Maritime lawyer advocates equipping maritime regulatory agencies with penal sanctions

Tayo Oladipupo

A maritime lawyer Barr. Osuala Emmanuel Nwagbara has called on the Federal Government to strengthen regulatory agencies in maritime industry to curb unethical practices in shipping subsector of the industry.

Nwagbara, the Managing Partner, Maritime and Commercial Law Partners, made the call in a paper presentation at a one day seminar in Lagos with the theme; “Ethics and Integrity in Shipping Trade”.

He quipped that institutions must be more powerful that individual operatives in the system.

His words, “Most of our regulatory laws have no penal sanctions against the operatives of the system. The result is that individuals regulate the system and not the system regulating the individual operatives. The system therefore becomes weak and ineffective.

“But laws are not just enough; technology and education are others, and much more. We need a strong system to achieve ethics and integrity in shipping trade in Nigeria”.

He therefore submitted that institutions charged with functions which would discourage and punish for unethical practices should carry out such functions in a manner that would make the victim have confidence and trust in them.

Speaking on the importance of shipping trade to the economy, Nwagbara stated that it had been agreed that the economic prosperity of a country was largely determined by the volume and direction of her international trade adding that this was so because the type, volume, direction of the trade trended to generate productive activities and services to support it.

“In simple terms, international trade is the exchange of goods and services between two or more countries for money, goods, services or a combination of these items. The converse is that where lack of ethics and integrity are the order of the day in the shipping trade of a nation, the volume and direction of its trade would pale and de-generate productive activities”, he added.

He however identified some of the content ethics and integrity in shipping trade to include; honestly dealing with every party, acting in a way that is not injurious to the other party, keeping to the terms of every agreement entered into, dealing with utmost good faith, supplying and delivering what is promised as well as acting in consonance with the law.

Nwagbara further went ahead to offer some examples of unethical conduct and practices bereft of integrity in shipping trade to include; falsification of shipping documents, passing of substandard goods as standard, tariff avoidance through under-valuation and over-valuation of imported and exported goods respectively which is also done through under-payment of assessed duties, foreign exchange malpractices of all manner, subverting the import/export banned and restricted substances/goods regime of the country and concealment of the nature and type of cargo imported or exported.

Others are; obtaining goods from trading partners deceitfully and not repatriating funds after sales as agreed, deliberate under-assessment of quality in order to short-change the supplier, Unilateral and arbitrary increases in freight rates and local shipping charges by ship-owners and/or their agents, increases in port charges by port service providers, cargo diversion and over-carriage by ship operators away from a named port of discharge determined only from the ship’s point of view without due consideration for cargo owners interests and willful and deliberate sinking of ships in order to fraudulently institute claims against under-writers [Barratry].

Still on the list are; non- remittance of import duties promptly by banks, hidden or unstated insurance clauses designed to trip up the shipper in the event of claims or refusal/delay in paying certified claims and sudden changes in import/export procedures, tariffs among others by governments.

He added that some of the effects of non-adherence to accepted ethical standards are; unavailability of credit to shippers both locally and internationally, inability to process and conclude claims quickly since every agency concerned especially insurers must be extra careful to ensure due diligence as time is money, goods and transactions, often times are not insured because of perceived sharp practices by some insurers leading to unnecessary losses to the shippers and the economy as well as unclear/imprecise customs procedures and requirements.

Others are; secure payment modes are avoided because the banks are seen to be unfair which in turn raises costs and risks (funds are transferred through the black market or other unorthodox means), loss of credibility for both the shipper and the country internationally with all the attendant negative snowball effect on other sectors of endeavour by the country, the country is labelled a high risk business area and foreign investment capital go to other destinations, cargo traffic volume may not reach its optimum potential resulting in loss in foreign exchange earnings, diversion of cargo meant for Nigerian ports to neighbouring ports is encouraged, shippers operate on short-term basis since the procedures are not stable which hardly makes for sustainability of long-term contracts and leads to massive loss in revenue accruable to government that, in some way, affects the development of needed infrastructure.

© 2019, maritimemag. All rights reserved.