Heavy Regulation Ahead

Published on April 25, 2013 by   ·   1 Comment
Heavy Regulation Ahead

The provision of maritime security services in Nigeria is about to turned on its head; non-legal actors will be forced out of the country and the Nigerian Navy and National Security Agency will begin to play an even more important role in regulating the industry.

Heavy Regulation Ahead for the Maritime Security Industry in Nigeria

The Maritime Security Review has learned that plans for a radical shakeup of the maritime security industry’s activities in Nigeria are further ahead than most have suspected.

Rumours of plans to regulate the industry and crackdown on non-legal  actors have been circulating for some time, however, no specific details have as yet emerged.

Maritime Security Review understands that the Nigerian Navy will play the lead role in introducing a series of measures that will force those operating without licences to leave the country while placing the legitimate players under stricter controls and monitoring.

According to one government official speaking on the condition of anonymity because they are not authorized to speak to the media: “The rules of the game are very clear in Nigeria, legislation governing the private security industry has been in place for a long time.

The sector is well regulated but there are those who try and operate illegally, we will bring a stop to this.”

According to the source, the Nigerian Government is not only angered over the flaunting of laws but strongly objects to the loss of tax revenues. The practice of ‘piggybacking’- a non-legal form of sub-contracting, means that only a small proportion of a contract’s value is awarded to a Nigerian registered company. In those cases where a foreign company is supplying services no taxes are paid in Nigeria at all.

Another issue of contention is the lack of opportunities for Nigerian citizens. According to the official Maritime Security Review spoke with: “There are a lot of young people who would like to work in the security sector, we believe that the companies operating in a non-legal fashion are slowing the growth of the industry,” adding that “would the British Government tolerate a similar abuse of the laws?

Well informed contacts within the maritime security community in Nigeria have told Maritime Security Review that the threat of a shakeup has been in the air for some time.

Obviously we welcome any form of control,” said Lee Kirton, Global Maritime Manager at LGS Nigeria. “Although it wouldn’t be appropriate to comment at the moment, we’ve got a full understanding of why changes are going to be introduced and a fairly clear idea as to just how they’ll be introduced.

LGS Nigeria’s Global Maritime Manager went on to state that: “We operate in full respect and accordance to the laws governing the supply of security services in Nigeria, we are a fully licenced, Nigerian owned and managed company. We are audited on a regular basis and we have all our cards in order.”

Kirton went on to explain that achieving a fully operational legal status was only possible after having completed a thorough and rigorous due diligence process. “Licences aren’t just handed out like that, you have to prove that the company is fully compliant with every part of the audit and due diligence process. To operate in the various sectors you need different licences, that’s and audit process every time…and believe me, these guys are thorough.

According to Kirton it can take years before a company reaches the fully licenced status. “You cannot rush the audit, it’s a process that takes time and follows a logical sequence. A lot of people think that it’s a case of turning up, applying for a licence and getting it a few weeks later. It’s not like that at all, nothing could be further from the truth.

Maritime Security Review has spoken with other experts in Nigeria some of whom are sceptical as to what the future is going to bring to the sector. “It’s all about the Navy wanting to obtain and exercise even greater control,” commented one.

It would not be appropriate for Maritime Security Review to comment on any such observations, however, the Review is quite certain that the Nigerian Navy will very shortly be asking some hard questions to those attempting to work without the full set of licences.

On a visit to the Nigerian Ports Authorities last year, Maritime Security Review was informed that the Authority would be cracking down not only on illegal security operators, but also on their clients; ship owners, operators and charterers.

Clients must insist on seeing copies of a company’s licences,” says Kirton. “Under no circumstances whatsoever should a company security officer even consider the services of a company that makes excuses or supplies copies of documents in another company’s name.”

According to the Global Maritime Manager: “At the very best what you risk when hiring a non-compliant company is your vessel being expelled from Nigerian waters without having had the opportunity to load or unload.

You can be banned from using Nigerian ports for 12 months, your vessel could be seized and the crew detained. In a worst case scenario, the outcome of an attack on a vessel could be your insurance policy being considered null and void, your vessel and cargo being seized and your commander arrested. It’s not a pleasant thought but it’s a possibility that all CSO’s need to consider.”

At a recent conference held at Nigeria’s Center for Strategic Research and Studies in Lagos, Alex Vines, African research director for London-based Chatham House, stated that: “Private security providers are licking their lips in anticipation of coming in and making good money.”

Andrew Pocock, the British High Commissioner to Nigeria, added to Vines comments by stating that: “We need to move from analysis to action.” At the current moment it is not clear exactly what form of assistance or advice is available to British companies from the Foreign and Commonwealth Office, however, the High Commissioner’s office would strongly advise any company seeking security services in Nigeria to be absolutely certain to choose a fully licenced local company.

There is no doubt as to the Gulf of Guinea’s becoming an ever riskier area; in 2012 Lloyd’s Market Association listed Nigeria, Benin and nearby waters in the same risk category as Somalia where piracy has flourished over the past few years.

Chatham House have been monitoring the maritime security situation in the Gulf of Guinea for some time, according to one of their recent reports: “Piracy in the Gulf of Guinea accounted for nearly 30% of attacks (427 of 1,434) in African waters between 2003 and 2011, and that proportion is increasing.”

At last Saturday’s event in Lagos Vice Admiral Dele Ezeoba, the chief of staff for Nigeria’s navy, explained that the recent escalation in violent pirate attacks, that range from low-level armed robberies to hijackings and cargo thefts, have led Nigeria to launch more anti-piracy patrols. The Vice Admiral stated that in recent months over 40 vessel have been detained.

Vice Admiral Ezeoba also commented that that there may be a greater role for private maritime security companies to play in combatting piracy in the region, the Vice Admiral went as far as to suggest that armed private security guards could be put on vessels in the Gulf of Guinea

Unfortunately he left the conference without being able to take any questions, however, there is no doubt as to his being firmly of the opinion that any development of the private maritime security sector’s role can only come about after further regulation has been introduced.

It would appear that the private maritime security industry in Nigeria is about to face a series of changes that will favour the committed, serious players and eliminate the far less professional.

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Readers Comments (1)
  1. Amazing, this advanced understanding of regulating chaotic markets.. I am deeply impressed.