THE COASTAL SHIPPING BILL, 2020

The Ministry of Shipping has published the draft of Coastal Shipping Bill, 2020 and has invited comments, which are to be submitted before 6th November 2020.  

The object of the bill is to consolidate and amend the regulatory framework for coasting trade and other activities in coastal waters of India in line with global best practice and to encourage participation of Indian vessels in coasting trade. This bill seeks to create shipping transportation networks for greater economic growth.

At the moment, the Coastal Shipping in India is governed by Merchant Shipping Act, 1958 which imposed various conditions regarding pollution control, manning norms and other operations which were cost-incurring for the coastal ships. The new bill intends to lower production costs and efficiency in the manufacturing sector.

This proposed act would apply to all vessels engaged in coastal trade including foreign vessels. The proposed act has 29 sections and a schedule.

Section 4 of the bill states that the no vessel other than the vessels registered as Indian ships (Part V of the Merchant Shipping Act, 1958) shall engage in  coasting trade, or the exploration, exploitation, or research, in the coastal waters of India, except under a licence granted by the Director-General under Chapter II of the Bill. This section incorporates the essence of Section 407 of Merchant Shipping Act, 1958 which states that no ship other than Indian Ship or ship chartered by citizen of India shall engage in coasting trade of India except under license provided by DG Shipping. The term “ship chartered by citizen of India” is seen to be omitted.

Section 5 of the bill deals with Conditions of grant license which may include conditions on Citizenship requirements of the crew, build requirements of the vessel and such other requirement DG may consider necessary.

Section 5 states that Director General shall consider whether the applicant has previously held license that was cancelled, violation of any provisions by the applicant, availability of vessels on the route, licenses granted for the same route, safety and security concerns, validity of vessel etc. If the grant of license is made dependent on the availability of vessels on the route, it may be lead to regulations being enacted which would hamper competition in the trade.

Section 8 of the Bill states that all the vessels shall report the ports or ports which it will visit in the course of its voyages, details of goods and passengers and any other information DG may deem fit. This seems to be an additional statutory requirement which the Coastal Traders have to comply with and may prove to be burdensome to the Coastal Traders. Fine upto one lakh may be imposed if the above provision is contravened.

Section 9 of the Bill states that National Coastal and Inland Shipping Strategic Plan which will be developed within two years of the enactment. It would identify new routes and would identify best practises for improvement of coast shipping. This would be effective only if the plan is prepared scientifically. Otherwise, it may lead to public outcry from affected communities such as that of fisherman early this year.

Section 10 of the bill states that a National Register of Coastal Shipping shall be maintained by DG Shipping which would contain details of licenses.

Chapter III/IV (Chapter III is omitted, which I believe is by oversight) of the Bill deals with offences under the Act. It refers to schedule which describes the offences and penalties for those respective offences. It provides power to the DG Shipping to make rules.

The Bill appears to be an amendment to the Part XIV of the Merchant Shipping Act, 1958. The hope is that it may give a boost to the Coast Shipping in India which would enable optimal utilisation of India’s vast coast line. However, the increasing state intervention is to be viewed cautiously and sceptically keeping in mind that over-regulation would be counter-productive to growth.