The Nigerian government recently banned 113 oil tankers from doing business in oil terminals in Nigerian territorial waters. No reason was given for the ban. However, industry sources have stated that the ban may be connected with issues arising from the carriage of crude oil from Nigeria by the affected vessels or associated interests. These issues range from discrepancies between the volume of crude oil lifted from Nigeria and the volume eventually discharged abroad to buyers to unauthorised entry into Nigerian territorial waters for the purpose of exporting stolen crude oil from Nigeria.
For now, these are merely unsubstantiated allegations. The development nevertheless brings to the fore the worrisome challenge facing the Nigerian oil industry – namely, the misappropriation and outright theft of the nation's crude oil, resulting in significant losses of potential revenue.
Further, this alleged breach raises pertinent questions as to whether the legislation is sufficient to deal with the problem and whether Nigeria can rely on the international conventions to which it is a signatory – particularly regarding the movement of vessels within its territorial waters.
The following international treaties and domestic laws are relevant to this issue:
- the Territorial Sea and Contiguous Zone Convention;
- the Crude Oil (Transportation and Shipment) Regulation;
- the Territorial Waters Act 2004;
- the Nigerian Administration and Safety Agency Act 2007; and
- the Armed Forces Act 2004.
Territorial Sea and Contiguous Zone Convention
This international treaty clearly delineates the territorial waters of different nations. Article 3 of the convention states that: "Every State has the right to establish the breadth of its territorial sea up to a limit not exceeding 12 nautical miles, measured from baselines determined in accordance with this Convention."
The convention further stipulates that vessels have the right of 'innocent passage' through the territorial waters,(1) as long as this right is not prejudicial to the peace, good order or security of the coastal state.(2)
Article19 (2) of the convention further states that:
"Passage of a foreign ship shall be considered to be prejudicial to the peace, good order or security of the coastal State if in the territorial sea it engages in any of the following activities:
...(g) the loading or unloading of any commodity, currency or person contrary to the customs, fiscal, immigration or sanitary laws and regulations of the coastal State;
...(l) any other activity not having a direct bearing on passage."
Crude Oil (Transportation and Shipment) Regulation
This regulation is a subsidiary part of the Petroleum Act (Laws of the Federation 2004) and stipulates the conditions and parameters for vessels to transport crude oil from and within Nigeria.
The regulation forbids ships from engaging in any or all of the following:
- carrying part cargo or dead freight;(3)
- making, demanding or receiving payment for topping by any ship, tanker or vehicle in which crude oil is carried within or outside any loading port or terminal in Nigeria;(4)
- failing to provide proper and accurate verification and certification of the capacity of any ship, tanker or vehicle in which crude oil is carried;(5)
- loading crude oil into the ballast tank;(6)
- making false declarations regarding the capacity of any ship, tanker or vehicle in which crude oil is carried or the quantity or quality of such crude oil transported by the vessel;(7)
- departing Nigeria without full documentation in the prescribed form;(8) or
- loading crude oil in unauthorised locations;(9)
Any person or body (corporate or unincorporated) that contravenes the regulation will be held criminally liable and be subject to prosecution.(10)
Territorial Waters Act
Section 1(1) of the Territorial Waters Act states that:
"the territorial waters of Nigeria shall for all purposes include every part of the open sea within twelve nautical miles of the coast of Nigeria (measured from low water mark) or of the seaward limits of inland waters."
Section 2(1) further states that the following shall be treated as an offence (and the offender shall be arrested, tried and punished under Section 3 of the act as if the offence had been committed in Nigeria):
"any act or omission which-
(a) is committed within the territorial waters of Nigeria, whether by a citizen of
Nigeria or a foreigner; and
(b) would, if committed in any part of Nigeria, constitute an offence under the law."
Section 2(2) further states that Section 2(1) "shall apply whether or not the act or omission in question is committed on board or by means of a ship or in, or by means of a structure resting on the sea bed or subsoil".
Nigerian Administration and Safety Agency
The Nigerian Maritime Administration and Safety Agency (NIMASA)(11) is the federal agency charged with the maritime security of the country's territorial waters (in collaboration with other relevant government agencies), and has been vested with the power to enforce the international maritime conventions to which Nigeria is a signatory.(12)
Section 23(5) of the Nigerian Administration and Safety Agency Act provides that the functions of NIMASA include the powers to:
- receive and consider any report of an offence;
- stop, enter, board, inspect and search any vessel and detain any vessel within the Nigerian maritime zone;
- demand the production of any licence, permit, record, certificate or other document and inspect, make copies or take extracts in relation to matters provided for under the act; and
- initiate an investigation into any offence which it has reason to believe has been, is being or will be committed under the act.
The Nigerian Navy is also vested with the responsibility to protect and preserve the borders of the nation's territorial waters.
Section 1(4) of the Armed Forces Act states:
"Notwithstanding the generality of the provisions of subsection (3) of this section-
(a) the Navy shall, in particular, be further charged with-
(i) enforcing and assisting in coordinating the enforcement of all customs, laws, including anti-bunkering, fishery and immigration laws of Nigeria at sea;
(ii) enforcing and assisting in coordinating the enforcement of national and international maritime laws ascribed or acceded to by Nigeria."
In order to avoid the risk of ban, arrest and detention by the Nigerian Navy or NIMASA, vessels doing business or intending to do business in Nigeria – particularly in relation to the transportation of crude oil – must ensure that they have all necessary permits issued by the relevant government authority and at all times comply with the abovementioned treaties and local statutes guiding the movement of vessels within Nigerian waters.
For further information on this topic please contact Nwabueze Anachebe at Akabogu & Associates by telephone (+23 41 790 5831) or email (firstname.lastname@example.org). The Akabogu & Associates website can be accessed at www.akabogulaw.com.
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