Lawyer blasts Intels for ‘distorting information’

A Senior Advocate of Nigeria SAN and Counsel to the Seaport Terminal Operators Asociation of Nigeria (STOAN), Mr. Femi Atoyebi has accused operator of the Onne oil and gas terminal, Intels Nigeria Limited of distorting public information in order to gain undue advantage over other concessionaires.

Reacting to an article published in a national newspaper (not SHIPS & PORTS DAILY), wherein Intels was said to have debunked allegation of plot to entrench monopoly in the handling of oil and gas related cargo across the country, the leading lawyer accused the Onne port operator of trying to undermine the effort of the Federal Government aimed at creating a level playing field for all terminal operators.

In a position paper made available to SHIPS & PORTS DAILY over the weekend, Atoyebi said, “The attention of our clients, Seaport Terminal Operators Association, made up of the twenty-six (26) Concessionaires of the ports have been drawn to an article  titled,  “Concessionaire  Debunks Allegation  on  Monopoly  at  Port”  published  at the behest of INTELS on  page  18  of the ‘Daily  Newswatch’  of Thursday, October 9, 2014.

“Our clients are most surprised that INTELS Nigeria Limited  (“Intels”) would at this point begin to distort information in order to obtain undue advantage over the other concessionaires.

“If INTELS now debunks the allegation of creating monopolistic environment, they should be asked who coined the nomenclature  such as “Oil  and Gas cargo” (which  is  unknown anywhere in  the  world) and have insisted, and continue to insist that these must be handled only at the ports of Onne, Calabar and Warri, which are INTELS terminals? To INTELS, pipes,  dismantled rigs are all oil  and  gas cargoes  and not general cargoes  that  they  are known to  be  all over the world. Vessels carrying pipes and related cargoes calling at and meant for other terminals have  been diverted to INTELS terminals at the instance  of INTELS.

“In an attempt to buttress this apparent absurdity, INTELS flaunts a copy of the purported terminal classification which they claim to have obtained from a government agency that gives them the exclusive right to handle all socalled  “Oil and Gas cargoes”!

“Interestingly, the definition of general cargoes in the Concessioning Agreement between the government and all other parties, which binds all concerned does not admit of the definition INTELS are trying to smuggle into it.”

Atoyebi insisted that there must be a level-playing field for all investors and terminal operators at all the seaports across the country.

“Every port  terminal operator has made and continues to make huge investments in their respective terminals. Expertise must thereafter be left to be determined by  the shipper who has an inalienable right and freedom to choose his port of discharge. This is  not a subject of negotiation as it is exclusively a business decision for commercial  expediency and convenience.

“We are aware that the Senate Committee on Trade recently proposed an amendment to a bill on the “Oil  and  Gas  Free  Zones Authority Act, Cap.  05 Laws  of  the Federation of Nigeria 2011”, to provide for the Designation and  Establishment  of Oil and Gas Free Zones and  Special Investment Areas and  Related  matters.

Section 12(5) (a) of the proposed bill reads:

“In consideration of the substantial investment in Oil and Gas Free Zones, all Oil and Gas related cargoes must  be  handled only at  an proved Oil and Gas Concessioned Ports. However, investors are free to choose ports of discharge of their  cargoes within the designated terminals at Onne, Warri and  Calabar  ports.

All stake holders who lately got to hear of the hearing, including our clients herein attended the Senate public hearing to raise their objections to this aspect of the proposed bill. Interestingly, only INTELS refused to air its views publicly on the day, but they find it convenient to take to the public gallery,” he stated.

Continuing, the leading lawyer said, “It is apposite to state that the operations of free zones relate to the manufacture, re-configurations and provisions of services for export and it has nothing to do with ports and their functions.

“As has been clearly settled by the appropriate Senate Committee as set out above, the classification of ports and cargoes do not have any nomenclature as Oil and Gas. Cargoes are classified as General Cargoes, Bulk and Containerized Cargoes.

“It is a known fact that pipes, dismantled rigs and other related cargoes recently being christened by INTELS as “oil and gas cargoes” fall under General Cargoes. The terminals at Concession in 2004  were delineated as internationally known in the industry as (i) container terminal (ii) Bulk terminal (iii) Multipurpose (or General Cargo) Terminal.

“It is to be noted that the Nigerian Ports Authority whose responsibility it is to delineate terminals did so in 2004, handed over the terminals in 2006 to our clients further to the execution of the Concessioning Agreements, which are still extant.

“It is known fact that only INTELS out of the now twenty-six (26)port concessionaires operates in Warri, Onne and Calabar ports to which the proposed amendments  to  the  law relate.  Thus, it is evident that INTELS’ grand design is to ensure that every concessionaire of multipurpose (or General Cargo) Terminals in Lagos and Port Harcourt for example, can no longer handle general cargoes meant for their terminals but which INTELS are now unilaterally re-classifying as “Oil and Gas Cargoes” and so must be diverted to their terminals. Is this not trying to create a monopoly for INTELS, which was one of the foremost declared objective of government in the privatization of our ports?”

He said the Senate Committee on Privatization as recently as 18 September, 2014, after an extensive visit to the terminals, addressed a position paper to the Honourable Minster of Transport on the issue in which it laid the matter to rest.

“We venture to quote a portion of the letter as follows:

“(a) Terminals in Eastern Ports, in particular, are all general cargo terminals with their respective operations specified in the Appendices to their Lease Agreements. Terminal operators are, therefore, entitled to undertake the   operations in respect of which their Gross Minimum Tonnage (GMT)    projections are based and upon which they bided and won the concessions.

“(b) That the Lease Agreements contain the operations which each Terminal is entitled to undertake and none was designated for any special purpose. The distinction as to oil and gas cargo therefore, does not arise under the terms of the Lease Agreements.

“(c) That the diversion of oil and gas related cargoes from one port to another and/or one terminal to another is contrary to the concession agreement and runs contrary to the spirit of competition and efficiency which the ports reforms seeks to engender.”

Atoyebi further advised  Intels to stop  their campaign of monopoly and allow peace to reign in the port industry.

“The sky is big enough to accommodate every bird without collision. Competition is a way of life. One of the objectives of the ports reforms is to increase efficiency of our port operations through promoting competition. Our clients consider that INTELS are only afraid of competition,” he added.

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