Tanzania: End to Foreign Management of Country's Shipping Industry Awaited

OMAR Hassan considers himself unlucky. On a daily basis Mr Hassan (not his real name) carries out day-to-day duties as General Manager at Emirates Tanzania Limited, a shipping agency firm whose principal is Emirates Lines of Dubai.
"I do the work but my foreign managers pocket the pay," said Hassan who is among hundreds of local managers who are being exploited by multinational shipping companies which import many under qualified foreign managers who are paid hefty salaries but the donkey work is done by locals.
"The law should clearly state that any expatriates should be sanctioned by Sumatra before work or resident permits are issued," said Peter Manyaka, a member of Tanzania Shipping Agents Association (TASAA).
Mr Manyaka pointed out that many qualified local shipping personnel are being forced to work under under-qualified foreigners some of whom hardly completed formal secondary education. Speaking during a Surface and Marine Transport Regulatory Authority (Sumatra) stakeholders meeting to discuss proposed amendments to the 2002 Shipping Agency Act, several local shippers decried foreign domination of the sensitive industry.
In a report, Tanzania Shipping Agents Association (TASAA) said after a decade of liberalization of the shipping industry, it's time for largely foreign owned shipping agencies to reflect local ownership and save billions of shillings being siphoned out in terms of salaries and under-declared revenue.
The report stated that most shipping agencies are owned by multinational shipping companies which used local personalities mainly lawyers and politicians as fronts holding nominal shares to justify their presence as per the 2002 Shipping Agency Act.
"It is clearly stated by the law that more than 50 per cent of the shares in the agents must be owned directly or indirectly by a citizen of Tanzania. However, to-date out of all 26 licensed agencies, ownership of many if not all companies is in hands of foreign shipping lines or companies which is against the law," the report stated. TASAA accuses Sumatra and Ministry of Labour and Employment of laxity in dealing with the problem which is costing the country a fortune annually.
Decrying failure by the regulators to reign in foreign shipping companies, TASAA said: "The government through parliament enacted the Shipping Agency Act of 2002 to regulate and control the business of shipping agency. Furthermore, the law was meant to empower Tanzanians to run, manage and own majority shares in licensed shipping agents."
But Minister for Labour and Employment, Gaudensia Kabaka and Sumatra spokesman, David Mziray defended their performance by stating that local stakeholders should report names of shipping companies and individuals violating the law.
"The process of endorsing foreigners get work permits is very tough and we have dismissed many applications in the past so it is not true that there is laxity," Ms Kabaka argued saying her ministry only licenses Class B permits in collaboration with Ministry of Home Affairs. She said other foreigners get Class A permits from Tanzania Investment Centre.
"Before issuing any permit, we make sure that the position being applied for has no one locally to serve them," she argued as TASAA members faulted her by saying that most agencies are actually managed by ex-National Shipping Agencies Company Limited employees.
While urging local stakeholders to give her specific cases so that she can address them, Kabaka also defended her ministry against criticism of failing to stop hefty payments made into foreign accounts abroad as salaries.
"My ministry only deals with pegging the statutory minimum wage but companies are free to pay anyone whatever they want but not the less than the minimum wage," she noted while stating that Tanzania Revenue Authority is responsible for pay as you earn collection.
On his side, Mr Mziray said Sumatra only issues licences to shipping agencies once they have completed basic requirements at TIC, Immigration department and Business Registration and Licensing Agency (Brela).
"As for shipping agency companies being owned by foreigners or using locals as fronts, I don't know anything unless I am given a specific example," Mziray argued. He however noted that Sumatra and stakeholders are currently reviewing regulations governing the industry to curb loopholes which allow foreigners to get jobs at the expense of locals.
TASAA's report also accused foreign managers and owners of recruiting fellow foreigners in junior positions such as storekeepers, accountants, documentation and sales officers often without proper work permits as required by the law.
Among other things, the 2002 Shipping Agency Act restricts foreign ownership, recruitment and domination of the industry which should be under the control of locals following a heated debate to liberalise the industry formerly controlled by the state under Nasaco.
"The government is losing huge amounts of revenue due to this as foreign companies tend to export much of their income to their home country. These foreign companies also under-declare their income to pay less tax in the country," the report noted. Foreign managers and chief executives earn between 10 and 15,000 US dollars (between 15.7m/- and 23.5m/-) per month compared to locals who do much of the donkey work but earn less than 5m/- a month.
"Much of these salaries are paid through their accounts abroad in Dubai, Europe or British Virgin islands while they receive allowances here which are subject to taxes," the port pointed out.
'Sunday News' investigations established that only three of out of 26 licensed shipping agencies in the country employ local managers and are majority owned by Tanzanians while the rest are operating illegally. The three companies are Forebridge Shipping Limited, Wosac Tanzania Limited and Tanzania Shipping Agents Limited
Source: Tanzania Daily News