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:

Cargo Talk - - Front Page - KAL­PANA LOHUMI

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

Deepak Shetty

Di­rec­tor Gen­eral (DG) of Ship­ping

Di­nesh Gau­tama Pres­i­dent Navkar Cor­po­ra­tion

Deepak Ti­wari Chair­man Con­tainer Ship­ping Line As­so­ci­a­tion

Ashok Shri­vas­tava Chief Ex­ec­u­tive Of­fi­cer All­cargo Ship­ping

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