop of these provisions, the NIMASA's plan appears to be a tacit admission that the waiver regime – which was intended to be a stop-gap measure pending the development of indigenous capacity – was derailing the country's lofty cabotage goals. Nonetheless, the cessation of the issuance of cabotage waivers represents a significant shift in policy, as the majority of cabotage operations in Nigeria are undertaken on the basis of some form of waiver.
From a purely legal standpoint, the NIMASA's plan appears to have little bite, as the agency has failed to prove that it has the power to implement it. Sections 9 to 11 of the Cabotage Act clearly vest the power of granting cabotage waivers (and consequently cease doing so) in the federal minister of transport. For example, Section 9 provides as follows:
The Minister may on the receipt of an application grant a waiver to a duly registered vessel on the requirement for a vessel under this Act to be wholly owned by Nigerian citizens where he is satisfied that there is no wholly Nigerian owned vessel that is suitable and available to provide the services or perform the activity described in the application.
Further, Section 14(1) of the act provides that the minister was required to publish criteria and guidelines for the issuance of waivers under the act immediately after it came into force. As mentioned above, the Federal Ministry of Transport issued the relevant guidelines in 2007. However, the guidelines simply enable the NIMASA to:
It cannot be inferred from these provisions that the power to grant waivers under the Cabotage Act has been delegated to the NIMASA. Even if this were the case, the Supreme Court has affirmed that a delegation of power does not imply an erosion of said power. Thus, unless such delegation is controlled by statute, the delegating power can resume its authority at any time.(1) This point illustrates the precariousness of the NIMASA's plan to cease granting cabotage waivers. At best, the plan may succeed only at the pleasure of the federal minister of transport. This situation would have been drastically different had the plan been put forward via an amendment to the Cabotage Act or even the published guidelines.(2)
In the bulletin containing an outline of the strategic plan to stop the issuance of cabotage waivers, the NIMASA clearly stated that its aim is to develop indigenous cabotage capacity. However, due to its susceptibility to abolition by the minister of transport or a legal challenge by potential waiver applicants, the plan may be ineffective. Notably, the NIMASA cannot validly refuse to process cabotage waiver applications (as required by Paragraph 5.3(4) of the Guidelines for the Implementation of the Cabotage Act) solely on the basis of its policy on the cessation of such waivers. Conversely, cabotage waiver applicants will be able to compel the agency (eg, via a mandamus order) to process their applications despite the policy on the cessation of cabotage wavers.
The NIMASA's plan to stop granting cabotage waivers is undoubtedly well-intentioned. However, the conflict between the plan and the extant law is real. The Cabotage Act intended for cabotage waivers to cease being granted once indigenous capacity had increased, but the NIMASA is attempting to use it as a means to that end. In addition to fostering an environment conducive to Nigerian cabotage entrepreneurs, methodical documentation and the continuous publication of existing indigenous cabotage capacity by the NIMASA is required to meet the aims of Nigeria's cabotage policy in general and the waiver regime in particular. Such publication will not only provide the information needed to grant or suspend cabotage waivers, but will also be an invaluable advocacy tool for preventing abuses of the waiver regime.
For further information on this topic please contact Victor Onyegbado at Akabogu & Associates by telephone (+234 1460 5550) or email (firstname.lastname@example.org). The Akabogu & Associates website can be accessed at www.akabogulaw.com.
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