Nigerian ship owners must begin to think out of the box – Ogbeifun

Engr. Greg Ogbeifun is the Chairman/Chief Executive Officer of Starzs Investments Group. He is a qualified Marine Engineer with a First Class (Combined) Certificate of Competency and an Associate Member of the Institute of Marine Engineers (IME).

Ogbeifun is recognised as a Marine Surveyor by Lloyds Register of Shipping, London.

In 1980, he joined the Arab Maritime Petroleum Corporation, Kuwait and left in 1983; returning to Nigeria to join an international oil company as an engineer.

In 1986, Ogbeifun left paid employment to set up Starzs Investments Company Limited. The company’s activities include ownership, operation and maintenance of barges and tugs.

In this interview with SHIPS & PORTS DAILY’s Shulammite Foyeku, the pioneer Chairman of the annual Nigeria Maritime Expo (NIMAREX) speaks on his leadership of the Shipowners Association of Nigeria (SOAN) and other maritime industry issues.

 

Excerpts:

 

What informed the idea of forming Shipowners Association of Nigeria (SOAN)?

I think it is important to clear this. You will recall that after the election of Nigerian Shipowners’ Association (NISA), what transpired made some elected executives in that election reject serving under the leadership that emerged. As a contestant for the office of President, I respected the verdicts and I congratulated the winner and went back to Port Harcourt to face my business. Soon after that, I got calls of irregularities, the summary of that was that the fate of that election was determined by principally non-shipowners and that became evident when we look at the executive that ultimately emerged, where non-shipowners now took critical positions and offices in the executive of a shipowners association. It is tantamount to having the executive of the Nigerian Bar Association (NBA) being populated by non-lawyers, it is not right. The result of that is that some critical personalities who are shipowners, who had left NISA because of reasons of policies that were not in alignment with what they thought the shipowners association should be doing called me and said Greg, we need to set up an association that will be strictly and exclusively for ship owners and that made a lot of sense to me. I asked them to go ahead and set it up and when they do, I will join but they said no that they wanted me to spearhead it. I told them to go ahead with it because I’ve had my own goal at the last election but a lot of entreaties were made and I was asked to put it together and there and then, an inaugural meeting was called by the former deputy Speaker of the House of Representative Hon. ChibudomNwuche, who is also a ship owner.

He sponsored SOAN and gathered a few of us – all ship owners – about 13 at the first meeting and told us there was a need for us to form a strictly ship owners association, members of whom must be people with track record in the industry, integrity and honor so that we can begin to talk not only about our issues but industry issues because according to him, the shipping and maritime industry had been neglected even by the then government and previous governments for a long time and that is because he did not think there was a strong entity of real ship owners who could partner with government to get the maritime policies right.

We saw a lot of wisdom in that and then we came on board. We have constantly emphasized that almost all of us remain members of NISA, an association of Nigerian ship owners and non-ship owners. SOAN is an association of any company operating ships in Nigeria whether foreign or Nigerian as long as they are operating according to the rules of the land because our law permits foreign participation in our maritime industry. So you can see two bodies with separate constitutions, different policies and ideologies and we don’t see any conflict. That is the essence of the formation of SOAN.

 

So, how well have you been able to achieve the ideals of setting up SOAN since you started?

So far so good, we have decided to put together or make our vessels available for sea time training of Nigerian cadets from Nigerian accredited maritime institution; we are waiting for the dust to settle so that we could make a formal presentation of this to the regulatory agency, the Nigerian Maritime Administration and Safety Agency (NIMASA). Right now, we have put together about a hundred training berths which we are presenting to NIMASA for their NSDP program. We are very concerned about the issue of seafarers training because it is a big challenge in our sector. Immediately President Buhari was sworn in, we forwarded a road map of what we believe can help revamp the shipping and maritime industry and within a week, the President sent an acknowledgment of that road map. We have also sent a copy of the  road map to the Minister of Transport when he was sworn in as contribution to the ideas of how to ensure that the industry is moving in the right direction. We identified challenges, lapses and recommendations. We are also aware that our image outside these shores is not the best. Our shipping industry is just synonymous with hostage taking, kidnapping, oil theft, illegal bunkering and all sorts of negativities and we found an opportunity to begin to change this impression when a few months into our establishment we were invited by the Commonwealth Enterprise and Investment Council to lead the private sector delegation to the Commonwealth Business Forum that was held in November 2015.

SOAN sent a 20-man delegation to that conference and was privileged to host the maritime session where my humble self made a presentation and at the end of the exercise, that session was judged the most attended, vibrant session in the whole conference resulting in SOAN being elected as a member of a three-man working group to develop the Commonwealth Maritime Initiative. Other members of the working group include Malta Transport and UK Maritime. The group is headed by the Lord Mayor of London, himself a shipping person. So the event was an opportunity for us to present to the whole world the true picture of Nigerian shipping and maritime sector and investment opportunities available there. We were able to correct all the wrong impressions that people had before we got there and I think today we are beginning to get overtures of people wanting to come into the country to collaborate with us to see how they can help our sector. This is what SOAN is achieving so far and the Lord Mayor of London has indicated a desire to invite a delegation of SOAN members to also meet the delegation of the UK ship owners to explore areas of collaboration to help the Nigerian maritime sector. So SOAN is not just about the members alone, yes members welfare, members business growth, members business interest is there but we are a bit more about our national industry, the government definitely needs the private sector collaboration to be able to get the policies right both in formation and the implementation and we hope in the long term or short term people will see the benefits of what we are about and that we are not in conflict with the policies of NISA.

 

What do you think the maritime sector can do to shore up its revenue in the face of the declining oil revenue?

Unfortunately, we have almost reduced our shipping and maritime sector to the oil and gas sector, both upstream and downstream. People are talking about offshore service, coastal tankers and product carriers but nobody has looked at the commercial cargo business. It is unfortunate that as we speak, our involvement in the affreightment of importation to the country is almost zero and same with the export as well and the general reason for this is that there is no indigenous capacity. I see that as a big opportunity for us in this country and I have said that we should begin to think outside the box. The oil price is not going back up in a hurry; people are going to be hurting for a long time in the upstream and downstream sectors of shipping. So we should begin to look at how we can leverage on the experience we have gathered over the decades in running ships upstream and downstream and see how we can evolve and re-invent a fleet of ships in whatever configuration either public or private or public-private-partnership so that we can begin to participate in the carriage of our import. For example, the big monstrous container carriers can come with 2,000 to 3,000 containers but we can also have a fleet of small vessels that can carry up to 200 to 300 containers and distribute along the coast and take from one Nigerian port to another port. So that will help decongest our roads. This initiative can be midwifed by those of us who are already playing in the shipping industry, articulate it in such a way that we can bring to play our experience. There could be a consortium, individual companies can also develop the initiative and thankfully, the type of platform that the Commonwealth is giving to us may even make it possible for us to collaborate with other Commonwealth countries that have excess fleet capacity which they can give to us may be on a charter guaranteed by government that the cargo is guaranteed and everybody will be in a win-win position. But the issue now is that we will probably be able to now re-invent a fleet that is indigenous that will reestablish a training platform for our numerous cadets. Obviously, it will stem the capital flight that is going through freighting and it will also bring in employment and the benefits are numerous. I think this government will probably be positively disposed to an initiative like this as long as it is not going to task them with dipping their hands in their pockets because the money is simply not there.

 

Do you think there is need for government to review the Cabotage Act 12 years after its failed implementation?

There is an urgent and desperate need for the Cabotage Act to be reviewed. The reason being that the Act actually provides for a periodic review of the performance of the Act and it has been judged to be an abysmal failure because the objective for which it was established or enacted has not been achieved. Yes I think there is need for government working with the stakeholders to review the Cabotage act and look at the areas where it has failed and then probably come out with an Act that can address those areas so that there will be measurable results from the Act.

 

NIMASA that should naturally pilot the affairs of the sector has been embroiled in a lot of allegations of late bordering on mismanagement of funds leveled against its past management. Were you surprised to hear of what happened under the agency’s former Director-General, Patrick Akpobolokemi?

I am not surprised. When I was the pioneer chairman of the first Nigerian Maritime Expo |(NIMAREX), I had the privilege of working very closely with the then Hon. Minister of Transport, Alhaji Suleiman and on several occasions in our discussions I used to tell him that we are in a country where from the Minister to the Permanent Secretary to the Director Maritime Services to the Director General and Executive Directors of the regulating agency, not one person there is a professional and this is an industry that has international dimension. In other words, the International Maritime Organization (IMO) of this world are linked with us through the regulating agency to ensure we are operating with international standards and yet we don’t have the people that are knowledgeable enough in our MDA to effectively engage the IMO’s of this world. We just go there and do what we are told to do and sign what we are told to sign. So I told the then Minister that we will always have a problem in our sector as long as we fail to realize the need to inject critical professionals into the system to ensure we are doing things by international standard. I think that is the problem with NIMASA. Until we get a sound tested professional to head that establishment, until we have a board of NIMASA that is populated not by politicians but by technocrats and stakeholders who can help the management, guide and work with them to get it right, we will continue to have a situation where NIMASA is reduced to a contract awarding establishment which is exactly what it is.

Someone was appointed as the Director-General because of political patronage with total disregard of the requirement of the Act. We must begin to learn to obey the law that we have created. So about what is happening in NIMASA, I am not surprised because in every enterprise where contract is the order of the day, you usually have financial misappropriation and unfortunately, some professionals down the line also got themselves stuck into it.

 

What do you think is the mystery behind government’s refusal to disburse the CVFF?

What we are doing right now at SOAN is that we have decided that each member company develop statistics of our taxes to government in the last five years from our businesses – statistics of our training programme, statistics of our employment profile and our contribution to CVFF since inception as well as our contribution to the Nigerian Content Development Fund and that is ongoing at the moment. At least with that, our Association can have verifiable statistics of the impact of our enterprise to the national economy. This way, SOAN as an association can confidently say that we have contributed money towards that course and it will be nice if other organizations that are also affected by the requirement of the CVFF contribution can also develop such statistics. That is how the new government can come to terms with the real amount that have accrued to that fund.  So there is need to get the real players to see what they put in there and we are working on that. With respect to government not disbursing the fund, I am not in a position to give an answer but what I can say is that my company Starzs Investments Company Limited happens to be the first in the list of the six companies that were shortlisted, we were taken through the biometrics by the SSS and apparently, that list was sent to the former President and that was the last we ever heard about it. So why they never disbursed we don’t really know but we expect this government will get to the bottom of it because if you remember during the election campaign, the present administration asked the former government what happened to the CVFF. So, now we would soon be asking this government what it found out happened to the CVFF. So let’s just wait and see what comes out of this.

 

A lot of people talk about the CVFF as if that will solve all the problems of Nigerian shipowners. What really is the problem with indigenous participation in the shipping sector especially ship owning. Is it money, lack of jobs or what?

I will say it is a whole lot of issues. For example, some ship owning companies have taken time to build their companies on sound industrial practice, good corporate governance but regrettably, other ship owning companies just saw the business as a way to get quick money and get out without putting structures and systems that are sustainable in place. Nobody will give you funds if you don’t meet the minimum standard requirements of an organization such that you are supposed to have. I will use Starzs as a case study. Sincerely, Starzs has always managed to get funds both from within and outside the country to fund the job opportunities we get and acquire ships. That means also that there is need for availability of job for the ship owner or cargo for the ship owner because that is what will trigger financing amongst other factors earlier mentioned.

Interestingly, that doesn’t come automatically; every contract Starzs had was competitively bided for before we won the contract, it wasn’t given on a platter of gold. There are conditions that you have to meet before the job owner gives you the job. Often times some of us have not taken pains to build our establishment to the level where the job owner would say this company is operating to a standard where I can trust my job in their care. What we saw happening in the last administration was a lot of political patronage. People from nowhere will just go to the Far East and Middle East, spend thirty to forty million dollars, buy a ship and then bring it here and say to the International Oil Company (IOC): you must give me a job.

They will go to Abuja and get a note, and they will give them the job just to satisfy political requirement. Those are the people hurting now because immediately the new government came on board; those were the first people that were jettisoned from the system. Such people will cry they have no job but if we get the structure right you will get the job competitively. To the issue of cargo, particularly those who are carrying products, some have gotten it right because they have the right type of vessels, right infrastructure in place; they have good governance and they are not complaining. It is not everybody in that sector that is crying. But there are some who have not taken pain to build an establishment and acquire assets that meet minimum industry international requirement. What some have tried to do is to arm twist the government to bend the rules to accommodate their inadequate assets and when government is not doing that they are crying. I say to people, if there’s an initiative today that can lead to the emergence of a fleet of two to four good crude oil carriers, we would go to government and say we have met all the requirements. Government will be glad to partner with you to ensure you participate because there will be abundant benefits to the nation’s economy. We want to cut corners and that is why you find out the indigenous shipping capacity has not blossomed as it should be. We talked about NIMASA; the challenges of meeting the requirement of the Act are created more by even the regulatory agency so there is a challenge from that angle and that is because the people that are there are not people who understand the implication of what they are doing. It is very easy for a member of staff of the regulatory agency to shut down a Nigerian ship owner for the flimsiest excuse not minding the consequence of that action on the contract, the employees, the revenue and the shipowners financial obligations, whereas in the developed clime, they will engage you and help you comply. Here in Nigeria, they behave like the policeman and all of these are just helping to stunt the growth of the industry. So the public, private and the operators all have a role to play to grow the industry capacity.

 

The Transport Minister recently said the federal government would not continue with the NIMASA Maritime University project at Okerekonko. He went as far as threatening to scrap NIMASA and that the functions of NIMASA would be transferred to the Ministry of Transport. What is your view on this?

If it is true that the Minister made such proclamation, he may have his reason but what I will say is that the Minister may need to be better informed about what the issues are particularly with respect to the regulatory agency so that whatever action he is taking meets international requirements otherwise the country stands a risk of being isolated from the international maritime domain by such threats.

I think the Minister therefore needs to be in a hurry to talk to stakeholders so he can get more information before taking actions that otherwise could embarrass him in the end. If you followed press interviews I have had over the years you may have heard me say I am not an advocate of maritime university, I am talking as an operator. If you come from a university with a degree it is no use to me in my establishment and so also to most other ship owners. Why establish a maritime university when it may be more expedient, looking at industry needs, to engage existing institutions such as Maritime Academy of Nigeria Oron to see how we can incorporate those critical courses and department to meet the need that is making you invest in a maritime university irrespective of where it is located.

I think an establishment like Oron can be upgraded to incorporate those departments without compromising the IMO requirement that set it up and that made Nigeria to come into IMO white list. A maritime university cannot meet that requirement. So we need to be careful and again what was their scope of consultation before they decided to establish the university and choosing a site or location for it? I am not aware that there was any public forum or selected interactions where opinions of critical stakeholders were sought and at the end of the day, decision was made.



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