Shipping: Revoking old laws
The Shipping Ministry is working on repealing 13 rules of the Merchant Shipping Act of 1958, which will enhance the ease of doing business in the country. CARGOTALK speaks with some industry veterans to know which laws need to be repealed. Excerpts:
India is touted as the land of opportunity for logistics service providers all over the world. And shipping plays an important role in this sector. Ninety per cent of the country’s trade volume (70 per cent in terms of value) is moved by sea. “In today’s era of globalisation, international trade has evolved so much that almost no nation can be self–sufficient and global trade has fostered interdependency and interconnectivity between the countries,” say the veterans.
However, the challenge remains to preserve the momentum through a sound maritime strategy by creating world-class ports, upgrading and modernising the existing maritime infrastructure and bringing in efficiency in every sphere of operations to meet international standards. However, other than infrastructure, one of the major concerns that needs government and professional’ attention is ‘law’. The Shipping Ministry will issue a notification revoking 13 rules of the Merchant Shipping Act 1958. Under this notification, old rules relating to certain tariffs, maintenance of equipment and pilgrim ships will be eliminated.
There are close to 67 such old rules have been identified and consensus has been reached on discarding 13. Some of the rules had been formulated in the 1950s.
The draft notification has been prepared for revoking the rules by the Ministry of Law and the same has been vetted by DG Shipping’s office.
The DG Shipping’s office also conducted a study and found 97 reasons for which shipping companies come to the shipping office for grievance redressal. Commenting on the same, Deepak Shetty, Director General (DG) of Shipping, said, “Other than the statutory requirements, we are trying to eliminate most of the issues, or moving them to an online platform for faster redressal. These 97 issues were pain areas.”
The challenge is to preserve the momentum through a sound maritime strategy by creating world-class ports, upgrading and modernising infrastructure
CARGOTALK asked a few shipping professionals about the need of withdrawing old laws from the shipping industry and what made DG Shipping think of eliminating old laws. Excerpts:
Old laws: The 13 laws are the rules that were issued under the Merchant Shipping Act, 1958. The deletion of the 13 rules proposed by the committee constituted under the purview of the Directorate General of Shipping for the purpose of recommending the repeal of obsolete rules and regulations, from the existing list of rules legislated under the Merchant Shipping Act is warranted as these rules have become obsolete, redundant or are reformulated elsewhere.
Welcome step: The shipping industry welcomes this positive step by government towards abolishing, amending and revamping the existing regulations and laws that regulate the Indian shipping industry. The shipping industry has been long advocating the need for such steps to overcome the impediments towards the growth and development of the shipping Industry in India. The regular upgrading, amendments and deletions of the old practices, rules, regulations and acts are necessary to match the ever dynamic shipping environment and trade. This step from Ministry of Shipping to incorporate the IMO Conventions, international practices and changing industry practices are necessary as the current and existing laws and policies vitiate the growth and development of the shipping industry and efficacy of the government policies towards simplification, rationalisation, transparency, trade facilitation and ease of doing business in India.
Moving ahead: The industry hopes that the Government does not stop just at this juncture but continues to revamp and change the existing regulatory practices and legislations not just restricted to the purview of the Ministry of Shipping but other regulatory bodies/Ministries related to trade, shipping industry and its ancillary industry.
While enacting upgraded versions of these acts, we should be careful not to lose on the court decisions that have kept shipping moving
Need to revoke: There is a crying need to update laws relating to shipping in India. Most of our laws are more than half a century old. These archaic laws are Major Port Trusts Act 1963, Customs Act 1962, Merchant Shipping Act 1958, The Light House Act 1927, Carriage of Goods By Sea Act 1925, Inland Vessels Act 1917, Indian Ports Act 1908, Bills of Lading Act 1856 and
Coasting Vessels Act 1838 (signed probably at the time of Bahadur Shah Zafar). There are some sections on shipping in the Income Tax Act 1961 that are archaic and also need to be looked into.
Different acts: According to the Major Port Trust Act of 1963, the owner of goods landing in a major port is the agent of the ship. This law was settled in a matter that was in the courts for past 40 years and finally the decision came that the owner of the cargo which lands in India is the agent only. This is Section 2(o) in the Major Port Trust Act of 1963.
The Customs Act of 1962 goes still deeper. It holds the Master of the ship responsible for all liabilities on the cargo and, before allowing the ship to sail out, an undertaking is taking from the local agent of the ship.
The Lighthouse Act of 1927 did not recognise the word ‘container’ because in 1927 there were no containers. So, all container ships had to pay about ` 100 for each 20 ft container carried on the deck of a container ship. (This figure is arrived at by taking ` 8 for every 100 cubic foot for all deck cargoes).
In December 2014, after a lot of explanation and persuasion for doing away with light dues on deck containers, the Light House Act of 1927 was amended and the fee increased. This is what happens when the subject is not understood correctly. I just wonder what will happen when a full load ‘Hatchless’ container ship calls at an Indian port. Technically, it has no containers on deck.
The Indian Ports Act of 1908 is full of archaic terms. Under this act, absolute liability rests on the user. This law applies to Indian waters and all ports–major and non major.While it takes care of the environment, it is unduly harsh and gives sweeping powers to a conservator of the port.
Again, according to the Customs Act 1962, an empty container is not considered as cargo, while as per the Merchant Shipping Act of 1958, an empty container is considered as ‘goods’ and hence is cargo.
The Director General of Shipping will look into all grievances that fall within the purview of the acts which are a part of his domain; Merchant Shipping Act, Coasting Vessels Act, and Inland Vessels Act. After the Multimodal Transportation of Goods Act, 1993 was enacted; all grievances under this act also fall within its purview.
Rules relating to certain tariffs, maintenance of equipment and pilgrim ships should be eliminated as they are outdated
Repealing old laws: The rules being repealed will help further enhance the ease of doing business in India. Rules relating to certain tariffs, maintenance of equipment and pilgrim ships should be eliminated as they are outdated.
Why deleting laws? The rules were formed in 1958. Business has changed since then. Technology has evolved and, for business to operate efficiently, these rules need to be removed. If you take, for example the safety equipment, technology has evolved to help prevent certain disasters from occurring. It is best that these matters are addressed for business to advance further.
Changing the laws: Ministry of Shipping (MoS) should be appraised for this attempt. Considering the modern shipping trade climate, it is one of the important steps in reforming the ailing Indian shipping
The government is planning to draft a new bill for dealing with admiralty cases as old laws were drafted in the colonial era
sector. The shipping laws which we are using are old and date to the British era and probably they don’t hold good for the present business environment.
Need to revoke: However it is still not clear which all laws are going to be repealed but rules relating to certain tariffs, maintenance of equipment and pilgrim ships will be eliminated. Further, the Shipping Ministry will soon release the official notification on the repealed laws.
Although, according to a report the ministry had initially identified 67 such old rules and then consensus has been reached on discarding 13. Admiralty Court Act 1840, Admiralty Court Act 1861, Colonial Court of Admiralty Act 1890, Colonial Court of Admiralty India Act 1891, and Coastal Vessel Act 1838 are all set to be repealed. Also it is of the view that the Ministry of Shipping is now planning to prepare a new bill ‘Draft Admiralty Bill 2015’. For better jurisdiction with regard to legalities and proceedings, the government is also planning to provide more autonomy to coastal state courts.
Need to delete: The government of India is looking forward to build efficient ports and shipping infrastructure. The old shipping laws were drafted in the colonial era and most of these are not applicable in the present scenario and also create irregularities in making decisions. The government is planning to draft a new bill for dealing with admiralty cases.
The shipping industry eagerly looks forward to further steps from government for a resurgent Indian economy
Director General (DG) of Shipping
Dinesh Gautama President Navkar Corporation
Deepak Tiwari Chairman Container Shipping Line Association
Ashok Shrivastava Chief Executive Officer Allcargo Shipping