If a ship is taken over by pirates anywhere in the Straits of Malacca or South China Sea (presumably by killing the crew) and if the ship can have a new identity including a new "Certificate of Registry" then I would call it the curse of modern technology. Why should a ship be registered without establishing the identity of the ship, the proof of ownership and above all without a deletion certificate from the previous registry?
In the next port why the authorities should not check the markings of the vessel and ensure that the vessel is genuinely the one presenting the documents. If we fail to do what we are supposed to do then we are in fact a party to legitimising a pirated ship or in other words a party to activities related to piracy. Online information is good but online registration is not good. It helps pirates.
A good registry of ships and maritime administration will in fact provide a service to facilitate international trade and commerce. They are not expected to be moneymaking department of the Government.
The Government will be expected to meet some of the expenses of this public service. From financial point of view it would be considered as a success if about 70 to 80 percent of the fundings is met by the fees and other charges collected by the Administration.
Flag is a matter of national pride. No self respecting country should give out their registry to be operated by a private business venture. Such commercial operators will evidently look for profit before quality and the flag will soon end up in disrepute.
The Maritime Administration, including the registry of ships, must remain a part of the Government through a degree of autonomy. The Directorate General of Ports and Shipping be made fully autonomous and manned by hard core professionals, if we want to promote, ship owning in Pakistan and promote Port industry to be compatible to Ports of the world.
There is nothing as international in nature as shipping. There are international conventions to regulate almost every aspect of maritime and shipping business. It is surprising that there is no specific convention on registration of ships and that is the reason whey we do not have common practices and procedures.
The Law of the Sea Convention (UNCLOS82) has some references to registration of ships but it does not provide the complete code. In 1986 an international instrument was adopted in Geneva on Registration of Ships but it never came into force.
Even if the 86 Convention came into force it would not serve any purpose because the convention was adopted on a different backdrop. It was meant to eliminate "flag of Convenience" which it failed. It does not contain any provision on common practice and procedure. There is a definite need for an international instrument to outline the procedures for registrations of ships.
Article 91 of the UNCLOS82 is on the subject of nationality of ships and article 94 summarises the duties of a flag state. Article 105 provided powers for parties to engage its naval and security forces to seize pirate or pirated ships and take into custody those responsible for such unlawful acts.
This provision of UNCLOS82 may turn out to be meaningless (on matters of jurisdiction) unless the member state has appropriate legislation (with penal provision) giving necessary powers to its security forces and jurisdiction to its courts to deal with such cases.
However one aspect of UNCLOS82 gives reasons for concern. In article 92 it is states. A ship may not change its flag during a voyage or while in a port of call, save in the case of real transfer of ownership or change of registry. The term "during a voyage" could mean the duration of the sea passage. Ships must never be allowed to change name or registry while at sea.
This is what the pirates would like to do. The second part of the sentence creates more confusion. Ships must be allowed to change name, ownership or registry only when in a port where it can be physically checked identified and marked. If a ship is not allowed to change registry and flag in a port, then the question is.
Where else it should do so. The term "during the voyage" perhaps refers to delivery of the cargo (remaining onboard) and accomplishment of the on going contract. This makes good sense but must not be dependent on interpretation. The use of the term " real transfer of ownership" clearly shows that the conference was not aware of other possible scenario such as the widely practised " registration under bare boat charter' The "Law of the Sea" division of the United Nations should study and review article 92 and if necessary, initiate the process of amendment. In any case UNCLOS82 cannot provide a total code on procedures relating to registration and hence there is need for a separate international instrument.
The registration of a ship does not close the chapter for the registry. It is just the beginning of a new chapter where the registry becomes responsible for yet another ship to ensure that the survey certification are done in compliance with the international requirements.
The international instruments as well as the national legislation will follow the common principle of application of the standards to own flag ships wherever they may be and foreign ships when within the waters of the party state. This makes two distinct roles for the Administration such as the one as Flag State and the other as the Port State. In IMO terminology they are referred to as PSI (flag state implementation) and PSC (port state control).
IMO is very keen to see that party states have appropriate legislation, competent administration, documented procedures and system of maintaining records to meet its obligation as a flag state. The PSI sub-committee has developed a set of forms (self assessment form) for party states to fill and send to IMO for an assessment and evaluation of the compliance.
Most of the party states fail to send any feedback. The system is clearly not working. It is strongly recommended to introduce an amendment to the SOLAS74 to state that a party which fails to return FSI/SAF forms for two successive years will be considered to have denounced the convention. This in turn will mean that certificates issued by or on behalf of such a state will not be considered as SOLAS certificates and the ships under such flag will virtually become inoperative.
This will definitely bring the desired results. Recently there has been lot of talks on STCW 95 and the white list. It must be understood that being in the white list (*considered by IMO as having given full and complete effect to the provision of the convention) does not automatically entail recognition by other party states.
It is still the final responsibility of the Flag State to ensure that the certification system complies with the essential requirement before it recognises such certificates and issues endorsement to appropriate certificates for officers to serve on its ships.
Whereas the IMO white listing is a paper exercise, regulation 1/10clearly stipulates that the flag state where it feels it necessary should even visit the training facilities to satisfy itself before recognising certificates issued by a party state.
Pakistan is on white list till 2009, as hard efforts were made to bring Pakistan on white list from 2003 to 2006, which has given boost to employment of Pakistani seafarers remitting about 70 mill dollars per annum and bringing employment to more that 12000 seafarers. It is negligible when compared to India and Philippines where seafares are remitting 0.5 billion/1 billion USD respectively.
With regard to Port State Control I would like to state that one should not preach what it cannot practise itself. A state, which cannot meet its obligations as a flag state, has no moral right to conduct port state inspections. This statement should be viewed from, a positive angle and used by the students of the WMU to convince respective Governments to streamline their own Administrations.
FSI comes before PSC. The philosophy of port state control inspection is that the lives of other seafarers are as important as our own and as such uniform standards of compliance are required from all ships. Detention of a ship under PSC is justified only when allowing a ship to proceed to sea would endangering, life, property or environment.
The PSC does not have to be under a regional agreement. Every sovereign state can conduct its own PSC. However it makes better sense to do it under regional agreements by which one can avoid duplication, waste of time and resources and above all co-ordinated action will provide better scope for targeting such standard ships.
The most important thing to remember is that the term "Port State" does not refer to the Administration of the Port but in fact refers to the "Administration of the state" to which the Port belongs The port authority and its administration should not be involved in port state control.
Finally a few words about he classification societies. In todays' world of globalisation the role of the international classification societies cannot be over emphasised. They (specially the IACS members) have the resources, competence and the global network.
This does not mean that we have to delegate everything to them. We have to find a balanced way of utilising their services to meet our needs and requirements but still monitor and exercise full control bearing in mind that only functions can be delegated but not the responsibility and obligations.
The duty of any Government is to facilitate business and not to engage itself in business. However because of national interest some of the developing countries may have state owned shipping enterprise. Any developing country that aspires to supply seafarers to a global context will require ships willing to employ trainee seafarers (in addition to the requirement of the safe manning) so that the trainee seafarers can perform the initial sea service that is mandatory for obtaining a certificate.
This is where the state owned companies came into the scenario because privately owned companies are unlikely to co-operate in such training projects. However in addition to providing the training facilities (so vital to create job opportunities for national seafarers), the company is also expected to run in profit (and not a charity on government subsidy). However a ship owned by a state owned enterprise must not be referred to as a Government vessel. It is just another merchant ship.
The only difference is that instead of being owned by a private company it is owned by a state owned company. Only those vessels are Government vessels that are used in law enforcement and other regulatory measures such as those used by the Police. Customs, Immigration, Fisheries inspectorate or the Coastguard.
The role and responsibility of an Administration must not be mixed up with that of a commercial company (even though it may be state owned) All efforts should be made to keep the company free of bureaucratic controls and interference. The success of any commercial venture will depend on the autonomy and freedom to take its own business decisions.
The Government (the minister as well as the civil servants) should not get involved in the management and operation of the company. If they become a party to the management and operation of the company, the chain of accountability will be lost.
The minister being the public representative and acting in the public interest he should appoint a capable and competent person having commercial shipping background as the Chief Executive. The Chief Executive should be directly responsible to the minister for the performance of the company and the minister will remain answerable to the public through the parliament.
I not only admire but fully subscribe to the views expressed in your editorial to make Directorate General fully autonomous to regulate Ports and Shipping Industry.
(Concluded)
Wednesday, September 26, 2007
Tuesday, September 25, 2007
Understanding maritime administration - I
After having read the Editorial of Business Recorder Monday the 20th August, 2007, I thought it prudent to discuss the subject and support the views of Editorial to make Directorate General Ports and Shipping autonomous.
The word "Administration" ordinarily means the conduct and execution of the role and functions of an office project or institution and in broader terms it normally refers to the Government. The word 'Maritime Administration" would refer to that department, directorate or agency of the Government that oversees the shipping and maritime activities.
When we say "Maritime Safety Administration" we mean the Administration that looks after the safety at sea and protection of the marine environment. In this case the word "Safety" relates to safety of life, property and environment at sea.
However, when we refer to maritime administration we cover a broader range of subjects that will also include economic and developmental aspects of shipping. In Pakistan Directorate General of Ports and Shipping was established in 1962 and is responsible for Maritime administration being signatory to 27 IMO conventions and to act as regulator for Ports and Shipping industry based at Karachi.
I now try to identify the range of activities that will fall under the purview of maritime administration. They can be summarised as: 1. Registration of Ships; 2. Tonnage measurement; 3. Registration/deletion of mortgage and issue of transcript 4. Survey and certification of ships including approval of plans and manuals (L.L. SOLAS, MARPOL, etc 5. Examination and certification of marine personnel (STCW95) 6. Article of Agreement (Crew Agreement), health, hygiene and safety at work; 7.
Registration, survey and certification of fishing vessels, 8. Examination and certification of fishing vessel personnel (STCW-F) 9. Registration of yachts and pleasure craft, regulate pleasure industry as required for safety, including training requirement for persons serving on yachts; 10. Safety of inland shipping (rivers and lakes); 11. Type-test and approval of locally manufactured marine equipment and safety appliances, including approval of life raft service stations and workshop that services and certifies fire fighting installations and appliances, 12. Safety of offshore rigs and mobile units, 13.
Recognition of classification societies and delegation of certain functions with monitoring provisions 14. Casualty investigation 15. Representation and co-ordination with IMO/ILO/ ITU/INMARSAT/IALA/IHO/UNCTAD and other international bodies 16. Promotional aspects such as training facilities, ship building and repair facilities, ship breaking industry, acquisition policy, protection,. Incentive, subsidy etc 17. Port state control (inspection of safety standards of foreign flag ships) and random inspection of own ships 18.
Regulate handling of dangerous goods in ports and harbours, 19. Survey coastal water and provide charts and data for own waters, 20. Provide necessary navigational aids and facilities along the coast, 21. Develop VTS, broadcast weather and navigational warnings and provide radio medical service, 22. Provide (humanitarian) SAR along the coast, 23.
Combat accidental pollution with legal measures to recover damages, 24. Removal of wrecks with legal measures for recovery of cost, 25. Prevent unlawful activities such as slave trade, human trade in illegal immigrants, piracy, terrorism,, drug trafficking etc; 26. Intervene in certain cases, 27. Protect and preserve living, mineral and other resources within the EEZ or Continental shelf.
The State is also expected to operate safe and efficient port facilities in its own interest to meet the needs of the trade and commerce. The primary role of the Port Authority (the administration of the port) is to provide service to the Port users. Though the Port Authority shall control all movements within the port and look after safety of all such operations, the ultimate responsibility of maritime safety and protection of the environment will still rest with the national Maritime Administration ie Directorate General of Ports and Shipping.
The Port authorities do not approve intervention and acts as independent authority in contravention of IMO conventions, thus sidelining the role of Directorate as regulator of Ports and Shipping and merely reducing the role as nonentity with support of Ministry at Islamabad.
In order to accomplish the role as a coastal state, specially those relating to SAR, contingency plan to combat pollution, prevention of unlawful acts and intervention etc, it is necessary to have a disciplined multiple role organisation in line with Defence services. Most countries have recognised this factor and developed "Coastguard" as a paramilitary organisation.
Normally in peacetime the Coastguard will work under the Transport (Ministry or Department) but as a law enforcement agency will also maintain link and co-ordination with police, Justice, Treasury, Fishery, etc. The Coastguard is essential for protection of fisheries and other economic interests within the EEZ. However, in case of war the Coastguard often becomes a part of the navy and may be used for coastal defence and port security. In Pakistan the role is assigned to MSA, which also do not co-ordinate with Directorate.
It is also quite common in many countries for the hydrographic section of the Navy to conduct survey and prepare charts, tide tables and other navigational data. They shall of course maintain close link with the maritime administration. Informatively this aspect of providing appropriate chart and other navigational information along with weather forecast have now been included in Chapter V if SOLAS 74.
Fishing (as a resource) policy at international level is looked after by FAO (Food & Agriculture Organisation) though safety at sea and protection of the marine environment is till looked after by the IMO. At national level fisheries (as a policy for preservation, protection and planned exploitation) will possibly be looked after by a different ministry or department.
The relevant department will determine the TAC (total allowable catch) keeping in view the national interest and this will automatically determine the optimum size of the fishing fleet. This is one reason whey the Maritime Administration/Registry of Ships will only register those fishing vessels that are licensed by the Fisheries Department. However, once a sea going fishing vessel is registered then it is the responsibility of the Maritime Administration to ensure safety at sea and protection of the marine environment through usual process of survey certification.
In respect of training and certification of sea going fishermen, the Maritime Administration is concerned with the subjects of Navigation, Engineering, Stability, Seamanship, Communication, Safety and Environment. The professional aspects of fishing such as the recognition of fishing grounds use of fishing gears and equipment fishing techniques fish processing preservation and hygiene are matters for the Fisheries Department.
The examination and certification can be jointly conducted by the two departments or first by the fisheries department on the art and skill of fishing and then the final part of the examination by the Marine Department. In some cases the mandatory sea service on fishing vessels will be considered to have taken care of the fishing part and the examination and certification will be conducted solely by the Marine Department for safety at sea and prevention of marine pollution.
The circumstances of all countries would not be the same. There are land locked countries that may also have maritime aspirations. From the range of maritime activities, it should not be difficult to identify the elements that will apply to such countries. There may be also countries that have the access to sea but may not want to operate a register. Still they will have certain maritime obligations to meet.
The business of ship registration, is for the state to decide whether it wants to operate a restrictive register solely owned by its own nationals or in some cases may be with more than 50% owned by locals. The ships will of course have a genuine link with the flag and the Administration may even specify the need for certain number of crew being flag nationals. Normally the legislation shall specify that a ship can be registered provided more than 50% of the shares are owned by local nationals or by a company whose majority shares are owned by locals.
In the other case the legislation will simply state that a ship can be registered provided a company registered in the country owns it. It will normally not specify anything about the nationals who own such company giving a wide range of flexibility for foreigners to set up a company or to own an existing company and register ships under the ownership of the company. The success of "open registry" will depend on the tax incentive (probably none) and a greater degree of ease, convenience and flexibility offered by the Administration.
We have to consider the matter in the light of our national interest. A coastal state with large volume of trade and no lack of entrepreneurs has no reason to go for an open registry. A land locked country or a small island state will probably find it more to their interest to have an "open" register because the fees generated by the register will be substantial to their notional context.
An underdeveloped country (now a days referred to as a developing country) with a large population (abundance of human resource) may find it effective to have an "open" register and at the same time have training facilities to sell their manpower to foreign ship owners whose ships are registered there. In every case we will find that "open" registers are designed to grow a fleet under the flag in excess of genuine trading need of the country.
The open registers do not necessarily have to be sub standard. It is for the Administration to find ways and means as to how to make the Flag attractive without compromising the standards. The administration must maintain a policy of transparency in the sense that it should not hesitate in giving out any information that relate to maritime safety in respect of any the ships on its register.
The Administration should also authorise classification societies to give information in respect of any of the statutory functions that the societies are authorities to conduct on behalf of the Administration. Interested parties should be able to obtain a transcript of a ship on payment of nominal fees. Pakistan is in dire need of promoting ship owning under its flag and lure private entrepreneurs as ship owning is in only Public Sector thus we need parallel or open registry to induce private entrepreneurs and enacted monopoly ordinance be strictly enforced.
The registrar will normally require the proof of eligibility to own a ship under the register and then establish the identity of the ship through a "Certificate of Survey" which will outline the dimension and other main features of the ship including the particulars of the machinery. The ownership has to be established through a "Bill of Sale" for existing ships and for a new building the copy of the contract along with the delivery certificate.
The ship must also have an international Tonnage Certificate. The ship has to be either "free of encumbrances" or consent from the mortgagee to carry forward the remaining mortgage to the new register. The ship will be marked with the IMO or official number (and in some cases also with tonnage) as required by the registrar for identification purpose (in case of any piracy).
Some countries may also insist on a P&I cover for the ship before any statutory certificate can be issued. For an existing ship the "Certificate of Registry" shall not be issued until a deletion certificate is recovered from the previous registry.
Ships can also be registered under "bare boat charter." Our MSO 2001 provides in which case the ship has to be chartered on bare boat basis by a company eligible to own a ship under the register. The charter party has to allow the registration in a place of choice of the charterer to which the owner as well as primary register must have no objection. The consent of the mortgagee, if any, will also be required.
The "Certificate of Registry under Bare boat charter" will record the name of the charterer. It is also probable that the name of the primary registry will be noted in the certificate. The bare boat charterer or their managers will be able to operate as if they are the owners except that they will not be allowed to raise any capital against the ship (because it is not their property) and no mortgage can be recorded on a bare boat charter register.
Every mortgagee will look at how well the interest of the mortgagee is protected. A good register must not allow any change of status eg change of owners, change of name, change of flag, a second registration under bare boat charter, deletion etc without the knowledge of the registered mortgagee. In fact we require the official consent of the mortgagee before any such change is made.
Though not very common but ships may also be registered when under construction. You may be aware that the ship building contract normally incorporates five states of payment, the first being when the contract is signed, second when the keel is laid and so on with the final payment on delivery (in some cases at the end of the guarantee period). When the buyer wants to raise money to pay for the final two or three stages of payment when he may register the ship so that the mortgage can be registered against the ship. In the "Certificate of Registry of a vessel under Construction" the names of the builders as well as the buyer will be recorded. The provisions of the contract will determine the question of ownership of the vessel at any state.
Because of reasons explained above we can understand that it has become a competitive business to operate ships register in order to make the register more attractive, efforts are made to simplify procedures. This in some cases led to unethical practices leading to registration of pirated ships.
The word "Administration" ordinarily means the conduct and execution of the role and functions of an office project or institution and in broader terms it normally refers to the Government. The word 'Maritime Administration" would refer to that department, directorate or agency of the Government that oversees the shipping and maritime activities.
When we say "Maritime Safety Administration" we mean the Administration that looks after the safety at sea and protection of the marine environment. In this case the word "Safety" relates to safety of life, property and environment at sea.
However, when we refer to maritime administration we cover a broader range of subjects that will also include economic and developmental aspects of shipping. In Pakistan Directorate General of Ports and Shipping was established in 1962 and is responsible for Maritime administration being signatory to 27 IMO conventions and to act as regulator for Ports and Shipping industry based at Karachi.
I now try to identify the range of activities that will fall under the purview of maritime administration. They can be summarised as: 1. Registration of Ships; 2. Tonnage measurement; 3. Registration/deletion of mortgage and issue of transcript 4. Survey and certification of ships including approval of plans and manuals (L.L. SOLAS, MARPOL, etc 5. Examination and certification of marine personnel (STCW95) 6. Article of Agreement (Crew Agreement), health, hygiene and safety at work; 7.
Registration, survey and certification of fishing vessels, 8. Examination and certification of fishing vessel personnel (STCW-F) 9. Registration of yachts and pleasure craft, regulate pleasure industry as required for safety, including training requirement for persons serving on yachts; 10. Safety of inland shipping (rivers and lakes); 11. Type-test and approval of locally manufactured marine equipment and safety appliances, including approval of life raft service stations and workshop that services and certifies fire fighting installations and appliances, 12. Safety of offshore rigs and mobile units, 13.
Recognition of classification societies and delegation of certain functions with monitoring provisions 14. Casualty investigation 15. Representation and co-ordination with IMO/ILO/ ITU/INMARSAT/IALA/IHO/UNCTAD and other international bodies 16. Promotional aspects such as training facilities, ship building and repair facilities, ship breaking industry, acquisition policy, protection,. Incentive, subsidy etc 17. Port state control (inspection of safety standards of foreign flag ships) and random inspection of own ships 18.
Regulate handling of dangerous goods in ports and harbours, 19. Survey coastal water and provide charts and data for own waters, 20. Provide necessary navigational aids and facilities along the coast, 21. Develop VTS, broadcast weather and navigational warnings and provide radio medical service, 22. Provide (humanitarian) SAR along the coast, 23.
Combat accidental pollution with legal measures to recover damages, 24. Removal of wrecks with legal measures for recovery of cost, 25. Prevent unlawful activities such as slave trade, human trade in illegal immigrants, piracy, terrorism,, drug trafficking etc; 26. Intervene in certain cases, 27. Protect and preserve living, mineral and other resources within the EEZ or Continental shelf.
The State is also expected to operate safe and efficient port facilities in its own interest to meet the needs of the trade and commerce. The primary role of the Port Authority (the administration of the port) is to provide service to the Port users. Though the Port Authority shall control all movements within the port and look after safety of all such operations, the ultimate responsibility of maritime safety and protection of the environment will still rest with the national Maritime Administration ie Directorate General of Ports and Shipping.
The Port authorities do not approve intervention and acts as independent authority in contravention of IMO conventions, thus sidelining the role of Directorate as regulator of Ports and Shipping and merely reducing the role as nonentity with support of Ministry at Islamabad.
In order to accomplish the role as a coastal state, specially those relating to SAR, contingency plan to combat pollution, prevention of unlawful acts and intervention etc, it is necessary to have a disciplined multiple role organisation in line with Defence services. Most countries have recognised this factor and developed "Coastguard" as a paramilitary organisation.
Normally in peacetime the Coastguard will work under the Transport (Ministry or Department) but as a law enforcement agency will also maintain link and co-ordination with police, Justice, Treasury, Fishery, etc. The Coastguard is essential for protection of fisheries and other economic interests within the EEZ. However, in case of war the Coastguard often becomes a part of the navy and may be used for coastal defence and port security. In Pakistan the role is assigned to MSA, which also do not co-ordinate with Directorate.
It is also quite common in many countries for the hydrographic section of the Navy to conduct survey and prepare charts, tide tables and other navigational data. They shall of course maintain close link with the maritime administration. Informatively this aspect of providing appropriate chart and other navigational information along with weather forecast have now been included in Chapter V if SOLAS 74.
Fishing (as a resource) policy at international level is looked after by FAO (Food & Agriculture Organisation) though safety at sea and protection of the marine environment is till looked after by the IMO. At national level fisheries (as a policy for preservation, protection and planned exploitation) will possibly be looked after by a different ministry or department.
The relevant department will determine the TAC (total allowable catch) keeping in view the national interest and this will automatically determine the optimum size of the fishing fleet. This is one reason whey the Maritime Administration/Registry of Ships will only register those fishing vessels that are licensed by the Fisheries Department. However, once a sea going fishing vessel is registered then it is the responsibility of the Maritime Administration to ensure safety at sea and protection of the marine environment through usual process of survey certification.
In respect of training and certification of sea going fishermen, the Maritime Administration is concerned with the subjects of Navigation, Engineering, Stability, Seamanship, Communication, Safety and Environment. The professional aspects of fishing such as the recognition of fishing grounds use of fishing gears and equipment fishing techniques fish processing preservation and hygiene are matters for the Fisheries Department.
The examination and certification can be jointly conducted by the two departments or first by the fisheries department on the art and skill of fishing and then the final part of the examination by the Marine Department. In some cases the mandatory sea service on fishing vessels will be considered to have taken care of the fishing part and the examination and certification will be conducted solely by the Marine Department for safety at sea and prevention of marine pollution.
The circumstances of all countries would not be the same. There are land locked countries that may also have maritime aspirations. From the range of maritime activities, it should not be difficult to identify the elements that will apply to such countries. There may be also countries that have the access to sea but may not want to operate a register. Still they will have certain maritime obligations to meet.
The business of ship registration, is for the state to decide whether it wants to operate a restrictive register solely owned by its own nationals or in some cases may be with more than 50% owned by locals. The ships will of course have a genuine link with the flag and the Administration may even specify the need for certain number of crew being flag nationals. Normally the legislation shall specify that a ship can be registered provided more than 50% of the shares are owned by local nationals or by a company whose majority shares are owned by locals.
In the other case the legislation will simply state that a ship can be registered provided a company registered in the country owns it. It will normally not specify anything about the nationals who own such company giving a wide range of flexibility for foreigners to set up a company or to own an existing company and register ships under the ownership of the company. The success of "open registry" will depend on the tax incentive (probably none) and a greater degree of ease, convenience and flexibility offered by the Administration.
We have to consider the matter in the light of our national interest. A coastal state with large volume of trade and no lack of entrepreneurs has no reason to go for an open registry. A land locked country or a small island state will probably find it more to their interest to have an "open" register because the fees generated by the register will be substantial to their notional context.
An underdeveloped country (now a days referred to as a developing country) with a large population (abundance of human resource) may find it effective to have an "open" register and at the same time have training facilities to sell their manpower to foreign ship owners whose ships are registered there. In every case we will find that "open" registers are designed to grow a fleet under the flag in excess of genuine trading need of the country.
The open registers do not necessarily have to be sub standard. It is for the Administration to find ways and means as to how to make the Flag attractive without compromising the standards. The administration must maintain a policy of transparency in the sense that it should not hesitate in giving out any information that relate to maritime safety in respect of any the ships on its register.
The Administration should also authorise classification societies to give information in respect of any of the statutory functions that the societies are authorities to conduct on behalf of the Administration. Interested parties should be able to obtain a transcript of a ship on payment of nominal fees. Pakistan is in dire need of promoting ship owning under its flag and lure private entrepreneurs as ship owning is in only Public Sector thus we need parallel or open registry to induce private entrepreneurs and enacted monopoly ordinance be strictly enforced.
The registrar will normally require the proof of eligibility to own a ship under the register and then establish the identity of the ship through a "Certificate of Survey" which will outline the dimension and other main features of the ship including the particulars of the machinery. The ownership has to be established through a "Bill of Sale" for existing ships and for a new building the copy of the contract along with the delivery certificate.
The ship must also have an international Tonnage Certificate. The ship has to be either "free of encumbrances" or consent from the mortgagee to carry forward the remaining mortgage to the new register. The ship will be marked with the IMO or official number (and in some cases also with tonnage) as required by the registrar for identification purpose (in case of any piracy).
Some countries may also insist on a P&I cover for the ship before any statutory certificate can be issued. For an existing ship the "Certificate of Registry" shall not be issued until a deletion certificate is recovered from the previous registry.
Ships can also be registered under "bare boat charter." Our MSO 2001 provides in which case the ship has to be chartered on bare boat basis by a company eligible to own a ship under the register. The charter party has to allow the registration in a place of choice of the charterer to which the owner as well as primary register must have no objection. The consent of the mortgagee, if any, will also be required.
The "Certificate of Registry under Bare boat charter" will record the name of the charterer. It is also probable that the name of the primary registry will be noted in the certificate. The bare boat charterer or their managers will be able to operate as if they are the owners except that they will not be allowed to raise any capital against the ship (because it is not their property) and no mortgage can be recorded on a bare boat charter register.
Every mortgagee will look at how well the interest of the mortgagee is protected. A good register must not allow any change of status eg change of owners, change of name, change of flag, a second registration under bare boat charter, deletion etc without the knowledge of the registered mortgagee. In fact we require the official consent of the mortgagee before any such change is made.
Though not very common but ships may also be registered when under construction. You may be aware that the ship building contract normally incorporates five states of payment, the first being when the contract is signed, second when the keel is laid and so on with the final payment on delivery (in some cases at the end of the guarantee period). When the buyer wants to raise money to pay for the final two or three stages of payment when he may register the ship so that the mortgage can be registered against the ship. In the "Certificate of Registry of a vessel under Construction" the names of the builders as well as the buyer will be recorded. The provisions of the contract will determine the question of ownership of the vessel at any state.
Because of reasons explained above we can understand that it has become a competitive business to operate ships register in order to make the register more attractive, efforts are made to simplify procedures. This in some cases led to unethical practices leading to registration of pirated ships.
Saturday, September 15, 2007
Making shipping safer and the seas cleaner
Statistics indicate that well over 70% of the marine accidents relate to human error or omission. The recent accident of M.T. Golden Gate on 14th August 2002 spilling 1800 tons crude in harbour and M.T. Tasman Spirit in August 2003, spilling 30,000 tons of crude oil and causing devastation of our beaches, marine life and environment are said to be due to element of human error.
The enquiry report precisely said to have established human error, but on whose part, can't be debated or divulged as the document has yet to be made Public document.
Unfortunately we have not learned any lessons from these debacles and due to unawareness of Maritime Law and not being signatory to CLC/Civil Liability Convention at that time, nor member of fund-92, have not been able to recover compensation from owners and their underwriters. In a similar accident case of ERICA Italian classification society RINA has been sued alongwith flag state Malta.
The tribunal in Paris has not allowed immunity to RINA. The argument made that RINA and flag state are so closely inter-twined in issuing statuary certificate to the vessel, irrespective of authority delegated. The owners of ERIKA and their insurers will not be able to escape as judgement is due soon, unlike owners of Tasman Spirit their insurers, classification society and flag state are virtually free of any liability upto date.
Thus training in conjunction with documented procedures and checklists can improve human performance and help to reduce accidents. In the words of the Secretary General of IMO "We sometimes forget that regulations can only be effective if they are properly implemented, and this can only be done by skilled people".
Similarly trained and competent seafarers are required to make the best use of advances in ship technology to ensure the highest possible degree of operational safety and protection of the marine environment.
The international convention on standards of training, Certification and Watch keeping for Seafarers, 1978 (STCW'78) was the first IMO initiative in the field of training. It was a good starting point but it had no reference to quality control and above all it had no teeth. That is to say it had no means to ensure compliance. The amendments in 1995 make the convention more effective.
The amended version is commonly referred to as STCW 95. Significantly at about the same time IMO (also developed the SOLAS-ISM code. The two instruments are complimentary to each other in introducing the new regime of quality standards systems.
International treaties and conventions can only become effective when they are implemented. The process of implementation requires 3 (three) essential ingredients.
They are:
1. National legislation to provide for the power and jurisdiction
2. An administration (well trained and competent) to execute or monitor the execution: and
3. Documented procedures for the administration to act upon.
Most IMO conventions have provisions allowing the administration to recognise and employ the services of organisations (a reference to the classification societies). This delegation relates to functions only; responsibility still rests with the administration.
STCW is one of the few conventions which does not provide any scope to recognise an organisation. In other words there is no role for separate organisations such as classification societies. However, the convention does make reference to non-governmental agencies or entities which is further expanded in Code A-1/6.7 under the heading "Training and Assessment within an Institution."
The paramount statement in respect of training and assessment is given in Reg 1/6 "Each party shall ensure that the training and assessment of seafarers, as required under the convention, are administered, supervised and monitored in accordance with the provisions of Section A-1/6 of the STCW Code". This requires a total commitment on the part of the administration.
Where training institutes are authorised by the administration to conduct any part of the training and assessment, they shall be supervised and monitored by the administration. An example of delegation of function but not responsibility. STCW'95 requires that "Each party shall ensure that all training, assessment, certification and revalidation activities carried out by non-governmental agencies or entities under its authority are continuously monitored through a quality standards system."
This clearly requires the administration to supervise and monitor the quality standards system implemented by the training institutes. It does not rule out the scope for the training institutes to take voluntary (but not mandatory) QA schemes such as ISO 9002.
The important thing to note here is that whether the training institute has gone for a separate quality certification or not, the administration will have to meet its obligations under STCW'95 to administer, supervise and monitor the training and assessment of its seafarers as referred to in Reg 1/6 and 1/8.
Such arrangements would be particularly suitable for the short and specialised training programmes covered in chapters V and VI which are related to purely vocational training and maritime related skills.
This is not the case with the contents of chapters II and III (except 11/43 and III/4) which are far more broadly based education and training and include the underpinning knowledge necessary to fully meet the convention requirements.
In this case the supervision and monitoring should not only be carried out by the maritime administration but also by the relevant education authority such as university or a technical education board.
In the UK the conduct of education, training and assessment covering the main education and training leading to a Certificate of Competency (Reg II III) are jointly supervised by the MSA (Administration) and EDEXCEL/SQA. This meets the requirements of the QSS so far they relate to training institutes.
Now let us focus our attention on QSS for the administration itself. Reg 1/8.2 states "where governmental agencies or entities perform such activities, there shall be a quality standards system." For the first time an international instrument insists on a quality standards system (QSS) on the part of the administration to be evaluated, monitored and audited by a competent independent body or persons.
What does it imply? It is certainly not making any reference to a classification society simply because the society itself is supposed to be audited by the administration. It must not turn out as scratching each other's back.
There are two main ways of achieving a QSS for the administration. 1 to go for the ISO 9002 through the national standards institute 2. The other is for the Government to appoint a panel of competent persons, who are not associated or connected with the administration in carrying out its obligations under the STCW, to carry out periodical (not exceeding 5 years) inspection and audit to ensure that a QSS is maintained.
In the UK, for example, the requirement for QSS on the part of the administration is met by the MSA maintaining the ISO 9002 under the watchful eyes of the BSI (British Standards Institute).
Finally let us discuss how the QSS works. The Government Department, Directorate, Agency or Authority has to have a framework document both in respect of its structure as well as its functions, goals and objectives. It has to have a proper recruitment policy spelling out the qualifications and experience required against each post. The role and responsibility at each level must be well defined.
The administration has to identity various functions (related to implementation of STCW) and have documented procedures against each.
Some of these functions are outlined below:
1. Approval of Training institutes in general
2. Approval of Cadet Training programmes
3. Approval of Marine VQ programmes (along with EDEXCEL/SQA)
4. Approval of various short and specialised training courses
5. Approval of watch rating certification.
6. Approval of type rating certification
7. Evaluation of certificates issued abroad for recognition
8. Issue of endorsement to foreign certificates
9. Processing applications for certificates of competency
10. Processing applications for Tanker Endorsement
11. Processing applications for revalidation of certificates.
12. Setting mandatory medical standards
13. Maintenance of records (Data base)
14. Issue of AB Certificates
15. Issue of Ship's Cook certificates.
16. Issue of Safe Manning Documents
17. Approval of Muster lists
18. Issue of Dispensation, issue of endorsement to GMDSS certificates
19. Inquiry and disciplinary measures
20. Inspection (PSC) of ships for STCW compliance.
It is necessary to develop criteria and establish documented procedures for the execution/processing of each of these functions to the satisfaction of the awarding body to have the initial QSS recognised. It will be also necessary to maintain records and documents to demonstrate that the procedures have been followed and that new procedures have been developed where felt necessary to maintain the QSS.
In a similar manner, the training institutes have to develop criteria for initial approval of each of the training programmes and have procedures in place for the operation of the same. At each monitoring inspection by the administration the institute will have to satisfy the administration that the approved training programmes have been conducted strictly in compliance with the criteria and procedure agreed upon.
Let us now take an example of such a training programme; the certificate of Proficiency in Survival craft and rescue Boat. For the approval of such a course of training the administration will require the institute to make a submission covering the following points.
1. Scope (making reference to STCW, SOLAS etc)
2. Objectives (such as taking charge of survival craft.
3. Entry standards (such as age, sea services, basic training etc)
4. Intake limitation (such as facilities, instructor student ratio)
5. Staff qualification (certificates, experience etc and necessity for separate staff for instruction and assessment.
6. Facilities and equipment (whether lake, pool or waterfront available or accessible and how many different launching methods can be demonstrated etc)
7. Conduct of training (combination of lecture, video, practical work etc)
8. Assessment (independent of instruction; or continuous performance evaluation)
9. Certification (format to include correct reference to STCW, reference to approval and authorisation by the administration and contact point of the institute for checking authenticity etc);
10. Maintenance of data-base so that records can be checked. The initial approval by the administration, as well as the maintenance of the QSS, will depend on how closely the procedures have been followed.
Regulations 1/6 and 1/8 make direct references to the quality standards system. There are other regulations which deal with matters which have a direct bearing on the QSS. The maintenance of records commonly referred to as the Data-base is an integral part of the QSS. The STCW makes direct reference to national data-base as it applies to the administration.
There is also reference in Reg 1/14 under "Company responsibility" where the company is required to maintain records of all seafarers employed by the company. The training institutes also will have to maintain records of all seafarers trained or certificated by the institute as a part of QSS.
The QSS referred to in STCW 95 is independent of the ISM code ISO 9000 or ISMA certification. The ISM code largely deals with the human element but refers more directly to the ship and the company whereas STCW has a distinct primary role for the administration.
For a developing country it will probably be best to have a two-tier provision in the legislation such as:
1. The administration may authorise a training institute or center to conduct any of the training programmes required under the convention providing that such training programme shall be evaluated against criteria set by the administration prior to the approval and that the training programme conducted at the approved center shall be supervised and monitored by the administration at period not exceeding 5 years in accordance with the provision of Reg 1/6 and 1/8 of the Convention and the relevant codes attached to the convention.
2. The Ministry of Ports and Shipping may appoint the National Standards Institute or a panel of competent persons, other than those involved in the routine operation of functions related to training, certification, issue of endorsement or maintenance of record to make an independent evaluation to ensure that a quality standards system has been developed with documented procedures for each of the functions and the same is followed and maintained by the administration in respect of functions and activities referred to in Reg 1/6 and 1/8 of the convention and the relevant codes attached to the convention.
The audit shall take into account the audit of the training institutes undertaken by the administration. A copy of the report of such inspection, which shall take place at intervals not exceeding 5 years, shall be forwarded to the organisation."
In concluding I come back to the statement where I said that STCW95 and the ISM code are complementary to each other. Reg 1/14 is the best example where the company responsibility has been explained, especially the requirements relating to familiarisation training. These are common in both instruments. Both instruments are aimed at reducing human error and omission. Proper implementation of both instruments should go a long way in making shipping safer and the seas cleaner.
The enquiry report precisely said to have established human error, but on whose part, can't be debated or divulged as the document has yet to be made Public document.
Unfortunately we have not learned any lessons from these debacles and due to unawareness of Maritime Law and not being signatory to CLC/Civil Liability Convention at that time, nor member of fund-92, have not been able to recover compensation from owners and their underwriters. In a similar accident case of ERICA Italian classification society RINA has been sued alongwith flag state Malta.
The tribunal in Paris has not allowed immunity to RINA. The argument made that RINA and flag state are so closely inter-twined in issuing statuary certificate to the vessel, irrespective of authority delegated. The owners of ERIKA and their insurers will not be able to escape as judgement is due soon, unlike owners of Tasman Spirit their insurers, classification society and flag state are virtually free of any liability upto date.
Thus training in conjunction with documented procedures and checklists can improve human performance and help to reduce accidents. In the words of the Secretary General of IMO "We sometimes forget that regulations can only be effective if they are properly implemented, and this can only be done by skilled people".
Similarly trained and competent seafarers are required to make the best use of advances in ship technology to ensure the highest possible degree of operational safety and protection of the marine environment.
The international convention on standards of training, Certification and Watch keeping for Seafarers, 1978 (STCW'78) was the first IMO initiative in the field of training. It was a good starting point but it had no reference to quality control and above all it had no teeth. That is to say it had no means to ensure compliance. The amendments in 1995 make the convention more effective.
The amended version is commonly referred to as STCW 95. Significantly at about the same time IMO (also developed the SOLAS-ISM code. The two instruments are complimentary to each other in introducing the new regime of quality standards systems.
International treaties and conventions can only become effective when they are implemented. The process of implementation requires 3 (three) essential ingredients.
They are:
1. National legislation to provide for the power and jurisdiction
2. An administration (well trained and competent) to execute or monitor the execution: and
3. Documented procedures for the administration to act upon.
Most IMO conventions have provisions allowing the administration to recognise and employ the services of organisations (a reference to the classification societies). This delegation relates to functions only; responsibility still rests with the administration.
STCW is one of the few conventions which does not provide any scope to recognise an organisation. In other words there is no role for separate organisations such as classification societies. However, the convention does make reference to non-governmental agencies or entities which is further expanded in Code A-1/6.7 under the heading "Training and Assessment within an Institution."
The paramount statement in respect of training and assessment is given in Reg 1/6 "Each party shall ensure that the training and assessment of seafarers, as required under the convention, are administered, supervised and monitored in accordance with the provisions of Section A-1/6 of the STCW Code". This requires a total commitment on the part of the administration.
Where training institutes are authorised by the administration to conduct any part of the training and assessment, they shall be supervised and monitored by the administration. An example of delegation of function but not responsibility. STCW'95 requires that "Each party shall ensure that all training, assessment, certification and revalidation activities carried out by non-governmental agencies or entities under its authority are continuously monitored through a quality standards system."
This clearly requires the administration to supervise and monitor the quality standards system implemented by the training institutes. It does not rule out the scope for the training institutes to take voluntary (but not mandatory) QA schemes such as ISO 9002.
The important thing to note here is that whether the training institute has gone for a separate quality certification or not, the administration will have to meet its obligations under STCW'95 to administer, supervise and monitor the training and assessment of its seafarers as referred to in Reg 1/6 and 1/8.
Such arrangements would be particularly suitable for the short and specialised training programmes covered in chapters V and VI which are related to purely vocational training and maritime related skills.
This is not the case with the contents of chapters II and III (except 11/43 and III/4) which are far more broadly based education and training and include the underpinning knowledge necessary to fully meet the convention requirements.
In this case the supervision and monitoring should not only be carried out by the maritime administration but also by the relevant education authority such as university or a technical education board.
In the UK the conduct of education, training and assessment covering the main education and training leading to a Certificate of Competency (Reg II III) are jointly supervised by the MSA (Administration) and EDEXCEL/SQA. This meets the requirements of the QSS so far they relate to training institutes.
Now let us focus our attention on QSS for the administration itself. Reg 1/8.2 states "where governmental agencies or entities perform such activities, there shall be a quality standards system." For the first time an international instrument insists on a quality standards system (QSS) on the part of the administration to be evaluated, monitored and audited by a competent independent body or persons.
What does it imply? It is certainly not making any reference to a classification society simply because the society itself is supposed to be audited by the administration. It must not turn out as scratching each other's back.
There are two main ways of achieving a QSS for the administration. 1 to go for the ISO 9002 through the national standards institute 2. The other is for the Government to appoint a panel of competent persons, who are not associated or connected with the administration in carrying out its obligations under the STCW, to carry out periodical (not exceeding 5 years) inspection and audit to ensure that a QSS is maintained.
In the UK, for example, the requirement for QSS on the part of the administration is met by the MSA maintaining the ISO 9002 under the watchful eyes of the BSI (British Standards Institute).
Finally let us discuss how the QSS works. The Government Department, Directorate, Agency or Authority has to have a framework document both in respect of its structure as well as its functions, goals and objectives. It has to have a proper recruitment policy spelling out the qualifications and experience required against each post. The role and responsibility at each level must be well defined.
The administration has to identity various functions (related to implementation of STCW) and have documented procedures against each.
Some of these functions are outlined below:
1. Approval of Training institutes in general
2. Approval of Cadet Training programmes
3. Approval of Marine VQ programmes (along with EDEXCEL/SQA)
4. Approval of various short and specialised training courses
5. Approval of watch rating certification.
6. Approval of type rating certification
7. Evaluation of certificates issued abroad for recognition
8. Issue of endorsement to foreign certificates
9. Processing applications for certificates of competency
10. Processing applications for Tanker Endorsement
11. Processing applications for revalidation of certificates.
12. Setting mandatory medical standards
13. Maintenance of records (Data base)
14. Issue of AB Certificates
15. Issue of Ship's Cook certificates.
16. Issue of Safe Manning Documents
17. Approval of Muster lists
18. Issue of Dispensation, issue of endorsement to GMDSS certificates
19. Inquiry and disciplinary measures
20. Inspection (PSC) of ships for STCW compliance.
It is necessary to develop criteria and establish documented procedures for the execution/processing of each of these functions to the satisfaction of the awarding body to have the initial QSS recognised. It will be also necessary to maintain records and documents to demonstrate that the procedures have been followed and that new procedures have been developed where felt necessary to maintain the QSS.
In a similar manner, the training institutes have to develop criteria for initial approval of each of the training programmes and have procedures in place for the operation of the same. At each monitoring inspection by the administration the institute will have to satisfy the administration that the approved training programmes have been conducted strictly in compliance with the criteria and procedure agreed upon.
Let us now take an example of such a training programme; the certificate of Proficiency in Survival craft and rescue Boat. For the approval of such a course of training the administration will require the institute to make a submission covering the following points.
1. Scope (making reference to STCW, SOLAS etc)
2. Objectives (such as taking charge of survival craft.
3. Entry standards (such as age, sea services, basic training etc)
4. Intake limitation (such as facilities, instructor student ratio)
5. Staff qualification (certificates, experience etc and necessity for separate staff for instruction and assessment.
6. Facilities and equipment (whether lake, pool or waterfront available or accessible and how many different launching methods can be demonstrated etc)
7. Conduct of training (combination of lecture, video, practical work etc)
8. Assessment (independent of instruction; or continuous performance evaluation)
9. Certification (format to include correct reference to STCW, reference to approval and authorisation by the administration and contact point of the institute for checking authenticity etc);
10. Maintenance of data-base so that records can be checked. The initial approval by the administration, as well as the maintenance of the QSS, will depend on how closely the procedures have been followed.
Regulations 1/6 and 1/8 make direct references to the quality standards system. There are other regulations which deal with matters which have a direct bearing on the QSS. The maintenance of records commonly referred to as the Data-base is an integral part of the QSS. The STCW makes direct reference to national data-base as it applies to the administration.
There is also reference in Reg 1/14 under "Company responsibility" where the company is required to maintain records of all seafarers employed by the company. The training institutes also will have to maintain records of all seafarers trained or certificated by the institute as a part of QSS.
The QSS referred to in STCW 95 is independent of the ISM code ISO 9000 or ISMA certification. The ISM code largely deals with the human element but refers more directly to the ship and the company whereas STCW has a distinct primary role for the administration.
For a developing country it will probably be best to have a two-tier provision in the legislation such as:
1. The administration may authorise a training institute or center to conduct any of the training programmes required under the convention providing that such training programme shall be evaluated against criteria set by the administration prior to the approval and that the training programme conducted at the approved center shall be supervised and monitored by the administration at period not exceeding 5 years in accordance with the provision of Reg 1/6 and 1/8 of the Convention and the relevant codes attached to the convention.
2. The Ministry of Ports and Shipping may appoint the National Standards Institute or a panel of competent persons, other than those involved in the routine operation of functions related to training, certification, issue of endorsement or maintenance of record to make an independent evaluation to ensure that a quality standards system has been developed with documented procedures for each of the functions and the same is followed and maintained by the administration in respect of functions and activities referred to in Reg 1/6 and 1/8 of the convention and the relevant codes attached to the convention.
The audit shall take into account the audit of the training institutes undertaken by the administration. A copy of the report of such inspection, which shall take place at intervals not exceeding 5 years, shall be forwarded to the organisation."
In concluding I come back to the statement where I said that STCW95 and the ISM code are complementary to each other. Reg 1/14 is the best example where the company responsibility has been explained, especially the requirements relating to familiarisation training. These are common in both instruments. Both instruments are aimed at reducing human error and omission. Proper implementation of both instruments should go a long way in making shipping safer and the seas cleaner.
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