Published On: Thu, Aug 20th, 2015

Stakeholders raise doubts over impartiality of Shippers’ Council as commercial regulator

Vikky Haastrup



Critical stakeholders in the maritime industry have expressed concerns over the suitability of Nigerian Shippers’ Council as the economic regulator in the shipping industry.

Their anxiety stemmed from their claims that the traditional role of the Council has placed a moral burden on the agency to act as an impartial and unbiased umpire in the process of dispute resolution between the service providers and the consumers of their service.

In February 2014 and after much horse- trading, the former presidency of Goodluck Ebele Jonathan, through a presidential fiat, directed the Nigerian Shippers’ Council to assume the interim role of commercial regulator in the port industry.

The new status confers on the Council the responsibility of regulating the commercial activities of shipping service providers and the consumers.

However, prior to this ad-hoc arrangement, the Nigerian Shippers’ Council was primarily established to protect the interests of the consumers of the shipping services provided by terminal operators and shipping companies.

These consumers include shippers, importers and exporters.

The formation of Shippers’ Council worldwide, especially in the developing countries, followed the general agitation against shipping service providers whose activities the shippers often complained about.

However,  the agitations crystalized into what later became known as a new World Maritime Order in 1965 which encapsulated in the UN Liner Code for Liner Conferences document that strongly recommended the formation of National Shippers’ Councils in developing countries also referred to as Group of 77.

UNCTAD confirmed this new order by endorsing the formation of Shippers’ Councils in its 1968 meeting in New Delhi, India. Thereafter, Shippers’ Councils sprang up in various parts of the world, including the developed countries. The first Shippers’ Council in Africa was set up in 1968 in Cote D’ Voire while the Nigerian Shippers’ Council was established in 1978.

Therefore, to all intents and purposes, the formation of national shippers’ organizations in the developing countries was to act as a countervailing force against the operational activities of foreign ship owners and other service providers at the ports.

It is however instructive to note that the traditional functions of Shippers’ Council all over the world was to protect the shipping interests of shippers, importers and exporters.

Nowhere in the world did the council combine this role with the responsibility of regulating the commercial activities of shipping service providers, ironically whose activities for which it was primarily created to monitor on behalf of the consumers.

Some discerning critics therefore noted that the development in Nigeria is akin to standing logic on its head.

”How could government ensure the neutrality and impartiality of Nigerian Shippers’ Council in a dispute arising from a transaction between a shipper whose interest the Council was statutorily created to protect and a service provider , of which it is likely to have a biased mind towards?”, a shipping operator declared.

”Automatically, the traditional functions of the Council have disqualified it from assuming the role of commercial regulator due to the high probability of its bias in dispute resolution between the service providers and the service consumers”, another respondent claimed.

Already, the terminal operators, under the aegis of Seaport Terminal Operators of Nigeria (STOAN), has already expressed loss of confidence in the ability of the Council to act as unbiased umpire in the whole process.

The association, under the leadership of Princess Vikky Haastrup, has declared unequivocally that they do not recognize the Council as the Commercial regulator.

Legal experts explained that the import of the declaration of the terminal operators suggest that one of the parties in the process has already passed a vote of no confidence on the umpire.

”Just like in a law court, in the process of dispute resolution, if one of the parties in the dispute raised a doubt, no matter how remote, on the impartiality of the umpire, it is incumbent on such person or body to disqualify himself or be disqualified”, a renowned maritime lawyer noted.

In the case of the Shippers Council, the terminal operators have raised concern over what they regarded as unwarranted and unguided statements of the Council which tend to undermine the successes and achievements recorded under the port concession programme of the Federal government.

According to them, the statements, which often most of the time painted the services at the ports in bad light, are capable of scaring away genuine investors, thus greatly hampering the sure-footed stride towards efficiency at the port.

The operators also believed that the way and manner the Council has chosen to act as a commercial regulator has clearly compromised the discharge of such onerous duty.

The service providers have strongly shown their disapproval to the ways and manners at which the Council was carrying out this new role through their consistent challenge of the agency at the courts.

Observers expressed concern that the traditional role of the Council which was ”to protect the interests of shippers” has established an intrinsic link between the shippers and the Shippers’ Council.

”The service providers are justified and have reasonable ground on which they predicated their doubt about the impartiality and unbiased stance of the Shippers’ Council as a commercial regulator”, another maritime expert remarked.

It is being feared in another quarter that this lack of trust and cordiality between the Shippers Council and the terminal operators, whom they observed now live as cat and mouse, may not only hamper the capacity of the agency to discharged this new role, but is capable of giving the consumers of shipping service the short end of the stick.

”This will not create the mutual trust needed in the discharge of such vital role as being commercial regulator which is meant to get the confidence and respect of all the parties involved in the resolution of any dispute that may eventually arise”, a maritime consultant, who pleaded for anonymity, observed.

The stakeholders therefore asked the government to strip the Council of the task and restrict it to its traditional role while a neutral agency which they said has no such affiliation with the shippers as Shippers Council be assigned the new role.

They however advised members of the National assembly to expedite action on the passage of the National Transport Commission(NTC) bill which will create the legal body specifically charged with carrying out the functions of Commercial regulator.

”President Mohammed Buhari has promised to reverse all the actions and inaction of the previous administration that are likely to hamper the development of the economy. The designation of the Shippers’ Council as the economic regulator in the shipping industry should be seen as one of such actions created through presidential fiat but which has since put the maritime industry on the boil”, the respondents chorused.

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