NSC Protects N90.6bn, $1.348m for Nigerian Shippers

The Nigerian Shippers' Council (NSC) has reported protecting over N90.60 billion and $1.348 million in economic value for Nigerian shippers through its regulatory interventions and alternative dispute resolution (ADR) mechanisms. This significant achievement, announced by Dr. Akutah Pius, the Executive Secretary and CEO, underscores the Council's critical role as the port economic regulator in safeguarding shippers' interests, promoting fair trade practices, and reducing the cost of doing business in Nigeria's maritime sector. The interventions primarily addressed unjustified demurrage payments, arbitrary charges, and resolved numerous commercial disputes, reinforcing confidence in the Council's framework and aligning with national economic objectives.

The Nigerian maritime sector, a vital artery for the nation's economy, is continuously shaped by regulatory oversight aimed at fostering efficiency, transparency, and fairness. In a recent development that highlights the impact of such regulation, the Nigerian Shippers' Council (NSC) announced that it has protected a substantial N90.60 billion and $1.348 million in economic value for Nigerian shippers. This impressive figure, disclosed by Dr. Akutah Pius, the Executive Secretary and Chief Executive Officer of the NSC, stems from the Council's diligent regulatory interventions and robust dispute resolution mechanisms.

This achievement is not merely a numerical triumph but a testament to the NSC's evolving role as a crucial economic regulator within the Nigerian port system. It signifies the Council's commitment to mitigating exploitative practices, ensuring compliance with approved tariffs, and creating a more predictable operating environment for importers and exporters. The reported savings, particularly from preventing unjustified demurrage payments and resolving commercial disputes, directly contribute to reducing the cost of doing business and enhancing Nigeria's competitiveness in global trade.

This article delves into the legal framework empowering the NSC, examines the nature of its interventions, and explores the implications of these protective measures for legal practitioners and stakeholders in the Nigerian maritime industry. It will also touch upon ongoing legislative reforms poised to further strengthen the regulatory landscape.

The Nigerian Shippers' Council was established by Decree 13 of 1978, now codified as the Nigerian Shippers' Council Act Cap. N133, Laws of the Federation of Nigeria 2004. Its establishment was a direct response to a 1965 United Nations Conference on Trade and Development (UNCTAD) recommendation, urging developing countries to create national shippers' councils to act as a countervailing force against the potential exploitative excesses of foreign ship owners and other shipping service providers. The primary mandate of the NSC, as enshrined in its enabling Act, is to provide a forum for the protection of the interest of shippers in matters affecting the shipment of imports and exports to and from Nigeria, and to advise the Federal Government on related matters.

A pivotal expansion of the NSC's powers occurred in February 2014 when it was appointed the Port Economic Regulator. This appointment was subsequently affirmed by the Nigerian Shippers' Council (Port Economic Regulator) Order, 2015, and the Nigerian Shippers' Council (Port Economic) Regulations 2015. This enhanced role empowers the NSC to create an effective regulatory regime at Nigerian ports for the control of tariffs, rates, and charges, as well as to oversee economic services to address the negative impact of port concession activities on the economy. Key functions in this capacity include providing guidelines on tariff setting to guard against arbitrariness, monitoring and enforcing service delivery standards, encouraging competition, performing mediatory roles, and establishing accessible dispute resolution mechanisms.

The reported protection of N90.60 billion and $1.348 million by the NSC illustrates the practical application of its statutory and regulatory powers. A significant portion of these savings, specifically N86.06 billion, was attributed to preventing unjustified demurrage payments. Demurrage, a charge payable to a shipping line for delays in returning containers beyond the free period, often becomes a point of contention due to factors such as port congestion, administrative bottlenecks, or arbitrary charges by service providers. The NSC's interventions in this area are crucial for ensuring that shippers are not unduly burdened by costs outside their control.

Beyond demurrage, the Council secured an additional N4.54 billion and $1.348 million through other regulatory interventions and Alternative Dispute Resolution (ADR). The NSC's ADR mechanism is a cornerstone of its protective mandate, offering a swift and cost-effective means of resolving commercial disputes between shippers and service providers. The Council received 558 complaints and successfully resolved 295 commercial disputes since November 2023, covering issues such as container deposits, detention charges, terminal charges, cargo claims, and export fraud. Notable out-of-court settlements involved major players like APM Terminals Nigeria Limited, CMA CGM, and Maersk Nigeria Limited over charges collected above approved tariffs, demonstrating the Council's enforcement capabilities.

Furthermore, the NSC's regulatory efforts extend to harmonising bonded terminal invoice charges, reducing billing categories from 18 to 6, which simplifies port charges and enhances transparency. This proactive approach, coupled with directives for terminal operators to publicly display approved tariffs and for shipping companies to establish holding bays, aims to streamline port operations and reduce congestion. These actions align with the broader national agenda to improve the ease of doing business and position Nigeria as a leading maritime hub.

Looking ahead, the passage of the Nigerian Port Economic Regulatory Agency (NPERA) Bill by both chambers of the National Assembly represents a significant legislative milestone. This Bill, awaiting presidential assent, is set to repeal the existing Nigerian Shippers' Council Act and establish an independent port economic regulator with enhanced powers. While the NPERA Bill aims to reinforce and expand the economic regulatory functions currently performed by the NSC, including tariff-setting, licensing, and dispute resolution, it also seeks to separate the commercial and economic oversight of ports from the operational and safety mandates. This transition is expected to further strengthen the regulatory framework, promote competition, and foster greater investor confidence in the maritime sector.

The Nigerian Shippers' Council's reported success in protecting substantial economic value for shippers underscores its indispensable role in fostering a fair and efficient maritime trade environment. The N90.60 billion and $1.348 million safeguarded through regulatory interventions and alternative dispute resolution mechanisms highlight the tangible benefits of a proactive economic regulator in mitigating exploitative practices and reducing operational costs for businesses. This commitment to consumer protection and trade facilitation is vital for enhancing Nigeria's global trade competitiveness and supporting the national economy.

For legal practitioners, the NSC's robust framework presents both opportunities and challenges. Advising clients on compliance with NSC regulations, leveraging its ADR mechanisms for dispute resolution, and understanding the implications of its tariff guidelines are becoming increasingly critical. The impending enactment of the Nigerian Port Economic Regulatory Agency (NPERA) Bill signals a new era of enhanced regulatory authority and a more structured approach to port economic regulation. Practitioners must closely monitor the assent and implementation of this Bill, as it will redefine the legal landscape for port operations, tariffs, and dispute resolution, necessitating a proactive approach to ensure clients remain compliant and their interests protected within Nigeria's evolving maritime sector.