By Steve Agbota, [email protected]
After 21 years of initiating the Cargo Defence Fund (CDF) by the Nigeria Shippers Council (NSC), it’s operations have been in limbo due to non legal backing for its implementation and disbursement.
The Fund, is a company limited by guarantee set up as a Cargo Protection & Indemnity (Cargo P & I) scheme. It is established to mitigate losses incurred by shippers, especially upcoming importers and exporters, who may not have the financial muscle to pursue their legitimate maritime claims.
The fund is also a mutual scheme to provide cover for particular risks as agreed upon by members. The focus of the scheme is on Nigerian importers and exporters. It became operational in 2001 and is managed and administered by a Board of Trustees representing major interest groups and stakeholders.
Conversely, when the fund was functional, it was administered by three committees, the legal, the joint Committee of Cargo Defence Fund and the Nigerian Insurance Association and the Finance Committee.
Investigation by Daily Sun revealed that in 2001, the fund was launched under section 26 of the Companies and Allied Matters Act of 1990, with a N10 million seed capital provided by the Federal Ministry of Transport and other donors. The fund was envisaged to benefit all shippers registered with various States shippers associations, by way of advice and funding of their litigations and claim recoveries.
Prior to the establishment of the fund, the Council noticed a very high rate of abandonment of legitimate claims by indigent Nigerian shippers who could not afford the cost of pursuing their legitimate claims either in the court of law or through arbitration as may be prescribed in the carriage contracts.
Daily Sun learnt that due to this high rate abandonment of legitimate claims, a lot of shippers, especially the indigent ones have been out of business or gone bankrupt because they are not financially buoyant to pursue such claims. To provide a viable solution to this problem faced by the shippers at that time, the Council established two similar service schemes or products, initially known as the Cargo Protection and Indemnity Fund and the Cargo Litigation Fund. These two were domiciled under the Legal Unit of the Council at the time. The schemes were later merged and formalised into the present Cargo Defence Fund with a special unit created to form its secretariat.
Curiously, 21 years after the establishment of the Fund, there is no legal backing to implement the CDF and modalities on how the fund should be disbursed to the qualified shippers.
Though, some shippers who spoke with Daily Sun said that the fund has been in limbo for years and presently, the bill for the CDF is before the National Assembly for implementation. They urged the lawmakers to facilitate the passage of the bill so that Mr President can sign it into law so that shippers, especially the indigent ones can have access to it.
Recently, the Executive Secretary/ Chief Executive Officer of the Nigerian Shippers’ Council (NSC), Emmanuel Jime, said the Council would resuscitate the Cargo Defence Fund (CDF), and make it operational within one year, as part of measures to enable it resume the mitigation of losses incurred by shippers in international trade, saying the Council has saved shippers from losing 900,809,361.00 through its interventionist role.
Meanwhile, the Shippers Association of Lagos State (SALS)has vowed that it would monitor the implementation of the Cargo Defence Fund to make it effective.
Speaking with Daily Sun on why the CDF has been in limbo, the spokesperson for SALS, Dr. Kayode Farinto, said that there was no law for now backing it. He said what happened now is that the National Assembly has made a bill, which will be assented to by the President.
“I think it is just to give it legal backing, legal treatment and a direction on how it’s going to be disbursed, condition of being disbursed and who can be the beneficiary,” he added.
Farinto said that the SALS would collaborate with government agencies to ensure that the Cargo Defence Fund did not become moribund like the Cabotage Vessel Financing Fund (CVFF).
According to him, the Cargo Defence Fund is very impotant and shippers do not want it to become moribund.
“The Cargo Defence Fund is to assist shippers and help cushion the effect of the COVID-19 pandemic,” he said.
He also urged government to look at trade facilitation as a core principle to enable shippers bring in cargo effortlessly.
However, he said that shippers do not receive enough protection by the Nigerian Shippers Council (NCS) hence, SALS would vacate its second-floor accommodation at the NSC corporate headquarters over what the association called ill-treatment.
“This year, the NSC must carry everybody along. It is important that the chicken that lays the golden eggs are protected. The Shippers must be protected, empowered and encouraged.
“Shippers are very important in the industry, they are the proverbial hen that lay the golden eggs; without shippers, there will not be any cargo. In the NSC’s Act, a shipper is the direct owner of the cargo,” he added.
“Section 3, subsection C of the Act number 13 that establishes the council also stated that the council is to encourage the formulation of shippers association all over the country.
“Unfortunately, the role of the shippers in the industry shows that shippers association have not been carried along and we will partner with agencies to make ourselves be heard,” he said.
Farinto added that shippers believe in the leadership of the NSC, but urged that they carry shippers along to ensure collective responsibility.
However, he cautioned the Federal Government not to pay lip service to trade facilitation because if trade facilitation is achieved, there would be simplicity and projection in cargo clearance and employment generation.
The President of SAL, Rev. Jonathan Nicole, said: “The Cargo Defence Fund is a shippers fund. We are supposed to be part of it. The fund is to help indigent shippers who cannot pay their frieght access the fund, pay for the freight, when the goods arrive and return the money upon completion of their business.
“I don’t want to talk about the first one that we don’t know what happened to it. I’m talking about the present one that Shippers Council presented to the Senate. All of us should be part of this system. “The fund should support us when we have legal issues and we don’t have money to hire a lawyer, they will take over the case and provide a lawyer. So it is a very useful fund for shippers, especially shippers that have problems within and outside the country.
“So it is a fund all of us would be obliged to contribute to. And we are partnering with the NSC to make sure that the Cargo Defence Fund succeed. And there are several areas private sector need to help,” he said.
He said the fund was raised 21 years ago, shippers were not too keen because it was not raised under the platform of togetherness, adding that this time around, the Cargo Defence Fund will help most of the indigent shippers to resuscitate their business and ensure it works.
In his view, President, Africa Association of Professional Freight Forwarders and Logistics of Nigeria (AFFLON), Otunba Frank Ogunojemite, said the reason why shippers have not been able to access the fund could be as a result of change of leadership at the Council.
“Secondly, Shippers Council again requested us to come and verify our registration with them. That was emphasized at the last meeting we had. What Shippers Council should do is to facilitate the registration and the process to continue on this fund.
“Before the former Executive Secretary, Bello Hassan left office, he said a lot of things about this and we all welcome the idea. I think there is need to look at the impediments that may have caused delay on this.
“I think as an association, we need to make some moves to speak to them on this too. So it is a good move if you people in the media can address it now and may be that will change the whole idea,” he said.