Chapter one
Introduction
- Background of the study
Despite the efforts of the government of Nigeria in fighting corruption in all sector, several unwholesome activities are still going on in the maritime sector most importantly by the shipping agencies and terminal operators, under the watchful eyes of government agencies, conniving to slam fictitious charges on importers and agents in what has been described in the maritime domain as a ceaseless economic rape. The product of this organized graft, which often runs into several billions of naira annually has continued to swell the volume of the capital flight the country suffers yearly. Following this scheme, used vehicles, clothing, food items and other goods are now cheaper to buy in Cotonou, Lome and Ghana markets, than when purchased in Nigeria (Thisday, 2015).
Fraud in commerce is as ancient as commerce itself, with examples going back to the Roman world and before. The International Maritime Bureau defined maritime fraud as: “An international trade transaction involves several parties – buyer, seller, shipowner, charterer, ship’s master or crew, insurer, banker broker or agent. Maritime fraud occurs when one of these parties succeeds, unjustly or illegally, in obtaining money or goods from another party to whom, on the face of it, he has undertaken specific trade, transport and financial obligations (Skuld,2014).”
Maritime fraud is becoming more common due to a number of reasons: Criminals are increasingly turning to new methods such as computer hacking, ports are adopting new technologies that in the worst case can enable new types of fraud (such as automatize container operations) and as shipowners are under pressure to win new business, many have disregarded due diligence when dealing with new business partners.
According to previous findings, the terminal operators, shipping lines and shipping agents have taken advantage of the largely unregulated maritime industry in Nigeria to hike charges like demurrage, and container deposit, among others, which are at variance with what obtains in neighboring West African ports. A full analysis of shipping charges conducted in three African countries – Nigeria, Ghana and Benin Republic by a maritime industry medium, “Shipping Position,” shows that port charges in Nigerian remain the highest in the ECOWAS region. Experts have, however, attributed the high charges to the unwholesome practices among shipping companies operating at Nigerian ports. Again while it takes few days to get the container deposit refund in other ports once the empty container is returned, it may take up to three months in Nigeria because the terminal operators allegedly delay receiving it in order to build up demurrage that may eat up the deposit. Other charges not collected in other countries but obtainable in Nigeria include MOWCA levy and stamp duty (Tancott, 2015).
Importers are also perplexed that contrary to what is obtainable in other West African countries’ ports, Nigeria only offers three days free of progressive storage charge while Benin, Ghana and Cote D’Ivoire offer seven days free of progressive storage charges. Maritime experts have argued that the development was threatening the nation’s sea hub status as Cotonou, Lome and Accra ports are snatching cargoes from Nigeria. It is feared that the partial cargo drought often experienced in the country, is attributable to this development as some shipping companies prefer to call at other West African ports where they enjoy huge incentives, especially reduced charges are largely the outcome of such practices (Tancott, 2015). The soaring frequency of smuggling is because some importers may not make profit after paying all charges at the ports.
Based on this background the researcher wants to investigate effect of maritime fraud on freight forwarding operation in Nigeria seaport. The study will use port Harcourt port, Rivers State as a case study
- STATEMENT OF THE PROBLEM
Ports play a key role in the Nigeria economy and development, almost the trade between the Nigeria and the rest of the world is handled in ports. Maritime fraud never has been so profitable and secure proposition than during the recent decades. In the late Seventies, maritime crime reached a new peak and the trend is going on in full swing. Now the question naturally arises as to how a maritime fraud occurs. We know that maritime transport plays an important role in international trade transaction where several parties such as sellers, buyers, shippers, shipowners, charterers, ship masters and crew, port authorities, inland howlers, bankers and insurers are involved. Maritime fraud occurs when one of these parties succeeds in intentionally and illegally obtaining money or goods from another of these parties. Maritime fraud is, therefore, that species of general fraud which is connected with the maritime field. It may take a variety of forms i.e. documentary fraud (by forging documents or signature) chartering frauds, intentional or non-existing loss of or damage to cargo, barratry, the scuttling of ships etc., etc (Kazi,2015).
Maritime fraud is truly international and the victim can come from any corner of the globe. The fraudster is indifferent to the colour, creed or political belief of his victim. There may be various form of maritime fraud and there is a great deal of evidence that a significant proportion of maritime frauds and related offences are perpetrated by organized groups. For years the shipping industry ran freely and well on spoken commitment, within a system. But there has been continuing infiltration by organized groups in the shipping industry and this is the single worrying factor to curb maritime crime and fraud. The deliberate destruction of the ship, whether by scuttling, fire or other means achieved a certain degree of prominence in the twenties. It then subsided until the Seventies, when it emerged as a totally new art. The days of the sinking of old and useless vessels by owners, if not past, have had to make way for methods employed by a much more intelligent, solvent, and organized group of fraudsters (Kazi,2015).
Maritime cargo frauds can range from the non-shipment of any cargo at all through to deliberate destruction of over insured cargo. Overvaluation as a means of fraud relates naturally to both vessel and cargo
1.3 OBJECTIVE OF THE STUDY
The objectives of the study are;
- To examine the effect of maritime fraud on the operation of port Harcourt seaport
- To identify the various means employed in defrauding maritime activities port Harcourt seaport, Rivers State
- To identify the cause(s) of fraud in Port Harcourt seaport
- To recommend measures for reducing the incidence of maritime fraud
- RESEARCH QUESTION
- What is the level of maritime fraud in port Harcourt seaport, Rivers State?
- What are the various means employed in defrauding maritime activities port Harcourt seaport, Rivers State?
- What are the cause the cause(s) of fraud in Port Harcourt seaport?
- What measures can be used for prevention and control of such fraud practices in port Harcourt seaport, Rivers State?
- SIGNIFICANCE OF THE STUDY
The significance of this study is in the fact that it highlights the immediate and remote causes of fraud practices, effects, prevention, and control in Nigeria maritime with particular reference to port Harcourt port, Rivers State. Several attempts have been made by researchers, writers e.t.c. On how to minimize or eradicate it if possible. The studies have been geared towards finding out causes and consequences, prevention and control of frauds in seaport.
Therefore, the suggestions that are advanced in this study would no doubt be useful not only to the shipping industry but to all shipping firm be it public or private sector of the Nigerian economy. The content of this research and the suggestions to be proffered will serve as resources for further study in the same or similar areas maritime in the area of fraud practices
1.8 SCOPE AND LIMITATION OF THE STUDY
The scope of the study covers Effect of maritime fraud on freight forwarding operation in Nigeria seaport (A case study of port Harcourt port, Rivers State).
The researcher encounters some constrain which limited the scope of the study;
- a) AVAILABILITY OF RESEARCH MATERIAL: The research material available to the researcher is insufficient, thereby limiting the study
- b) TIME: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.
FINANCIAL CONSTRAINT– Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).
DEFINITION OF TERM
MARITIME FRAUD: Maritime fraud exists whenever there is intentional deception as to some fact or circumstance in connection with maritime activities which enables the unjust obtaining of money or goods
FREIGHT: goods transported in bulk by truck, train, ship, or aircraft.
SEAPORT: A port is a maritime facility which may comprise one or more wharves where ships may dock to load and discharge passengers and cargo
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