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Nigerians' oil tankers float idle as foreign ships score the jobs

A 2003 law was supposed to restrict all domestic shipping to Nigerian-owned ships. The country is rich in oil but rife with corruption, and more than half its people live in poverty.

May 14, 2011|By Robyn Dixon, Los Angeles Times

Reporting from Lagos, Nigeria — They are not the most beautiful ships to take to the sea, unless you are a retired naval captain with seawater washing through his veins.

For Nigerian sea captain Niyi Labinjo, his little fleet of four ships is his life. They're workhorses: ugly tankers a quarter of a century old or older, picked up cheap and designed for small coastal jobs, not to ply the high seas.

But these workhorses rarely work.

Like many other Nigerian-owned ships, they mostly lie at anchor while vessels flagged in places like Panama or St. Vincent and the Grenadines dominate Nigerian waters. The most lucrative cargo is exports of crude oil leaving Nigeria and imports of refined petroleum products including gasoline and diesel.

It wasn't supposed to be this way. In 2003, Nigeria, one of the world's top oil producers, passed a law restricting all domestic shipping to Nigerian-owned ships. The aim was to guarantee Nigerians a piece of the maritime trade. Similar laws exist in Canada, Japan, Europe, Australia and Indonesia.

Eight years later, foreign operators still dominate the industry. Nigerians who jumped into the business with high hopes said authorities have failed to enforce the law, known as the Cabotage Act; dozens of domestic ship owners have gone bankrupt.

Labinjo said he's heard complaints that Nigerian ships are too old and decrepit to safely transport petroleum products to and from larger tankers offshore, and that local crews lack the skill to do the job. Some of his ships have gone as long as nine months without a load.

"They use many excuses. They say, 'No, your ships is leaking,' when it isn't leaking. They will say 'Your papers aren't complete, you don't have insurance.' When you have everything, your ship is first class, your ship is insured, they will say you don't have enough bollards," he said, referring to ships' mooring posts.

Nigeria — a country rich in oil but rife with corruption, and where more than half the population lives in poverty — is taking steps to make its economy more competitive.

Its ports were privatized five years ago to cut cargo wait times. Some terminals saw stunning improvements. But Nigeria is still ranks 146th out of 183 countries in terms of the efficiency of its ports, according to the World Trade Organization.

Labinjo, general secretary of the Indigenous Shipowners Assn. of Nigeria, blamed corrupt and ineffective maritime authorities for hampering the industry's development. The walls of his office are hung with the photos of chugging tankers that he said would transform Nigeria's economy if more natives were given a fair share of the trade.

"For every Nigerian you give a [shipping] job, you are empowering Nigerians because he will employ Nigerians and he will use Nigerian services and he will put the money into a Nigerian bank."

To be in the Nigerian shipping game, Labinjo said, narrowing his eyes, you have to be tough and you have to love ships. He said he joined the army at 16, transferred to the navy, rose to captain and commanded many ships.

"That's where I got this love of ships, this love for the sea."

After 35 years in the navy he retired, raised some money and bought his first ship for $65,000. He went on to purchase four more.

"People who are engaged in shipping are not in it for the money, but for the interest. It's a cyclical business, boom and bust," he said. "Those of us in the shipping business call it a storm. It takes a person who is strong enough and interested enough to stay, even after the storms."

A storm — real, not figurative — that hit Nigeria in February 2010 illustrates the industry's problems. Sixteen idle ships, anchored empty offshore, were washed ashore like corks. Five of them were destroyed.

Labinjo lost one of his ships, the Ray, which sank not far from land. He said insurance didn't cover the loss

Frustrated by the government's inaction, the shipowners association in 2009 arrested six foreign ships in Nigerian waters for allegedly breaching the Cabotage Act. The high court of Nigeria found the owners of a Filipino-crewed vessel, the Lovell Sea, guilty of breaking the law that year. But such enforcement is a rarity.

Babatunde Fashola, governor of Lagos state, said locals lack the training and equipment to compete with foreign operators.

"Unfortunately, most of [the maritime industry] is in foreign hands, because we lack the capacity to compete effectively through the ownership of adequate equipment and the required manpower or expertise," he said at a March maritime exhibition in Lagos.

But Lagos maritime consultant Bolaji Akinola said government officials are the ones who are unqualified. Temisan Omatseye, the last boss of the Nigerian Maritime Administration and Safety Agency, was arrested in November and accused of corruption, money laundering and other abuses.

In a February interview with the Vanguard newspaper, Akinola said enforcement of the Cabotage Act would funnel a steady stream of business to Nigerian ship owners, enabling them to replace old ships and boost hiring.

"No Nigerian vessel should be allowed to sit idle on Nigerian waters while foreign vessels have a field day on our waters. Period," Akinola said. "All we need is some level of patriotism and political will to do it."

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