Merchant Shipping Reforms
Context:
The Government is set to introduce two landmark legislations—the Merchant Shipping Bill, 2024, and the Coastal Shipping Bill, 2024. These bills aim to modernise India’s maritime sector, addressing critical gaps in existing laws and fostering sustainable growth.
Need for Bills
- India’s maritime sector is currently governed by the Merchant Shipping Act, 1958, and the Coasting Vessels Act, 1838—both of which are outdated.
- These laws fail to address the evolving needs of the industry, leaving significant regulatory gaps.
- For example, nearly 50% of Indian-flagged vessels operate in the offshore sector, yet they remain inadequately regulated.
- While maritime training has been liberalised to allow private sector participation, the current legal framework lacks provisions to regulate private maritime institutes.
- Additionally, existing laws restrict welfare measures for Indian seafarers to those working on Indian-flagged ships, overlooking the 85% who serve on foreign-flagged vessels.
- The absence of enabling provisions for implementing international conventions and outdated regulatory mechanisms further highlights the need for reform.
Key Features of the Merchant Shipping Bill, 2024
- Simplified Vessel Registration: The new bill introduces flexibility in registering vessels to attract foreign investment. Key changes include:
- Reducing the Indian ownership requirement from 100% to 51%.
- Allowing Limited Liability Partnerships (LLPs), Non-Resident Indians (NRIs), and Overseas Citizens of India (OCIs) to own and register Indian vessels.
- Permitting foreign entities to hold shares in Indian vessels, while ensuring majority ownership remains with Indian entities, NRIs, or OCIs.
- Introducing provisions for the bareboat charter-cum-demise system, enabling entrepreneurs to own vessels after a charter period.
- Comprehensive Regulation of Vessels: The bill expands the definition of ‘vessels’ to include a wide range of crafts, such as:
- Submersibles, semi-submersibles, and amphibious crafts.
- Offshore drilling units, barges, and drones.
- Addressing Marine Pollution: India has adopted several measures to combat marine pollution, such as reducing the sulphur content in marine fuel and banning single-use plastics on ships.
- The new bill incorporates international conventions like MARPOL, the Bunker Convention, and the Wreck Removal Convention, aligning India’s regulatory framework with global standards.
MARPOL Convention
MARPOL, or the International Convention for the Prevention of Pollution from Ships, was adopted in 1973 and modified by a protocol in 1978. It aims to minimise pollution of the oceans and seas from ships by addressing various sources of pollution, including oil, noxious substances, sewage, garbage, and air emissions.
Bunker Convention
The International Convention on Civil Liability for Bunker Oil Pollution Damage, commonly known as the Bunker Convention, was adopted on March 23, 2001, and entered into force on November 21, 2008. This convention ensures that adequate compensation is available for damages caused by spills of bunker oil from ships.
Wreck Removal Convention
The Nairobi International Convention on the Removal of Wrecks, adopted on May 18, 2007, and entering into force on April 14, 2015, provides a comprehensive legal framework for the removal of shipwrecks that pose hazards to navigation or the marine environment.
- Welfare of Seafarers: With over 85% of Indian seafarers employed on foreign-flagged ships, the bill extends welfare measures and protections under the Maritime Labour Convention (MLC) to all Indian seafarers.
- This includes better working conditions, enhanced safety, and stronger support systems.
- Maritime Training: To regulate the 160+ private maritime training institutes, the bill introduces clear legal provisions, addressing issues of unauthorised institutes and fraudulent practices.
Focus on Coastal Shipping
The Coastal Shipping Bill, 2024, separates the technical regulation of ships from commercial coastal operations. Key features include:
- Simplified licensing for operations along the Indian coast and Exclusive Economic Zone (EEZ).
- Integration of inland and coastal shipping through a unified coastal plan.
- Alignment with the ‘Sagarmala’ program, which promotes coastal shipping via dedicated berths and improved connectivity.
Modernising Maritime Administration
- The proposed bills mark a shift from a regulatory-only approach to a regulator-cum-facilitator model, enhancing the ease of doing business.
- By addressing long-standing challenges, these reforms promise to boost investments, improve safety, combat pollution, and support seafarers.
