A PAPER PRESENTED BY MR. OLUWOLE ADEYEMI THE NATIONAL PRESIDENT OF NATIONAL ASSOCIATION OF GOVERNMENT APPROVED FREIGHT FORWARDERS (NAGAFF), AT THE ONE DAY SENSITIZATION SEMINAR WITH THE THEME: IMPLEMENTATION OF GUIDELINE ON IMO VERIFIABLE GROSS MASS (VGM) FOR SUSTAINABLE GROWTH AND DEVELOPMENT OF THE NON-OIL EXPORTS HELD ON THE 16TH JUNE 2016 AT MAN HOUSE, IKEJA, LAGOS.
Protocol
I am deeply honored by the invitation extended to my association to present a paper on this burning issue bordering on the need to sensitize exporters, freight forwarders, regulators and other stakeholders on the intended guidelines for the establishment of a common approach for the implementation and enforcement of Safety of Life At Sea (SOLAS) requirements regarding the verification of the gross mass of packed containers (VGM).
The importance of this regulation cannot be overemphasized since the whole idea is to ensure the safety of the ship, the safety of workers both aboard ship and ashore, the safety of cargo and overall safety at sea. This is in compliance with the international convention for the safety of life at sea (SOLAS), as amended, which provided in Chapter VI, Part A, Regulation 2 that packed containers gross mass are verified prior stowage aboard ship.
Containers are platforms for unitization of cargo for export or import through Ocean going vessels, trains, trucks and air cargo planes to the location of derived demand.
For the purposes of determining freight chargeable the freight criteria shall include type of cargo, weight, distance and mode of transportation. It is an issue at the moment the level of fraud being committed by shippers to evade appropriate port charges, customs duty and other dues through manipulation of cargo description and weight. The inherent danger other than evasion of official charges is now dangerous to the means of carriage either by ocean going vessels, air cargo plane, train, truck and or as the case may be.
Nigeria as a maritime nation and a member state to the International Convention on Safety of Life at Sea (SOLAS), is duty bound to comply, implement and enforce the IMO regulatory framework. It is however, pertinent to ascertain if Nigeria will be able to meet up with the July 1, 2016 commencement date for the enforcement of the Safety of Life at Sea Convention (SOLAS) requirements regarding the verification of the gross mass of packed containers and its applicability.
The Federal Government proposal to establish a weigh station at the nation’s seaport is a welcome development, but must not be stampeded to embark on a project that is designed by the international community to transfer the cost of the risk that should be borne by ship owners. The safety of sea going vessel depend mostly on the compliance with the load line convention principle of the IMO. Where the risk of over loading or incurate declaration of actual weight of container lies is in the handling equipment by Terminal Operators and truckers.
The IMO guideline has also made it explicit that:
1. The shipper is responsible for the verification of the gross mass of a container carrying cargo (hereinafter “a packed container”), which must be stated on the shipping documents.
2. The verified gross mass is a condition for loading a packed container onto a ship.
The two conditions no doubt, impose additional responsibilities on the freight forwarders whose traditional role include the planning of route and booking of space in the vessel amongst others.
The good news about this development is that the relevance of the Nigeria freight forwarder and his wealth of experience will now be put to test in ensuring that the exporters whom he represents either directly or indirectly are properly guided to ensure compliance with the new guideline. This is an added task to the functions required from the freight forwarder. To cope with this, will depend on the forwarder’s scope of operation. His traditional advisory role needs to be tapped in other to assist the local authorities in the implementation of the guideline.
The explicit nature of the new IMO guideline on VGM has help to resolve virtually all the questions that could have arisen from stakeholders on the proposed regulation. What we should be looking at now is the preparedness of Nigeria Maritime Sector to embrace the new regulation and its workability in the context of achieving sustainable growth and development of the non-oil export.
NON-OIL EXPORT - SUSTAINABLE GROWTH AND DEVELOPMENT UNDER THE VGM
Non- oil export refers to the export of solid minerals, food items and locally manufactured and semi manufactured/processed goods to foreign countries. It includes over 25 items most of which are exportable by the use of freight containers in the marine transport. Some of these non – oil exports are not exportable by the use of containers due to various reasons ranging from inherent vices and the volumes demanded at any given time by the overseas customers. Food items are mostly exported in smaller quantities by the use of airfreight.
The trade on non oil export has been in place before crude oil was eventually discovered in the late 50’s in Nigeria. This discovery brought about the neglect of the agricultural produce/cash crop sector that was initially the mainstay of the economy. The need to grow the non oil sector became paramount with the clarion call to diversify the economy which was fast going down due to the slump in crude oil prices in the global market. With the new IMO guideline on VGM, there is indeed every tendency that the expected sustainability in growth and development of the non oil export would face some challenges with inherent benefits.
CHALLENGES OF THE VGM ON NON - OIL EXPORT
· Weigh bridge operators and Terminal operators may convert the opportunity for extortion.
· Shippers are bound to inherit additional cost through the container weighing charges.
· Elongation of the already cumbersome clearance process
· Terminal Operators would be looking at how to earn more rent through default by the shipper or his freight forwarder.
· Shipping Company also will target the collection of demurrage for exceeding the allowable number of days for the free use of the empty container book for stuffing export cargo.
· Customs formalities may become more cumbersome, as this new requirement may now form part of the clearance procedure.
· Patches, welding, wear and tear may alter the actual weight of the tare mass of the container
· Integrity of the weigh bridge might be in doubt
· Manipulative tendencies may not be ruled out in the process
· May add to delay and congestion in the ports if only a single weigh bridge is constructed at each port.
· Power instability could be an impediment.
· Does not help to check manipulative tendencies on import containers
· Does not guarantee checks on the manifest falsification and under declaration of the tonnage on vessels at port of destination.
· May lead to high extortion of exporters and freight forwarders
· Shipping companies and terminal operators may create internal policies that could lead to hindrances and interruptions in the process.
Ø The safety of the shippers investment is guaranteed
Ø Check incidences of overcharging of the shipper
Ø Remove speculative tendencies
Ø Reduces concealment and under declaration
Ø Promotes transparency and integrity or the supply chain
RECOMMENDATION
ü Cost of weigh bridge construction should be borne/share with shipowners
ü Expired and out dated containers usage should be discourage
ü Shipping lines to make provision of their bridges at designated points outside the ports – accessible.
ü Local authorities to create an enabling environment
ü Government must ensure transparency of the process
ü Method 1 of the VGM of the IMO guideline should be adopted by the Federal Government of Nigeria.
CONCLUSION
The success of the implementation of the guideline on Verified Gross Mass (VGM) of containers by the International Maritime Organisation (IMO) will depend on the corporation of every concerned party involved in cargo movement by sea transport. Efforts must also be intensified to hype the sensitization of exporters, forwarders, regulators and industry stakeholders on the need to avoid the fraudulent under declaration of laden container.
In the same vein the approving competent authorities should ensure close supervision of the activities of the operators of the weigh bridges, the Terminal Operators and the shipping lines to check incidences of manipulation, extortion and vices that might lead to impediment to trade facilitation.
More importantly, adequate care should be taken by all parties in the implementation of the VGM to avoid creating circumstances that might impugn on the sustainability of the anticipated growth and development of the non oil export which now serves as the main avenue to regenerating the battered economy.
On the part of freight forwarding agents as the coordinating agent between the shipper, the carrier and Government agencies, it is most appropriate and essential that the gross mass of containers must be verifiable to enable best practice in the freight forwarding business.
The Council for the Regulation of Freight Forwarding in Nigeria (CRFFN) is the tonic and catalyst to power best practices in our maritime trade and transportation. It is therefore our recommendation and advise that Government authorities connected to port management and administration should henceforth take the advantage of the platform of CRFFN in the administration of sea born trade.
Contributors
Founder NAGAFF – Dr. B. O. Aniebonam
Deputy National President Headquarters – Chief Increase Uche
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