In April 2017 the Ports and Harbours Authority Bill passed its third and final reading in the Senate. In accordance with the Constitution, the bill still requires concurrent passage by the House of Representatives and presidential assent to become law. However, many industry watchers consider these last hurdles to be minor – thus, a pre-emptive look at some of the bill's more significant provisions is worthwhile.
The first section of the Ports and Harbours Authority Bill clearly states that the bill's objectives are to:
- provide an appropriate institutional framework for the ownership, management and development of ports and harbours;
- ensure the integrity, efficiency and safety of the ports based on the principles of accountability, competition, fairness and transparency;
- encourage private sector participation in the provision of port services and infrastructure; and
- promote and safeguard Nigeria's competitiveness and trade objectives.
These objectives will resonate with followers of Nigeria's port reform efforts, as they clearly demonstrate an intention to give legal status to the landlord port management and administration model adopted by the government in 2006. The bill thus addresses some of the legal issues that have resulted from the inadequate statutory provisions that support Nigeria's so-called 'port concessions era'.
The bill expressly repeals the Nigerian Ports Authority Act 2004 (Cap N126 LFN) and transfers all assets and liabilities vested in the Nigerian Ports Authority to the Nigerian Ports and Harbours Authority – a new entity created therein. As provided for in Section 9 of the bill, the Nigerian Ports and Harbours Authority's functions will include:
- developing, maintaining and implementing a national strategic port plan;
- providing and enforcing technical regulations on operations, construction and installations within ports and harbours;
- setting the overall policy for port security, health and safety, environmental protection and coastal conservation;
- encouraging and facilitating private sector participation and investment in the provision of port services and facilities;
- approving the establishment and planning of offshore cargo-handling facilities and related services;
- negotiating, supervising, implementing and ensuring compliance with international maritime obligations under the applicable international conventions and protocols;
- providing landlord services in ports and harbours in an economically, socially and environmentally sustainable manner;
- ensuring that ports are effectively integrated with other external infrastructure systems, in cooperation with other relevant bodies;
- facilitating the sustainable growth of trade through ports;
- developing and deploying resources to enhance port security;
- engaging in any business activity, either alone or in partnership with other parties, as approved by the minister; and
- ensuring that private operators comply with the overall policy on health and safety, environmental protection and coastal conservation.
From the above, it is clear that the transfer of the Nigerian Ports Authority's assets and liabilities to the Nigerian Ports and Harbours Authority will preserve the existing port concession agreement. It is also clear that – in addition to the traditional functions of a ports authority, such as the provision of technical regulations and the formulation and implementation of port-related government policies – the Nigerian Ports and Harbours Authority will be empowered to initiate and participate in relevant port-related ventures undertaken by the private sector.
Also noteworthy is the fact that unlike the existing Nigerian Ports Authority Act, which states that the provision of facilities for berthing, towing, mooring, moving or dry docking ships – and even the lighterage, sorting, weighing, warehousing and handling of goods – is part of the Nigerian Ports Authority's functions, the Nigerian Ports and Harbours Bill simply requires the Nigerian Ports and Harbours Authority to provide landlord services in ports and harbours – a testament once again to the model of port management and administration already operative in the country. Granted, being the ports' landlord will not legally prevent the Nigerian Ports and Harbour Authority from personally embarking on some or all of the functions listed in the existing act, and Section 29 of the bill expressly addresses this. However, a combined reading of the objectives of the bill and the functions of the Nigerian Ports and Harbours Authority leaves no doubt as to the legislature's intentions. The authority will thus predominantly act as a regulatory body and landlord, while port operations (especially cargo handling) will be carried out by private entities.
The Nigerian Ports and Harbours Authority's power to "negotiate, supervise, implement and ensure compliance with international maritime obligations under applicable international conventions and protocols" is a notable potential point of conflict. Examined in conjunction with Section 22(1)(q) of the Maritime Administration and Safety Agency Act, which requires the agency to carry out similar – if not more elaborate – functions, it is clear that a conflict of functions is bound to occur if the Nigerian Ports and Harbours Authority Bill becomes law in its present state.
The labour issues associated with the bill's passage are also potentially problematic and require attention. The Maritime Workers' Union of Nigeria (MWUN) has expressed serious reservations regarding some of the bill's provisions. Specifically, the union has criticised Item 6 of Schedule 2, which essentially entitles the Nigerian Ports and Harbours Authority to retain only as many staff as it requires. Considering that the bill includes no clear provisions relating to severance packages for existing Nigerian Ports Authority employees, the MWUN's objection is understandable. However, the privatisation of public entities and industries is a well-travelled road for the Nigerian authorities. It is thus expected that political (if not legal) resolutions will be found for this and other labour issues in the long term.
Other important provisions of the bill are found in Part VIII, which concerns concessions. Section 33 provides that no entity can provide marine or port services or facilities in a port unless authorised to do so by the Nigerian Ports and Harbours Authority. Section 34 also empowers the authority to grant concessions, subject to laws relating to or governing concessions. However, no concession exceeding five years may be granted by the authority without the president's approval. It has been argued that Section 33 of the bill may also lead to a situation where functions are duplicated with regard to Section 31(1) of the National Transport Commission Bill, which entitles the proposed National Transport Commission to register and certify operators in the regulated transport sector. The section provides that no party can operate or maintain a transport facility or provide transport services in a regulated transport sector unless it has a registration certificate from the commission. It is hoped that the Nigerian Ports and Harbours Authority Bill and the National Transport Commission Bill will be harmonised in order to avoid over-regulation and the duplication of functions and powers.
The Nigerian Ports and Habours Authority Bill is clearly different from the Nigerian Ports Authority Act. It deviates from the owner-operator port management model provided for in the existing act and instead favours the landlord model, which will improve private sector participation in port operations. The bill also provides a legal framework for the government policy which is already operative in Nigeria and is thus a welcome – albeit overdue – development.
This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.
For further information on this topic please contact Emeka Akabogu or Victor Onyegbado at Akabogu & Associates by telephone (+234 1460 5550) or email (email@example.com or firstname.lastname@example.org). The Akabogu & Associates website can be accessed at www.akabogulaw.com.