Setting up shop in Nigeria

THE maritime sector in Nigeria is undergoing a general overhaul. Last year the transport minister set up a committee designed to spearhead reform of the sector as a whole. Part of the committee's assignment is to review and update the Merchant Shipping Act 1962, which is based on the British Merchant Shipping Act 1894 and the regulations made pursuant thereto. Until the updating is complete, the Act will continue to regulate the operation of shipping companies, including the registration of ships, mortgages, terms and conditions of service of officers and crew, and the safety of passengers, crew and cargo.

Another key piece of legislation is the National Shipping Policy Decree No 10, 1987, which established the National Maritime Authority (NMA) and provides for the setting up of national carriers, i.e., vessels eligible to benefit from cargo-allocation, cabotage, access to special cargo etc. As part of the ongoing reform of the maritime sector, the cargo reservation policy was suspended last year.

The usual commercial regulations for the incorporation of limited liability companies, under the Companies and Allied Matters Act 1990, apply to the setting up of a shipping company. Non-Nigerians are eligible to be directors and/or shareholders of a shipowning company provided that sixty per cent equity is owned by Nigerians.

Vessel eligibility

A vessel is not eligible to be registered under the Act unless owned wholly by qualified persons, i.e., body corporate registered and owned by Nigerian citizens. In the case of a national carrier, a maximum of forty per cent equity ownership by non-Nigerians is permitted. The maximum age of vessels for registration, according to the office of the new Government Inspector of Shipping (GIS), is ten years.

Registration procedure

Ship registration is currently administered by the GIS in Lagos Island, now directly under the Federal Ministry of Transport. The applicant needs to submit, along with the application, the following documents:

  1. Certificate of incorporation
  2. Memorandum and articles of association
  3. Three years or current tax clearance certificate
  4. Particulars of directors
  5. Declaration of ownership
  6. Application for approval of ship's name/change of name
  7. Bill of sale or builder's certificate
  8. Deletion certificate
  9. Certificate of registry
  10. Tonnage measurement certificate issued by Nigerian surveyors
  11. Design plan and specification of vessel
  12. Recent surveys and certification of vessel
  13. Classification of vessel
  14. Payment of registration fees
  15. Official number, carving and marking note where applicable
  16. Master's name and certificate numbers
  17. Load line certificate
  18. Radio Telephony Certificate/Radio Accounting Authority Identification Code

If all required documents are available, the registration process takes between seven and ten days. The regulation permits provisional registration for a maximum period of six months. There are no restrictions on the registration of mortgages and encumbrances on vessels. Parallel registration is not permitted, and bareboat-chartered vessels can be registered only if the vessel has been deflagged or its name deleted from the previous registry. Initial registration fee is N5,000 (about $46) and N1,000,000 (about $9,000) for national carriers.

Inspection and certification

Every vessel must be inspected by the Maritime Inspectorate Division (MID) under the GIS office and must have survey, tonnage and safety certificates. It is obligatory for a vessel to be in class at the time of registration, and four classification societies are authorised to perform this duty on behalf of the Nigerian government - American Bureau of Shipping, Bureau Veritas, Germanischer Lloyd, and Lloyd's Register of Shipping.

Manning

The crew must be 100 per cent Nigerian citizens, as must 75 per cent of shipboard officers, including the captain, the chief naval officer and, where possible, the chief engineer. It is mandatory for vessels of all types to have manning certificates, and a Safety Management Certificate and Document of Compliance in conformity with the International Safety Management (ISM) Code issued by the MID.

All officers and crew are expected to have certificates of competency issued by the GIS, which currently issues certificates only for domestic trade, in conformity with the International Convention on Standard of Training, Certification and Watchkeeping for Seafarers 1978. Plans are afoot to implement STCW 1995.

Also acceptable by the registry is a certificate of competency issued by the administration of the country of nationality of the officer/crew or flag of registration, a seamen's identification and record book, or a Commonwealth certificate of competency. Although not part of Nigeria's domestic legislation, the provisions of Marpol 73/78, STCW 78 and the ISM code have largely been applied administratively.