Why in news?

The Government plans to introduce the Merchant Shipping Bill, 2024 and the Coastal Shipping Bill, 2024 to drive reforms and bring transformative changes aimed at boosting the shipping industry.

What’s in today’s article?

• Need for new bill
• Features of the Merchant Shipping Bill
• Focus on coastal shipping

Need for a new bill

• The Merchant Shipping Act, 1958, and the Coasting Vessels Act, 1838, which the new bills aim to repeal, are outdated and fail to address the contemporary needs of the merchant marine sector.
• Significant regulatory gaps exist, particularly for vessels operating in the offshore sector, comprising nearly 50% of Indian-flagged vessels.
• Furthermore, maritime training was liberalised allowing private sector participation, yet there is no legal framework in the existing Act to regulate their activities effectively.
• Welfare provisions in the Merchant Shipping Act are limited to Indian-flagged ships, though 85% of Indian seafarers work on foreign-flagged vessels.
• The existing Act lacks enabling provisions for implementing international conventions signed or planned by India.
• License-era provisions hinder modernization, preventing maritime administration from transitioning to a regulator-cum-facilitator model.

Features of the Merchant Shipping Bill

• Expanded vessel scope
  • The existing Act regulates only large mechanized ships, leaving smaller and non-mechanized vessels unregulated, creating operational and safety risks in the offshore sector.
    • India’s offshore drilling sector gained prominence in 1974 when Sagar Samrat, a merchant vessel designed for exploratory offshore drilling, drilled the first well in Bombay High.
    • Since then, the offshore sector has employed a diverse range of mechanised and non-mechanised vessels.
    • However, these vessels remain either unregulated or inadequately regulated
  • The new Bill addresses this by expanding the definition of 'vessels' to include a wide range of crafts, such as submersibles, hydrofoils, and Mobile Offshore Units (MOUs), ensuring comprehensive oversight and enhanced transparency.
• Foreign investment
  • Lowers the ownership threshold for Indian entities from 100% to 51%, enabling NRIs, OCIs, and foreign entities to invest while maintaining majority Indian ownership.
• Bareboat charter-cum-demise
  • The Bill allows the registration of vessels chartered by Indian entities under the bareboat charter-cum-demise, enabling entrepreneurs to acquire ownership of vessels at the end of the charter period.
    • A bareboat charter-cum-demise is a maritime contract where a vessel is leased without crew or provisions, with the intention that ownership will transfer to the charterer after a set period, functioning like a lease-to-own arrangement for the ship.
  • This provision, particularly beneficial for capital-deficient entrepreneurs, facilitates entry into the shipping industry without upfront investment.
• Provisions for temporary registration of vessels destined for demolition
  • India, the second-largest ship recycling center after Bangladesh, faces challenges in registering vessels for demolition as they are often deemed unseaworthy.
  • The Merchant Shipping Bill introduces provisions for temporary registration of such vessels, aiming to boost activities at recycling hubs like Alang.
• Enhancing coastal security
  • The 26/11 Mumbai attacks highlighted gaps in maritime security, emphasizing the need for stricter vessel regulations.
  • The new Bill empowers authorities to issue instructions to all vessel types, enhancing coastal security and safeguarding India’s coastline.
• Marine Pollution Measures
  • Reduction of sulphur content in marine fuel to less than 0.5%.
  • Ban on single-use plastics on Indian ships.
  • Launch of the ‘Swachh Sagar’ portal for ship waste disposal at ports.
  • The new Bill fully incorporates international conventions like MARPOL and the Wreck Removal Convention, aligning India's maritime regulations with global standards and promoting sustainable shipping practices.
• Provisions for Seafarers
  • Indian seafarers on foreign-flagged ships have grown significantly, from 1,16,000 in 2015-16 to 2,85,000, representing 85% of the workforce.
    • The existing Act lacks provisions for the welfare and safety of this vast workforce working on foreign-flagged vesels.
  • The new Bill addresses gaps in welfare and safety provisions for these seafarers by extending government welfare measures and protections under the Maritime Labour Convention (MLC), ensuring better working conditions and safety standards.
• Provision for maritime training
  • The Union Government is responsible for regulating maritime education and training under Entry 25 of List 1 (Union List) of the Constitution.
  • Previously, training was managed by government-run institutions, so no specific legal framework was needed.
  • However, with economic liberalization has allowed unauthorized institutes to thrive, complicating regulatory actions.
  • The proposed Bill introduces clear legal provisions to regulate maritime training, aiming to eliminate illegal institutes and ensure high-quality, standardized education, protecting rural youth from exploitation.

Focus on coastal shipping

• Distinguishing Technical Regulation and Commercial Utilisation
  • The Government has separated the technical regulation of ships from the commercial use of Indian coastal waters.
  • Licensing, operational permissions, coastal planning, and integration of inland and coastal shipping are now part of the proposed Coastal Shipping Bill, 2024.
    • It has removed the provisions related to the commercial utilisation of Indian coastal waters from the Merchant Shipping Act.
    • The Merchant Shipping Act will focus on technical regulation of ships
• Alignment with ‘Sagarmala’ Program
  • The new Bill supports the Government’s ‘Sagarmala’ program, which promotes coastal shipping through dedicated berths and better hinterland connectivity for coastal cargo.
  • This approach is essential for infrastructure growth and a strong regulatory framework.

Conclusion

The reforms are intended to be bipartisan, focusing on investment, safety, marine pollution prevention, and seafarers' welfare. These measures are aimed at unlocking the full potential of India’s maritime sector.