On reforms in merchant shipping

  • December 11, 2024
  • Posted by: OptimizeIAS Team
  • Category: DPN Topics
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On reforms in merchant shipping

Sub : Polity

Sec: Legislation in news

Why in the news?

  • The Government plans to introduce two significant bills:
    • Merchant Shipping Bill, 2024
    • Coastal Shipping Bill, 2024
  • These bills aim to replace outdated laws (Merchant Shipping Act, 1958, and Coasting Vessels Act, 1838) and modernize the shipping sector.

Why are New Bills Needed?

  • Outdated Framework: Existing laws fail to address contemporary needs, especially for the offshore sector (50% of Indian-flagged vessels).
  • Regulatory Gaps:
    • Maritime training liberalized without proper legal provisions for private sector regulation.
    • Welfare provisions limited to Indian-flagged ships, excluding the majority (85%) of Indian seafarers working on foreign-flagged vessels.
  • International Commitments: Existing laws lack enabling provisions for implementing international conventions India has signed or plans to ratify.
  • Ease of Doing Business: License-era provisions hinder modernization and efficiency in maritime administration.

Key Features of the Merchant Shipping Bill

1. Simplified Vessel Registration
  • Reforms for Foreign Investment:
    • Reduces Indian ownership requirement from 100% to 51%.
    • Allows ownership by NRIs, OCIs, LLPs, and foreign entities (with majority ownership by Indians).
  • Bareboat Charter-cum-Demise Provisions:
    • Enables Indian entrepreneurs to charter and eventually own vessels without upfront investment.
  • Support for Ship Recycling Industry:
    • Introduces temporary vessel registration for ships destined for demolition, aiding hubs like Alang.
    • India is the second largest ship recycling centre after Bangladesh.
2. Expanded Scope of Vessels
  • Inclusion of Previously Unregulated Vessels:
    • Covers submersibles, hydrofoils, barges, pleasure crafts, Mobile Offshore Units (MOUs), and drones.
    • Ensures comprehensive regulation and safety oversight.
  • Enhanced Coastal Security:
    • Strengthens monitoring and regulation of all vessels, addressing vulnerabilities like those exposed during the 26/11 Mumbai attacks.
3. Marine Pollution Management
  • Aligned with several conventions of the International Maritime Organization (IMO), aimed at preventing and combating marine pollution, such as the Civil Liability Convention (CLC), the Convention on Limitation of Liability on Maritime Claims (LLMC), the Bunker Convention, the International Convention for the Prevention of Pollution from Ships (MARPOL), and the Wreck Removal Convention.
  • Initiatives include:
    • Reducing sulphur content in marine fuel to below 0.5%.
    • Banning single-use plastics on Indian ships.
    • Launch of the ‘Swachh Sagar’ portal for proper ship-waste disposal.
4. Welfare of Seafarers
  • Extends welfare measures and protections to Indian seafarers on foreign-flagged vessels.
  • Aligns with the Maritime Labour Convention (MLC) to ensure better working conditions and safety standards.
5. Maritime Training Regulation
  • Under Entry 25 of List 1 (Union List) of the Constitution, the Union Government is responsible for the education and training of the mercantile marine and the regulation of such education and training provided by States and other agencies.
  • Introduces a legal framework for over 160 private maritime training institutes.
  • Addresses issues of unauthorized institutes and fraudulent practices, ensuring standardized, high-quality training.

Coastal Shipping Bill, 2024:

  • Purpose: Separates technical regulation of ships from commercial utilization of coastal waters.

Key Features:

  • Focuses on: 
    • Licensing and operational permissions for Indian coastal waters and Exclusive Economic Zone (EEZ).
    • Integration of inland and coastal shipping.
    • Coastal plans involving both Union and State governments.
  • Aligns with the Sagarmala Program to promote:
    • Dedicated berths for coastal vessels.
    • Enhanced hinterland connectivity for coastal cargo.

Significance of the Reforms:

  • Boosting Maritime Development: Encourages investment, innovation, and modernization in the shipping sector.
  • Strengthening Security: Ensures comprehensive oversight of vessels and coastal regions.
  • Promoting Sustainability: Aligns India’s maritime policies with global environmental standards.
  • Empowering Seafarers: Improves welfare, safety, and career opportunities for Indian seafarers.

Source: TH

On reforms in merchant shipping Polity