Why wharf landing fee collection by Lagos govt may remain controversial

Despite alleged arrogance of Chairman of the Lagos State Wharf Landing Fee Committee, Joe Igbokwe,in responseto inquiries concerning the rationale for the continued collection of the fee by the state government, in the face of total disrepair of Apapa Wharf road, stakeholders believe that beyond legality, the collection of the fee by state raises a lot of moral questions.

Recently a maritime stakeholder, Prince Aderemi Olikuntuyi alerted on the implications of the non stop collection of the fees without the roads being fixed with the money.He said the Lagos state government should have used part of the proceeds from the fees collected to fix the dilapidated port access roads leading to where the money is being generated, insisting that the money, which according to him has run into “trillions of naira”, is currently going into the pockets of individuals.’

Most Port Users who spoke to SHIPS & PORTS DAILYsaid the Lagos state government owes the public explanation on what this fee which it has been collecting since the days of Babatunde Fashola at Alausa has been and is being used for. Some even called on the governor to render proper account now, warning that it could have retroactive effect in years to come. But while the likes of Barrister Osuala Nwagbara, a maritime lawyer said that the government is obligated to take care of communities around the ports with the proceeds from such fee, Frank Ojadi, a lecturer at the Lagos Business School said that before people make uninformed conclusions on that, they should take time to find out how the money is being utilised.

But the likes of Ojadi appear to be in the minority. Out of 10 port users that spoke to SHIPS &PORTS DAILY, seven of them, four of which are clearing agents believed that while the government collects the money, it does not use it for the purpose that the money is meant for.

But port users are not the only people raising questions on the fee collection. The Federal Government recently commenced move to retrieve the funds earned by Lagos government through its Wharf Landing Fees Law No. 5 of 2009 introduced by the administration of Fashola.

The Federal Government filed a suit, in this regard before the Supreme Court, urging it to among others,declare the law unconstitutional and order the state to refund all it had earned through the law since its implementation kicked off.The law imposes levies which vary from N300 to N1, 000 on consignments transported from Lagos ports to other parts of the state and the country.

The federal government also wants the court to declare that Lagos State has no power to make law on any maritime, shipping and navigation matters including “Wharf Landing”, exclusively reserved for the Federal Governments in item 36 of the Exclusive Legislative List, Part 1 of the Second Schedule of the 1999 Constitution.

It equally asked for an order directing Lagos State to account, refund and pay to it all the sums it has charged, received and collected pursuant to the implementation of the Wharf Landing Fees Law, which it estimated at billions of naira.

The federal government wants the court to authorize it to deduct the fund from the statutory allocation due to state from the Federal Account.The suit marked: SC/443/2010 was filed on behalf of the Federal Government by Olisa Agbakoba (SAN), using the name of the Attorney-General of the Federation (AGF).

In its brief filed in support of the originating summons, the plaintiff argued that the motive behind the Wharf Landing Fees Law, was clear from the nature of the law itself, “which is to levy taxes and tariffs on goods and consignment imported from overseas through the sea ports in Lagos State”.It argued that the law encroaches on the powers of the Federal Government to collect import duties and customs duties.

Lagos, in a counter-affidavit deposed to by a former Senior Special Assistant to the state Governor on Justice Sector Reform, Olanrewaju Akinsola, stated that it had the power to authorize relevant local government councils to collect the fees in areas outside the jurisdiction of the Nigerian Ports Authority (NPA), pursuant to Section 7 of the 1999 Constitution.

It argued that the law was aimed at stopping the incidence of multiple and illegal taxes in Lagos adding that prior to the enactment of the law, several local government areas engaged in indiscriminate imposition of levies on vehicles carrying goods and equipment in a bid to ameliorate the damage caused to their infrastructure by heavy traffics, especially those coming from the ports.

Notwithstanding the vexed inquiries many which remain unanswered, Igbokwe recently urged the port stakeholders to pay their regulatory fees to avoid the wrath of the law.He reminded the captains of industry, wet and cargo dealers and other operators in the maritime sector that the law regulating remittance of fees before moving goods from the port to any local government in Lagos was still in force.

Igbokwe told the stakeholders at an interactive meeting at the Apapa office of the authority that the government will resort to coercion, following the failure of pleas and dialogue.He said: “We are reinventing the tax culture. The Ambode administration will always make use of the tax to promote public welfare. We are moving away from expectation to manifestation.

“The law is in force. If the rule of appeasement fails, we will employ the instrument of coercion. We will seize the trucks.” He thanked some companies, including Flour Mills, Elephant Group, Dangote Group, Total PLC, Sahara Energy, Eternal Oil and Fatgbems, for complying with the regulations, urging other companies to emulate them.

He explained that the authority has not relented in agitating for more infrastructural facilities from government to enhance business operations in Apapa, especially the Apapa and Tin -Can road networks.

Urging the operators to pay the fees, Igbokwe said: “We do not think N 1,000 for 40ft container and N 500 for 20ft container is too much for the owners to pay to the government. Again, cars are meant to pay just N 300 while SUVs are to pay N 500.But, in most cases, the drivers of these cars refuse to pay, especially at the PTML bounded terminal at Otto Wolf, Mile 2 and elsewhere. We do not think that N 1000 is too much to pay for 33,000 litres of wet products, which is about three kobo per litre.”

Igbokwe lamented that while the operators pay varying degrees of fees to many unions in the sector, they are eager to resist the fees mandated by the government.

“Why should associations and unions which are not responsible for the provision of amenities charge exorbitantly while the state government which bears the brunt and burden of the wear and tear the roads are subjected to cannot collect a mere N 1,000 on a trunk laden with 33,000 litres of fuel?

“Since we came on board, we have issued 240 invoices to the various companies and got only 81 responses in terms of payment, representing 34 per cent. This is not a good advertisement of what is supposed to be a cordial and symbiotic relationship. Government needs all funds for sustainable development.”

Igbokwe, said the authority has 304 clients in its payment bracket. He gave the breakdown as dry cargo (225), bonded terminals (29) and wet cargo customers (50).He urged those in the payment bracket to henceforth route their payments to the state government through the authority, using designated banks.

The Nigerian Ports of Authority (NPA), the landlords at the port do not seem to be in tandem with explanations of the Wharf Landing Fee Committee on the rationale for collecting the fees. Recently, it’s Managing Director Ms. Hadiza Bala Usman, made moves to stop the collection.

She questioned the legality behind the wharf landing collection in Lagos as there was no provision in the NPA Act of 1958 or as amended or any National Assembly legislation backing the fees currently being collected by the state government on every container of cargoes that comes in to the country through the ports in Lagos.

The Manufacturers Association of Nigeria (MAN) has also come out strongly against the fee in some its forums on ease of doing business especially as it pertains to the rising cost incurred by its members which has spiralling effect on the ailing economy.

Reacting to issues raised by the NPA MD,Igbokwe said Hadiza Usman is ignorant of the law. He added that if any body feels aggrieved by the collection of the fee, such person can go to court to seek redress.

He said the NPA was saddled with too many challenges for it to start looking at the legality of Wharf Landing fee collection.He explained that all land belongs to the state and all that the Lagos government is charging is the landing fee.

Igbokwe explained that the collection of Wharf Landing fee is a worldwide practice affirming that landing fees are collected in cities where ports are located.

Giving his opinion on the controversial wharf landing fee, President Association of Nigeria Licensed Customs Agents (ANLCA) Prince Olayiwola Shittu threw his weight behind Lagos. He  asked “Who has been maintaining the port access road? That road belongs to the federal government and abandoned. All the roads within Apapa that is been utilized by all the trucks bringing in and taking goods into the port are owned by Lagos State government and through the local government, the Lagos State government have been maintaining the roads and even making new roads. Wharf landing fee is too infinitesimal amount for the federal government to start breaking their head over it. That should not take their attention as far as I am concerned provided the money is being utilized for maintaining of roads which we are seeing.

“Federal government has abandoned the roads. Those palliatives done by Lagos State must come from somewhere. Any way we can support the Lagos State in doing what the federal government has failed to do we need to that as fast as possible. They are not collecting it inside the ports that belong to the federal government. These collections are done on the roads and these roads are within the administrative jurisdiction of Lagos State and its local governments. Wharf landing fee did not come out of the blues, it went through the assembly and there was public hearing before it was turned to law. There are more private organizations making more than 500 percent of the money collected for wharf landing fee in this industry. Is it the tanker drivers or the NARTO people or the money we pay for demurrage inside the port? In fact, we are the most unfortunate because we are the only one that does not make money in the industry. Some people are making as much as between N5, 000 and N10, 000 per vehicle, Even NPA security at the gate are making more money. “Remember that trailer drivers are paying N10, 000 to NPA which they said they are going to use to standardised their trucks what have they done? The N10, 000 is just one collection point how about the gate point? And all the government cares about is wharf landing fee of N500 and N1000? I think the government should be more adventurous in solving people’s problems than crying over little money. Lagos State today is still in the fore front among all the States that care for the people.

“Even the federal government as responsible to so many things within the port have abandoned that responsibility including through NPA. Sometimes the Shippers ‘Council came up with the idea of weigh bridge to regulate the weight of traffic on roads and save the roads but till now, it has been stiffed. People went behind and say no we will do our weigh bridge by ourselves. Between Lagos State and Federal government who is working within the port access roads? All the roads in Apapa are being used by trailers carrying empty containers inside the port and those roads are being remade by Lagos State government. Burma Road is an example. What effort has the government made to fix the Ijora Bridge that people have been crying that it is shaking? Is it until it collapses? Even opposite the Tin can port gate, is it not an eyesore? That is why I said that amount is too small for federal government to divert attention to.

“This is not a political issue because both federal and Lagos State government belong to the same party but why suddenly it is the wharf landing fee that is the issue now? I don’t understand. Naturally, we don’t want to pay extra money but anything that can be done to assist us pass that road is worthy of support. The federal government should focus its attention on its own responsibility of fixing all bad and abandoned federal roads. Those in the ministry of transport are not Council, there would have been emergency fund to repair the road. He has not done anything. Like all ministers of transport, they are more interested in what they can get from the parastatals and professionals. They are civil servants relying on largesse from the ports and from the departments. If the minister of transport is a man who cares for the sector, at the Federal Executive himself a grade A minister, and cargoes are falling and people are dying. For that one alone, he has failed. This is the road where government made all their money. Why are they stabbing the chicken that is laying the eggs? See the way the roads are and he (minister) has come there several times and he is calling for refund of wharf landing fee.

The wharf landing fee came into being in 2009 when the Lagos State Government under Babatunde Fashola imposed charges on containers. Fashola disclosed that Lagos State government has spent over N15billion to repair most of the 117 Federal roads in the state, saying the money was yet to be paid back to it.

The law as earlier reported stipulates that the charge on every small car is N300, while heavy duty trucks are expected to pay N1, 000 each.  Fashola said that defaulters would face strict sanctions, but added that goods belonging to international agencies, the Federal, States and local governments were exempted.
“Corporate organisations that default in the new fee payment will  be made to pay a fine of N500,000 while a private importer will pay a fine of N100,000 and the cost of litigation.,’’ he warned.

While addressing over 3,000 maritime operators at a stakeholders’ forum,Fashola said the port landing fee was introduced to repair the damages done by the heavy trucks to 3,028 state and 6,415 local government roads in the state.He explained that the wharf landing fees have been harmonised by the state to facilitate trade and eliminate arbitrary charges by each of the local government authorities in the state.

The then Chairman of the wharf Landing Fee Authority, Alhaji M A Kekere-Ekun, explained that Section four of the law on Wharf Landing, empowers the agents to stop any vehicle for the purpose of determining whether the goods being conveyed fall under those that should pay the fee, saying upon inspection, they are empowered to collect the fees for the purpose of ensuring compliance with the laws.

It will be recalled that in the May this year, the Lagos state government added tankers lifting petrol among vehicles mandated by law to pay the fee. Their inclusion which up to 305 the number of firms in the payment bracket, it was learnt followed the deregulation in the downstream sector of petroleum industry.

The development came after the expiration of a four-month notice served on Messrs M-TOF Consulting Services by the Lagos State Government to hands off the collection of wharf landing fees on its behalf.

The state Attorney-General and Commissioner for Justice, Mr. Adeniji Kazeem, who signed the contract termination notice, said the consultant breached certain clauses in the agreement between it and the government.

The notice was served on April 18, 2016 and addressed to the Managing Director of the firm.

 

Copyright 2016 Ships & Ports Ltd. Permission to use quotations from this article is granted subject to appropriate credit given to www.shipsandports.com.ng as the source.

 

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