War Risk Insurance Status: The NLNG Corporate Laundering Controversy

BY EGUONO ODJEGBA

Has Nigeria been removed from the War Risk Insurance penalty imposed on her in 2017 by foreign shipping lines and insurance companies?

In December 2024, stakeholders spoke strongly against Nigeria’s continued payment of a $400 million war risk premium to foreign insurance companies, despite claims that attacks on cargo vessels calling Nigerian ports have been brought down to zero level over the past three years.

It will also be recalled that only recently, the Nigerian Maritime Administration and Safety Agency (NIMASA) called for an end to the sanction against Nigeria and the continued collection of the war-risk insurance premium.

The Director General NIMASA, Dr Dayo Mobereola, had specifically appealed for support from the Danish government to join hands with other countries of the world to review the sanction, noting that the conditions that gave vent to the sanction no longer exist.

Mobereola who was speaking when he received a team from the Danish Maritime Security Project noted that the risks of piracy attacks and related in Nigeria’s territorial waters including that of the Gulf of Guinea has ceased and brought to almost zero level in the past three years.

The demand by NIMASA and others to discontinue the regime of war risk insurance sanction imposed on Nigeria also comes on the backdrop of the action of the International Maritime Bureau (IMB), which had in 2023, delisted Nigeria from the list of piracy-prone countries.

NIMASA has said that the federal government is also seeking the intervention of the United Nations to help bring about a quick review, especially in the light of the fact that companies like Lloyd’s of London has continued to push these premiums, and thereby inflating freight costs for imports and exports.

While officials maintain that the war risk insurance premium penalty has outlived its purpose following the general perception that the matters of piracy the penalty was imposed to address has resolved itself, there are also concerns that the improved piracy situation is premised on allegation of self help by foreign cargo vessels.

Above self help is believed to be a violation of Nigeria’s sovereign authority as the cargo vessels sails into the ports of Lagos, Warri and others with the full complement of armed escorts; in the face of the perceived, protracted state of insecurity.

There is no indication that the Nigerian government has done anything about such obvious and flagrant display of abuse of international protocol, until yesterday, Monday, March 25, 2025 when the NLNG Shipping and Marine Services Limited (NSML) went to town with the claim that the contentious war risk insurance premiums has been removed.

NSML Managing Director, Abdulkadir Ahmed who announced the development at a press conference to launch the company’s new logo, noted that NIMASA was responsible for the removal of the war risk insurance.

“War Risk is a perception of safety in the region, and I am glad to mention the fact that the NIMASA deep blue project has significantly addressed the concerns of safety within West African waters.

“When it comes to war risk insurance, if I recall correctly, it has been removed. We really want to commend NIMASA for what they have done in terms of the Deep Blue Project, it has really enhanced security within the Gulf of Guinea” he said

While some observers and industry stakeholders think that the NSML disclosure is a pretentious and cheap political posturing, others think that Ahmed may just have passed privileged information.

This is even some others pundits expressed far more reaching concern that NSML may be running a corporate image laundering errand for some foreign interests or engaged in outright international conspiracy; while pretending to be serving the cause of NIMASA and the national interest.

Reacting to the development, Nigeria’s renowned maritime security expert, Captain (Dr) Warredi Eniusoh said such disclosure out to have been left for government officials who are most suitable to provide the update.

“It would be nice to have a document confirming this, though. We should be seeing them on the news. In that way, we can refer to them in our discussions”, Enuisoh said, adding:

“These are some of the reasons why people don’t believe us. Even industry leaders lack facts. It’s speculations all the time.”

Commenting on the controversy, Publisher and CEO of MMS Plus, Mr. Kingsley Anaroke  expressed shock that a JV company operating a critical state asset like the NLNG with predominant foreign interest, including shipping lines should be the one speaking on such sensitive matter.

“He was not sure of his claims. He was trying to make someone feel elated. But this is serious. He was unveiling a rebranded firm premised this early on misinformation and uncertainty, bordering on international conspiracy.

“He was quoted. And the quote shows he was catching cruise with expressions and romanticizing and romancing corporate friends. What a way to rebrand a brand!”, the maritime and business journalist enthused.

On his part, the Principal Consultant/CEO of International Trade Advisory Services Ltd, Mr. Okey Ibeke argued that whereas the Lloyd of London and other players have noticed and taking into account a gradual drop in the associated risks that informed the penalty insurance premium abnitio, he thinks that only the federal government is in the proper position to be providing Nigerians with an update.

“Few international marine insurers have actually scaled down Nigeria from high risk status to medium risk status, while many still maintain high risk status for the country”, he said.

In January 2025, the Swedish Club listed Nigeria as part of the subsisting perceived enhanced risk areas.

Rated a critical player in global cargo trade, the Swedish Club in its recent publication sates:

“The insurance is valid world-wide subject to Notice of cancellation as per Hull War, Strikes, Terrorism and Related Perils Notice of Cancellation Administration Clause (JW2022/007A) as regards trading warranties, with the following areas currently excluded. Trading to Listed Areas should be reported to the Association before commencement of the voyage.

“An additional premium, which depends on area and current rate, may be required. A premium indication will be provided at reporting.”

Other countries listed as Perceived Enhanced Risk in Africa as of 1 January 2025 includes Benin, Cabo Delgado, Gulf of Guinea, Somalia, Eritrea, Libya, Sudan and Togo.