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Reforms in Merchant Shipping

Last updated on December 10th, 2024 Posted on December 10, 2024 by NEXT IAS Current Affairs Team  108

Syllabus: GS3/ Economy

Context

  • The Government is set to introduce the Merchant Shipping Bill, 2024 and Coastal Shipping Bill, 2024 to reform and modernize the shipping sector, replacing outdated laws.

What is Merchant Shipping?

  • Merchant shipping refers to the commercial activity of transporting goods, passengers, or cargo via ships across domestic and international waters.
  • It forms a critical component of global trade and the maritime economy, enabling the movement of essential commodities, energy supplies, and industrial goods.

Need for reforms

  • Outdated Laws: The Merchant Shipping Act, 1958 and Coasting Vessels Act, 1838 are obsolete and fail to meet contemporary needs.
  • Regulatory Gaps: Offshore vessels (50% of Indian-flagged ships) lack oversight.
  • Seafarer Welfare: The 1958 Act excludes Indian seafarers on foreign-flagged vessels, despite 85% of 2.8 lakh seafarers working abroad.
  • Ease of Doing Business: License-era provisions hinder maritime administration from becoming a regulator-cum-facilitator.
  • International Standards: India’s laws lack enabling provisions for implementing global maritime conventions.

Key Features of the Merchant Shipping Bill 2024

  • Ease of Registration: Reduces Indian ownership requirement from 100% to 51% to attract foreign investment.
    • Permits NRIs, OCIs, and LLPs to own and register Indian vessels.
    • Allows bareboat charter-cum-demise registration, enabling capital-deficient entrepreneurs to acquire ships gradually.
    • Provides temporary registration for vessels destined for ship recycling hubs (e.g., Alang).
  • Enlarged Scope of Vessels: Expands the definition of ‘vessels’ to include Mechanised and non-mechanised crafts: submersibles, hydrofoils, barges, drones, MODUs, MOUs, etc.
    • Addresses regulatory gaps for offshore vessels like work barges and accommodation barges.
  • Seafarers’ Welfare: The Bill extends welfare provisions to Indian seafarers working on foreign-flagged ships.
    • It implements Maritime Labour Convention (MLC) standards for improved working conditions, safety, and benefits.
  • Maritime Training: Introduces a legal framework to regulate private maritime training institutes post-liberalisation.
  • Marine Pollution Control: The new Bill fully incorporates the IMO conventions at preventing and combating marine pollution, aligning India’s maritime regulatory framework with global standards.
Steps taken by India to control marine pollution
– India is required to reduce the sulfur content in marine fuel from 3.5% to less than 0.5% as part of the International Maritime Organization’s (IMO) 2020 regulation.
– India banned the use of single-use plastics on ships in its waters.
– Swachh Sagar portal has been launched for waste disposal at ports.
International Efforts
– The International Maritime Organization (IMO) has adopted several conventions aimed at preventing and combating marine pollution, such as 
1. The Civil Liability Convention (CLC), 
2. The Convention on Limitation of Liability on Maritime Claims (LLMC), 
3. The Bunker Convention, 
4. The International Convention for the Prevention of Pollution from Ships (MARPOL), and 
5. The Wreck Removal Convention.

Coastal Shipping Bill 2024

  • Distinction of Regulation: Separates technical ship regulation from commercial coastal operations.
  • Key Provisions of the Bill;
    • Licensing and permissions for coastal operations.
    • Integration of inland and coastal shipping.
    • Development of a coastal plan involving the Union and States.
  • It aligns with the Sagarmala program, which emphasises the promotion of coastal shipping through initiatives like;
    • Dedicated berths for coastal vessels and
    • Enhanced hinterland connectivity for coastal cargo movement.

Significance of the Reforms

  • Boosting Investment: Attracts foreign investors by easing vessel registration rules.
  • Regulatory Oversight: Uniform regulation of mechanised and non-mechanised vessels, especially in the offshore sector.
  • Enhancing Coastal Security: Stricter vessel regulation strengthens maritime safety post-26/11.
  • Environmental Sustainability: Aligns with international conventions to combat marine pollution and promote sustainable practices.

Way Ahead

  • Strengthen Infrastructure: Develop ports, hinterland connectivity, and coastal facilities under Sagarmala.
  • Skilled Workforce: Strengthen maritime training and seafarers’ welfare mechanisms.
  • Environmental Responsibility: Promote clean fuel, reduce marine waste, and enforce pollution control measures.

Source: TH

 
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